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Eye on the Competition
April  1997
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HP's purchase of VeriFone creates strong e-commerce player

San Francisco (April 23, 1997) -- Hewlett-Packard Co.'s announcement today that it plans to buy electronic payment systems maker VeriFone Inc. has the potential to create a strong player in the electronic commerce market, according to company officials and analysts.

While HP gains a premier provider of electronic payment systems, VeriFone stands to gain HP's established distribution network and marketing muscle, observers said.

"HP is involved in infrastructure and VeriFone is arguably the largest payment system vendor," said Clay Ryder, director at Zona Research in Redwood City, CA. "This also complements HP's alliance with Microsoft," he said.

In the near future users will be able to get one integrated electronic commerce system, optimized for HP's hardware and running on Microsoft software, that will also include transaction processing and payment verification systems, Ryder said.

"Every time somebody will click the electronic payment button some money will trickle in at HP," Ryder said. "It will be interesting to see how this will change the company's business model."

HP this morning announced its intention to buy VeriFone in a one-to-one stock swap valued at roughly $1.18 billion.

VeriFone, which had net revenues of $472 million in fiscal 1996, will operate "fairly independently" as a subsidiary of HP, said Richard Belluzzo, HP executive vice president and head of the Computer Organization.

"We believe the strengths of HP, along with VeriFone's expertise and reputation, can redefine the marketplace and expand the capabilities around electronic commerce," Belluzzo said in a conference call with analysts.

Together the two companies will accelerate the evolution of electronic commerce, said Hatim Tyabji, VeriFone's chairman, president and CEO, who will continue his role as president and CEO of VeriFone, reporting to Belluzzo.

"HP has a formidable distribution infrastructure. It will allow us to penetrate the market faster and in a more cohesive fashion then we would have been able to do on our own," Tyabji said.

HP's Belluzzo said the acquisition will not have a negative impact on VeriFone's established relationships with a number of other vendors.

In addition, the timing of the deal was not related to VeriFone's stock price, but rather to the industry at large, Belluzzo added. "We did this because of what the market potential is, and the timing is dictated by the speed with which we wanted things done," he said.

VeriFone, founded in 1981, provides secure electronic payment solutions for financial institutions, merchants and consumers. The company maintains more than 30 regional sales, development, manufacturing and distribution centers throughout North and South America, Europe, Asia, Africa, Australia, and the Pacific.

--Torsten Busse, IDG News Service, San Francisco Bureau

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SCO set to merge UnixWare and OpenServer

San Francisco (April 14, 1997) -- It must be time for Unix vendors to make nice with Wall Street because as of tomorrow, three major Unix vendors will have laid out their respective "roadmaps" in the past week. The latest of these will come from Sun Microsystems at an exclusive press briefing at Sun's Menlo Park, CA campus tomorrow (see related story). There, SunSoft President Janpieter Scheerder is expected to discuss Sun's plans to provide "WebTone" to the corporate intranet and pitch Solaris as the ideal backend to the network computer environment Sun sees us all adopting in the next couple of years.

Not to be left out of the fun, The Santa Cruz Operation Inc. and Hewlett-Packard Co. also recently announced roadmaps of their own. They are also flogging their own buzzwords, with SCO talking about the "Internet Way of Computing" and HP countering with its "Pervasive Solutions Foundation," which both seem to loosely refer to all the hardware and software both companies expect to sell as intranet technology moves forward.

As well as releasing the most recent revs of its UnixWare 2.1.2 and OpenServer 5.0.4 products SCO is now saying that it will release its merged version of the two operating systems, code-named Project Gemini, in the final three months of 1997. SCO has been promising to do this since it acquired UnixWare from Novell in December of 1995. Gemini should be out in early access form sometime before October. SCO is also readying a Universal Development Kit that will support OpenServer, UnixWare, and Gemini. It will be rolled out along with Gemini.

Another hot technology for SCO is its Tarantella software, which is supposed to turn into a product this September. Tarantella uses SCO's Advanced Adaptive Protocols (AAP) to let Java-enabled clients access X Window or character applications. SCO is now showing off a demo of Tarantella in which a simple terminal emulation applet gets downloaded to a Java client. A Tarantella server launches applications and performs screen grabs off of a Unix server. It then serves them to the Java client using a cookie to ensure that the data sent goes to the right person. SCO Senior Engineer Steve Hoff says that with Tarantella customers can launch a server-side application, disconnect from the server, and then reconnect to the application. Hoff says that Tarantella can even perform a "suspended resume" in which a different client logs onto a server to reconnect to an application, say a sales transaction, already in progress.

With the release of its four-node ReliantHA clustering software, SCO claims it is the first to offer "enterprise-level clustering products" on Intel -- a claim Sun was unable to make with its recent "Full Moon" clustering announcement. In fact, all that Sun is saying about clustering on Intel is that "it will be available in 1998." Also new from SCO in the clustering space is its Oracle7 Parallel Server failover software, called ReliantDLM. Both ReliantDLM and ReliantHA run on UnixWare. Pricing for ReliantHA starts at $4,000 per node and at $3,000 per node for ReliantDLM.

--Robert McMillan

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HP says no end is near for PA-RISC

San Francisco (April 14, 1997) -- Though Hewlett-Packard seems to be betting heavily on the success of the upcoming Intel 64-bit chip, code named Merced, HP Vice President Dick Watts says that no date has yet been set for retiring the PA-RISC line. HP will release at least two more PA-RISC chips before Merced: The PA-8500 is expected in early 1998, and the PA-8200 should arrive on the market in the next few months. According to Watts, PA-RISC machines will continue to roll out even as Merced ships with 32-way SMP (symmetric multiprocessing) configurations scaling to over 2,000 processors currently planned. The Merced configurations are expected to go as high as 256-way SMP and scale to over 4,000 central processor units.

Merced is Intel's next-generation processor designed to run both Windows NT and HP-UX applications. It is currently being co-developed by Intel and HP. Watts says that the lab team has moved from simulations to silicon implementations of the chip, but he will not say when the chip will first be demoed. HP is also keeping quiet on when exactly it expects Merced to ship, though 1999 seems likely at this point.

The Pervasive Solutions Foundation is HP's new catch phrase for much the technology it intends to develop along with Merced. Watts says it encompasses the Merced chip sets, coprocessors, HP-UX, Windows NT, compiler technology as well as interoperability, management, connectivity, and messaging software. All of this, says Watts, is being designed to provide a clean migration for customers from PA-RISC to Merced. Watts says that there is "no downside" to recompiling applications from PA-RISC to Merced as both platforms will be binary compatible.

--Robert McMillan

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