• Digital’s downfall
• Digital moves into NT
• Compaq now owns Alpha
• What will Compaq do with its new asset?
• But NT doesn’t yet support full 64-bit computing
• Compaq’s five-year plan
• Galaxy

When Compaq agreed to pay £6 billion to take over Digital, there was much speculation among rivals, analysts and journalists about what exactly Compaq thought it was buying. Was it Digital’s renowned and loyal installed base, its Alpha technology or its global reach? Or more importantly, was it Digital’s NT heritage? Digital and NT have been closely connected since the earliest stages of Microsoft’s operating system. Dave Cutler, the architect of VMS, Digital’s core operating system, was lured away to Microsoft to design Windows NT. Not surprisingly, this led to some similarities in architecture between the two operating systems. But equally important have been the business pressures that have pushed the two companies closer together - or, rather, pushed Digital into Microsoft’s tailstream. By the time Cutler and the rest of the Microsoft development team had Windows NT up and running, the writing was on the wall for Digital, whose hold in the mid-range market was slipping.

Digital’s downfall

Digital had risen and risen under the leadership of its founder Ken Olsen to become the second-largest computer company in the world in the 1980s. Its fortunes were based on the superb technical engineering that had propelled forward first its PDP/11 machines and then its departmental workhorse, the VAX, powered by VMS. On the back of that, Digital had an extensive customer base and substantial businesses in many additional areas. But the seeds of its downfall had already been sown. When Unix began to take off as an alternative to proprietary operating systems, Digital failed to appreciate its importance. Olsen famously described Unix as "snake oil" - and by the time Digital got into the Unix game, its core market in VAX machines could no longer sustain the company against the inroads of open systems and PCs. The company had grown but was unable to react quickly to changing market conditions. Finally, Olsen left the company he had founded and Bob Palmer was appointed to cut staff numbers and turn the company around.

Digital did climb back into profit but not by finding a secure role within the industry, in the same way it had with its VAX sales. Instead, the company began to be pared down, with division after division being sold off until, finally, 40 years of history came to an end with Digital’s sale to Compaq early in 1998 - the largest take-over in the history of the computing industry.

Digital moves into NT

Somewhere in that process, one of the steps taken by Digital in an attempt to claw its way back to profitability was to recognise, as it had failed to do with Unix, the emergence of a new operating system. This time, of course, the new operating system was Windows NT, whose chief architect was none other than Cutler. Digital swallowed its pride and hitched itself to the NT star. Amid criticism that it had become little more than a Microsoft reseller, the company began a number of technical and marketing initiatives to bring its own products and services closer to Microsoft’s NT platform. Most important of all, it began to align its Alpha-based hardware with NT.

In 1995, Digital launched the Affinity programme and its aim was to make it easier for users to integrate VMS and NT based systems. Digital’s technicians used the many mature systems management features within VMS, or OpenVMS as it was by now styled, to make it easier for IT managers to run NT. So, for instance, OpenVMS operating system supported clustering within NT, even though NT didn’t itself feature clustering capabilities. This proved to be one of the pivotal aspects of Digital’s alliance with Microsoft and its subsequent appeal to Compaq. As Digital started to move away from VMS towards Windows NT, it began to transfer its clustering capabilities from VMS to NT. The result was a broad range of clustering features within NT running on both Intel and Alpha-based servers, as well as for OpenVMS and Digital Unix on Alpha boxes.

With Microsoft hard at work on its own NT clustering, Microsoft Cluster Server (MSCS) for Windows 2000 Server (formerly Windows NT Enterprise edition), Digital’s clustering capabilities were, not surprisingly, attractive.At this time, Microsoft was working on clustering with fault-tolerant specialist Tandem. When first Tandem and then Digital were taken over by Compaq, it put the former PC and server company into pole position to develop NT’s clustering capabilities for a huge range of hardware.

That position was underlined in September, when Microsoft agreed to license parts of the Tandem’s Nonstop Kernel and Digital’s OpenVMS to increase the resilience and scalability of NT. The deal covers clustered transactional and recovery services, remote mirroring technology for improved disaster recovery and clustered file system infrastructure and management.

Compaq now owns Alpha

Digital’s clustering capabilities were obviously a clear attraction for Compaq. However, clustering is just one part of the equation. Compaq has also acquired Digital’s top end, 64-bit Alpha servers and processors. As the merger has settled down, there have been mixed opinions from outside the two companies about what Compaq would do with the Alpha processors. When the take-over was announced, Compaq President and Chief Executive Officer Eckhard Pfeiffer said Compaq was committed to investing in Digital’s "strategic assets", in which he included its worldwide customer service business and its 64-bit Alpha chip business.

Since that time, doubts have been expressed by some over the real level of Compaq’s commitment to the Alpha chip, but Digital itself remains bullish about the prospects for Alpha. Here too, Digital has positioned itself in a close alliance with Microsoft. In January, the two companies announced a technical deal to develop Windows NT for Digital’s top-end, Alpha-based SMP servers, due out early in 1999. This gives Microsoft access to the high-end corporate server market and plays to Digital’s strengths as a high-performance platform for NT. Digital also has its feet firmly in the 64-bit Unix world, where it is one of the biggest players. For some time, the key Unix suppliers, including Digital and SCO, have been discussing creating a 64-bit Unix standard to ward off the competition from NT to the top end Unix market. That puts Digital in something of an awkward position, given its partnerships with Microsoft, but the company maintains that it can sell both NT and Unix.

