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Computer industry chips away at operating changes; consolidation, standardization emerge as new trends.


Changes -- from store-front resellers dying off to new alliances and pledges for greater compatibility -- are stirring up the computer industry in the Southland. And each indicates a trend toward standardization or consolidation.

Some companies have taken sides in the debate over whether the Apple/IBM team or the so-called "Gang of 19" will set the technical standard for the next century. Others are creating products they think will be compatible with either standard.

For software developers, the challenge is to respond to the success of Microsoft's Windows operating system operating system (OS)

Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs.
. It's widely recognized as easy to use, and software companies know it is becoming an industry standard.

"They've got to write for Windows, whether they want to or not," said Steve Bass, president of the Pasadena IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries)  Users Group. "Everybody will be using Windows within the next five years." Bass' group of 1,300 members experiments with new software and trade experiences.

For Santa Monica-based Nantucket Corp., Windows is only one of several operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap.  with which to deal. Its software is used by others as a tool for developing applications software. Nantucket has a long-term strategy to develop its "application-development" software to serve programmers on Windows, OS/2 Presentation Manager and other operating systems, like the Macintosh.

Meantime, Nantucket is evolving its flagship product A primary product of a company, which is typically why the company was founded and/or what made it well known. For example, MS-DOS, Windows and the Microsoft Office suite have been flagship products of Microsoft. CorelDRAW is a flagship product of Corel Corporation. , Clipper, to become "thoroughly object-oriented," in the words of Nantucket Marketing Director Phil Ressler. That means it uses new generation programming technology that relies on streamlined modules for increasing a programmer's efficiency by ten-fold or more.

A different type of standardization hit computer sellers, including Merisel Inc., one of the nation's largest wholesalers, dealing in 8,000 products.

"If you look back two years," said Merisel Co-Chairman Bob Leff, "it was clearly the storefront resellers that were dominant." But the Businesslands of yesterday are becoming extinct or merging. Mass-market operations and "superstores" have moved in, like Price Club and CompUSA.

In response, Merisel set up a consumer products division with a staff of 12 and is hiring many more. And beginning this fall, several dozen contractors were hired to help push product to the new mass channels. Sales techniques had to change, because the sophistication so·phis·ti·cate  
v. so·phis·ti·cat·ed, so·phis·ti·cat·ing, so·phis·ti·cates

v.tr.
1. To cause to become less natural, especially to make less naive and more worldly.

2.
 of the retail clerk has fallen.

According to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 Leff: "We have to keep them from making mistakes. We have to say, 'Look, this inventory isn't selling. You should sent it back to us so we can replace it with something that will sell.' We do a lot more hand-holding (whereas) the traditional reseller knows what's hot."

For the superstores, Merisel must put new markings on its products, like bar-coding and stickers with retail prices.

In July, Ashton-Tate began selling its computer software products through mass-market channels, a first-ever move to satisfy a growing consumer demand at the doorstep of stores like K mart. Company executives cited projections that one in six personal computers will be purchased through mass merchants by 1994.

Ashton-Tate announced it would sell at consumer-electronic stores, office supply stores, warehouse clubs, software-only chain stores and department stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores.  nationwide. Product packaging was redesigned for the mass consumer. The new boxes include UPC (Universal Product Code) The standard bar code printed on retail merchandise, which is administered by GS1 US, Brussels, Belgium and Lawrenceville, NJ (www.gs1.org).  coding, more graphics, detailed product descriptions and larger lettering for quick purchase decisions.

The company's simpler software was offered, not its flagship dBASE line. That will continue to need support offered by traditional resellers, said a spokeswoman.

Ashton-Tate, however, has bigger concerns. It is awaiting word from the U.S. Justice Department on its pending $440 million merger with former competitor Borland International Inc. of Scotts Valley, Calif.

Recently, Borland executives disclosed that Ashton-Tate's Torrance headquarters would be closed down following the mergers completion. They estimated about 600 to 900 of Ashton-Tate's employees would get offers to stay with the company. The work force in June, when the merger was announced, was 1,600.

For Ashton-Tate employees who are retained by Borland, culture shock is in store. "The two cultures are like night and day," said former Borland contract worker W. Knox Richardson. He worked for Philippe Kahn Philippe Kahn (born March 16, 1952)[1] is an American technology innovator and entrepreneur, French-born, known as the founder of Borland, a producer of software development tools for as well as Starfish Software, the creator of the first wireless synchronization , Borland's flamboyant founder, chief executive -- and professional musician.

Frenchman Kahn, a world-class sailor, founded his company eight years ago while he was still awaiting U.S. citizenship. He has provided tennis courts for his employees and encouraged jogging through nearby redwood forests, as well as graveyard shifts for software developers who covet cov·et  
v. cov·et·ed, cov·et·ing, cov·ets

v.tr.
1. To feel blameworthy desire for (that which is another's). See Synonyms at envy.

2. To wish for longingly. See Synonyms at desire.
 solitude. "I've taken major business (contacts) in to see Philippe, and he's in a T-shirt and jogging shorts," said Richardson.

Far more conservative is Ashton-Tate, whose chief executive is former IBM manager William P. Lyons. His attire and my-work-is-my-life stance are probably more admirable to old colleagues at Big Blue.

