NEXT
SECTION
Monday, April 22
(updated: 3:30 pm EST)
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IBM Unleashes Merlin's Magic
HP To Announce AssetView
Motorola Wireless Retrenches
More: Plaintree, GeoTech
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Friday, April 19
Microsoft Reports Stellar Quarter
NetFrame To Bundle Notes
AMR To Spin Off Sabre
More: Cheyenne, Intel
Thursday, April 18
Oracle, Sun, IBM Join Forces
IBM Earnings
Apple Earnings
Smith Barney Deal
More: DB Expo, SAP, Inacom
Wednesday, April 17
HP Intro Highlights DB Expo
Data Security Gets Tighter
Object-Oriented Software, Eh?
More: Cheyenne, Spyglass, Adobe
Tuesday, April 16
Gates Outl ines Windows Plan
Microsoft Demos PageView
NBC Tests MCI Video Intranet
More: Apple, Banyan, Seagate
Monday, April 22
Merlin's Magic To Be Unleashed
Tomorrow
IBM will offer the first demonstration of the next version of OS/2 Warp, code-named Merlin, tomorrow at its Technical Interchange in Nashville tomorrow and will highlight its new speech navigation capabilities.
Merlin includes an improved user interface that offers enhanced speech navigation and dictation and an updated version of Lotus' SmartCenter information-management software, according to sources close to IBM. SmartCenter allows users to store appointments and e-mail and launch frequently used applications.
The company will demonstrate the software all week to developers at the show, and will begin a beta-test program later this quarter. General availability will begin in the second half of the year.
The speech navigation technology lets users navigate menu bars, dictate memos, negotiate Web sites, and cut and paste text in word processors. It supports SoundBlaster audio boards. Pricing is not yet available.
HP Gives Customers More Control In
Asset-Management Arena
Hewlett-Packard Co. is expected today to announce an expansion t o its existing asset-management program with the release of HP AssetView, a software package that returns some asset- management capabilities back to the customer.
HP has been in the asset-management business since October 1994, when it began offering HP Asset Management Services, a program to let customers outsource all their asset-management needs to HP. But some customers remain reluctant to turn over all of their asset- management data about the network to HP. "Certain customers wanted something more tangible at their sites," says Mandeep Khera, worldwide operations manager for HP's Asset Management Operation. To meet that need, HP will begin offering as a standalone product the same tool its own Asset Management Services group uses to track assets.
With this announcement, however, HP is a newcomer in a market that's already relatively well-established. "There have been a lot of other asset-management tools available commercially for quite a while," says Doug Chandler, senior analyst at Internatio nal Data Corp., a research firm in Framingham, Mass. Chandler points out that HP is entering this market with a limited product --AssetView will only run on an HP Unix-based machine, while many software packages have already been ported to Microsoft's Windows NT. The software also works only in conjunction with a Sybase database.
HP's Khera admits the company is working to broaden AssetView's reach. Later this year, he says, HP will port AssetView to Oracle's database. In addition, the company plans to offer AssetView on NT next year. HP AssetView is available now starting at $22,000 for a one-user license.
Motorola Retrenches Its Wireless
Data Mission
Motorola is reorganizing its wireless data division, cutting back on personnel and refocusing its development efforts on vertical markets, according to Randy Battat, the division's vice president and general manager.
"We are going to skinny down the group. We'll focus on corporate and vertical markets," Battat says. Field service, telemetry, and retail are some of the areas the company will target, as well as wireless E-mail for corporate road warriors.
Battat declined to say how many employees would be axed from the division, which develops wireless modems, infrastructure equipment for wireless networks, and the Marco and Envoy Personal Digital Assistants (PDAs).
Until now, the wireless data group's efforts have largely been focused on packet radio networks. But with the proliferation of cell ular communications, Motorola sees opportunity in migrating its product line to support those networks. With the reorganization, the company is planning to adapt for digital networks its AirMobile middleware that is currently used for porting legacy applications to packet radio networks.
With the reshuffling, Motorola appears to have learned, as Apple Computer did, that a mass market for PDAs does not currently exist. Despite a marketing push and a number of third-party applications, sales of the Marco and Envoy have been paltry. Battat says Motorola is not abandoning the Marco and Envoy platforms, but that future generations will not be designed for a broad audience. One possible product that could evolve is a "low-cost wireless Web browser," Battat says.
Motorola's wireless data group is also making a push into the telephony market, developing smart phones that will be able to handle digital wireless data as well as voice communications.
Plaintree Tills Virtual LAN Soil
Plaintree Systems Inc. will announce next week three switches that provide the ability to create virtual LANs, or logical user groups. Virtual LANs are raising interest in the industry because they reduce traffic and save bandwidth by confining traffic to sets of users instead of broadcasting to the entire network.
The products include the WaveSwitch 1018 and 1216 workgroup switches with Ethernet ports and support for a variety of high-speed links, including Fast Ethernet, FDDI and, later t his year, ATM. Plaintree, of Waltham, Mass. and Ottawa, also is unveiling the WaveSwitch 4800, a heavier-duty "data-center" switch with slots for up to eight high-speed modules.
The switches can configure virtual LANs by port address, MAC (media access control) address and protocol. They can learn the identity of the various "subnets" that network administrators usually set up in IP networks and create virtual LANs accordingly.
