Unix vs. NT

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By Neil Munro

Unix vendors are trying to evade the hordes of Microsoft developers and sales staff pursuing their turf by scaling new heights in computing performance.

But by 2000, Intel Corp.'s next generation of computer chips may help give Microsoft's NT the same performance level as Unix, squeezing out all but the strongest Unix vendors - Sun Microsystems Inc., IBM Corp. and a consortium based on Unix software developed by SCO Inc., according to an estimate prepared by Forrester Research Inc., Cambridge, Mass.

In 1996, Unix-related revenues totaled $15 billion, while NT took in only $5.8 billion, according to the Forrester report. By 2000, NT's revenue should overtake Unix, likely reaching $20.2 billion to Unix's $16 billion, said the report.

The outlook for other operating systems, such as IBM Corp.'s OS/2 and Provo, Utah-based Novell Inc.'s Netware, is even bleaker, with their demise scheduled for 1999 by the Forrester report.

NT and Unix are vital to corporate America, as well as many government users - because they enable managers to run sophisticated software applications, such as database, e-mail or order-processing software, on their office networks, companywide networks or the Internet.

"Most of our [Unix-using] customers seem to be looking at NT ... [and] we're ready" to deliver applications designed for whatever operating systems they choose, said Anne Murphy, marketing vice president for Storage Computer Corp., Nashua, N.H. The company had 1996 revenues of $31 million, earned from its sale of high-volume data storage technology.

Despite the pressure from NT, Unix vendors radiate optimism: "Microsoft talks about the future in the present tense .... Unfortunately [for Microsoft], we are not sitting still. We expect to keep our substantial lead," said Scott McGregor, senior vice president for products at SCO, based in Santa Cruz, Calif.

According to corporate user and software developers, Unix's main technical advantage over Microsoft's NT operating system is its greater data-handling ability. So even as NT takes over the market for small-scale office networks, Unix vendors say their revenues are growing rapidly as customers buy software intended to handle high-capacity databases and high-volume network servers.

"While NT's low-cost, desktop connectivity and ease-of-use are seductive, its immaturity and limited scalability make it too scary for bet-the-business applications .... [Information technology] managers are not waiting for NT to catch up [on Unix] - they are buying new Unix servers for packaged applications, data warehousing and the Internet," according to the Forrester report, released Jan. 30. The report was based on a survey of 50 infotech managers in Fortune 1,000 companies.

The federal government is following along with a slew of new computer contracts that require both Unix and NT software. For example, the Treasury Department just awarded Sylvest Management Systems Corp., Lanham, Md., a contract worth up to $500 million for computers and Unix software built by Sun. The contract is part of the department's Treasury Distributed Processing Infrastructure program, which is expected soon to award additional contracts for NT-based products.

In SCO's case, federal, state and local revenue have grown 40 percent to almost $20 million by the end of 1996, said Mike Buchko, general manager of SCO's federal unit, based in Reston, Va.

Unix and NT will co-exist for many years yet, said analysts and industry executives. A survey of 1,300 corporate infotech managers by Datapro Information Services Group, Delran, N.J., concluded that 31 percent of existing Unix managers intend to expand their Unix assets by 2000.

Jonathan Falkner, a software engineer at Comtex Information Systems Inc., based in New York, agreed with the report, saying that companies are reluctant to use NT for higher-end applications. For example, Falkner installed a Unix-based system at one power-generation company that toted up the bills incurred by its 3.5 million clients every night.


The fast- growing Internet will also spur demand for
Unix systems.

-Scott McGregor
SCO

Reasonably enough, the upper end of the market is being targeted by Unix vendors, who say the fast-growing Internet will also spur demand for Unix systems. Thus, companies seeking to sell products via their World Wide Web page must have operating systems that can deal with sudden spikes in demand or with a large volume of Web visitors. "That's the segment of the market that we believe will grow the most," said McGregor.

The arrival of Sun's Java technology - and its Microsoft counterpart - will also benefit Unix vendors because they promote network computing, said analysts. While NT was tailored for office networks, Unix was designed to handle large tasks, such as the rapid shuttling of Java-based miniapplications from one Internet site to another.

To improve Unix's performance, Unix vendors are allying in technology-sharing agreements, and are modifying their software to run on the new generation of very high-performance, 64-bit chips. Thus, SCO expects to release Unix software tailored for Intel's 64-bit Merced chips by the end of 1998.

But Microsoft executives won't concede much to Unix: "We have a better system that costs less," said Enzo Schiano, Microsoft's group manager for NT servers. NT server software outfitted to work with 10 desktop computers will cost roughly $1,300, he said.

Also, claims that NT can't handle high-end tasks are a myth, he said, adding that "the NT server is moving into the highest space." Microsoft is continually improving its software, he said. Last July, Microsoft released the 4.0 version of NT with an Internet capability, he said.

Schiano grudgingly acknowledged that Unix can perform some of the most demanding tasks better than NT; "At some level, some of the high-end Unix systems may achieve higher scalability." But the extra performance of Unix software is not worth the cost, he said.

Unix vendors can't rely on technical performance, said Falkner. "Quite often, the [corporate buying] decisions are made not on technical grounds, but on political grounds," such as technical standardization and management simplicity, he said.

Aware of this danger, Unix vendors are sharing their technology, hoping to make it easier and simpler for Fortune 1,000 companies to manage Unix software, and to spur software companies into writing more Unix-based applications. Without the confidence of users and developers, Unix vendors can expect their product to suffer the same fate as Apple Computer Inc.'s Macintosh operating system, whose sales have been battered so much by Microsoft's Windows that consumers and software vendors are increasingly reluctant to invest in a technology that seems doomed.

For example, SCO is already working with IBM and Hewlett-Packard to develop common software tools that help software developers write Unix-based application software for 64-bit chips. On Feb. 20, SCO and Hewlett-Packard Co. announced the introduction of shared technology that allows the companies' existing Unix software to operate on Intel's impending Merced chips.

This agreement reflects closer cooperation among Unix vendors, several of which have junked their own varieties of Unix in favor of SCO's Unix.

By relying on SCO's technology, Hewlett-Packard, NCR Corp. and Data General Corp. share development costs. This new technology announced Feb. 20 will also be shared with an alliance of Unix vendors, dubbed the Open Group, which was formed to promote interoperability among the different versions of Unix.


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