Toshiba notebooks take the direct sales route

Toshiba plans to shift from its channel-only strategy to selling high-end notebook PCs directly to corporate customers on a build-to-order basis, starting from April.

Toshiba will kick-off the service in the US for its Tecra notebooks and the high-end models in its Satellite portables range.

The company may then follow-up with direct desktop PC sales later in the year, according to Fumio Yamashita, senior manager of international operations at Toshiba's PC division. The company has sold PCs directly in Japan since October last year, however Toshiba Australia has not included the build-to-order direct selling approach to notebooks in its local business plans.

The move in the US follows that of other PC vendors, such as Compaq, NEC and IBM, which have resorted to almost-direct or direct sales to lower costs and shorten the time required to bring products to market.

Hard slog ahead

However, one analyst says Toshiba has its work cut out for it.

"Built-to-order for portables is pretty hard to do," said Mike McGuire, a Dataquest analyst.

"You're dealing with a lot less area and are limited by physical space."

It is particularly difficult for vendors to take a direct approach without alienating their highly-valued channel partners.

"It would be possible to consider something like building specific products for large corporate accounts and mailing them directly, but not without consulting the channel first," McGuire lowers K6 shipment forecast for '98by Terho UimonenTAIPEI -- Advanced Micro Devices' much- publicised production woes have forced the processor vendor to lower, by some 20 per cent, its forecast for this year's shipments of the flagship K6 processors.

The chip vendor now expects to be able to ship only 12 million K6 processors this year, as compared to earlier forecasts of 15 million units, said Mark Lunsford, AMD's director of marketing for the Asia-Pacific region and Japan.

Although rival Intel continues to gain market share for its high-end Pentium II chips, AMD still expects around 40 per cent of total worldwide PC shipments this year to feature so-called Socket 7 processors, Lunsford said.

The K6 and other Pentium-class processors from vendors such as Cyrix, all fit into motherboards featuring the older Socket 7 architec- ture, while Intel's Pentium II chips can only be mounted on boards featuring the proprietary Slot 1 design.

The long-awaited K6-3D will be manufactured using 0.25 micron process technology, as opposed to the 0.35 micron design rules of past K6 iterations.

And there's the rub: AMD's planned move to the more advanced 0.25 micron production technology has met with serious delays, officials admitted.

By the end of the second quarter, however, AMD will have retooled its wafer fabrication plant and all future K6 parts will be manufactured on the 0.25 micron technology, Lunsford said.www.amd.comDirect does the business for DellSAN MATEO -- Dell's direct sales model, boosted by online sales, garnered it record revenues of $US12.3 billion for the 1998 fiscal year -- a 59 per cent increase over the previous fiscal year's $US7.7 billion.

Earnings for fiscal 1998, which ended February 1 1998, were $US944 million -- up 82 per cent from $US518 million in fiscal 1997.

For the fourth quarter of fiscal 1998, earnings were $US285 million, up 52 per cent from $US188 million for the fourth quarter of fiscal 1997. Revenues for the fourth quarter of fiscal 1998 grew 55 per cent to $US3.7 billion compared with $US2.4 billion in revenues for the year- earlier period.

Again, the key to Dell's success is its focus on its direct model which allows the company to closely control inven-tory, says Michael Dell, chairman and CEO. Worldwide Internet sales alone accounted for more than $US4 million per day by the end of the fiscal year, the company said.

Going forward this year, Dell plans to expand its direct model in Asia-Pacific and Latin America, as well as further penetrate the European market, the company said.

Dell's sales for the fourth quarter of fiscal 1998 were up around the world, even in Asia where the ongoing economic crisis has impacted other IT companies' results. Revenues exceeded $US240 million, a 79 per cent jump over the year-ago quarter, making Asia-Pacific the fastest growing region for IDG staff goes service orientedby Craig Stedman and Randy WestonBOSTON -- The allure of services and consulting to enterprise vendors such as Computer Associates and Compaq can be summed up in two words: account control.

Services are becoming a central part of technology buying decisions, industry analysts said.

Big vendors that don't have them are at a disadvantage.

"The rules of the game for buying technology are being changed," said Bob Djurdjevic, an analyst at Annex Research. "When it starts to hit you in the pocketbook and you see control of your accounts slipping away, reality sets in." Even vendors that don't want to take a whack at the full range of professional services are getting more involved in consulting.