Eric Hinden, program manager at the Yankee Group in Boston, is impressed. "If they can deliver the three types of virtual LANs they're promising, with auto-configuring, that would put them in the forefront of the market."
The WaveSwitch 1018 is priced at $4,995, the 1216 at $5,995 and the 4800 at $29,995.
GeoTek Promotes Digital Wireless
Nets
GeoTek Communications Inc. a Montvale, N.J., operator of digital wireless radio networks, is separating its equipment division into a subsidiary to market products to GeoTek partners and other carriers.
GeoTek CEO and president Yaron Eitan says the equipment division is expected to generate $400 million in revenue over the next five years. The subsidiary has not yet been named, nor has a management team been appointed, but an announcement is expected in the coming weeks.
GeoTek now operates its specialized mobile radio (SMR) networks in three marketsÑPhiladelphia, Washington, and New York. The networks operate on the 900 MHz frequency and carry voice and data, largely for dispatch and fleet management. The company announced last week that it has tripled its geographic coverage area by acquiring licenses in 42 additional markets during the FCC spectrum auction that closed April 15.
"This will give us more flexibility in planning our networks," Eitan says. The company expects to offer services in up to seven additional markets, including Boston, Miami and Dallas by year's end, and to be operating in 35 markets by the end of 1997.
Friday, April 19
Mic
rosoft Financials Raise Industry
Optimism
Microsoft reported another stellar quarter on Thursday, giving Windows software vendors and customers some reason for optimism amid widespread worries about a slowdown in PC sales growth.
For the quarter ended March 31, Microsoft had $2.2 billion in sales, a 39% increase over the same quarter a year ago. Net income totaled $562 million, up 42% over last year and boosting Microsoft's pretax profit margin to a record 86.6%. "That is the highest quarterly gross margin the company's ever had," said analyst Scott McAdams, who tracks Microsoft for the Ragen MacKenzie investment firm in Seattle.
Microsoft's fiscal third-quarter results, which matched or exceeded the earnings predictions of most analysts, may say more about the company's profitability than about the strength of the PC market, McAdams noted. He cautioned against reading too much into the figures, noting that Microsoft's software sales usually lag PC sales by about a quarter and the company is deferring some of its revenue from Windows sales for up to two years.
Mike Brown, Microsoft's chief financial officer, suggests the recent concern over slowing PC sales may be overblown, noting that Microsoft took in more revenue than ever last quarter from preinstalled software sold through original equipment manufacturer channels. The company estimates that at least 70% of PCs sold last quarter shipped with Windows 95.
Microsoft also pointed to brisk sales of Office 95 and other desktop Windows applications, which broke $1 billion in quarterly sales for the first time. Despite that record performance, Brown said he is concerned application sales could slow. "We have the issue of saturation there [in desktop applications,]" he told Wall Street analysts, noting that Office sales have received a big boost in recent quarters from Windows 95, which won't be upgraded this year. Microsoft hopes to boost application sales later this year with a new version of Office, which chairman and CEO Bill Gates confirmed this week the company plans to ship by year's end.
Microsoft did not compare its Windows 95 sales to Windows NT sales, but officials claim NT sales are growing rapidly. Treasurer Greg Maffei said Microsoft sold three times the number of Windows NT Workstation licenses last quarter as a year earlier, and four times the number of Windows NT Server licenses.
As Windows NT becomes a volume business for Microsoft, the company is no longer trying to win trophy accounts as it did with Exchange, Maffei said. Microsoft is boasting that Boeing, EDS, MCI, and Texaco have agreed to adopt Exchange as their corporate messaging system.
NetFrame Builds Scalable Notes
Servers
Lotus Notes users are about to get a big boost in scalability. NetFrame Systems on Monday will announce plans to bundle Lotus Notes with its ClusterServer 8500 series platform. The integrated system, which NetFrame calls the Notes MessageCluster, will support more than 1,500 Notes users on a single, continuously available platform.
This kind of scalability, the company said, will help reduce database replication and network traffic problems typically experienced by users who deploy multiple PC-class Notes servers. Companies generally have an average of 100 to 200 users per Notes server. But as the number of Notes servers increases throughout the enterprise, performance and availability begin to diminish.
The MessageCluster is based on 150-MHz Pentium versions of the ClusterServer, a nd is configured with Microsoft Windows NT 3.51 and Notes 4.0, which has a multithreaded architecture designed to exploit symmetric multiprocessing. It will be available in May for approximately $90 per user.
The Notes bundle follows a similar announcement made by NetFrame last December to bundle Novell's GroupWise messaging system with its ClusterServer line. The company also is expected to offer a Microsoft Exchange bundle later this year.
AMR Corp., the parent of American Airlines, will spin off its $1.6 billion computer services and travel reservations unit, Sabre Group Inc., into separate subsidiary status by the third quarter of this year. The move would position the unit for a possible sale of minority ownership and set it up for strategic partnerships with customers and other technology vendors, according to statements made Wednesday by Gerard Arpey, AMR's chief financial officer.
