Paul: Contrary to the preachings of the YUK Register, Compaq seems to be doing OK with Intel based servers.
investors.com
Compaq Plans To Help Rivals, Helping Itself
Date: 3/18/99
Author: Michael Tarsala
Makers of large business computers often talk tough, but they aren't above offering olive branches to each other - if there's a potential gain at the end.
In recent months, leading makers of server computers - including Compaq Computer Corp., Hewlett-Packard Co. and Dell Computer Corp. - have made key technologies available to their rivals.
Why don't the companies keep these jewels to themselves? Because sometimes helping rivals is self-serving, says Mary McDowell, head of Compaq's Intel-based server business. This strategy can help if it pushes the popularity of servers that run on Intel Corp. chips, which still trail in the higher-end market against the more-entrenched Unix servers.
Compaq is a leader in sharing its server technology, McDowell says. On Wednesday, Compaq revealed another sharing move. It said it's been working with Intel to build key data input/output hardware that works with Intel's new Pentium III Xeon chips. The I/O hardware is the way a computer communicates with its disk drive, printer and other peripherals. The I/O hardware and Xeon chips will be used in servers sold by many makers of Intel-based servers. Machines are expected as soon as June, say Intel and Compaq.
McDowell this week spoke with Investor's Business Daily about Compaq's motives for offering technology to rivals.
IBD:
How does spending research and development dollars on technology that will be available to rivals help Compaq?
McDowell:
It's a change in how we approach innovation. Before, we focused only on how to make our products different and better than the competition. Now, we not only worry about how we can grow our slice of the pie, but how we can grow the pie faster.
We think partnering with Intel on an input/output architecture will help speed the adoption of Intel-based servers, increasing our market opportunity.
IBD:
How else is Compaq working with others to increase the market size?
McDowell:
We have a separate collaboration with IBM Corp. and HP. It's a future input/output technology initiative started in 1998. It will affect products in 2001. It basically defines the future I/O architecture for servers. The I/O is the connection point for the disk drives and other peripherals that controls how the server's processors interact with these peripherals. It's a critical part of a computer's architecture -especially in determining performance.
Right now, we have engineers working together to define specifications. Then we will work together with IBM and HP to define products.
IBD:
Are there more opportunities to innovate with servers than with personal computers?
McDowell:
This erver market) is different from the PC market. Intel designs most of the processor innovations for PCs. But in servers, we can get involved in changes to the architecture.
IBD:
Why is that?
McDowell:
Servers are different than the PC model. Unlike with PCs, customers are asking how they can increase the performance and reliability of Intel-based servers. This gives each company an opportunity to shine. For Compaq, it's an opportunity to leverage the technology we purchased in the Digital and Tandem acquisitions.
And there's a much broader range of server products. On the server side, you have one- processor machines up through servers with many processors that hook to other servers. There's a lot of latitude to innovate and increase performance and reliability.
IBD:
How does this collaboration strategy fit into Compaq's business plan?
McDowell:
We want to migrate our high-end Tandem and Digital technologies down to the ProLiant family of PC-based servers. Thanks to the Tandem acquisition, we at Compaq own a majority of the clustering technologies in the industry.
IBD:
What is clustering?
McDowell:
It's a process of hooking together two or more servers to increase performance, as well as having one server be used as a backup for the other. Microsoft has some clustering capabilities in its enterprise-edition operating system. It allows you to hook two servers together. One acts as backup to the other. There's other software that can do even more. This is a big deal to customers.
IBD:
How do Intel-based servers fit into Compaq's overall business?
McDowell:
It's a key business for Compaq. We have a No. 1 market share position. It's a good business, and it's part of our stated direction to drive standards-based computing to the highest level.
IBD:
How can Compaq gain an edge if it makes the technology available to everyone?
McDowell:
The incentive is that as my engineers are developing advances, if we can partner with an Intel or a Microsoft, we get our technology accepted as a standard. Then I can free up engineers to develop the next-generation products, instead of focusing on catching up.
IBD:
When making your technology a standard, is it with the stipulation that you get to be first to market with products based on that standard?
McDowell:
Our mission has been to not hold anything back. Sometimes there's a time-to-market advantage for us. In this (I/O) case, the technology is made available to all other companies at the same time. Our early knowledge will allow us to bring the product to market more quickly. But there's nothing in a contract to make us first, or to hold technology from other vendors.
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(C) Copyright 1999 Investors Business Daily, Inc.
Metadata: CPQ HWP DELL INTC IBM MSFT I/3572 I/3675 I/3270 E/IBD E/SN1 E/TECH
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