NCR NCR announced OCCA (Open, Cooperative Computing Architecture) as its strategy for client/server computing in February 1990. This strategy involves the same types of components, services and functions described in the distributed architectures of HP, DEC and IBM for open, standards-based, enterprise-wide computing. Three products announcements have been made since February in support of OCCA: o System 3000, announced September 18, 1990 A family of scalable systems running UNIX, based on Intel 80X86 processors for desktop, workgroup and enterprise computing. The largest servers are planned to be large multiprocessors offering 100,000 MIPS. Three single processor, desktop systems are currently shipping. Refer to the Competitive HOTLINE / HP6650 (NCR3000) for more information. NCR has established 21 porting centers and is working with software vendors to modify products to run on the System 3000. o Open Networking Environment (ONE), announced October 16, 1990 A set of networking products based on the OSI model for network application services and inter-networking capabilities. Sales literature claims to simultaneously bridge or route OSI, TCP/IP, SNA, DECnet, Netware, XNS, NetBIOS, X.25, Appletalk, Ethernet, Token Ring and StarLAN. NCRNet Manager was also announced for centralized network and system management. Ships April 1991. o Cooperation, announced October 9, 1990 Software to integrate applications into a cooperative system with a consistent graphic interface. Based on HP NewWave, ships Q3 1991. To sell these new OCCA products, the NCR U.S. sales force has undergone 20,000 person hours of retraining (salesforce number not known) and they plan to sell to the highest levels of management. NCR believes that integration services will be key to the success of OCCA products. They are in discussions with eight major integrators and are developing their own consulting programs and integration services: Cooperative Support Services is a menu of 20 consulting services such as project management, systems integration, implementation assistance, etc. COOPERATION IN MORE DETAIL: Cooperation is a distributed, object-oriented software environment based on HP NewWave. It is composed of 54 software modules, some of which NCR developed themselves, such as: electronic mail, calendar; and some of which NCR licensed from third parties and modified and "glued" together. The Cooperation development effort involved 3 million lines of code and a half billion dollars in less than a year. Eleven third party products have been integrated into the Cooperation infrastructure. HP has relationships with most of the same third parties as "plug in" capabilities for NWO. Third Party Product HP has: -------------------- ------------ ------- Hewlett Packard HP NewWave X Microsoft Windows 3.0 X Saros Corporation Mezzanine X Eicon Technology SNA, X.25, SDLC X Channel Computing Forest & Trees X Gupta Technologies SQL Data Access X FutureSoft DynaComm X Fulcrum Ful/Text Mastersoft Word-for-Word Keyword MCC Coordination Technologies Smart Folders SoftSwitch Softswitch Central HP Openmail RetiX X.400, X.500 HP X.400, X.500 Like HP NewWave Office, users can create automated solutions for accessing and managing information over a LAN. But NCR also allows users to share information across multiple servers without knowledge of where information is stored. Cooperation entered beta testing at several customer sites in October, 1990. Cooperation Version 1 will run on OS/2 LAN Manager servers and on Windows clients. The promised availability date was March 1991; but is expected to slip several months. Version 1.2 will run on UNIX servers as well as OS/2 and is scheduled for the end of 1991. INDUSTRY ANALYSTS: Industry analysts praise Cooperation for its technical merits but are quite consistent in questioning whether NCR will be able to achieve market presence as a software vendor. * Stuart Woodring, Forrester: questions "whether NCR, historically a hardware company, will be able to present itself as a credible vendor of software." * Patricia Seybold: "Their big challenge will be to convince people that NCR can be a software company." HP Sales Reps have reported that NCR is fending off that criticism and turning it around and putting it back on HP. "Isn't HP, historically an instrument company--calculators and such?" We need to be able to respond with a statement of our long history in commercial computing and OIS, our leading client/server technologies and our superior computing products and support services. * Clif Conneighton, Gartner Group, predicts that the products will slip and that: "NCR will do well selling Cooperation into its traditional niches inside banking and retail." (Products, P-NCR-779, October 17, 1990) * Jim Hammons, Sierra Group: "NCR should be able to hold onto its position in installed base accounts but will have a more difficult time penetrating into new accounts." AGGRESSIVE MARKETING: NCR knows that it's one thing to conceive of and develop OCCA and that it's another to sell it: o They are advertising the OCCA strategy and products in eight full- page, glossy, color ads in the major trade and business publications. o They have trained their sales force. o An HP SR reports that NCR has sent fencing swords to CEOs as an analogy to leading edge tools which will give the customer a competitive advantage. o It is likely that NCR will discount Cooperation to win some successes. o Cooperation is being demonstrated at trade shows; most recently UNIX Expo, COMDEX and UniForum. AT&T is making a determined and well financed $6.2 billion attempt to takeover NCR. NCR considers the takeover attempt hostile and threatens a management walkout should the merger occur. What would the merged company look