Apple Reference & Presen…rary 8 (Internal Edition)/Apple R&P Lib Internal v8.0.iso/3-Presentations/Apple Computer Inc./Industry Competition/ROMs/Compaq/Compaq 486 & SystemPro '89

Text File | 1990-06-24 | 14KB | 309 lines

Apple Confidential



COMPAQ'S FIRST 486 MACHINES


By:  Michael Mace, Kenneth Lim, Dave Garr, Michael Bobrowicz
Contact:  Michael Mace, Competitive Analysis/Market Intelligence.  MACE1.


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SUMMARY

On Monday, Compaq announced its long-awaited 486-based desktop computer, and a
new tower system positioned as a server.  The systems will be Compaq's first to
use the new EISA (Extended Industry Standard Architecture) expansion bus, and
are also the first vaporware announcement by Compaq in years (they won't ship
until the end of 1989).

The announcement's impact on Apple should be minimal, especially since the
products are not yet shipping.  Probably the most interesting element of the
announcement from Apple's point of view is that it underlines Compaq's drive to
be perceived as the technology leader in the PC industry.  The company is
adopting much more aggressive tactics, including product preannouncements and
performance claims that skirt the edge of believability.  We think Compaq will
act aggressively throughout 1990, although its main focus will probably
continue to be IBM and not Apple.


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WHAT WAS ANNOUNCED


DeskPro 486/25

    --25 MHz Intel 486 processor
    --Cache memory controller with 128K static RAM
    --4 MB RAM standard (expandable to 100 MB)
    --11 slots (Seven EISA and four memory expansion)
    --Connector for optional Weitek 4167 coprocessor
    --Hard drive options 120 MB to 650 MB.  1.3 GB maximum internal storage.

Price is very high:
    With 120 MB HD:  $13,999
    With 320 MB HD:  $17,499
    With 650 MB HD:  $20,499
(For comparison, a Sun SPARCstation 1 with 8 MB RAM and a 200 MB HD is about
$13,000.)

Comments:
    Performance for this system is claimed at up to three times the speed of a
25 MHz 386 system, or "15 VAX MIPS."  We think actual performance will vary
tremendously, depending on the application being used.  With the prices Compaq
quoted, we think this machine will sell in limited quantities to very
aggressive power users.


SystemPro

This is the tower server.  Configurations announced Monday include only 386
processors.  However, the company said 486 processors will be available later.

    --33MHz 386 processor
    --Machine can be configured with a second CPU
    --33 MHz cache memory controller
    --64KB cache memory (25ns)
    --4 MB RAM (expandable to 256 MB)
    --Up to 4.28 GB hard disk storage
    --Six EISA slots
    --Connectors for optional Intel 387, Weitek 3167 coprocessors.
    --Intelligent Drive Array Controller (allows user to treat several hard
drives as a single drive)

Pricing (standard features above, plus):
    --240 MB hard disk storage:  $15,999
    --420 MB hard disk storage:  $19,999
    --840 MB hard disk storage:  $25,999

No price or availability date was given for the 486 upgrades.

Comments:
    Some of the technology in the SystemPro sounds interesting.  Compaq
emphasized two elements heavily:
    --Multiprocessing.  The SystemPro uses a hybrid architecture that is
neither a backplane nor a motherboard, but somewhere in between.  The actual
processor sits on a board that plugs into one of two processor slots.  Compaq
will ship it with one or two 386 boards, with 33 MHz 486s available at some
undetermined future date (probably in the first half of 1990).  Compaq is
touting the SystemPro's multiprocessing capabilities saying that this can
double or quadruple the processing power available in the base system.
However, this applies only when the machine is used as a server running
Compaq's specific versions of SCO UNIX System V/386, Novell Netware 386 and
Compaq LanManager software.  We think it is very important for Apple to point
out that multiprocessing will probably not be accessible when the machine is
used as a standalone DOS or OS/2 box.
    --New Drive Technology.   Compaq's new Drive Arrays connect two or more
drives together into one physical and logical unit that allows simultaneous
response to multiple data requests with up to four times faster data transfer
rates.  They also support special reliability functions such as data guarding
(separate encoding for file reconstruction), "mirroring" (two copies of every
file on separate drives within a drive array), and duplexing (similar to
mirroring except across different arrays).  A "32-Bit Intelligent Drive Array
Controller" handles all of these functions and includes disk caching for even
more speed.
    The drive choices are 240 MB, 420 MB or 840 MB.  Eleven drive slots are
available with total capacity up to 4.28 gigabytes.  This amounts to massive
storage capacity for a PC, far beyond anything offered by the other major PC
manufacturers.