Both American Airlines and Sabre will benefit, said Arpey. American Airlines will unload $850 million in debt and about $400 million in leases onto the new subsidiary, and already has reduced data processing and telecomm costs by $40 million a year as part of negotiations with Sabre for a 10-year computer services contract. Sabre will have access to capital and identification in the marketplace as a technology company instead of as an airline unit, he added.
Sabre, headed by Arpey's predecessor, Michael J. Durham, posted $449 million in revenue du ring the first quarter, up 12.5% from the same quarter a year ago. While Sabre is a small fraction of AMR's total revenue for the quarter of $4.3 billion, it is a whopping 49% of pretax earnings, according to industry analysts.
AMR has been struggling for several years to expand the market opportunities for Sabre's technology prowess, and in the past has initiated talks around equity-based joint ventures with AT&T, IBM, SHL Systemhouse, and others. A source familiar with those talks, which did not result in any concrete decisions, believed that a more independent Sabre will have a better chance of forming the partnership it needs with a technology or telecomm company.
Cheyenne Sues McAfee After
Takeover Attempt
Cheyenne Software Inc. employees must be scratching their heads this week, wondering in which direction their company is headed. After beginning the week fending off a takeover bid by McAfee Associates Inc., the company now has turned around and sued the virus-protection software developer, alleging false claims about Cheyenne.
On Monday the PC LAN backup market leader announced it had received -- and rejected -- a $1 billion takeover bid by McAfee (See related story) . The reason for the rejection, according to ReiJane Huay, president, chairman, and CEO, of Cheyenne in Roslyn, N.Y., was based on skepticism over McAfee's ability to continue its current growth rate.
On Tuesday McAfee issued its own statement re emphasizing why the merger would be beneficial. With no response from Cheyenne, Bill Larson, president, chairman, and CEO of McAfee, on Wednesday held a series of public meetings wherein he referred to Cheyenne as "a diamond in the rough [with] great potential that current management can't seem to maximize," and reaffirmed his commitment to try and bring these two companies together.
That got Cheyenne's attention: Wednesday afternoon the company issued a statement where Huay said: "Cheyenne Software is not for sale and has absolutely no interest in pursuing the merger proposal by McAfee Associates." And the company did not stop there. In what may now turn into a courtroom drama, Cheyenne on Thursday morning slapped the Santa Clara, Calif., company with a lawsuit, alleging company president Larson "made numerous materially false and misleading public statements concerning Cheyenne," according to Huay.
"We are concerned that McAfee's unlawful conduct has caused and continues to cause our stockholders to buy and sell securities on the basis of the fraudulent statements," he said.
Would the companies be a good fit? Melissa Eisenstat, an analyst at Oppenheimer & Co. in New York, says yes. "Strategically, the companies' businesses are complementary as each dominates different parts of the local area network management business." But now that war has officially been waged, customers may never get the chance to find out.
Intel Introduces LANDesk For
NetWare and NT
I ntel is expected to release on Monday an enhanced version of its LANDesk Management Suite that will now let customers manage both Novell NetWare and Microsoft Windows NT servers from the same management console as well as perform management tasks over Internet links.
Intel's LANDesk Management Suite was born out of the need to manage NetWare LANs. Version 2.0, which was released in January 1995, was among the first viable offerings to provide integrated remote control, inventory, software distribution, metering, server monitoring, and other capabilities for NetWare LANs all in one product.
Monday's release of version 2.5 is designed to bring the LANDesk Management Suite beyond NetWare. "We're expanding out of the NetWare space," said Terry Dickson, business unit manager for Intel's LANDesk Group. "We're adding the ability to manage NT servers and adding key management functionality to clients attached to those servers."
Version 2.5 also supports the TCP/IP networking protocol -- the same used by I nternet traffic--which means even remote clients can be inventoried and can receive software distributions from LANDesk Management Suite.
Despite these improvements and Intel's claim of expanding beyond NetWare, LANDesk Management Suite 2.5 is still a NetWare based product: The central management console can still only run on a NetWare server. And, while company executives are quick to point to the recently added NT support, they do not say whether plans are currently underway to port the entire product to the NT platform. LANDesk Management Suite is available now, starting at $750 for a five-node license.
Thursday, April 18
Oracle, Sun, and IBM are teaming up May 20 in an effort to make the "network computer" a universal communications device for corporate customers and consumers. On that date, the trio will announce a standard set of specifications and APIs for building these devices. The companies, along with hardware manufacturers, telephone companies, and others will announce a joint effort for building the hardware, coordinating distribution, and solidifying service and support in an attempt to eventually turn the rhetoric over this next generation of computing into a reality.
In an interview with InformationWeek Online yesterday, Oracle CEO Larry Ellison said the companies are joining together to announce "an industry-agreed upon set of specifications." To create these network computers, or NCs as Oracle calls them , "you have to support a [specific] version of HTML, you have to support SQL data access, smart cards, etc. So in a sense, the NC is going to be a piece of paper that everyone agrees upon."
Ellison says he met with Sun CEO Scott McNealy yesterday morning and says Sun has agreed to participate in the standards-setting group. Sources say IBM is also on board. William "Ozzie" Osborne, general manager of The IBM PC Co.'s commercial desktops group in Raleigh, N.C., declined to confirm IBM's participation, but says the company would be interested in the group's proposed standard "if it's a valid standard." Osborne added that IBM is "a major proponent of industry standards."
