Hewlett-Packard Co’s participation in the carve-up of Unix and the way it’s going about it – it’s been talking to Novell Inc for three or four months – has unloosed speculation that it may be preparing to acquire a leaner, meaner Novell at some point down the road to get into the small and medium-sized […]
Hewlett-Packard Co’s participation in the carve-up of Unix and the way it’s going about it – it’s been talking to Novell Inc for three or four months – has unloosed speculation that it may be preparing to acquire a leaner, meaner Novell at some point down the road to get into the small and medium-sized business market against IBM Corp. Then again, maybe IBM, which had been talking to Novell for months before the Lotus Development Corp merger, might step back into the picture. The Unix carve-up (CI No 2,754) has seen Novell hand UnixWare over to Santa Cruz Operation Inc in return for shares representing 17% of the enlarged equity and a revenue stream of as much as $84m between now and 2002 based on the performance of the business Santa Cruz has bought. But si nce UnixWare hasn’t been selling very well, Novell may not see much money. According to the arrangement, Santa Cruz gets all of the intellectual property connected with UnixWare, aka Unix System V.4.2, and the source code. X/Open Co Ltd continues to own the brand.
Santa Cruz is expected to continue to supply UnixWare as both a shrinkwrapped and an OEM product, as well as to continue supplying Unix System V.3 and System V.4 to the existing OEM customers. For the time being, Santa Cruz will collect the royalties on old business, subtract a commission of around 10% and pass the rest of the money to Novell. Santa Cruz, whose reputation as a development house is not exactly high-toned and caused problems in the Advanced Computing Environment even though Digital Equipment Corp was going to do most of the work, is supposed to take the UnixWare 2.1 (Eiger) code and tinker with it, merging it with the Unix V.3-based SCO OpenServer Release 5 (Comet) to create a high-volume system integrated with portable NetWare networking services – in other words revive the famous SuperNOS. It is expected to release this merged 32-bit iAPX-86-based product in 1997, precipitously close to the time when power-mad users will be thinking about the prospective 64-bit Intel-Hewlett-Packard chip and 64-bit software. Volume sales and new applications created specifically for the merged offering aren’t seen in the transition plan until April 1998. A beta version of the merged OpenServer-UnixWare stuff, along with a software migration tool kit, is due next summer. Prior to that, the company, will enhance existing product lines to include Unix 95 compliance, NetWare file, print and the like. Novell will license its NetWare Directory Services and other NetWare 4 technologies to Santa Cruz in support of the efforts. Meanwhile, at the top end, Hewlett-Packard will develop a NetWare-informed 64-bit operating system for the chip it’s developing with Intel Corp, by 1997-98. It will collaborate with Santa Cruz swapping HP-UXisms and merged OpenServer-UnixWare exensions so that Santa Cruz’s 32-bit stuff flows in some neat evolutionary path into the Hewlett-Packard work, eventually becoming a single high-volume, low-royalty operating system spanning everything from the desktop to the data centre. Santa Cruz will help commercialise it.
By William Fellows
The pair swear they are past masters at migrating the user base from system to system, without encountering the hazards Sun Microsystems Inc did going from Solaris 1 to 2. They had better be. They have a lot of divergent streams to bring together and reportedly have not worked out yet how they will manage all this collaboration. Novell and Hewlett-Packard are supposed to collaborate – with the former licensing technologies to the latter – to produce a high-performance implementation of its NetWare Directory Services and File/Print Services for HP-UX. They’re also supposed to integrate the overlapping NetWare Directory Services and Distributed Computing Environment technologies, picking what’s popular in each – like the Remote Procedure Call, Andrew File System and Kerberos security in Distributed Computing Environment and the file/print in NetWare Directory Services – and stick them together. Hewlett-Packard will
retain a basic Distributed Computing Environment for existing users, but privately admits the Environment’s CDS directory service is all but washed up. The plans to turn the Distributed Computing Environment-NetWare Directory Services combination into a commercial product are uncertain. The companies are talking to IBM about joining it and may expand the talks to include other Distributed Computing merchants. Hewlett-Packard noted that 70% of its customers are running NetWare local area networks. Hewlett-Packard is heading an architecture committee. The company’s contributions to the ultimate effort are such that it claimed last week that it would eventually fall heir to what remains of the Unix royalty stream. It is thought these royalties could currently be worth around $65m to $75m, with Hewlett-Packard and Santa Cruz still paying their shares. Santa Cruz’s portion now ceases. Meanwhile, Santa Cruz and Hewlett-Packard are also to take over some of the 400-odd Unix people, now headquartered in Florham Park, New Jersey, that Novell inherited from AT&T Corp. The Novell-Santa Cruz deal is to close by December 1. The ramifications of these arrangements, which the industry was still trying to digest as we went to press, are still unclear. Santa Cruz of course is already a direct competitor of SunSoft Inc, the only remaining entity with a Unix-on-iAPX-86 operating system and Solaris x86, already System V.4, now also includes SCO compatability, making it more dangerous to Santa Cruz. It seems that the kernel of the merged will be neither purely System V.3 or System V.4.2. It is unclear whether Intel’s OEM contingent, companies like AT&T Global Information Solutions and Unisys Corp, and even UnixWare supporters like ICL Plc, will fall in meekly behind the arrangement or whether – as some of them have suggested – they would look at it long and hard, no matter what face they put on it publicly. Hewlett-Packard recently indicated that it feels its axis with Intel will prove irresistible to second- and third-tier Unix-on-iAPX-86 players and will draw them within its thrall in the next six months, while at the same time claiming such an outcome is not strategic to it. It remains to be seen whether these players will accept an operating system, or even components, from such a die-hard competitor. It also remains to be seen what impact this arrangement has on RISC companies who appear to be left to their own devices. Sun now reckons it might get to make a run at some of the stragglers and at least it can now develop tighter alliances with Novell on NetWare. The Novell gang never bothered to brief Digital Equipment, the only company with an existing 64-bit Unix operating system, but DEC suspects the new coalition could bring new fissures to the fragmented industry.
It also suspects – and it’s hard to argue with it – that it’s buddy Microsoft Corp will become a long-term beneficiary of what’s happening here. It is ironic that Novell’s weeks of negotiating to dump Unix culminates in it passing to an archetypal industry odd couple, staid up-market inheritor of the IBM mantel, Hewlett-Packard, and the proletarian Santa Cruz, a company for which Hewlett-Packard has little taste. A definitive understanding of the business terms underlying the Novell-Santa Cruz deal wasn’t signed until 8pm Tuesday night September 19, just hours before the threesome went public with their news the following morning, under heavy security at Unix Expo, making an patched up announcement that bore all the hallmarks of having been cobbled together at the last minute, and one that conspicuously appears to serve the interests of the three principals while appearing largely to ignore those of the rest of the Unix fraternity.