Wang Laboratories Inc, despite or because of its recent troubles, has been on the acquisition trail recently, as part of its new focus on workflow software rather than hardware. In the last six months, the company, now based in Billerica, Massachusetts, much to the chagrin of Lowell, has bought Applied Data Systems Inc, Sigma Imaging Systems and the UK’s BISS Ltd, not to mention Compagnie des Machines Bull SA’s US maintenance operations. But its latest acquisition, of Boulder, Colorado-based Avail Systems Corp (CI No 2,810), looks set to be the most significant takeover to date. The deal has been hailed by Scott McCready, director of International Data Corp’s image practice as The most savvy acquisition which has been done in the software industry this year. Under the agreement, Wang is to exchange some 1.8m new shares for Avail, which works out at a total transaction value of around $32m.
Bang to rights
The purchase provides Wang with three major bebefits: storage management software for its imaging business, new software revenue opportunities, and an expanded co-development relationship with Microsoft Corp, under which the companies will work on storage management products for Microsoft operating systems as well as imaging and workflow products – Wang won the original agreement when the Redmonder realised that the company had it bang to rights on its patent infringement suit and decided that a joint venture was the least cost way of settling. Avail’s standards-based image storage management technology will, according to Wang, enable it to offer imaging without the need for the dedicated image server required by competing systems. Images are handled in the same way as other data such as text. Traditional workgroup imaging systems generally include a proprietary database layer to improve aggregate input-output performance, a file wrapper to provide greater naming flexibility and a database to track files. According to McCready, These workflow solutions, although cheaper, slower and less functional than their high-end brethren, still come with a stand-alone proprietary architectural approach. For a workgroup it has to be no-effort technology if it is going to be widely used, and that is what Wang will provide. One of the major advantages of the deal is the co-development agreement with Microsoft, which brings the two companies even closer together. Microsoft already holds a 10% stake in Wang, which it took in June as part of the settlement of the patent dispute. Microsoft also had to agree to incorporate Wang’s imaging and object controls into future generations of Windows95 and Windows NT. Meanwhile Microsoft and Avail signed an agreement early in 1995 to incorporate Avail storage management technology into the next generation of Windows NT, and MIcrosoft bought licences to Avail’s pending patents for storage management software.
By Emma Woollacott
Now, Wang and Microsoft will co-develop Hierarchical Storage Management functions to be embedded in Cairo, Microsoft’s next generation operating system. Wang will release a product based on the joint development in April, while Microsoft will release its version in 1997 as part of BackOffice or Windows NT. This agreement not only makes Wang more visible to Microsoft users, it also gives the company a time-to-market advantage over its competitors through advance knowledge of Microsoft operating system development. Wang reckons that Avail technology will give it a major competitive advantage thanks to its foundation in industry standards. The Avail technology will be included in a new family of collaborative work management products from Wang scheduled for introduction in the first half of next year. According to Wang, information stored on client-server networks is already increasing at as much as 50% per annum. At the same time, however, the company estimates that 80% of this information is accessed only rarely 30 days after it has been stored, and the average network server is at 95% of capacity. The resulting demand for efficient software for storage on networks is, therefore, growing exponentially. Wang now intends to take advantage of this demand by taking the Avail storage management technology and offering it to other vendors. The company is particularly interested in the Internet, which generates vast amounts of information on attached servers. Avail’s software automatically removes less accessed information from a network server as it reaches capacity. According to Wang, this means it provides virtually infinite network storage capacity, reduces overall hardware storage costs by as much as 50% compared with conventional hard disk storage, and dramatically lowers the administrative costs of managing data, particularly in a distributed network environment.
Synergy stuff
As disk volumes on network servers fill with information, the oldest, least recently used information is moved to less expensive layers of storage peripherals such as disk drives, optical jukeboxes, and tape libraries to optimise both the cost of storage and the average level of information access time. If a network user needs the information, the software enables it to be transparently recalled from the less expensive storage peripheral as though it were still stored on the network server. Wang plans to expand the existing distribution channels for Avail’s products, and will also market the software through its Software Business network integration unit. Once the acquisition is completed, Avail will become a business unit within Wang’s Software Business, continuing to operate from Boulder. Avail’s president and chief executive, Robert Wight, will become a Wang Software Business vice-president, and will head the new business unit. Existing staff will be kept on: as IDC comments: More important than the great price of this deal is that it makes sense for a whole host of reasons – maybe there is something to this synergy stuff after all.