Overall, the buyout is indicative of a national consolidation trend among software publishers, like No. 3 Novell Inc. agreeing to buy 17th-ranked Digital Research Inc. for $80 million in stock. No. 1 Microsoft Corp. raised its market share to 25 percent last year from 16 percent in 1985. Joining Lotus Development, Novell Inc. and WordPerfect, the big four control 54 percent of the market.

That might be good news to business owners who are uneasy buying software from many companies. Compatibility might be gained, at the expense of eager start-up firms.

An exception is Santa Monica-based Quarterdeck Office Systems Quarterdeck Office Systems, later Quarterdeck Corporation, was an American computer software company. It was incorporated in 1982. Their offices were initially located in Santa Monica, California and later in Marina Del Rey, California. , a roaring success on Wall Street. It may be the hottest high-tech concern in the nation to go public recently. Shares doubled in price since they were first sold over-the-counter in mid-June at $10. The stock has surged past $20. Quarterdeck (Quarterdeck Corporation, Marina del Rey, CA) A pioneering software company, founded in 1983, that offered a variety of utilities, diagnostics, connectivity and Internet products for the PC and Macintosh.  products enhance Microsoft's DOS software, the basic operating system (operating system) Basic Operating System - (BOS) An early IBM} operating system.

According to folklore, BOS was the predecessor to TOS on the IBM 360 and it was IPL'd from a card reader. It may have been intended for very small 360's with no disks and limited tape drives.
 in about 70 million PCs worldwide.

There are plenty of exceptions, too, to the standardization trend.

Many businesses continue to move away from IBM and DEC mainframes as their core computers. Instead they set up decentralized de·cen·tral·ize  
v. de·cen·tral·ized, de·cen·tral·iz·ing, de·cen·tral·iz·es

v.tr.
1. To distribute the administrative functions or powers of (a central authority) among several local authorities.
 networks of personal computers, or more high-powered workstations. Many find they can process data faster, store more and pay less for the systems.

The trend has played into the hands of several Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850.  manufacturers, especially Micropolis Corp., which makes high-end disk drives that gobble up Verb 1. gobble up - eat a large amount of food quickly; "The children gobbled down most of the birthday cake"
garbage down, shovel in, bolt down

eat - take in solid food; "She was eating a banana"; "What did you eat for dinner last night?"
 torrents of data. The Chatsworth company responded in October by unveiling a product for networkers, called Raidion. This is a "disk array," essentially a string of between three and 28 individual disk-drives to store a maximum of 47 billion characters of information.

The disk drives work in parallel fashion with redundant memories to bail out users when the drive "crashes."

"The biggest concern most companies have is loss of data," said Micropolis marketing consultant Bill Reed. Raidion relies on a duplicative technology called RAID, Redundant Array of Inexpensive Disks Redundant Array of Inexpensive Disks - Redundant Arrays of Independent Disks . The "daisy-chain" disk-drive set-ups retail for between $5,000 and $175,000. They are designed for networks running Novell software, which commands about 80 percent of the networking market. Pre-orders totaled more than $1 million.

American Airlines American Airlines

Major U.S. airline. American was created through a merger of several smaller U.S. airlines and incorporated in 1934. It continued to buy the routes of other airlines, becoming an international carrier in the 1970s; its routes include South America, the
 and other big businesses have given up mainframes for such networking systems.

Those companies often buy "parallel processing" computers, the likes of which Teradata makes. While that El Segundo company has pulled out of its sales and earnings slump from last autumn, it faces a new challenge with its top development partner, NCR (NCR Corporation, Dayton, OH, www.ncr.com) A technology company specializing in financial terminal transactions, retail systems and data warehousing. Until the late 1990s, NCR was heavily invested in the hardware side of the industry, known worldwide as a major manufacturer of computers  Corp.

Teradata was given 60 days to consider ending its joint venture with NCR without any penalties, under the merger terms between NCR Corp. and American Telephone & Telegraph Co. The latter is Teradata's prime customer, and the union created a ticklish tick·lish  
adj.
1. Sensitive to tickling.

2. Easily offended or upset; touchy.

3. Requiring skillful or tactful handling; delicate: a ticklish matter.
 situation allowing AT&T a direct pipeline into Teradata's development lab. Teradata has until Nov. 19 to make a decision.

Another Teradata partner is Wyle Laboratories, which helps it assemble customized systems using components from different manufacturers. The El Segundo distributor has managed to make fiscal 1991 its best year ever in sales and earnings, despite disruption in sales channels.

"Every major computer company, including IBM, must reorganize the way they sell their products to their customers," said Wyle spokesman Van Holland. "These manufacturers can no longer afford to sell through their expensive direct sales force or support their products with huge software and service bureaucracies," he said, noting Wyle's 1991 coup with DEC. That giant manufacturer asked Wyle and two other distributors to sell DEC equipment to its top 1,000 customers in the U.S.

As for consolidation trends, Computer Sciences Corp. in El Segundo cashed in on the corporate urge to farm out computer services. CSC signed a memorandum of understanding A Memorandum of Understanding (MoU) is a legal document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action and may not imply a legal commitment.  in September with General Dynamics to provide the giant defense contractor over the next 10 years with such services as managing data centers and network operations. In the first year that should add $350 million in revenues to the $1.7 billion-a-year company.
COPYRIGHT 1991 CBJ, L.P.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Article Details
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Author:White, Todd
Publication:Los Angeles Business Journal
Article Type:Industry Overview
Date:Nov 18, 1991
Words:1421
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