<tr><td valign=top><font color="#000000"><font size=4><strong><tt>Friday, July 19</tt></strong></font></font><p><font color="#000000"><font size=5><strong><tt>And Bill said: "What's a network?" </tt></strong></font><font size=4></font><font size=5><strong><tt> Acorn's Hermann Hauser</tt></strong></font></font></p>
<p><font color="#000000"><font size=5><strong>Acorn's Hermann Hauser on the NC and getting it right</strong></font><font size=4> </font><font size=5><strong>this time ...</strong></font><font size=4><br>
Hermann Hauser has probably been upbeat since the day he was born in Vienna, Austria you
don't foster 20 technology start-ups without some sort of optimistic streak. But right now, his
confidence knows no bounds. Acorn, the company he founded in 1978 during post-doctoral work
in Cambridge is about to deliver the NetStation, the technological and market prototype for the
Network Computer Alliance founded by Oracle, IBM, Sun, Netscape and Apple.<br>
<br>
Acorn lost millions last year yet on the day in December when it made a joint announcement on
the NC with Oracle, its stock nearly doubled in value. Since then, it has jumped, as Hauser notes
drily, "every time we make an announcement". US investors have persuaded former majority holder
Olivetti and Hauser himself to part with stock.<br>
<br>
The NetStation runs on ARM chips made by Adavanced Risc Machines, in which Acorn has a
43% holding. The company's processors are about to go into 3DO platforms, GSM phones and
auto engines. Things are going well and Hauser puts it all down to the forging of alliances.</font><br>
<br>
</font><font color="#400080"><strong><tt>What brings you here? An evangelism tour for the NC?<br>
</tt></strong></font><font color="#000000"><br>
An evangelism tour combined with seeing my relatives in Warkworth. I married a New Zealander and my wife and kids are
spending part of the British summer here.<br>
<br>
</font><font color="#400080"><strong><tt>I have to say I was impressed by the NetStation prototype, but it did occur to me that Acorn
has been first many times before. Do you lie awake at night worrying that you'll be first
again , but that someone else will make the money?</tt></strong></font><font color="#000000"><br>
<br>
No I don't, because I learned why we didn't capitalise on our previous firsts as much as we should have and the reason
was alliances and partnerships. I often tell the story that Bill gates was trying to sell me MS-DOS in the early 80s and I had
to say "Bill, we can't possibly take such a retrograde step, because our operating system really is an operating system and
has many features that MS-DOS doesn't have. And by the way, a little schoolboy can type 'I am Johnny' into one of our
computers and be logged on through the network to a local fileserver. They can use the same commands to get files down
from the server that they've learned with a floppy disk." And Bill's answer to that was, "What's a network?"<br>
<br>
So they were clearly far, far behind where we at the time. So the question is why is the world not Acorn compatible instead
of Microsoft and Intel compatible? And the answer is partnerships. He picked his partners much better than we did. In fact,
we didn't even think about partners because we were so successful. At the time, we were the fastest growing company
ever in the UK and we didn't think we needed partners. Neither did anybody else. Bill just had a bit of Bill luck and got the
right partner at the right time.<br>
<br>
But now we know that it is all about partnerships and so for the Network Computer we have the world's second-largest
software company, Oracle, as the lead partner. It was Larry Ellison's vision of the Network Computer that just fit like a
glove with the Acorn NetStation. Together we now have some 50 of the biggest IT companies in the world signed up to
this standard. So I'm as confident as one can be at this stage of proceedings that the NC will be a success.<br>
<br>
</font><font color="#400080"><strong><tt>I'm interested that Oracle seems to have come to you for a hardware solution, because in all
of this, amid the talk of the ARM chips and Acorn's ability to build the box, I don't hear
much about the RiscOS.</tt></strong></font><font color="#000000"><br>
<br>
You are mistaken. The Acorn NetStation runs the Acorn RiscOS. It's now called NCOS, but it's just renamed RiscOS.<br>
<br>
</font><font color="#400080"><strong><tt>So all those licensees will be running the RiscOS?</tt></strong></font><font color="#000000"><br>
<br>
Yes. Absolutely.<br>
<br>
</font><font color="#400080"><strong><tt>That's quite extraordinary. That's a very fast trip from a niche market to the mainstream.</tt></strong></font><font color="#000000"><br>
<br>
Absolutely right.<br>
<br>
</font><font color="#400080"><strong><tt>Quite apart from the technology, a crucial part of making a success of the NC would seem to
be selling it at the right price.</tt></strong></font><font color="#000000"><br>
<br>
Yes £399, including VAT, in the UK. The reason we can achieve that price point is well-known it's the ARM chip.
