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Compaq partners with SCO

Compaq recognizes growing sales of server computers running Unix software by partnering with SCO, the largest vendor of this type of software.

Compaq (CPQ) and Santa Cruz Operation (SCO), a leading supplier of Unix software, have signed a contract establishing a "strategic alliance" which targets large corporate customers who use the Unix operating system.

The tie-up shows that Compaq has recognized the growing customer base for its Unix servers, despite the fact that it is the largest supplier of Windows NT servers, which compete with Unix servers on many fronts.

Compaq's Unix partnership comes as Sun Microsystems is, conversely, stepping up its assault on the Windows software market, in what appears to be mutual attacks on each company's respective market strengths. (See "Sun takes aim at MS.")

Compaq and SCO explained that they are interested in corporate "enterprise" customers, a market of over 14,000 companies which typically have over 500 employees. The business segments include telephony, manufacturing, and health care, all of which depend heavily on the Unix operating system running on server computers.

In addition to enhancing efforts in the areas of joint engineering, service/support, and testing, the alliance will establish a multimillion-dollar, joint worldwide marketing fund for the promotion of enterprise solutions based on SCO UNIX and Compaq servers, the companies said.

"They are the largest SCO server vendor. Sales of [Compaq] SCO servers are rising," noted Devin Comiskey, an analyst at D.H. Brown Associates.

Indeed, 20 percent of all Compaq server sales are Unix, said Mike Perez, vice president of the server product division at Compaq.

This partnership comes as Sun Microsystems is, conversely, stepping up its assault on the Windows software market. (See "Sun takes aim at MS.")