AT&T's Ties to Sun Microsystems Raise Computer Maker's Concerns Over Unix

By William M. Bulkeley
The Wall Street Journal

January 18, 1988

More than a dozen worried computer makers are protesting the increasingly tight ties between American Telephone & Telegraph Co. and Sun Microsystems Inc.

The computer companies all use Unix, an AT&T software product, as the operating system for a growing portion of their product lines. AT&T, which recently announced plans to buy as much as 20% of Sun, has said it will work with Sun to improve and standardize Unix.

Mountain View, Calif.-based Sun already is the fastest growing and most aggressive major company in the Unix field. Competitors including Digital Equipment Corp. of Maynard, Mass., and Hewlett-Packard Inc., Palo Alto, Calif., fear that Sun will have an advance peek at the direction of Unix development and a crucial advantage in designing future products.

The appeal of Unix has been that it is a standard operating system, available cheaply to anyone from AT&T. Operating systems control the basic workings of computers, and many software applications will run on all computers that use Unix.

Now, "this level playing field appears tilted toward the corner occupied by AT&T and Sun," said Mark Hatch, manager of software product marketing for Apollo Computer Inc., Chelmsford, Mass., a bitter rival of Sun in the engineering workstation market. "From a competitive point of view, that worries everybody."

On Jan. 7, a group of engineers and technical experts from several major Unix customers gathered in Digital Equipment's western regional laboratory in Palo Alto to discuss their concerns. Last week, they completed a letter to AT&T requesting a meeting with Vittorio Cassoni, the chief of AT&T's computer operations. The letter has been signed by chief executives or high-level vice presidents of the firms.

Although the letter didn't specify plans, representatives of the companies said they would like to have their own engineers participate in the design and development work with Sun and AT&T.

An AT&T spokesman said that the company hasn't yet seen the letter. He said "We're a little surprised. We're very committed to Unix being open" to all computer vendors. A spokeswoman for Sun said, "we were very surprised to hear about this meeting. We weren't invited."

The agreement by AT&T and Sun to work together to upgrade and standardize Unix was announced last fall. Unix has become increasingly popular in recent years, largely because Sun has encouraged its use in universities, and the Federal government demands it in many contract requests. However, there are several variations of Unix and work to unify them has proceeded slowly in industry standard-setting committees.

"People in the Unix community should praise the agreement," said Richard A. Shaffer, editor of Technologic Computer Letter, a New York-based newsletter. "With Sun and AT&T working together we will get a standard. (Otherwise) Unix will fall victim to OS/2," the new operating system designed by Microsoft Corp. and International Business Machines Corp.

The computer makers have grown more worried about the joint development plan since AT&T announced its investment in Sun early this month. Mr. Hatch of Apollo said that "what really raised our concern was when customers started asking, 'what is the standard Unix -- (the current version) or this new version from AT&T and Sun?.'"

Larry Lytle, a manager in Hewlett-Packard's technical systems sector, said "a lot of development work will go on behind closed doors, with one of our major competitors actively participating in the definition of the standard." He added that if some company announced a feature on a new computer, "I can see customers or the government saying, 'that's a nice idea. We'll wait and see if Sun or AT&T introduces it.'" On the other hand, he said that if the two companies add some feature to Unix that other vendors don't expect, it might take a year to catch up. "We'd always be in a response mode," he said.

Participants at the meeting said some companies were more worried than others. One said some companies suggested that if AT&T wouldn't let them participate in the development work, they might file a lawsuit charging restraint of trade. Others suggested setting up their own independent Unix development group to create a standard Unix.

Other companies signing the letter requesting a meeting with AT&T include NCR Corp., Dayton, Ohio; Unisys Corp., Blue Bell, Pa.; Data General Corp., Westboro, Mass.; Prime Computer Inc., Natick, Mass., and Tandem Computer Systems Inc., Cupertino, Calif.