Digital?s plans to bundle Netscape with the next version of its Unix operating system signifies the company?s intention to become a major player in the world of the Web. But it also signals a new maturity on the part of Digital.
In the past, the company has tried to compete head-on with its rivals, sometimes with disastrous consequences. One only has to think of the fiasco of Digital?s involvement in the PC world where its offerings ? the Rainbow, Dec Professional and the Vaxmate ? were appalling failures. Similarly, when it tried to take on IBM with a mainframe style machine, the Vax 9000, it failed conspicuously. Yet this time, Digital may have got it right.
In its report, Internet, Intranet and the Enterprise: a Review of Web Technology, consultancy Bloor Research identifies Netscape as the leading player in the field. ?Netscape is the original Internet company. It did not need to jump on to the Internet bandwagon ? it built most of it. Netscape produces a range of Internet-specific technologies and the glue that binds them into other environments.?
As each new technology develops, it attracts adherents as companies try to capitalise on emerging markets. The report points out that the move to minicomputers created Digital; Unix workstations created Sun; relational databases created Oracle, Sybase and Informix; and the PC era created Apple, Microsoft, Novell and Compaq.
It also predicts that there will be a shake-out of both PC companies and relational database suppliers. If it is true that the minicomputer created Digital, then it is also true that it attracted other companies such as Hewlett Packard, the then fledgling Data General and a host of other companies eager to jump on the Digital-led bandwagon.
The rise of the minicomputer also forced the mainframe companies like IBM and ICL to introduce minicomputers to counter the upstart suppliers which challenged their mainframe dominance.
But the report suggests that, because of the speed with which the Internet has taken off, there will not be time for other companies to emerge to challenge Netscape. ?We can expect these last two groups [the relational database and PC suppliers] to be thinned out. The Internet has happened so fast that it is likely it will only create a single computer vendor of any substance ? Netscape Communications Corp.?
Digital announced last November that it planned to bundle the Netscape Fastrack Server with Unix, claiming to be the first vendor to offer a Web server bundled with an operating system. The Bloor report describes the Fastrack Server as being aimed at ?novice publishers and low-performance installations?.
Of more importance to the corporate market is the Enterprise Server, which is aimed at high-performance installations, including multiprocessing platforms. From February, Digital?s Internet Alphaserver (IAS) will include support for a new version of Enterprise Server, version 2.01, which will offer improved functionality and performance, says Digital. Customers that have version 2 will receive a free upgrade. Digital is also promising an upgrade to IAS later this year, which will offer enhanced performance.
Also last year, the company announced a series of initiatives designed to enhance the commercial use of the Internet, particularly in the field of electronic commerce. These included a public Internet kiosk designed to bring businesses into contact with high street customers; the Internet Innovators programme, to promote the work of software developers; and a startup service for Internet providers.
The Internet programme is intended to foster commercial applications on the Alpha platform by encouraging application developers to ally with Digital?s channel partners and systems integrators.
Digital has one major advantage over some of its competitors ? its ownership of the Alta Vista search engine. Digital launched Alta Vista at the end of 1995, and by the beginning of 1996 was claiming 200,000 visits a day rising to 1.2 million visits a day by May of the same year.
Alta Vista is an extremely powerful search engine, according to Clive Watts, Digital European Internet business manager. One US medical company researching DNA accessed over 20 Oracle databases with it ? in the past a full search of the databases took almost a day. ?It can now be done in seconds using Alta Vista,? claims Watts.
According to Bloor Research, there are only two Web browsers worthy of consideration: Netscape Navigator and Microsoft Internet Explorer. Netscape is the clear market leader, with some 80 per cent of the market. But Microsoft ? a long-time Digital partner ? is promoting its product as a serious rival, the report says.
With the Alpha chip, Digital undoubtedly has one of the most powerful engines on the market, but if it is to succeed in the Internet arena, it must capitalise on that power. ?The thing that must cause Digital deep concern is that the whole market is moving towards Intel for servers,? says Robin Bloor, chairman of Bloor Research.
Bloor believes that, while the Intel-based PC market will not disappear, it will no longer prove to be the cash cow that it has been for the past 16 years. Intel and many other companies see the Internet as reviving their fortunes. Companies like Sequent, Hewlett Packard, Tandem and NCR have already aligned themselves with the Intel camp.
The other factor is the future of the operating systems market. Windows NT, regarded by many as the server operating system of the future, faces challenges from IBM?s mainframe operating system, OS/390. Once viewed as the doyen of proprietary systems, OS/390, formerly MVS, has now been pronounced an open system by the decision of the Open Group to grant it certification.
