Eye on the Competition

Up-to-the-minute news on Sun's rivals

October  1997
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Justice department asks court to fine Microsoft $1 million/day for anti-competitive practices

Boston (October 20, 1997) -- The U.S. Department of Justice today asked a federal court to hold Microsoft Corp. in contempt and charge the software giant $1 million daily for requiring PC manufacturers to license and distribute the Internet Explorer browser as a condition of licensing Windows 95.

The department charges that Microsoft, based in Redmond, Washington, violated a 1995 court order obtained by the U.S. government barring Microsoft from conducting anti-competitive licensing practices.

"Our main concern is that by violating the court order, Microsoft is using unlawful advantage to beat back an important competitive challenge to its Windows monopoly," said Assistant Attorney General Joel Klein in a printed statement. Klein, head of the department's Antitrust Division, announced the charges at a Washington, D.C., press conference with U.S. Attorney General Janet Reno.

In its petition to the U.S. District Court for the District of Columbia, the department asked the court to bar Microsoft from forcing PC manufacturers to accept Internet Explorer as a condition of receiving Windows 95. The petition also asks that Microsoft be required to notify consumers who buy PCs with Windows 95 that they are not required to use Internet Explorer and that they can use any compatible browser.

Microsoft also will have to tell consumers how to remove the Internet Explorer icon from their PC desktop, according to the request of the court.

Moreover, the department is asking the court to strike down sections of non-disclosure agreements Microsoft requires PC manufacturers to sign. According to the department statement, Microsoft's non-disclosure agreements might deter companies from voluntarily providing information in the department's ongoing investigation of Microsoft.

"We need a court order to clear the air here so that anyone with relevant information will feel free to come talk to the department without fear of intimidation or reprisal," Klein said in the statement. "We will not let Microsoft or anyone else burden that fundamental right."

The statement says that the department is not taking sides in the battle between Microsoft and arch-rival Netscape Communications Corp., nor in any emerging competition between the Windows operating system and others. Windows 95 is used on more than 80 percent of the country's PCs. Pre-installation on PCs is Microsoft's primary means of distribution.

Microsoft has eleven days to respond to the department's petition in writing, and then a judge will decide if a hearing is appropriate.

The U.S. Department of Justice's action is not the only legal hurdle Microsoft is facing these days. Besides the federal investigation into its practices, Microsoft also is under scrutiny in at least four states, its business practices are being looked into by U.S. consumer advocate Ralph Nader, and the company is being sued by Sun Microsystems for violating the terms of a Java licensing agreement between the two corporations.

--Nancy Weil, IDG News Service, Boston Bureau


Wall Street Journal: Intel is eyeing Alpha

Boston (October 6, 1997) -- Digital Equipment Corp. is discussing handing over its Alpha RISC microprocessor technology to Intel Corp. for more than $1.5 billion, thus ending a patent battle, according to a report published today.

Digital sued Intel in May for infringing on 10 Alpha-related patents to build Intel's Pentium line of chips. Several weeks later Intel filed its own suit against Digital over alleged misuse of technical information Digital had obtained through a nondisclosure agreement with Intel.

Jettisoning Alpha could ease the substantial financial investment Digital must maintain in the technology, though it has long been championed by Digital Chief Executive Officer Robert Palmer, according to a report in The Wall Street Journal. On Digital's part, acquiring Alpha would relieve Intel from what would likely be a protracted lawsuit whose outcome is by no means certain, the Journal said.

U.S. Federal Trade Commission (FTC) approval would be needed before Intel could acquire Alpha, which could be hard to win given Intel's weighty presence in the chip market. On the other hand, Digital could attempt to sway the FTC by showing that Alpha's market share is quite small, the Journal said.

--Rebecca Sykes, IDG News Service, Boston Bureau

IBM's S70 high-end servers to ship November 14

San Francisco (October 6, 1997) -- On November 14, IBM will begin volume shipments of its first RS/6000 system built on the 125-MHz PowerPC RS64 chip. The RS/6000 S70, code-named Raven, is being billed as a high-end enterprise server that will scale up to 12 SMP (Symmetric Multi Processor) processors. It will be powered by the latest version (v. 4.3) of IBM's AIX Unix.

IBM product marketing manager Rick Cole says his company will also ship a 160 MHz Power2 SuperChip-based workstation called the Model 397, at the same time. The 397 will be "the last of IBM's Micro Channel [bus] products," says Cole, adding, "we are planning all our future systems in PCI."