Ellison says open standards are critical to the development of a network computer industry. "It will be unlike the personal computer, which was built in 1981 before the word 'open' had drifted into our vocabulary," said Ellison. "The PC is the proprietary property of one, and only one, company--Microsoft. And if you want to build PCs you must go to Redmond, Wash., and ask permission."
Oracle plans to license a portable NC operating system for Intel and other architectures, as well as its applications software to a variety of manufacturers. Several Japanese and Taiwanese companies are already interested, he said. Oracle also developed an OS with the help of Acorn Computer Ltd. for the ARM processor.
Oracle doesn't plan to sell the hardware itself, but says manufacturers will sell them in the $500 price range. Oracle will also rely on a distribution model similar to the cellular telephone industry: a network service provider will give you the device for free and charge a monthly fee for services.
"We think that is critical because universal service is essential for us to realize our goal with the NC," Ellison said. "We really want the same penetration as the television."
--Stephanie Stahl and --Brian Gillooly
IBM Reports Flat 1Q Results, Outlook
Shaky
In what officials described as uneven performance for this year's first quarter, IBM reported a 5% gain in revenue for the first three months of 1996 to $16.6 billion, up from $15.7 billion in the first quarter of 1995. That was better than expected, but the company's stock plummeted on news that the company will face big challenges in PC sales moving forward.
On the positive side, services revenue grew 31%, continuing strong growth. But at the same time, IBM officials said hardware revenue and ma rgins were disappointing, mainly due to product transitions in the System/390 and AS/400 lines. Also, there was weak demand for PCs in the U.S. and price pressures in semiconductors and storage products.
"We're on the proper course,'' says IBM chairman and CEO Lou Gerstner. "Our strategies are the right ones for a world that increasingly is turned toward what we do best -- handling large amounts of networked data on a worldwide basis.''
Hardware revenue, which includes all systems from PCs to S/390 mainframes, remained flat, software sales grew by 6%, and maintenance revenue declined by 4% from the first quarter of 1995. The gross profit margin also declined from 42.4% in the first quarter of 1995, to 40.9% in the first quarter of 1996.
IBM's first quarter results include one-time charges of $435 million for the acquisition of Tivoli Systems Inc. and Object Technology International Inc. IBM also recorded a $236 million charge for costs associated with workforce reductions, primarily outside the U.S.
Apple Copes With Massive Losses
Apple Computer exceeded its earlier estimate of second quarter losses by six percent, announcing yesterday that losses for the quarter ended March 29 totaled $740 million. Apple's sales for the quarter were $2.19 billion, down 18 percent from the comparable quarter last year.
The financial report didn't come as a surprise to analysts, who were told earlier this month to expect a loss of about $700 million and a decrea se in sales. But Apple disclosed yesterday that the company plans to lay off another 1,500 workers, in addition to 1,300 layoffs that were announced in January. As expected, Apple says it will continue to liquidate assets and outsource operations. "It seems the company is going in the right direction with some of the actions it's taking," says Todd Bakar, an analyst with Hambrecht & Quist in San Francisco. "But it's too early in the ballgame to see how things will turn out."
Apple also says it's going full bore on a plan to streamline its product offerings--a move applauded by industry observers. "Last year, Apple introduced 47 new models of Macs," says Pieter Hartsook, editor of the Hartsook Letter in Alameda, Calif. "That makes it complicated for Apple, the resellers, and the customers."
Apple CEO Gil Amelio says the company will focus on "migrating to an Internet-based computing architecture" in the coming months. "We anticipate the development of media-rich, interoperable products aimed at defi ning the computing paradigm of the information age," Amelio said in a prepared statement.
--Mary Hayes and
Compaq/Microsoft Snare Smith
Barney Deal
Tuesday's announcement of a $170 million contract with Smith Barney and its parent company, Travelers Group, signifies the biggest win yet for the three year old "Frontline Partnership" alliance between Compaq and Microsoft aimed at product fulfillment for enterprise customers. The two PC heavyweights forged their partnership in April 1 993, but the agreement has focused mostly on joint testing of products, sales presentation and seminars to corporate clientele.
"We've had a lot of wins, but none of this scale," says Ross Cooley, Compaq senior VP and general manager for North America.
The Smith Barney/Travelers deal will initially include the roll-out of approximately 500 Compaq ProLiant servers and 20,000 Compaq Deskpro PCs running on the Microsoft Windows NT operating system and BackOffice family of applications to be used throughout Smith Barney's 460 retail branch offices.
The two companies are hoping to use their success with Smith Barney/Travelers to snare more deals among the big brokerage firms. "The brokerage industry has been real blue (IBM-centric) for a real long time," says Cooley. "There's been a very high level of interest and commitment by Microsoft and Compaq in making sure this becomes a picture-book perfect installation, because we know it could be a strong reference site in the financial community."
Smit h Barney is working with a systems integrator on the implementation, according to Cooley, who declined to name the company.
The Compaq hardware and Microsoft software will replace IBM RS/6000 workstations running AIX applications when the full-scale rollout begins this September as part of Smith Barney's NextGen project. The rollout is expected to take a year to be fully implemented. NextGen is a fully integrated system of shared applications data designed to provide Smith Barney's financial consultants with immediate access to a client's profile of personal, financial or account-related information, as well as maintain more specific data to build a complete history of conversations and correspondence.
