Modcomp Unix strategy changed to stress installed, proprietary systems?

Electronic News, April 13, 1992 by Gerry Khermouch

FORT LAUDERDALE, FLA. -- Only months after unveiling a broad family of Unix-based real-time systems, Modular Computer Corp. appears to have cut back its marketing of the new systems in order to focus more heavily on its installed base of proprietary systems.

The strategy, which has been put quietly into effect over the past several months, reflects the impact of the recession and defense spending reductions, along with the poor returns that the Real/IX lines have generated in some markets following very heavy R&D investments by Modcomp's German parent, AEG.

Just how far the unit has backtracked is a matter of debate within the closely knit real-time computer sector, where many companies have had to grapple with sluggish demand. Modcomp officials acknowledge that they have withdrawn from some markets, notably training/simulation. They also expect users of their proprietary Classic lines -- particularly among U.S. industrial automation customers -- to make a more gradual transition to Unix than they had anticipated last spring when he rolled out the Unix lines (EN, June 24, 1991). But they insist that European demand for Real/IX is robust and vigorously deny that they have pulled the plug on development and marketing of Real/IX, as some competitors and former Modcomp officials suggest.

Further, vice president of research and development John Parker said new programs under development will allow Classic users to make and "evolutionary versus revolutionary" shift to Unix. He said Modcomp will unveil in the next few weeks a dual-ported, shared-memory program dubbed Real/MAX that, for as little as $10,000, will allow Classic users to obtain superior networking and graphics capability while not abandoning their existing applications.

Mr. Parker also noted that R&D spending remains strong, although projects in the hardware and Real/IX arena have been discontinued in favor of a greater reliance on outside vendors, particularly Motorola, its RISC platform supplier. But software R&D could actually grow, depending on some key major contracts, he said.

During a recent reorganization, "The open systems technology core wasn't touched," Mr. Parker maintained. "What did happen was that the trainer/simulation push was a disaster, and we're out of that business. That's been taken as a sign that we're out of Unix, but that's not the case." Many of the cutbacks announced late last year affected development, marketing and sales staff associated with that push.

One of the casualties of that cutback, former marketing vice president Carmen Marchionni, said that shift was drastic, but understandable. "The strategy has pretty much been exclusively on the installed base, if not exclusively on their older product," he said, but termed it "a sound strategy. As much as I didn't want it to happen, I was part of that discussion," which resulted in the departure of about 25 to 30 people, primarily on the marketing side, he said.

"It's still a good product line, but they want to get financially sound by going after known customers," Mr. Marchionni said. He believes the company is only supporting existing customers of the new systems, primarily NASA in the United States and European customers, particularly in Germany.

John Worden, vice president for sales and marketing, said the strategy has shifted since Mr. Marchionni's departure, and that while the aerospace/defense market does comprise the largest U.S. base of Real/IX users, that will change once the economy recovers. "It's definitely a question of when, not if," he said.

Several observers, including Mr. Marchionni, noted that another issue Modcomp must confront is the increasing real-time functionality being added to Unix by both the Open Software Foundation and Unix International. And once the Posic standard is fully accepted, "The competitive advantage of Real/IX goes away," Mr. Marchionni observed.

But Mr. Worden responds that "In time-critical applications, standard Unix falls down in a hurry." And while the Unix licensing fees that Modcomp must pay AT&T might put Modcomp at a cost disadvantage against some competitors, Mr. Worden said AT&T "has been particularly aggressive in giving us licensing fee concessions to compete."