Rich & Thread:
Interesting Article by PBS Columnist on CPQ/DEC etc.:
May the source be with you: two important events that have nothing at all to do with Monica Lewinsky
by Robert X. Cringely
Nearly 20 years ago, I worked for awhile in the White House. The President back then was Jimmy Carter, former Democratic governor of a southern state who had a pretty and forceful wife, a young daughter, an embarrassing brother, and who thought that the answer to just about any problem could be found in some new government policy. Sound familiar? Carter had admitted to Playboy his "lust in the heart" for other women, but most people focused on his born-again Christianity. In truth, Carter's personality had elements of both qualities (after all, he was a politician). The most telling story I recall was how the Secret Service tried to please Carter by removing all the booze from Air Force One only to have the Commander-in-Chief ask for a highball during his first foreign trip as President.
It's not Monica Lewinsky, I know, but that highball anecdote at least shows that things are generally not as they seem.
Last week in the world I work in, the apolitical, often asexual, but definitely cut-throat world of computers, two important things happened that were also not as they seemed. Compaq bought Digital Equipment Corp. and Netscape started giving away its Web browsing software for free.
The DEC sale says much more about Compaq than it does about Digital, a company that had been adrift for several years. Sure, Digital already had all the elements for fashioning its own salvation and renewed vigor, but like Dorothy, it had always been that way. Those ruby slippers hadn't done anything to increase shareholder value in at least a decade, so there was no compelling reason they were likely to get tapping now. So the merger comes not so much from Digital's failure as Compaq's success: DEC could have limped along for years but Compaq needed it NOW.
And why did Compaq need DEC so much it would throw almost $10 billion (nearly $5 billion in cash!) into buying what most other computer companies just would have seen as a pack of troubles? Because Compaq CEO Eckhard Pfeiffer is a man with a mission, to run the largest computer company in the world. Pfeiffer's target is IBM.
To compete with IBM, Compaq has to be a truly global company with a complete product line. Starting with a PC hardware company, Pfeiffer added networking, mainframes (first from Tandem and now DEC), minicomputers, workstations, microprocessors, service, and software. The parts of IBM he specifically avoided were chip-making factories, which are hideously expensive and almost instantly obsolete, and basic research. Compaq will buy any new technologies it needs, thank you.
The result is a lean and mean vertically-integrated company that can meet or beat IBM at every turn. DEC fills some important gaps for Compaq, notably in microprocessors, workstations, and software. Tandem Computer, which Compaq bought last year, uses MIPS R10000 processors in its Nonstop systems and that had to change. Expect Tandem to move to DEC Alpha chips. Digital workstations give Compaq a one-up on IBM and allow the company to at least appear as a blip on Sun's radar screen. Sun is, of course, another Pfeiffer target.
The Alpha chips and Digital's discount Pentium deal with Intel were attractive, too, because now Compaq has even more leverage with Intel. Not only can they, as the largest user of microprocessors in the world, get the best prices, but the Alpha CPUs offer to Compaq the same leverage they gave to DEC -- the ability to tell Intel to go to hell and roll their own if necessary. It will never become necessary.
But the most interesting part of the deal is the software expertise it brings to Compaq. Minicomputer and mainframe companies, unless they are building clones of some other system, have to be responsible for their own system software, yet Compaq had always left that to Microsoft. No more. Digital came with abundant software talent. All those engineers who left Digital for Microsoft to do Windows NT left plenty of their friends behind.
So let's say Compaq is successful and turns itself into a leaner and meaner IBM, who does that threaten besides IBM? Microsoft. Suddenly Compaq has its own operating systems, and good ones at that. Sure, Windows 95 and NT are bread and butter, but doesn't Pfeiffer have some room left for cake? Microsoft's biggest single customer will not be so dependent as before.
And then there is Netscape, which a few days ago announced that its Navigator and Communicator browsers would be available for free. On the surface this looks like Netscape just had to meet Microsoft's price point for Internet Explorer (free), but the announcement is much more insidious than that. In the area of browsers, at least, Netscape has made a master stroke that even Microsoft may not be able to overcome.
How do little software companies co-opt big software companies? One method invented in 1982 by Sun Microsystems is to freely license source code. Sun came from the Berkeley Unix community, where Unix source code was licensed to universities for a flat fee. An entire generation of programmers grew up doing regular recompilations of their favorite operating system. It's hard to imagine now how amazing that was, because just about all the OSes before Unix were strictly commercial with the source code hidden in corporate vaults. Microsoft source code has never been seen by anyone who didn't work for Microsoft or IBM. But Sun would sell a license for anything, everything, and in doing so made itself a powerhouse in workstation software. The hardware was just carried along by the code.
Then came the Open Software Foundation, the Free Software Foundation, and products like the GNU compilers and, of course, Linux. Suddenly not only was source code available, it was free! The success of Linux, FreeBSD and several other important-yet-free operating systems is a result of these movements. Thousands of very capable programmers are working hard to improve this code, for free, for fun. It's revolutionary. and it's what Netscape is proposing to do with its Web browsers.
For now the browsers are free, but with Version 5, Netscape says the source code will be free, too. Why? Well, it's a little like Tom Sawyer painting that fence: giving away the source code will encourage those thousands of programmers to donate their efforts to improving Netscape's product. That's more programmers than Netscape could ever afford to hire and more programmers than even Microsoft would devote to one project. It should result not only in Netscape regaining profitability, but in Netscape browsers retaining market dominance. And one thing's for sure: Microsoft won't follow suit. When Bill Gates first heard about the idea of giving away Internet Explorer, he called it Communism. Well, Netscape's move IS Communism and Microsoft can't do the same without shaking the very foundation of its corporate structure.
If it's such a great idea, why wait until Communicator 5? Because lots of other companies own code that's in Netscape browsers and that code has to be either licensed under the same terms or removed. And there's also the issue of expurgating those embarrassing comments in the source code that programmers never thought would be read by anyone outside Netscape.
So there you have it, two important blows against Microsoft. They're no Monica Lewinsky, but they're a start. |