Unix, the other major contender in the operating systems battle, now faces challenges from IBM on the one hand and Windows NT on the other. Even IBM is on record as saying that NT represents a major operating system platform for its hardware.
Although all the major hardware suppliers have pledged their allegiance to NT, the platform is particularly important to Digital. Digital Unix has never played a particularly important role in the company?s revenue stream, while Open VMS is gradually becoming less important.
Robin Bloor believes that ultimately there will be only one winner in the NT market among those hardware suppliers that have endorsed it. ?You don?t have to be a genius to see that only one of the suppliers is going to get the Windows NT market,? he says.
?Digital is heavily committed to NT and could get an NT life and, because Microsoft is going heavily for the Web, it could get a Web life as well.?
Bloor?s colleague and co-author of the firm?s report, Mike Norman, is not so certain that Digital can win against the other major players. The report identifies four other key players in the Internet field besides Netscape: IBM, Oracle, Sun and Microsoft.
Digital is not mentioned in the report except as the inventor of the minicomputer. Norman is not certain that Digital can take on the four heavyweights in the market ? particularly Sun ? and win. ?Sun looks very strong in the market and Digital will find it difficult to take them on,? he says. But he believes that the decision to bundle Netscape products could be an advantage to Digital.
Norman?s scepticism is shared by some Digital resellers. ?Like most things with Digital, they often have the best technology, but have difficulty getting the message across,? says Peter Derby, product marketing director for Hawke Systems, a Digital, Sun and Compaq dealer.
?Digital is not the first company in people?s minds when it comes to the Internet. Sun is the platform they have heard of and it has taken the high ground with Java. It is an uphill struggle to promote Digital. The company is making a big noise about the Internet, but it does not seem to go beyond the Digital community.?
Derby admits Digital is on to a good thing with its 64-bit Alpha chip and with Alta Vista, but questions just how many firms need the raw power of such a system.
Adrian Gale, MD of Digital distributor Metrologie, accepts that in the past Digital?s market has not been good, but believes that the company is becoming more aggressive. ?The weakness of Digital last year was that it had good products and good ideas, but it failed to get the message across,? he says.
But Digital now has a new aggressive marketing policy, according to Gale. ?Digital has introduced something called One, Three, Nine; one strategy, three tactics and nine activities. I am sure that the Internet is one of the nine,? he says.
Gale believes Digital is aware that it needs better communication with the channel. Watts confirms that 60 per cent to 70 per cent of Digital products now go through the channel. ?One of the things that Digital is trying to do is get closer to the dealers. They have asked if they can survey our dealers to find out what they think of Digital; what is good, what is average and what is bad,? says Gale.
But in addition to improving channel relations, there are some trends in the industry that could further come to Digital?s aid. The company?s troubles in recent years have not helped its perception among users in the market. Although it has begun the processor recovery, it still carries the stigma of being knocked out of the number two position in the manufacturer league table by Hewlett Packard.
Derby is convinced Digital and its channels will manage to sell the company?s Internet products into its existing base, but suggests it will be more difficult for Digital to find new customers. ?Many users have already decided on their hardware platform for the Internet and Digital will find it difficult to shift them,? he says.
Norman believes that Digital may also benefit from the move back to centralised computing which Bloor Research believes is taking place. The company believes that the Internet is partly responsible for the return to centralised processing; for the advent of a new wave of graphical user interfaces; and of a new hardware device ? the network computer or thin client ? with which to access the centralised system.
The research firm argues that the GUI is being redefined and that the PC operating system is being subsumed. ?The major function of the GUI is to enable users to navigate ? to select their next piece of work. Navigation means locating the data that you wish to work on or the program that you wish to use. Windows ? and indeed other GUIs ? are not actually good at this.
?With the advent of the Web, the need for an effective GUI increased simply because there was far more navigation that needed to be done. This gave rise to the browser ? a purpose-built GUI,? says the report.
It concludes that the browser has become both the user interface and, as far as the user is concerned, the operating system.
It may be true that Digital has the fastest chip on the market and that other suppliers are still trying to attain a 64-bit chip. But that in itself is no guarantee of success in the increasingly competitive Internet market.
Chip manufacturers tend to leap-frog each other in terms of technological breakthrough. And with every player in the market, from the mainframe suppliers down to the PC manufacturers, regarding the Internet as the technology that will restore their fortunes, Digital will become ever more dependent on its distributors and dealers.
The fact that the company is now taking soundings among its channel partners would indicate that it is aware of this situation. But the new One, Three, Nine strategy could have come too late to make any appreciable difference.
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