Microsoft Buys Stake in Major Seller of Unix System Software
Microsoft Corp., already the world’s leading supplier of personal computer software, announced a deal Wednesday that will allow it to expand its lead.
Microsoft said that it is buying less than 20% in Santa Cruz Operation, the largest independent seller of Unix operating system software. Terms of the deal were not disclosed.
Operating systems, which direct the data flow of a computer, vary among computer manufacturers. But, increasingly, manufacturers are attempting to rally behind just a few systems that will become the standards for the entire industry.
In the personal computer industry, the standards so far have been Microsoft’s DOS and OS/2, used on IBM and IBM-compatible machines, and Apple’s proprietary Macintosh system.
Unix, much like No. 3 auto maker Chrysler, has run a very distant third, and was mostly dismissed as an arcane system mostly for use by engineers and accountants with sophisticated computer systems.
Microsoft’s acquisition was seen as underscoring two significant shifts in the personal computer industry. It demonstrates the growing acceptance of Unix as an operating system for the desktop computer, as well as the determination of Microsoft, which already provides the operating system used by a majority of personal computers on the market today, to take advantage of this new market.
“This is Microsoft’s way of saying that it wants to be a software conglomerate,” said Thomas Friedberg, a Seattle-based analyst with the investment firm of Piper Jaffray & Hopwood. “Microsoft wants to be all things to all people.”
Until recently, most personal computer makers and software publishers have considered the complicated and sophisticated Unix system as more suited to large, powerful multi-user computers and not independent desk-top personal computers used by office workers.
And Microsoft, led by chairman and chief Unix critic William H. Gates, was no exception.
But analysts said the investment in Santa Cruz Operation demonstrates that such an assessment may have been off the mark.
Microsoft Chairman “Bill Gates may rail about Unix not being right for the personal computer, but he is an excellent businessman, and if there is a buck to be made on it, he will find a way to make it,” analyst Friedberg said.
Although analysts said the deal was a sure boost for the participants, they noted that it could spell trouble for other companies that have been trying to promote Unix systems for personal computers. Although Microsoft has not supported the use of Unix for personal computers until now, the company is no stranger to the system. In the early 1980s, the company developed its own version of Unix called Xenix.
However, in 1981 the company decided to concentrate on its DOS and OS/2 system, and it contracted with Santa Cruz Operation to market Xenix.