In this case the ARM7500fe, which is basically a single-chip computer. On the chip you have the microprocessor, the I/O
controller, the video controller, the DRAM controller. And it costs less than $30. If you were going to do that in the PC
world you'd have to find a processor somewhere between the 486 and the Pentium that alone will set you back about
$50 and then you've got to buy the rest of the chipset. Once you've got that together you're way above where we are with
the single chip.<br>
<br>
That's reason number one. Reason number two is RiscOS. We have put it on ROM for more than 10 years, and as you
probably know, operating systems don't like to be ROM'd. It's very hard to do, because if you have a bug in your
operating system, it also gets ROM'd. But because we've done that for so long, we think we know how to do it better than
anybody else. And ROMming it is key for ease of use. When you switch this thing on, it's ready faster than the TV warms
up. And ROM is a fifth the price of RAM and there is no room to have a storage device, you can't afford to have a disk in
there. So it must be in ROM and you can't do that with Windows 95.<br>
<br>
The third reason is the quality of the picture, using anti-aliased outline fonts something else Microsoft is still trying to get
right in Windows 95. We got that right five years ago.<br>
<br>
</font><font color="#400080"><strong><tt>Bill Gates put out a white paper on the NC recently and one of the things he was most
scathing about was having the OS in ROM. He said it was fatally flawed because it couldn't
be updated. What would be your response to that?</tt></strong></font><font color="#000000"><br>
<br>
Bullshit<br>
<br>
</font><font color="#400080"><strong><tt>Can you expand on that for me?</tt></strong></font><font color="#000000"><br>
<br>
Well, I've gone through the advantages. The disadvantage of course is that you can't change it or so Bill Gates would
have you believe. Of course this isn't true either. Because we've ROM'd things before, we've worked out mechanisms for
patching the OS in RAM. What Bill also doesn't tell you is that one of the standard slots in the NetStation is a ROM slot,
so if you want to do a complete upgrade, and have it done by the user, we have a thing that's very similar to a PC Card
which just plugs in and there's your upgrade. It's a cheaper, more reliable upgrade. Of course you'd only do that, say, once
a year or two. All the minor updates sit on the network the whole point of having a network computer is that the
updates sit somewhere on the server and get downloaded without you even knowing. Apart from anything else, it's also
highly resistant to virus attack. You can't alter a ROM over a network.<br>
<br>
</font><font color="#400080"><strong><tt>The NC does seem likely give a whole new meaning to the "service" function of an Internet
Service Provider. Suddenly the ISP has to provide remote storage, software maintenance and
upgrades and so on. Are there service providers in the UK who understand what's required and
are prepared to do it?</tt></strong></font><font color="#000000"><br>
<br>
They're falling over themselves. Every service provider we've talked to so far including New Zealand Telecom has
been very happy at the idea of working with us. They're delighted with the extra service requirements, because it brings in
extra revenue.<br>
<br>
</font><font color="#400080"><strong><tt>Did you talk any sort of time frame with New Zealand Telecom?</tt></strong></font><font color="#000000"><br>
<br>
No, but I wouldn't be at all surprised if it was there early next year.<br>
<br>
</font><font color="#400080"><strong><tt>What is NChannel?</tt></strong></font><font color="#000000"><br>
<br>
It is the company we have established to distribute the NetStation boxes. It's a spin-off from Acorn, to give us a presence
in the consumer electronics market, which we didn't have before. This is a consumer electronic business it's producing
something that, as the Californians say, is a great out-of-box experience. You take it of the box, plug it into the power
supply for the electrons, the telephone network for the bits, and the back of the TV set for the photons, and there you are,
you're on the Internet.<br>
<br>
The aspect to ease of use is that you've got to make the Internet itself easy to use. So you've got to have a service
component which gives people a satisfying experience the first time they go on the Internet. That's a very important part of
the solution and for that we'll need partners around the globe.<br>
<br>
</font><font color="#400080"><strong><tt>Ah ...I confess, I saw "NChannel" and thought, "Ah, they've got content too!" It does seem