Other Announcements:

    --Compaq LAN Manager 386/486 is the Compaq-labeled version of Microsoft's
networking extensions to OS/2.  As such, it constitutes part of Compaq's
answer to OS/2 Extended Edition.
    --Compaq also announced that SCO Unix System V/386 will support the
SystemPro.  This will enable users to configure the SystemPro as a Unix compute
server.  This is also the only configuration that we think will take full
advantage of the multiprocessor capabilities of the SystemPro.


__________________________________
ANALYSIS:  LESS THAN MEETS THE EYE


Availability.

None of the products announced will be available until "late December."  It is
very unusual for Compaq to preannounce products.  Our guess is that volume
shipment won't come until February 1990 and possibly later depending on how
quickly Intel fixes the bugs and production problems in the 80486.  In the case
of the SystemPro, only 33 MHz speeds are supported, so it's difficult to
predict when a 486 version will be available.


Aggressive Benchmarks & Positioning.

The positioning of the DeskPro 486/25 is fairly straightforward:  It's the
ultimate power PC.  Some of the power claims for the machine are a little tough
to swallow--in particular Compaq's claim of up to 15 MIPS, which would put it
ahead of even some RISC-based workstations.

For the SystemPro, Compaq claims an amazing performance range of 8 to 40 MIPS.
The positioning of the SystemPro was a little confusing as well.  Compaq
emphasized that the system is a PC, but compared it directly to several
prominent minicomputers.  Compaq President Rod Canion said the system is "six
times faster than the DEC VAX (Model 6310) and more than three times faster
than the HP 9000 (Model 835)....Even though the SystemPro sells for about
$135,000 less than the VAX, and about $68,000 less than the Hewlett-Packard."
Compaq also claimed the system is nine times faster than IBM's AS/400 Model B30
(and in some specialized cases up to 38 times faster).

As the industry evolves, PC-based servers may eventually replace some uses of
minicomputers.  But that is a very long-term process.  For now, we think Compaq
is just hoping to tap into the growing market for PC LAN servers.  The rhetoric
about minicomputers helps Compaq position itself as a leader, and was consumed
voraciously by the press.  But the real competitors to the SystemPro today are
Unix workstations and other PC servers, not the AS/400.


____________
IMPLICATIONS


More impact on image than on sales.

Compaq's new high end machines should not hurt Macintosh sales significantly,
primarily because they won't be available in quantity until early 1990, and
because they are priced thousands of dollars higher than any Macintosh
available today.  However, increasing sales may not be the most important goal
of these machines.  Compaq is using the new machines as flagships to reinforce
its image as a technology leader (more on that below).

Because announcements like this one tend to focus customers on clock speeds and
hardware specifications, we think it's important that Apple continue to
articulate its commitment to maximizing the functionality of Macintosh, rather
than just adding features to it.


Compaq is evolving as a company.

There was a time when Compaq was content to follow on IBM's coattails.  But it
seems to be moving toward a more aggressive, leadership position.  Here are
some examples:
    --The company was a leader in creating the EISA bus to combat IBM's MCA.
    --The LTE/286 portable, announced by Compaq last month, is the first
notebook PC with a 286 and a hard disk.
    --By raising a big stink about floating-point bugs in the 486, Compaq
forced Intel to publicly acknowledge them, and forced IBM to temporarily
withdraw its 486 Power Platform product.  Although the stock analysts didn't
like the announcement, we think it was a PR win for Compaq.
    --Now Compaq announces a major new workstation-like product and doesn't
even bother with established workstations but compares it with minicomputers
instead (particularly IBM's very successful AS/400).
    --And, to get maximum impact, it preannounces vaporware products just a
week before Comdex.

