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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: J Krnjeu who wrote (22833)	5/17/1999 10:07:00 PM
From: Maverick	Respond to of 74651

Xerox, Microsoft to unveil technology alliance STAMFORD, Conn., May 17 (Reuters) - Xerox Corp , the world's biggest copier maker, and software titan Microsoft Corp will unveil a technology alliance on Tuesday, a Xerox spokesman said on Monday. "It is our intention to make an announcement that Xerox and Microsoft are collaborating, on technology that will help people become a lot more productive in the digital office," Xerox spokesman Jeff Simek told Reuters. He said Xerox Chief Executive Rick Thoman and Microsoft President Steve Ballmer will announce the partnership at a news conference at 1300 EDT (1700 GMT) on Tuesday at the Xerox lab in Palo Alto, Calif. "You will hear both Thoman and Ballmer articulating each company's strategic intent for the way that things will play out in the digital office," Simek said. He declined to comment on a Wall Street Journal story published on Monday, quoting unnamed sources who said Xerox and Microsoft will design software applications together, enabling Xerox digital copiers to connect easily to computer networks running Microsoft software. Xerox is expected to build its digital copiers around Microsoft's Windows NT operating system, replacing the current Unix-compatible software now bundled inside its midrange line of copiers, the Journal said. "I think it facilitates Xerox's entry into the digital world," Jack Kelly, managing director at Goldman Sachs, told Reuters. "They're already there. They already have software that does this, but this will be better software." "The old analog machine is fast going by the wayside," Kelly said. "Digital is where the action is, because you're linked up to a network." Last year, Stamford, Conn.-based Xerox signed a similar deal with International Business Machines Corp. to make its copiers compatible with IBM's collective software, called Lotus Notes. "You'll see a similar type of uplink capability (to the Web) off the Microsoft platform," said Alex Henderson, analyst at Prudential Securities. "Xerox did indicate at Friday's (Wall Street analysts') meeting that this would be a broader arrangement, and that there would be other things covered than the simple software connection," Henderson said. "It makes (the Xerox) product more functional, it does distinguish their products from other people's products that don't have this capability, and it should stimulate incremental demand for their products -- it's an additional selling capability," Henderson said. Xerox generated 1998 revenues of $19.5 billion, up 7 percent over 1997. The company has been increasingly emphasizing digital products for the past several years, moving away from traditional copiers using so-called light lenses, which date back to its original 1950s machines. "I still think the stock looks attractive," Henderson said, adding that Xerox shares should approach $78 over 12 months. Xerox shares were down 69 cents at $57.94 in early afternoon trading on the New York Stock Exchange. "Why this makes sense is that when you move into the digital world... those copiers, they're really multi-function machines -- they're printers, copiers, scanners and fax machines," Kelly said. "When those machines link up to a network, you have to have an interface, which is software," Kelly said. "To the extent that you can get software that gives you better access to the network, the better off you are." ((--Matthew Lewis, Hartford newsroom, (860) 727-0224))