To Gary Thomson, vice president of information systems at Choice Hotels International in the US, the idea of vendors taking a more active post-sales services role has merit.

Choice bought help desk software through a reseller. But the reseller "just doesn't have the right resources to implement it himself", Thomson said. "I would love to have the vendor here so we could get our hands around their neck and get them to do it right."

HP prepares five 333MHz Kayak shipments

by Jeanette Borzo

PARIS -- Hewlett-Packard said last week that on March 1, it would ship five new HP Kayak PC workstations sporting Intel's 333MHz Pentium II processor and at least 64MB of synchronous dynamic RAM (SDRAM).

The models span HP's workstation line-up. At the low end, three new HP Kayak XA PC workstations are targeted at business and technical users running 2D and business 3D graphics, each offering 64MB of SDRAM expandable to 384MB.

The desktop and minitower XA models have a 6.4GB Ultra ATA hard disk. The third XA workstation offers a 4.5GB Ultra Wide SCSI ATA hard disk.

All expected street prices exclude monitors.

The HP Kayak XU PC workstation supports single- and dual-processor configurations, and includes a 440LX Accelerated Graphics Port (AGP)-based system architecture and Matrox's Millennium II graphics card with AGP 66MHz support.

The fifth workstation, the HP Kayak XW, also supports single- and dual-processor Pentium II configurations, and features HP's Visualize fx4 as a graphics subsystem. The HP Kayak XW sports 128MB of SDRAM and has the same hard drive as the Kayak XU. www.hp.comDigital plans reaffirm Alpha line's futureby Jaikumar VijayanBOSTON -- Maybe there's a future for Digital's Alpha line after all.

The vendor will follow its recent announcement of a next-generation 21264 Alpha chip with a road map next month, that details plans for even faster processors and servers over the next few years.

The moves are aimed at reassuring skittish Alpha users that Digital's commitment to the Alpha architecture remains as strong as ever in the wake of its proposed acquisition by Compaq.

Digital will begin shipping its third-generation Alpha 21264 in May, said analysts briefed by the company.

The firm also is slated to ship a 32-processor Alpha server, code-named Wildfire, by the end of the year. The systems, which can be clustered to support up to 1000 CPUs, will support OpenVMS, Unix and Windows NT, up to 128GB of memory, up to 64 Peripheral Component Interconnect (PCI) buses and up to 224 PCI slots.

Digital will follow in December with an even faster 0.25 micron processor.

Known as the EV67, it features clock speeds of up to 800MHz. cuts 600 jobsby Elinor MillsSAN FRANCISCO -- Sybase is laying off 600 of its 6000 employees worldwide to focus on high-growth areas of Internet, mobile computing and data warehousing in an attempt to return to profitability.

Employees at the database and tools vendor were informed of the cuts last week and a spokeswoman said they would take effect immediately. The layoffs are across the board, with the largest number coming from the firm's San Francisco offices and a smaller number coming from its Boston offices.

In a statement to the press, Sybase said the realignment of its resources "makes it possible to more efficiently focus the company's strengths in enterprise data management and enterprise application development around three rapid growth market opportunities: Web computing, occasionally connected computing and data warehousing.

"The company believes the steps being taken are necessary to ensure a return to more rapid and sustainable long-term growth," the statement said.

Intel eases PC memory upgrade path

by Andy Santoni

SAN FRANCISCO -- Intel is developing standards that will let end users upgrade memory across the enterprise without buying modules tailored to specific PC models -- and without throwing away usable memory housed on the wrong type of module. The standards aim to short-circuit the problems caused by a transition from one memory technology to the latest, fastest chips.

The reason

Intel is responding to users who were stung by problems with upgrading systems that used the first round of synchronous DRAM (SDRAM) chips, explained Intel Fellow and director of Platform Architecture Peter MacWilliams.

The problem was that when OEMs moved from SIMMs containing EDO DRAM to DIMMs with synchronous DRAM, modules from different manufacturers would not necessarily work in another vendor's PC, MacWilliams said.

To eliminate upgrading problems, Intel's PC100 specifications tighten definitions so that any PC100-compliant module will work in any compliant PC, MacWilliams said.