Digital is bullish about its Unix sales, pointing out that sales of Unix on Alpha systems rose by anything up to 70% in 1997, due largely to the lead Alpha has in speed and scalability. The company also points out that its roadmap for Alpha, which was rolled out in February, emphasises its ability to get more powerful Alpha hardware out more quickly, now that Intel is manufacturing the Alpha chips.

What will Compaq do with its new asset?

So, what does Compaq plan to do with its new asset? The first casualty of the merger, apart from the 17,000 staff facing the axe (15,000 from Digital and 2,000 from Compaq) has been Digital’s PC business. Given the strength of Compaq’s PC business, Compaq has subsumed the Digital PC range into its own product line. Not all the technology has been dumped: the Digital Ultra 2000 has been renamed as the Compaq Armada 6500. Further up the product line, though, it’s a different story: Pfeiffer has said that the Digital and Tandem brands will be kept as long as possible and Digital’s chief strategy in terms of server operating systems is one of co-existence.

Richard George, Alphaserver Product Marketing Manager at Compaq, who worked at Digital for twelve years before the take-over, says the name of the game is integration. The aim is to bring OpenVMS, NT and Digital Unix closer together, not technically, but in terms of running alongside one another, so IT managers can choose where to deploy them.

OpenVMS is included in this list largely because of Digital’s huge installed customer base; Digital users have already been warned, as if they couldn’t work it out for themselves, that Compaq eventually wants them to migrate off OpenVMS and onto NT. The way forward appears to hinge on pushing Unix for top end, high capacity servers and NT on applications servers. "Things then become a lot simpler," maintains George. "It’s all about consolidation and about bringing down the cost of ownership." Despite this explicit strategy, Digital users don’t appear too unhappy with the Compaq roadmap for Digital products. In mid-October, Digital unveiled its OpenVMS Galaxy software, designed to provide substantial new features for the operating system (see box).

Galaxy is one of several development paths being followed by Digital as part of the overall goal of making it easier for Compaq’s operating systems to co-exist. Another recent announcement is support within Digital Unix for distributed password files. This, says George, is one of several moves to make Digital Unix more NT-friendly, a process that is taking place under the Affinity for Unix programme. "We’re looking, for instance, at developing a single piece of code and executables for both Unix and NT," he explains. The main market focus for this work is in developed distributed applications and web-enabled applications, as well as looking at how systems management capabilities for all three systems can be brought closer together.

There are clear advantages to Compaq in being able to run Web-enabled systems management that will encompass the wide range of hardware now owned by the company. The first step in this is widening its Insight Manager product to manage all Intel-based hardware sold by Compaq, from Alphaservers to Tandem’s Himalaya non-stop servers. "The strategy is to run all systems management through Insight Manager," says George. "So all the Digital Unix systems management software will link into the Insight Manager toolkit."

But NT doesn’t yet support full 64-bit computing

But there’s still a lot of work to be done. The most glaring problem is that NT doesn’t yet support full 64-bit computing, so it is not yet able to harness the full capabilities of the Alpha 64-bit chip. That doesn’t mean it’s not fast, says George. "With Windows 2000 (formerly NT 5.0), Alpha will support up to fourteen processors and 14Gb of memory," he comments. "As NT scales up at the top end, we’re at the pinnacle of performance and with Windows 2002 (NT 6.0), we will get full 64-bit capabilities, as well as scalability."

According to George, this is something Microsoft wants badly. "Bill Gates wants NT on that platform," he comments. "Over the next four or five years, we will be able to build on that and get up to 248 processors through switch technology. It will give Alpha significant speed advantage over anyone else." But however much Gates, and Compaq, want to see 64-bit NT up and running on 64-bit Alpha chips, there are commercial realities to cope with in the meantime. "Compaq is absolutely committed to NT, but we also recognise that companies are not going to just deploy NT," says George. "They are running mixed environments."

The view seems to be that OpenVMS and Tandem’s NonStop Kernel operating systems will be regarded within Compaq as "designer" systems, for more specialised environments, being sold alongside NT and Unix. "Realistically, the sales figures show a fairly even split between NT and Unix in the market right now," says George. According to IDG, NT and Unix have about 40% each of the worldwide server market, with proprietary systems mopping up the remaining 20%.

Compaq’s five-year plan

Earlier predictions that NT would motor on through the market, pushing its share up to more than half, have now been scaled down, acknowledges George. "The predictions on NT have been throttled back," he comments. "Customers are waiting for Windows 2000 and the millennium problem is also a factor, so things are slowing down a bit, although that may change once we’ve gone through the year 2000." Compaq has issued a five-year plan for how it intends to develop its new stable of products and operating systems. "The biggest challenge now is to execute the big plan and communicate it to customers," says George. "Our sales people have a kicking story - they just have to get it over to the customers. Within the organisation, there’s a very positive feeling."