like, what products would be dropped or how would they change because of redundancy, how long would it take to get it all sorted out, and would it be successful in the end? NCR has "bet the company" on OCCA and Cooperation, it's senior management is highly focused and has generated significant market attention. If the AT&T takeover is successful, then NCR's senior managament will focus on survival and lose their momentum with OCCA and Cooperation. TECHNICAL DATA: - DOS 3.3 client requires 6 Mb of memory - server must be Intel 80X86-based with an IBM Micro Channel Bus and running OS/2 1.2 with 12 Mb of memory, 580 Mb disk - 12 user license costs $1,900 to $3,100 per user depending on options - 24 user license costs $1,700 to $2,500 per user depending on options NCR WEAKNESSES: * Cooperation is not shipping until mid 1991 and could be delayed. * NCR has no experience in selling or supporting office software and has no office installed base customers to migrate to Cooperation. Office is a new business for them. * NCR will support only OS/2 servers and DOS clients when it starts shipping. UNIX servers will not be supported until at least August 1991. * NCR's lack of suport for Novell NetWare limits its opportunities at the departmental level. * Although NCR is shipping three of their scalable System 3000 servers, Cooperation will only runs on OS/2. So despite their OCCA scalability rhetoric, they, like AT&T are only capable of departmental office automation solutions. * Few OS/2 applications are available * NCR has integrated 3rd party tools/products into their infrastructure. The supportability, stability and delivery of eleven third party products will be complex and is a high risk strategy for a company who has historically been a hardware vendor rather than a credible software vendor. * According to Gartner Group, NCR is going after more industries than its resources or architecture can handle. NCR's architectures do not support the engineering segment of Enterprise Computing and, therefore, fall short of enterprise computing capability for manufacturing. * NCR company, OCCA strategy and Cooperation product directions are all confused in light of AT&T's hostile takeover attempt. What would a takeover mean for NCR, OCCA and Cooperation? HOW NCR IS POSITIONING COOPERATION VS NEW WAVE OFFICE NCR tells customers that they have enhanced document management vs HP. - version control - attribute and keyword searches - document archival and restoration - content based retrieval >>>> Prior til now, they were right. But now, with WaveFront Developers HP has superior document management capability. DOS PC users as well as NewWave PC users can use the document management features. NCR tells customers that Cooperation offers multiple desktops: >>>> HP should respond: HP does not see this as significant. Similar functionality can be achieved through the use of folders. NCR tells customers that Cooperation supports a Calendar/schedular system with links to the mail system while HP does not. >>>> HP should respond: 1. The NCR calendar is OPTIONAL. 2. HP has a calendar/scheduling capability in HP Desk. 3. HP has an integrated calendar/scheduling capability from a NewWave desktop with a WaveFront Developer product. NCR tells customers that HP has no workflow automation capability. >>>> HP should respond: HP is focusing on mail-enabled and database-enabled process automation with "Smart Tools." NCR and AT&T focus their workflow automation on re- engineering organizational processes. This approach requires programming and is inflexible. HP's process automation allows end-users to automate existing processes and does not require organizational re-engineering. HP's process automation is flexible and and does not require extensive programming. HP also offers dynamic workflow through HP AIMS. NCR tells customers that HP has done no work in developing object- oriented methodologies for use by ISVs or by MIS development groups. And that the NCR Object Framework Libraries offer major development advantages over the HP tools. >>>> HP should respond: HP has a full object oriented development environment through a WaveFront product. HP STRENGTHS: * HP NWO is shipping now and has an installed base of referenceable NewWave Office customers (see customer references). HP is an experienced OIS vendor and its field teams are experienced in the OIS market. * HP NWO supports more clients and more servers than NCR. HP offers scalability and choice; supports MPE, HP-UX, 386 UNIX, and OS/2 servers and DOS, DOS Windows and terminal clients (see matrix). * HP NWO offers an enterprise-wide solution because of server scalability and richer mail capabilities. * Because of HP's client/server flexibility, users have a choice of the wider range of existing vertical market and generic applications which can be run in a NWO environment. Many more applications are available on UNIX and MPE than OS/2. * Because of HP's client/server choices, user investments in existing hardware and software are protected. * HP NWO is integrated but modular enough to allow customers to add only the third party products they need. * HP has more than 100 ISV relationships. * HP offers superior support/service and customer satisfaction over every other vendor, including NCR, and has been rated number one in the Datapro survey for seven years in a row. NCR was rated sixth in 1989 (see Datapro graph) And unlike NCR's service organization, HP's Response Center is experienced in supporting products from other vendors. * Cost of ownership for HP servers, HP-UX and HP 3000, is significantly lower than competitors, including NCR, per Sierra Group 1990. * HP NewWave requires half as much client memory (2 Mbytes) than NCR Cooperation (6 Mbytes).