Middleware Highlights Sybase's
Universal Connectivity
Following a disappointing first quarter, Sybase hopes a flurry of new middleware products will help it get back on track.
On Tuesday at the DB Expo conference in San Francisco, Sybase executives announced 10 new or enhanced middleware products as part of a program it calls Universal Connectivity. The products include new levels of support for IBM's AS/400, MVS, IMS, VSAM, and Lotus Notes environments, as well as improved support for Oracle databases.
Sybase executive VP Robert Epstein says the new products will help the company attract new customers. Sybase estimates its middleware is currently used in 1,800 corporate sites. "We have customers who have chosen us because of [our middleware]," says Epstein.
Sybase last week (April 11) reported a $6.9 million loss for the March quarter on revenue of $234.7 million. Compared to the same period last year, revenues were up 13% and database licensing sales were up 9%, both well behind the industry average. The one bright spot was development tools, which grew 21%, based on the strength of a new release of PowerBuilder. "We feel good about our business improving over the course of the year," says Epstein.
Dawn LePore, executive VP and CIO with Charles Schwab Corp., says two of the most pressing issues facing technology managers today are building customer loyalty and managing change.
In a keynote presentation at the DB Expo conference in San Francisco, LePore said the discount brokerage is in the midst of two projects to address both concerns. This summer Schwab will introduce a service on the World Wide Web that lets customers place trades, get stock quotes, and check account balances. Later this year, the company plans to introduce Voice Broker, a service that uses voice recognition to let customers place trades in the same way they can today with a touch-tone phone.
The Web service has been in pilot test since March 29 and now has approximately 1,000 beta users. "They love it. They just want us to add more functionality, which we'll do," she says. The service will be launched in May or June.
LePore says the number of trades over Schwab's systems has grown at a compound annual grow th rate of 29% over the past five years. In the same timeframe, peak transactions have risen from 273,000 an hour to 1.5 million. "We're making a huge investment in technology," she says. "And we're not quantifying the payback on each individual piece."
LePore says a key to making it all work is to keep technology managers in touch with customer needs. Toward that end, IT staff occasionally step in during especially busy days to handle customer- service calls, says LePore.
Cornerstone Los
s Attributed to
Technology Transition
Cornerstone Imaging Inc.'s CEO blamed the rise of enterprisewide imaging system solutions for a first quarter loss of $2.5 million, compared to a profit of $1.3 million in the same quarter a year ago. The financial report, issued Wednesday, showed the quarter's revenue at $17.8 million, just slightly higher than in the first quarter of 1995, with $17.7 million, but gross margins plunged to 30.2% for the first quarter of this year from 38.8% a year ago.
The demand for enterprisewide imaging solutions, driven by groupware and Intranet technologies, is good news in the long run for Cornerstone, which makes hardware and software components for imaging, said Thomas T. van Overbeek, president and CEO of the San Jose, Calif.-based company. But in the short run, he believes, buyers are delaying decisions until technology transition strategies are clearer. Imaging has traditionally been deployed on a departmental basis.
SAP First Quarter Results Show
Strong Momentum
Despite a negative report from a leading IT research firm, enterprise software leader SAP AG yesterday reported stellar first-quarter results, with sales up 40% worldwide and 82% in the Americas division. "There is still very strong demand for our products," says Paul Wahl, chairman of SAP America.
A report by Cambridge, Mass.-based Forrester Research released earlier in April predicted SAP sales would flatten next year and head downward in 199 8. SAP had overall sales of $466 million in the first quarter, with sales in the Americas of $157 million. Profits for the quarter were $79 million, up 62% from the year-earlier period.
After a teleconference with investment professionals, several securities analysts applauded SAP's robust growth. "I don't think they've lost any momentum," says John Van De Graaf, securities analyst at Deutsche Bank in New York.
Regarding SAP's loss of some major deals to competitors, most notably Ford Motor Company to Baan Co., Wahl said SAP "will be very successful in the automotive market. But at the end of the day, you can't win all the deals," he added.
SAP officials said they expected no impact on sales as a result of the negative viewpoint expressed in the Forrester report. "I don't see any impact on our sales cycle in the U.S.," says Jeremy Coote, president of SAP America. He said SAP had signed several major customers in North America during the quarter, including John Deere & Co., Rubbermaid Inc., McKesso n Corp., and Reebok.
Providing one-stop shopping for computer hardware, communications equipment, and services is helping Inacom Corp. gain market share and increase revenue and profits despite the slowdown in PC purchasing growth, says Dave Guenthner, chief financial officer for the reseller.
In the first quarter results, reported on Wednesday, Inacom posted $642 million in revenue, up 33% from $484 million a year ago, with earn ings up 38%, to $3 million, from $2.1 million a year ago.
Product sales were 93% of revenue and 52% of earnings, says Guenthner, while services were 4.4% of revenue and 37.7% of earnings, with Inacom's communications business making up the balance.
Inacom's services business, however, was down slightly from a year ago, when it contributed 4.5% of revenue and 45% of earnings, adds Guenthner, partly because of reorganization efforts to improve nationwide delivery capabilities. At the beginning of the second quarter, on April 10, Inacom acquired Technology Express, a $48 million network integrator in Nashville, Tenn.