that the successful NC vendor may be the one which almost gives away its box in order to
capture viewers for the content that will come through it. Sony certainly appear to be
preparing to take that path.</tt></strong></font><font color="#000000"><br>
<br>
That's exactly the strategy. You've got to have a compelling offering which is low-cost enough to hit the consumer. And if
that means subsidising the box for a while then that's what you do.<br>
<br>
</font><font color="#400080"><strong><tt>So who's going to subsidise your box?</tt></strong></font><font color="#000000"><br>
<br>
NChannel.<br>
<br>
</font><font color="#400080"><strong><tt>Who's putting up the money for NChannel?</tt></strong></font><font color="#000000"><br>
<br>
It's a start-up with venture capital finance and I put some of my own money in there because I feel this is a big opportunity.<br>
<br>
</font><font color="#400080"><strong><tt>And you recently released some of your own stock in Acorn itself?</tt></strong></font><font color="#000000"><br>
<br>
Yes, but I have 20 companies that I have started over the years that are now worth some three quarters of a billion US
dollars. These are all high technology companies and the role that I typically play is to put the team together, provide seed
finance and see them through their early growth before sending them off to fight on their own in the big wide world.<br>
<br>
</font><font color="#400080"><strong><tt>Most of those are British companied. Acorn, more than most has always been a example of
British technological prowess and values, and that of Cambridge more so.</tt></strong></font><font color="#000000"><br>
<br>
Yes, very much so. You know, I always say that Cambridge until recently was a disaster area, because it had the lowest
revenue per bright person in the western world. The revenue's not that bad there are about 700 little hi-tech companies
around Cambridge University with a combined turnover of about two billion pounds. Theres potential that we have there
because of the quality of the people who go through the university who are just as good as anyone at Berkley or
Stanford or Harvard. But we're not translating the brilliance of these technical people into revenue as efficiently as they do
in Silicon Valley.<br>
<br>
There are still two things that are missing from making Cambridge a European Silicon Valley. One is a better balance
between technology and marketing and sales. The second thing is links with the US and Silicon Valley in particular. I'm
spending most of this summer there and I'm there once every two months year-round. Whether we like it or not the IT
agenda is being defined in Silicon Valley and we just have to learn to fit in with it. And if you're not willing to do that, you're
not a player.<br>
<br>
I think the Acorn NetStation is a good example of that. It was clear that a number of big companies were ready to play in
this field, and that Oracle was going to be the lead partner, and I'm very pleased that we've managed to hook up with them.
Apart from the five founding partners of the NC Alliance Apple, IBM,Sun, Netscape and Oracle there are around
50 alliance partners. People like Mitsubishi, Funai, Olivetti, British Telecom, Deutsche Telekom ... lot of alliances.<br>
<br>
</font><font color="#400080"><strong><tt>I'm interested that you talk about the Acorn NetStation as the NC, rather than an NC. Is it
really that much of a fait accompli that Acorn's design will become the standard?<br>
</tt></strong></font><font color="#000000"><br>
There are two mantles that the Acorn NetStation has. It is the first instantiation of the NC standard But the Acorn
NetStation is also the reference design that gets licensed to everybody else. The Acorn NetStation isn't exclusive to Acorn;
it's just the first example of a Network Computer that gets licensed to Oracle or anyone else who wants to build a Network
Computer. There are 50 other companies who want to do that. And that's why we started NChannel to make sure that
there is also the Internet service part that makes the Internet easy to use. The only way this thing is going to take off is if the
end user gets a compelling experience.<br>
<br>
</font><font color="#400080"><strong><tt>There are two schools of thought about who the NC end user is initially going to be. One
says it will be the corporate market, with users operating Java-enabled NCs on a LAN and
IBM's AS/400 "thin client" is the first expression of that. The other says it will be the
consumer market. And you're picking ...</tt></strong></font><font color="#000000"><br>