NeXT, Hewlett-Packard Announce Partnership

As expected (TST, May 17), NeXT Inc. and Hewlett-Packard Co. have formed a marketing and development partnership to make the NeXTstep operating environment available on H-P's RISC workstations by the middle of next year. In announcing their new relationship, the two vendors singled out the financial services industry, including the trading room, as the market where they expect to do the most selling.

The deal--which involved no exchange of cash or equity--comes some three months after NeXT pulled out of the hardware business to become a software vendor (TST, Feb. 22). The vendor quit the hardware market because of poor sales: While NeXT had managed to convince some that NeXTstep could increase systems-development efficiency, few were willing to commit to taking the NeXTstation. Other firms that did commit were quick to abandon it when problems arose concerning lack of interoperability, nonconformity to standards and off-the-shelf applications that turned out to be vaporware. (Recall Mobil and mc2; TST, Feb. 8.)

NeXT and H-P have dubbed their new collaboration Object Enterprise--with "object" being what NeXT brings to the table and "enterprise" being what H-P ponies up. According to NeXT's chairman, president and CEO, Steven Jobs, the concept is to combine NeXT's object-oriented communications and programming environment with H-P's expertise marketing enterprisewide systems to corporate clients. Plans call also for the two to sell one another's products, and to jointly advertise and hold seminars.

NeXT announced the deal with H-P with much fanfare at the NeXTWorld conference in San Francisco. After the traditional Steve Jobs dog, pony and light show, a Q-and-A session was held, featuring Jobs and H-P financial services marketing director Ruann Earnst, as well as Chicago Research & Trading Corp.'s John Cavalier, Swiss Bank Corp.'s Dwight Koop and SHL Systemhouse's Jim Burns. CRT and SBC are both committed firmwide users of NeXT. Systemhouse is a software house that is active in developing NeXTstep-based products for the financial industry.

The potentially most significant item on NeXT's ambitious new list of goals is called Portable Distributed Objects (PDO), and is scheduled to be delivered by the fourth quarter of next year. To be developed by NeXT in collaboration with H-P, PDO is a software layer that allows H-P workstations and servers running NeXTstep to communicate with H-P workstations and servers running H-P's UX version of UNIX but not NeXTstep.

PDO could improve NeXT's, and H-P's, ability to sell to trading rooms. For one thing, it will allow NeXTstep users to call on processes running on higher-powered servers directly, using NeXTstep objects. Currently, that's not possible: A NeXTstep user wishing to design a program that calls on processes running on a higher-powered server--say, a Sun SPARCstation--would have to use traditional UNIX programming procedures to do so.

For H-P, the ability to offer the NeXTstep development environment to some, but not all, of a firm's traders--without forcing anybody to give up functionality--is a nice bit of value-added.

Meanwhile, for NeXT, PDO represents a way for the vendor to propagate its objects around a given network--without having to convince every client on that network to run the complete NeXTstep environment. Such a foot in the door also gives NeXT the hope of selling more and more NeXTstep licenses within a given firm as non-NeXTstep users observe NeXTstep users and, presumably, are impressed enough to demand the system for their own desktops. Or so NeXT hopes.

What's more, PDO--and the Object Enterprise collaboration itself--speaks directly to what some believe is the most useful application of object orientation: Not simply to apply objects to programming, but to use them as a means of simplifying communications in a distributed environment.

In teaming with H-P, NeXT has also put itself under pressure to comply with the range of industry standards to which H-P religiously adheres. NeXT has now committed to integrate NeXTstep with Open Software Foundation's Distributed Computing Environment (DCE) and Distributed Management Environment (DME), as well as Object Management Group's Common Object Request Broker Architecture (Corba).

In addition to the Object Enterprise collaboration, NeXT also announced last week the intention of another handful of PC vendors to carry NeXTstep for Intel Corp.'s 486-based microprocessors--Digital Equipment Corp., Compaq Corp. and NCR Corp. In April, H-P, along with Dell Computer Corp., Epson America Inc., Data General Corp., NEC Technologies Inc. and Siemens Nixdorf Information Systems AG all said that they would carry NeXTstep for Intel.

It's too soon to tell whether the new relationship between NeXT and H-P will yield concrete results for either vendor. Many computer industry pundits have already written off NeXT, declaring its plans to take on even a slice of Microsoft Corp.'s turf unlikely to succeed. They also continue to cite imminent stiff competition from other object-oriented software systems.

And that may be true, as far as it goes: For NeXT to compete now with Microsoft in the market at large is a tough challenge. But the H-P alliance, with its frank emphasis on financial services, suggests that that's not really what the vendor's intention is.

Jobs appears now to have deferred such large ambitions. The man has a theory: As desktop publishers once drove the development and spread of graphical user interfaces, so trading systems programmers will now drive the development and spread of object orientation. Jobs thinks that trading room system designers--people who have ultra-fast development cycles to contend with but, increasingly, less programming know-how--represent the most obvious market for NeXTstep.

The tricky part, of course, is to convince entire financial services enterprises to buy NeXTstep based on the needs of a handful of traders. NeXT's new relationship with H-P--which has lately given trading-room market-leader Sun a run for its money--should go some way towards simplifying this task.

But NeXT must continue to watch its back: PDO is still 18 months away (and that's if it stays on schedule). Meanwhile, SunSoft's Distributed Objects Everywhere (DOE) looms on the horizon ready to solidify the SPARCstation's installed base. Also, H-P itself--playing many ends against the middle--has an object-oriented project of its own under way, not to mention the fact of its joining in a consortium to set UNIX standards.

Interestingly, despite all the zingers Jobs has directed at Microsoft, NeXT, by joining with H-P, may have found a good way to neutralize the threat of Windows NT--in the trading room, at least. While the arrival of NT could force the displacement of Suns in the trading room, H-P with its range of processors from mainframes to PCs, can go with the flow. And maybe NeXTstep running on Intel's Pentium could ride along with it.