Wednesday, April 17
HP Unveils Web/Database Technology
At DB Expo
New tools for providing World Wide Web access to corporate databases were front and center at the opening of the DB Expo show in San Francisco on Tuesday, and Hewlett-Packard immediately capitalized on the heightened interest in this technology.
Conference director Colin White, president of Database Associates International, started off the day by predicting that Web browsers and Web servers will increasingly be used in conjunction with data warehouses, creating what he calls Web Warehouses. He was quickly proved correct. In a keynote speech, Hewlett-Packard chairman and CEO Lew Platt announced a Web-ready version of HP's Intelligent Warehouse middleware, which makes it possible to set up a secure data warehouse on the Web. "Your corporate data is like gold to your c ompany. It needs to be protected," said Platt.
Also at DB Expo, Oracle announced a number of Web-related products, including a Web-based version of Oracle Express Server, a multidimensional database, and Oracle Designer/2000 Web Server Generator, a development tool. Next week, Oracle plans to introduce Web-ready versions of its applications software.
Arbor Software Corp. announced plans to deliver in the third quarter a Web gateway for its online analytical processing (OLAP) database server. The software will make it possible for customers to access Arbor's Essbase server from a Web browser and then perform sophisticated number crunching. The company said the gateway will makes it possible to extend OLAP capabilities to a much wider group of users. "The Web was designed as a publishing medium. We want to bust through that barrier," said Kirk Cruikshank, VP of marketing for Arbor Software in Sunnyvale, Calif.
Security Dynamics To Absorb RSA
Security Dynamics Technologies Inc. and RSA Data Security Inc. announced on Monday that they reached an agreement for Security Dynamics to acquire RSA for about $200 million.
RSA of Redwood City, Calif., is one of the leading providers of public key data encryption software. Its encryption and authentication technology, used in products such as Microsoft Windows, Netscape Navigator, and Lotus Notes, is a security standard for the Internet and many private networks.
Charles Stuckey, president and CEO of Security Dynamics, said RSA's technology is an "excellent fit" with his company's user identification and authentication technology. Jim Bidzos, president and CEO of RSA, said the companies' security technology will be offered to Internet and intranet users as a package. He added that RSA will continue its existing license business as a subsidiary of Security Dynamics.
RSA, which had net income of $950,000 on sales of $11.6 million in the year ended Dec. 31, 1995, will be merged with a wholly owned subsidiary of Security Dynamics in Cambridge, Mass. On completion of the merger, expected by June, Security Dynamics will issue 4 million shares of its common stock in exchange for all of the outstanding shares of RSA.
Security Dynamics on Monday reported that its net income for the first quarter ended March 31 rose 128% to $2.6 million, on 95% higher sales of $12.2 million. The deal is subject to approval by stockholders of both companies.
Canadian Firm Leverages Object-
Oriented Technology, Eh?
Maple Leaf Foods, Canada's largest food processor, will be one of the first companies to standardize most of its business units on new object-oriented enterprise software from System Software Associates Inc. in Chicago. The Toronto food processor on April 16 signed a multimillion-dollar contract with SSA to use its new BPCS Client/Server system, which began shipping April 9.
Maple Leaf Foods will use SSA systems to manage its order-taking, manufacturing, accounting, and supply-chain act ivities. The company provides fresh and prepared meats, poultry, flours, bakery mixes, and seafood to retail, food service, industrial, and agricultural customers worldwide.
SSA's new software runs on both IBM AS/400 and Unix platforms; the food processor will use the AS/400 version. "BPCS Client/Server provides the framework for our overall information systems strategy," said George Macpherson, VP of IS at Maple Leaf Foods. One of the reasons Maple Leaf chose to go with SSA's new object- oriented system was that the company could continue to leverage its existing investment in, and expertise with, the AS/400.
BPCS is CORBA-compliant and runs on a variety of hardware, including Hewlett-Packard's HP 9000, IBM's RS/6000, and Digital Equipment's Unix servers, in addition to the AS/400. A Microsoft Windows NT version is in development. Other enterprise software companies with similar object-oriented applications suites include Marcam Corp. in Newton, Mass., and SCT Corp. in Malvern, Pa.
Cheyenne Rebuffs McAfee -- For Now
Just weeks after rumors of a takeover by Computer Associates International Inc., Cheyenne Software Inc. announced that it has received -- and rejected -- a takeover bid by McAfee. The merger deal, a proposed swap of McAfee common stock, worth about $27.50 a share, for Cheyenne stock, which is currently trading around $16, would have been worth about $1 billion.
"We believe that the transaction proposed by McAfee is n ot in the best interest of Cheyenne's shareholders," said ReiJane Huai, chairman, president, and CEO for Cheyenne in Roslyn, N.Y., in a statement issued Monday. "The timing of McAfee's proposal reveals it to be a transparent ploy designed to exploit the recent decline in Cheyenne's stock price."
But according to Bill Larson, McAfee's president, chairman, and CEO, McAfee made the exact same offer, which was also rejected, just two months ago, before Cheyenne's recent stock decline. "[Huai] said the price was too low, but showed no interest in negotiating," Larson said.
