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- Subject: Novell to buy Unix for $350 Million
- Message-ID: <9212230718.AA11664@ucbvax.Berkeley.EDU>
- Date: 23 Dec 92 03:42:51 GMT
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- Novell to buy Unix System from AT&T
- By John Burgess
- Washington Post Staff Writer
- (12/22/92 Page E1)
-
- In the computer software industry, most every company worries
- that its niche will draw a covetous glance from Microsoft Corp.,
- the industry's titan. Yesterday, No. 2-ranked Novell Inc.
- announced a $350 million purchase widely seen as a gambit to
- keep Microsoft at bay and perhaps drive it back a bit.
-
- Novell agreed to buy a New Jersey-based operation named
- Unix System Laboratories, where 600 people refine the venerable
- family of software known as Unix. The seller is AT&T.
-
- Provo, Utah-based Novell holds about 60 percent of the world
- market for software that links personal computer into data
- networks. But the company is rattled by plans that
- Microsoft has for next year - a new version of Microsoft's
- best-selling Windows software that has networking functions
- built right in.
-
- By integrating Unix into its software products, analysts said,
- Novell would make them more attractive. It also would raise
- the possibility of Novell advancing a bit into Microsoft's
- prime turf, "operating system" software that tells computers
- how to carry out basic operations.
-
- As more and more of the world's computers are wired together,
- the companies are engaged in a race to provide one-stop
- shopping for the complex programs that PCs use.
-
- With sales last year of $2.8 billion, Microsoft dominates the
- worlds's $1 billion-a-year market for operating systems--programs
- such as DOS and Windows that users typically see first when
- they flip on a machine.
-
- In the industry, Novell, which has sales of about $1 billion a
- year, is known as the one company that may have the swagger to
- stand up to Microsoft. Highly profitable and all but owning a
- fast-growing sector of the market, its stock has soared from
- the $3 range in 1990 to more than $30 this year. Yesterday,
- the stock dropped $1.50 to $27.25, apparently in reaction to
- concerns over the cost of absorbing the new acquisition, the
- latest in a line by Novell.
-
- Novell already has tried to challenge Microsoft in the
- Operating system market by purchasing a small company called
- Digital Research Corp., which makes an operating system
- called DR DOS, which is compatible with Microsoft's DOS but
- has had little success in the market.
-
- The Federal Trade Commission is looking at whether Microsoft's
- pricing practices unfairly exclude companies such as Novell.
- Computer trade journals have widely reported that Novell
- has discussed with other companies the possibility of
- bringing an antitrust suit against Microsoft.
-
- "Every company keeps all options open but [now] I would
- characterize us as not moving in that direction," said
- Novell Executive Vice President John Edwards.
-
- Now Novell has Unix, an advanced operating system developed
- by AT&T's Bell Laboratories in the 1960s. When AT&T got
- permission to enter the computer market in 1984, many
- people thought unix would be a major strength and find its
- way into personal computers. But Unix has remained largely
- an engineer's tool, despite glowing reviews -- particularly
- its compatibility with networks. Many people find it too
- hard to use, and it has split into a series of incompatible
- versions clustered around two major factions in the
- industry.
-
- Wall Street analysts said that if any firm can make Unix
- take off, it is probably Novell. And Microsoft's presence
- may bring the Unix industry together.
-
- "The two Unix factions will be on much more friendly terms
- now that the enemy is at the gate," said analyst David Wu
- of S.G. Warburg & Co.
-
-
-