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Be Announces Software Licensing Agreement With Compaq

Written By: R. Krause
Published On: January 5 2000

Event Summary

MENLO PARK, Calif.--(BUSINESS WIRE)--Dec. 20, 1999--Be Incorporated today announced that it has entered into a licensing agreement with Compaq Computer Corporation that allows Compaq to pre-install and distribute Stinger, the code name for Be's software platform for Internet appliances, on future Internet Appliance computing devices under development in Compaq's Consumer Products Division. The parties are currently working together on joint development and sales initiatives in connection with this licensing agreement. The agreement is not exclusive for either party and does not contain any minimum purchase commitments on the part of Compaq.

Stinger is Be's software solution designed for the creation of appliances that deliver information and entertainment over the web. Based on BeOS, Stinger is fully customizable, offers a complete browser and supports popular streaming audio and video standards.

Market Impact

Compaq's support gives Be a big boost toward the mindshare battleground presently occupied by Windows and Linux. Although BeOS is still considered primarily a small-system OS by many, its robustness is winning converts. We expect the BeOS market to grow at a slower pace than Linux has due to a combination of Linux's greater application breadth and marketing buzz.

The benefits to Compaq are less tangible. Providing another OS option means Compaq has the potential to increase sales by reaching BeOS-philes. In addition, it will provide some leverage IN Compaq's dealings with Microsoft. However, Compaq runs the risk of losing its marketing focus, as it has done in the last two years with its channel distribution strategy. By promoting BeOS as a pre-install, Compaq must now build up its support services in this area - not an insurmountable task, but not a simple one either. We do not see this as a big threat to Microsoft, yet. However, this may provide Microsoft sufficient additional competition to cause headaches for Redmond.

User Recommendations

Large corporate users should adopt a wait and see attitude on this issue. BeOS is still not a "mature" OS, which we define here as an OS that has broad application support and a significant installed base (>5% of shipping OSes in this market space). Although BeOS has a loyal following, the BeOS community is still significantly smaller than the Linux community. Since this ubiquity is perceived as a key Linux benefit, the relative paucity diminishes BeOS's benefits. We expect this to change within one to two years, especially if Red Hat buys Be, Inc, as has been recently rumored.

However, users who stand to gain from BeOS's strengths in running Internet appliances and audio/video applications should still consider it, and should view this announcement positively because, as mentioned above, BeOS now has the support of a major player.

 
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