At this point, despite what each company may be seeking, the final decision will be up to the Cheyenne shareholders, who may decide that the deal is, in fact, in their best interests. Stay tuned.
Spyglass Splinters Client Software
Into Components
Spyglass Inc. is splitting its client software into pieces. The Naperville, Ill., company yesterday rolled out the Spyglass Web Technology Kit (WTK), which breaks its client technology into components that can be integrated into applications, services, or devices for the Web.
The approximately 20 components include media handlers, such as HTML Java; network level functions, such as SSL encryption; and protocols, such as FTP. They can be used by themselves or can be mixed and matched, says Dan Johnson, product manager at Spyglass.
The development kit is designed for commercial and corporate software developers, device manufacturers, and systems i ntegrators, who want to embed Web technology into their applications and products. For example, the components can be used to build Web browsers or to Web-enable existing software, such as CAD/CAM applications.
Johnson says Spyglass' approach differs from that of Microsoft, which is pursuing a similar strategy. "They are entirely focused on Windows 95. We support multiple platforms, including Windows, Mac and Unix," he says.
Available in June, the Spyglass WTK starts at $25,000, which includes 1,000 licenses and a one-year support and maintenance contract. The Spyglass WTK for the server, which was announced earlier this year, $25,000 for 100 licenses.
Adobe Targets Microsoft With Web
Publishing Tool
Adobe Systems Inc. will launch a direct challenge to Microsoft in the low-end Web publishing tools market on April 22 when it rolls out PageMill 2.0 for Windows 95, Windows NT and the Mac OS. PageMill, previously available only for the Mac, will compete directly with FrontPage, the Web authoring software that Microsoft acquired last year from Vermeer Technologies in Cambridge, Mass.
Microsoft will enjoy its head start, however: PageMill 2.0 won't be available until July. Street price is estimated at $99. In addition to the port to Windows, enhancements to PageMill 1.0 include professional level editing, layout and HTML coding features. Mac users who buy PageMill 1.0 after the April 22 launch date of 2.0 will receive a free upgrade.
Tuesday, April 16
Win 95 and NT Feature Sets On
Collision Course
Microsoft will have "synchronized," simultaneous releases of major updates to Windows 95 and Windows NT in late 1997 or early 1998, chairman and chief executive officer Bill Gates said yesterday. At that point, the two systems' feature sets will be much more similar.
The NT release, code named "Cairo," will provide an object file system based on the current NT File System as a distributed global directory system. Cairo will also incorporate Plug and Play capabilities and advanced power management features, like those in Windows 95. Additionally, the simultaneous releases of the NT Workstation version of Cairo and the Windows 95 upgrade code named "Memphis," will synchronize built-in Internet features and resolve the current incompatibility problems that force reinstallation of applications when NT 4 is installed over Windows 95. See related story Windows Pain
Gates' statements came during his keynote speech at the company's annual TechEd developers conference in Los Angeles.
Still, one analyst expressed skepticism that Microsoft can get the simultaneous Cairo and Memphis releases out by those timeframes. "I feel dubious. I feel much warmer about mid-1998 [as a more realistic shipping date]," said Dwight Davis, editor of the Windows Watcher industry newsletter in Redmond, Wash.
Gates also predicted that more than 50 million people will be using Windows 95 by the end of 1996. "We don't think NT will outsell Windows 95 for two to four years," Gates said. However, NT will move into the forefront as memory prices fall and PCs based on Intel's Pentium Pro dominate the desktop.
Microsoft Demos Internet Features
For Windows
Microsoft CEO Bill Gates and his managers yesterday showed off several new Internet features the company is adding to Windows 95 and Windows NT this year. In his keynote address to 7,000 software develop ers attending the company's week-long TechEd '96 conference in Los Angeles, Gates highlighted Microsoft's forthcoming PageView integrated browser, which will merge Internet Explorer 3.0 into the Win 95 and Win NT 4.0 user interface, letting users browse files on their hard drive or LAN from the same window they view Web sites. "It's probably the centerpiece of the Internet add on," said Gates.
Windows NT users will get a major upgrade this summer, but the Internet add-on pack may be the only upgrade Win95 users get until 1998. Microsoft won't release its next big Win95 upgrade, code- named Memphis, until late 1997 or early '98, about the same time it releases Cairo, Gates said.
Microsoft still hasn't finalized all the features of the Internet add- on pack, which will reportedly cost around $50. "The list is growing," says Yves Michali, a Microsoft program manager. For example, Michali demonstrated a personal Web server for Win 95 that Microsoft plans to bundle with the add-on pack. The personal Web s erver is similar to Microsoft's Internet Information Server for Win NT, with some new features that make up for Win 95's lack of built-in security, he says.
The personal Web server includes a new Web Publishing Wizard that Microsoft will distribute for free on its Web site, beginning with the first beta version due in May. The wizard is designed to take the hassle out of posting HTML files to a Web server, which, Michali says, many people find confusing. Users only need to know the name or http address of the Web server they are trying to reach, and the wizard does the rest. Microsoft expects the biggest use of the wizard to come from corporations looking for an easier way to let their employees post information on intranet Web servers.