According to AIX business strategy program director, Bill Sandve, the S70 machines will be priced in the $100,000 to $150,000 range and aimed squarely at Sun's Ultra Enterprise 5000 and 6000 servers. Stressing price performance as a selling point, Sandve notes, "we really think we've designed it to be a well balanced scalable platform to last for years."

IBM's RS/6000 model S70

One example of how the S70 is expected to grow lies in its CPU packaging. Four processor-protected circuit boards, called "books," can be installed in the S70, which means that it can be purchased in four-, eight- or 12-processor configurations. Johnson says that within 12 months when IBM's next-generation "North Star" chips come to market, the memory books can be swapped out for more powerful CPUs. North Star is expected to run in the 250-MHz range.

The S70 will support up to 16 GB (gigabytes) of main memory in the form of 1-GB memory cards. Next year IBM plans to come out with 2-GB memory cards that could also be swapped into the system. In fact, the S70 has room for 20 memory cards (though it has, at this point, only been "tested" for 16), which means main memory could go up to 40 GB.

The systems will have up to four I/O drawers, each with five 64-bit and nine 32-bit PCI slots.

The model 397 will ship with 128 MB of memory, a 4.5 GB internal disk, four Micro Channel slots and its S-6 memory SIMS will boast 2.56 GB/second of memory bandwidth. Pricing will start at $30,000.

--Robert McMillan, SunWorld

IBM, Cisco, others form alliance to link Web and mainframes

San Francisco (October 1, 1997) -- Four industry heavyweights yesterday announced the formation of a non-partisan alliance to tackle the issue of integrating corporations' old-style data centers with their TCP/IP-centric intranets.

The nimbly named "SNA-Capable Intranet" Alliance, composed of Cisco Systems Inc., IBM, Electronic Data Systems Corp., and OpenConnect Systems Inc., will hold its first meeting October 8th in Atlanta, to coincide with the Networld+Interop exposition.

The goal of the alliance is to develop, standardize, and promote solutions for integrating data centers -- ranging from mainframes to IBM AS/400 minicomputers -- with company intranets.

The alliance estimates that 70 percent of corporate information and applications reside within traditional data centers, as opposed to the Web servers hosting the companies' growing intranets. The alliance aims to help customers identify and evaluate technologies for extending their intranet to include data center resources.

An SNA (Systems Network Architecture)-capable intranet will support unrestricted SNA/APPN-based application access, database management, or data transfer across a standard Web server-based and TCP/IP-centric intranet.

The alliance will offer further details of its plans at a press conference following the Atlanta meeting.

--James Niccolai, IDG News Service, San Francisco Bureau

Cisco, HP drop Ethernet switch prices

Boston (September 30, 1997) - Cisco Systems Inc. and Hewlett-Packard Co. both announced price cuts today for 10/100 Ethernet switches.

Cisco said it is slashing the price on its Catalyst 1900/2820 Ethernet switches by 50 percent and also announced new switching products. HP said its 30-percent price cut makes its 10/100 switch the most inexpensive on the market.

Both companies issued statements saying the price cuts are indicative of their commitment to making costs more affordable for small- and medium-sized businesses that are moving to more advanced switching technology.

Analysts expect more cuts will follow in the highly competitive Ethernet switch market.

"We see further very brutal competition in the Ethernet switch arena," said Brendan Hannigan of market researcher Forrester Research Inc. in Cambridge, MA. "For users this is really fantastic because they're going to get really high-performance, high-function switches at very competitive and continually falling prices."

He said that Ethernet's future is "really bright" and that Forrester encourages companies of all sizes to move in that direction because of the speed of the technology in both backbone and desktop applications.

HP's latest price cuts are effective tomorrow and will leave the price range in the AdvanceStack line from $499 to $1,999. HP cut prices on another line of switches on Sept. 2.

Cisco said that its price reductions are aimed at helping small- and medium-sized businesses afford the move from basic hub connections to more advanced switching technology.

The existing Cisco Catalyst 1900 switch now will start at a price of $74 per port. A new version of the Catalyst 1900 and the 2820 Enterprise Edition switch will start at a price of $99 per port.

Cisco's new products include four advanced modules for its Catalyst 5000 series, the Catalyst 2926, improvements to the Catalyst 2901, and new versions of the Catalyst 1900 and 2820.

--Nancy Weil, IDG News Service, Boston Bureau

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