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June 11, 1997updated 05 Sep 2016 1:00pm

AS COMPAQ HOVERS, MICRON ACQUIRES NETFRAME

By CBR Staff Writer

Just a couple of months ago Micron Electronics Inc was denying rumors that Compaq Computer Corp was in talks to buy it (CI No 3,139), and now the Nampa, Idaho direct sales personal computer company has promptly turned round and bought NetFrame Systems Inc for around $14m cash. Micron Electronics, 79%-owned by memory maker Micron Technology Inc, says the acquisition would add Netframe’s symmetric multiprocessor servers to its desktop and notebook personal computers, and therefore give Micron a foot in the high-end enterprise server market. Micron will bring its direct sales expertise to the party, it says. For its part, Netframe has been suffering in the past couple of years, and saw losses for 1996 up to $27.9m from $175,000 the previous year, due, it said, to its being forced to change to the industry standard PCI bus from its own proprietary system bus (CI No 3,101). The company used to be on to a good thing as one of the early Intel-based server companies, for whom Windows NT seemed like a natural path, but along with rival Tricord Systems Inc, NetFrame was somewhat overtaken by all the other emerging NT server competitors. According to Micron Electronics chairman and chief executive Joe Daltoso, the acquisition will create the first high-end enterprise server to desktop solutions direct business model in the industry. Whether this will entice the Micron Technology parent to want to keep the business, or make it even more attractive purchase for Compaq, remains to be seen.

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