NBC To Leverage MCI Network For
Video Feeds
NBC and MCI are testing a new high-speed data communications application that turns the MCI network into an outsourcing platform for more than 200 Gbytes of raw video material that NBC generates for its affiliate stations each day.
The new MCI HyperMedia service packages MCI's high-speed communications services with high-end servers, workstations, and intranet browser software to create a video intranet for NBC affiliates.
Fred Briggs, MCI chief engineering officer, estimates that companies using this strategy for storing and accessing their own information can save 25% on the cost of maintaining and upgrading corporate PCs by switching to this strategy.
And it's a trend tha t MCI is hoping to bring to others. The company says it is looking to deploy HyperMedia intranets for other user applications, including telemedicine, on-demand video training, and internal product databases.
"It's makes a lot more sense to outsource where you can have these farms of servers sitting on the MCI network," says Daniel Briere, president of TeleChoice Inc., based in Verona, N.J.
Today, NBC sends out 16 to 18 hours worth of raw video a day via satellite, but the affiliate stations only use about 20% of the material. Deploying a video-on-demand system through the MCI HyperMedia intranet, affiliates will be able to use Silicon Graphics workstations to access Sun Microsystems servers located on the MCI network in Irving, Texas. Using a sophisticated browser-like technology, the affiliates will be able to select the video they want, and download only the portion that they need.
The affiliates access the server using asynchronous transfer mode, switched multi-megabit data service or frame re lay services at transfer speeds ranging from 1.54 Mbps to 45 Mbps. NBC and MCI are running a 90-day trial of the MCI HyperMedia service with 20 NBC affiliates.
Apple's Nagel Abruptly Resigns
A top Apple Computer executive who oversaw development of the Copland operating system announced his resignation yesterday, creating a disruption that could delay Apple's delivery plans for the new Mac OS once again, say industry observers.
David Nagel, senior vic e president of worldwide research and development at Apple, resigned to become the first president at AT&T Labs. "With Nagel out of the loop, I'd be very surprised if Apple could still pull off getting Copland out in 1996," says Tim Bajarin, president of Creative Strategies, a San Jose, Calif.-based consultancy. Apple initially planned to make Copland available by mid-1996, but Apple executives said at the MacWorld Expo in January they were targeting a fourth quarter release.
Although Nagel oversaw all research and development at Apple, he brought particular expertise to the Mac OS with his knowledge of how people interact with technology. That's why AT&T tapped Nagel to head up research, application development and technical collaboration for AT&T Labs, its main research division with 1,900 employees. "Dr. Nagel is a world-class talent in the development of easy to use, 'people-centered' technologies," AT&T Chairman Robert Allen said in a prepared statement. Nagel was chief of human factors research at NASA's Ames Research Center before he joined Apple in 1988, and also holds a Ph.D. in perception and mathematical psychology from UCLA.
Coordinate.com, the recently-created Internet division of Banyan Systems, on April 22 will ink a deal with Software.com, which will include Banyan's directory services technology in its Internet mail server software.
Coordinate.com will license Banyan's StreetTalk directory software to Software.com, which it will integrate into the same Post.Office Internet mail server software that it OEMs to companies such as Netscape, NDC, and GE Information Services.
The first directory-integrated version of Post.Office, which will ship later this year, will enable intranet users to send and receive Internet mail using public address books that help speed the process of finding people and their E-mail addresses on corporate networks. StreetTalk will also allow companies to synchronize intranet directories enterprisewide.
Internet mail has yet to penetrate the corporate market mainly because of the popularity of proprietary local area network-based systems, such as Microsoft Mail and Lotus cc:Mail, and the lack of directory technology, says Eugene Lee, VP of market and business development for Coordinate.com of Burlington, Mass. But this deal, company executives say, will bring enterprise-level directory technology to the fast-growing intranet market.
"This will give corporations the ability to deploy pure In ternet messaging," says Lee. "Until now, the large majority of Internet mail users have been Unix users or consumers using an Internet service provider."
Lee adds, "Companies can now tie into an incredible amount of innovation around open standards." Ironically, the companies' deal comes at a time when Microsoft, Lotus, and others are trying to convince users to move to their next-generation E-mail systems.
Seagate Extends Backup Utilities
Seagate Sof tware, the No. 2 provider of storage management systems, on Monday released a new version of its Windows 95 backup software that company executives say is intended to make life easier for Windows 95 users.
With Seagate Backup for Windows 95 version 1.1, users will now be able to get in a desktop-based utility much more detailed information from backups, such as the ability to determine which files get skipped in a backup. Version 1.1 also includes advanced device detection.
"Many older devices don't support Plug and Play," explains Nick Blozan, business unit director for Seagate's Windows 95/NT desktop team. "We emulate Plug and Play for those devices that don't support it--so everything will look Plug and Play for the user."
But this release is only a stepping stone for more important versions expected this summer, Blozan says. Not only will Seagate come out with a follow-on to release 1.1 of the Windows 95 backup product, it is also expected to introduce Seagate Backup for Windows NT 4.0. Seagat e executives hope to differentiate the NT 4.0 backup product from those of competitors by tying it into its own server product. With the new software a user will be able to back up information from the desktop machine onto a server-based tape array or other backup media.
Users of Seagate Backup for Windows 95 1.0 can upgrade to version 1.1 at no charge; new users can buy the software for $99.
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