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SCMP Reporter

PERSONAL computer software giant Microsoft has formed an alliance with hardware powerhouse Compaq Computer to design new technologies for emerging markets such as hand-held computers and voice-input systems.

  The agreement - which the two companies said aims to make the next generation of computers easier to use - is Microsoft's most comprehensive alliance with a hardware company since its well-publicised bust-up with IBM last year.

  It appears to be a strategic reaction by both companies to the current industry race to establish standards for hand-held mobile computing.

  Companies such as Apple Computer, with its Newton product, and General Magic, with its pen-based personal communicator, have, so far, stolen the march on what is universally held to be the next boom in the consumer electronics market.

  Working closer with its operating system supplier should give Compaq a better chance at competing against the revitalised Apple Macintosh line.

  Apple, which owns the technology to both the hardware and systems software for the Macintosh (unlike the IBM-compatible environment where the hardware and software comes from different vendors), has long been the envy of the computing world, because it has consistently built computers that are easier to use than anyone else.

  In a separate announcement, Microsoft said that it would form an alliance with Computer Associates (CA) to make CA's mainframe software compatible within Windows NT, Microsoft's yet-to-be-released operating system for personal computers (PCs) and workstations.

  The results of that alliance should mean that large corporations, which are downsizing from mainframes to networked PCs, will be able to keep the same software and file structures as on the large computers.

   CA and Microsoft are the world's biggest software players - Microsoft is number one, with about US$3.3 billion in revenue last year; CA is number two, with about $2 billion.

  But it is the so-called ''Frontline Agreement'' between Microsoft and Compaq that has generated most interest in the industry.

   It will produce a series of products over the next six to 18 months that should, ultimately, make the basic personal computer easier to use and easier to set up. It should also enhance its performance.

  Microsoft and Compaq have a long history of strategic alliances - some more successful than others.

   In 1985 and 1986, when Compaq had designed the first computers based on Intel's 80386 chip, it came bundled with the Windows 386 that had been designed especially by Microsoft.

  In the late 1980s, Compaq and Microsoft worked together to popularise the Extended Industry Standard Architecture (EISA), largely to combat IBM's introduction of the MicroChannel architecture.

  Less successful was the 1991 alliance to form the Advanced Computing Environment (ACE) with other consortium members. This collapsed as it attempted to move the industry towards a RISC (reduced-instruction-set computing) platform as the personal computing standard.

  Under the agreement signed last week, the two companies agreed:    To jointly work on operating software and hardware to create more integrated and easier-to-use systems, including desktop PCs, portables, docking stations, hand-held systems and ''other PC form factors''.

   To enhance PC technology with features such as pen interface and better audio capabilities.

  To promote a ''plug-and-play'' to the PC hardware, software and peripherals industry. Plug-and-play envisages an environment whereby any peripheral - such as a video or CD player - can be plugged into the basic PC, which automatically detects the peripheral and configures itself accordingly.

    Under the agreement, Compaq desktop systems will come with built-in compact-disc players, sound capability, built-in networking and Microsoft Windows, features already available as standard on the Macintosh products from Apple.

  The two companies are also committed to making whatever hand-held device they put to market to be DOS (disk operating system) compatible.

   DOS is the operating system use in 85 per cent of the world's personal computers.

  ''We see the hand-held PDA [personal digital assistant] as the natural and logical extension of the customers' existing PC network,'' said Compaq North Asia managing director Dr Lim Huat Seng.



Computer giants in new alliance