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Nixdorf Sees Big Future for Unix in U.S. : W. German Computer Maker Plans Expansion of Facilities, Staff

November 11, 1987|From Reuters

BOSTON — Nixdorf Computer AG, West Germany's second-largest computer company, plans to base a major U.S. expansion effort on the controversial Unix operating system, which has yet to gain wide acceptance here.

"Obviously we see a big chance in the Unix market. We think it is where the future lies in our industry," Nixdorf Chairman Karl Luft said in an interview.

Although Unix is a popular choice of European businesses, it is used in the United States mostly for scientific and engineering applications and is still a rarity in the corporate world.

But Nixdorf, in unveiling its Unix-based Targon computer in the United States last week, said the product was "aimed at commercial rather than scientific applications."

Luft cited a market research study that predicted that Unix sales in both the United States and the rest of the world will double in the next three years. "Unix will be a $16-billion worldwide market by 1990," he predicted.

Unix was developed by American Telephone & Telegraph Co. as a standardized operating system that any size computer could use, from desktop to mainframe. As conceived by AT&T, any computer using Unix could run the same software as any other, no matter who the manufacturer.

See Potential in U.S.

The operating system is the software that acts as the brains of the computer, allowing it to read programs and carry out instructions. Before Unix, most manufacturers had their own proprietary operating system or imitated those of industry giant International Business Machines.

Nixdorf, which is based in Paderborn, West Germany, cannot afford to avoid the United States if it is to grow, Luft said, adding, "This is the biggest information technology market in the world. We see a lot of potential in North America. I think we have a lot of opportunities to grow. Obviously the United States is a key to our step-by-step growth."

The company has had a small presence in the United States for 18 years based in Waltham, Mass.--the center of the Route 128 technology region.

But Luft, 42, said Nixdorf planned to build a much larger headquarters in the same area and significantly expand its U.S. work force, now at 1,200.

Last year, Nixdorf's revenue rose by 15% to $2.3 billion, of which about half came from West Germany, where the company is second in computers to Siemens AG, and 90% from Europe. Its profit rose 29% to $110 million.

Luft, who took over as chairman after founder Heinz Nixdorf died last year, has predicted that the 35-year-old company's revenue will double by 1990.

He defended the company's decision to emphasize Unix by saying the standard, which is supported by most of the large European manufacturers, has enormous research and development resources behind it. "Universities are turning out 6,000 programmers a year trained in Unix. That's very fast progress," he said.

Unix quickly gained popularity for scientific applications because of its ease of use for software development. But its progress in the commercial market, Nixdorf's stronghold, has been minimal.

Specific Niches Targeted

According to market researcher Novon Research Group, Unix-based systems account for 3% of the personal computers used in business environments, compared to 86% running the IBM standard MS/DOS.

Among large mainframe computers, about 300 large computer sites run Unix in the United States, compared to more than 25,000 that run IBM's CICS.

However, Luft said Unix will gain greater acceptance because of its backing from the largest data processing customer in the world, the U.S. government. Most federal agencies require compatibility with Unix in any new computer systems they order.

The U.S. Air Force is seeking bids on the largest Unix contract yet, a $4.5-billion order for 20,000 multiuser computer systems. "If the Air Force is really going to have a Unix system, it means additional investment in research and development, and it adds momentum," Luft said.

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