In its drive for respect, Compaq seems to be creating a weird mix of IBM-style
FUD and Sun-style benchmarks.  The combination will probably produce more
aggressive behavior in 1990.  As a result, we think customers will be even more
confused next year than they are today.


Continuing trend to larger disk drives.

By announcing SystemPro and DeskPro 486 configurations with hard drive options
over 500 MB, Compaq reinforced the IBM-standard world's push toward larger and
larger drives.  Those companies focus on hard drive capacity in part because
they have few other ways to differentiate their machines.  But Compaq's
announcement will increase the focus on drive capacity.  We think it's
important for Apple to emphasize the wide range of drive options available for
Macintosh from Apple and third parties.


----------------------
Server Implications...


SystemPro raises the ante in PC servers.

The SystemPro has raised the technological bar for dedicated server hardware.
The system not only offers more power than currently available products, it
offers technological improvements as well.  The power includes 386 processors,
capability to add up to six 32-bit network interface controllers, and an 840
Megabyte 4 drive array.  The technological improvements include a co-processor
architecture running two 386/33Mhz chips (or 486s when available), synchronized
fixed disk drive array technology, and a new 32 bit intelligent drive array
controller.  No currently available PC based server can claim these kinds of
hardware specifications.


SystemPro makes IBM's servers look weak.

IBM's most comparable tower system, the Model 80-311, uses a 386 at 20 MHz, has
seven expansion slots, and a 314 MB disk.  The high-end SystemPro uses a faster
386, has more expansion slots, and offers a much larger disk drive.  The new
Compaq machine is both more expensive and more powerful.

But the current version of the Model 80 is more than two years old, and
probably approaching the end of its life cycle.  We'll need to see IBM's next
tower machine before making a final judgment.  IBM is expected to announce new
PCs very soon.

One unanswered question about both of these machines will be their performance
in a graphical environment.  As the industry moves toward graphical interfaces,
computation-only benchmarks become less relevant.  What really matters is how
the entire system responds to the user, something we won't be able to judge
until the machines actually ship.


Some help for OS/2, but not a lot

The acceptance of OS/2 and LAN Manager MAY be helped by this announcement.  The
SystemPro is positioned as a high performance server and it could appeal to
customers looking for hardware that exploits the capabilities of OS/2.  We are
skeptical of the SystemPro pulling OS/2 sales on a widespread basis, because we
believe applications, not network performance, drive acquisition decisions.


Impact on Apple:  More Customer Focus on Servers

Expect another round of questions on Apple's server strategy.  Many corporate
customers already believe (and we think correctly) that a large part of the
computing world is moving from the glass house to the desktop.  Compaq has
presented its vision of what hardware server platforms will look like as the
move takes place.  We think this is a good time for Apple to remind customers
of its server strategy.

Compaq has also added momentum to Microsoft's efforts to establish LAN Manager
as the LAN operating system of choice.  Customers and the Apple field need to
be reminded that Novell and 3Com both support Macintosh on their networks--and
that these two vendors account for 75% of the installed base of LAN operating
systems.  And obviously, Apple's efforts to evangelize support for Apple
protocols among vendors in the OS/2 and LAN Manager communities remain
important.


___
Q&A

This announcement will probably stir up some of the usual customer questions
about clock speeds and processor families, such as the following...


Q.  How will Apple respond to Compaq's announcement?

A.  Apple is committed to the Motorola processor architecture.  Although we are
not preannouncing any products, it is logical to assume that Apple will take
advantage of the 68040, a compatible member of the Motorola 68000 family, at
some future date.  It's very deceptive to make comparisons between computers
based on the Intel processor architecture and those based on the Motorola
architecture.  The chips are different, and you can't necessarily assume that a
68040 is equivalent to a '486.  Furthermore, Apple's strategy is to offer the
best personal computing experience, not just the latest chip.  In addition,
Apple does not preannounce computers the way Compaq did with its '486 products,
which won't be available in quantity until early 1990.



______________________
We welcome your feedback.  Please link us if you have any questions or
comments.