====================================================================== DEC ALPHA PC ANNOUNCEMENT SUMMARY AND ANALYSIS ---------------------------------------------------------------------- ANNOUNCEMENT SUMMARY On Tuesday, May 24, Digital Equipment Corporation announced its 150-MHz Alpha AXP-based personal computer for Windows NT, the DECpc AXP 150, touting it as "the fastest PC in the world". The DECpc AXP 150 is designed for software developers and power users. The DECpc AXP 150 comes in a minitower configuration--the same box that is used for DEC's 486-based and Pentium-based PCs. It runs the Windows NT operating system, which DEC preinstalls. Digital has announced two configurations (detailed below): * The base configuration is priced at $6,795; it's availability is gated by the availability of Windows NT, which is scheduled to begin shipping in June, but may be delayed until September. * Available immediately, and priced at $9,995, is a larger configuration that will ship with the Windows NT BETA 2.0 Release. Digital is expected to offer Alpha and Pentium PCs at the same price, allowing users to select between the two architectures depending on whether they are looking for performance or application availability. The Alpha PCs will be targeted at professional users and sold through DEC's existing channels; the Pentium PCs will also be sold through current channels, but may be sold in discount stores and other indirect channels as well. DEC's future plans are rumored to include: * A 100-MHz Alpha PC with built-in PCI local-bus support, priced at $4000 and available in Q393. The chip-level 32-bit Intel Peripheral Connect Interface (PCI) bus comes with built-in Ethernet, SCSI and graphics accelerator instead of an EISA bus, and enables Windows NT applications running on DEC's Alpha and Pentium systems to interoperate. * 2GB 3.5" disks for the AXP 150 in Q493. * Alpha laptops in Q1 94. * A 200-MHz Alpha AXP PC in H1 94. * A low-cost Alpha chip rumored to run between 66 and 75 MHz that will allow Digital to make Alpha PC clients for less than $3,000. These systems will also run DEC OSF/1 and OpenVMS in the future. BOX DETAILS The DECpc AXP 150 configurations at a glance (items denoted by an X are included in the configuration): Package: Minitower Price: $6,795 $9,995 Availability: Q393 Today Features: Processor DECchip 21064 Alpha AXP 21064 21064 Clock rate 150 MHz 150MHz 150MHz Cache Internal 8Kb instruction and 8Kb data X X External 512Kbytes X X I/O Slots 6 EISA (4 available) X X Bus speeds 33 Mbytes/sec X X SCSI types SCSI II: Adaptec 1742B high X X performance SCSI adapter (requires EISA card and slot) RAM 16 to 128MB, 36-bit SIMMs 16MB 32MB Internal Disk 245MB, 426MB, or 1GB 3.5" hard disk 245MB 426MB Drive Bays 5 expansion bays: X X 1 for removable media 3 for 5.25-inch removable media or for 3.5-inch hard disks 1 for a 3.5-inch hard disk Maximum Storage 4.2Gbytes internal; 29.4Gbytes total X X Ports 2 asynchronous serial ports X X 1 parallel port X X Monitor 1024x768 14", 16" or 19" SVGA color 14" 16" Graphics Compaq Qvision SVGA adaptor with X 1024x768 resolution at 72 Hz (Opt.) Keyboard 101-key IBM PS/2 compatible X X keyboard and 3-button mouse Backup media 2.88MB 3.5" Floppy X X Network Ethernet Adapter card X Optional hardware: 600 MB CD-ROM X Tape drive Sound board Modem Printers Operating System Microsoft Windows NT Final Beta License & X X Documentation Warranty 1-year on-site warranty X X ANALYSIS Announcement Strengths ====================== + Excellent performance and price/performance + Expandability Announcement Weaknesses ======================= -- Digital is in Turmoil and their Market Position is Weak -- Digital is a company fighting for survival, throwing all its resources at Alpha in a desperate attempt to gain back its lost market share. Digital's market position is expected to remain shaky through at least 1994, due to management changes and ongoing restructuring, and its heavy reliance on the acceptance of OSF/1, Windows NT and Alpha. On March 29, 1993, Business Week reported that so far "Digital has signed few big buyers". And industry analysts say there is lots of confusion in the field among Digital's sales reps, indirect channels, and customers. -- Mission-critical Applications Not Yet Available in Quantity -- Analysts agree that one of the primary keys to Digital's success is getting applications onto Alpha quickly; this is as true for PCs as it is for workstations. UNIX is the preferred corporate operating environment with a wealth of mission-critical engineering and scientific applications. Today there are only 275 Windows NT applications that run on the Alpha AXP platform, most of which will be available within the next three months. Using SoftPC emulation, many 16-bit DOS and Windows applications will run on Windows NT, but they cannot interoperate. Applications written for Intel platforms running Windows NT need to be recompiled and relinked--using Microsoft C/C++, the ONLY NT compiler that generates Alpha code--to run on Alpha. DEC's incomplete development environment for Alpha systems running Windows NT makes development difficult for ISVs, and deters them from developing for Alpha. So application availability will continue to be a major weak spot for Digital. HP has over 5,000 technical and commercial applications available on the HP 9000 family; 3,200 of them run on the Series 700. -- New, Unproven Alpha Hardware and Software -- Alpha is a brand new architecture, with all the bugs that accompany any new architecture. PA-RISC is a robust, state-of-the-art architecture; the 7 in PA 7100 stands for 7th generation PA-RISC! Windows NT is also new; HP-UX is a mature and stable OS. Alpha's performance depends heavily on compiler performance, and the compiler performance for Windows NT on Alpha is still unproven. HP is strong in compiler technology. We have been increasing PA-RISC performance by 60% each year, and we are well-poised to handle compute-intensive applications. The 150-MHz Alpha chip sounds more powerful than it is. Alpha's clock speeds often do not translate into real-life application performance. Digital talks a lot about Alpha's full 64-bit architecture, but there is little advantage to it today; analysts agree that broad acceptance of 64-bit standards is years away and a broad base of 64-bit compatible applications is not expected until the end of the decade. Neither Windows NT, a 32-bit OS, nor the applications available for the AXP 150 make use of the 64-bit Alpha architecture. Today, PA-RISC provides 64-bit segmented addressing to meet customers current 64-bit addressing needs. The first enhanced PA-RISC full 64-bit systems will appear at the middle of the decade, well before 64-bit applications are available and 64-bit computing becomes a broad market requirement. -- Weak, Confused strategy -- Digital has a confusing strategy. On the software side, they have continued to state that OpenVMS, OSF/1 and Windows NT would be available across Alpha systems, but the AXP 150 only supports Windows NT. And Windows NT is a 32-bit operating system running on Alpha's 64-bit hardware; there's no advantage to that. On the hardware side, Digital will offer both Alpha and Pentium-based PCs. Their current positioning on when to buy one versus the other is to buy an Alpha PC for performance and a Pentium PC for applications; who needs performance without applications! HP has a clear strategy with HP-UX and PA-RISC. HP-UX is a mature, robust, proven operating environment, with the functionality required in a real-life working environment. For customers who want to implement standards, HP-UX is an excellent choice: all the OSF DCE and DME elements are implemented on the HP platform today, as are the proposed COSE features. PA-RISC is a mature, robust, proven RISC architecture, with all the functionality required today and plans to continue to enhance that for the future. -- Poor upgradability story for DEC Intel-based PC customers -- In spite of the fact that the DECpc AXP 150 is in the same minitower package as DEC's 486-based and Pentium-based PCs, the Alpha-based CPU board and Intel-based CPU board cannot be swapped. Customers using DEC Intel-based PCs can't just call on their Digital sales rep, dealer or retailer to obtain an upgrade--for their existing DECpc systems--to the Alpha CPU. They must buy a new system. HP has an excellent investment protection program on the HP9000; whenever possible, we provide upgrade paths to allow our users to upgrade from generation to generation of our PA-RISC-based systems. IN SUMMARY * Digital is investing heavily in unproven technologies: Alpha is a new, unproven architecture; Windows NT is a new, unproven operating system. Digital is a company in a state of turmoil and change. * Digital is focusing all its resources on performance, rather than taking a more thorough approach that would ensure delivery of a complete high-quality well-designed system. Their lack of an upgrade path to the Alpha PC and their confusing software and hardware strategies are evidence of this. * Alpha still offers few mission-critical applications. * HP is coming off the heals of our best quarter ever. Computer sales are strong and growing stronger worldwide. HP is today and will continue to be the #1 RISC vendor. ---------------------------------------------------------------------- Author: Shari Zedeck, WSG Outbound Marketing