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May 12, 1988

MIPS COMPUTER USES BIGGER BUYING POWER TO SLASH SOFTWARE PRODUCT TAGS 40% TO 90%…

By CBR Staff Writer

Well aware that its current position as one of the few RISC vendors with an established product line available is fast slipping away, Sunnyvale, California-based MIPS Computer Systems is doing all it can to strengthen its market foothold before rivals Motorola and Sun come fully on stream. Last month the company launched its software buying consortium, Synthesis Software Solutions, to encourage a faster transfer of third party software products onto the MIPS hardware base. Now Synthesis has announced price cuts of between 40% and 90% on products from Applix, Network Innovations Corp, Relational Technology, and Unify Corp, and says more announcements are to follow: price cuts have been matched to typical prices of minicomputer software installations, and have been cut to a level more comparable to microcomputer level, according to MIPS: the prices are for any MIPS-based hardware product (although there may be a few exceptions) and they are not tied to a set number of users. Jamie Muir, managing director of MIPS Computer Systems Europe said that the aim was to reduce software prices in line with falling hardware costs. We have to match the price of the product with the price of the software. According to Muir, price reductions were possible due to the increased volume commitments Synthesis was able to make with software vendors. Meanwhile, software vendors were distancing themselves from the move. As an OEM customer, Synthesis is free to price the products as it likes, said Steve Nilan, marketing communications manager of Unify Corp. And John Butler, marketing manager at Applix Inc said he had been unaware of the move, and thought it unlikely that the increased interest in binary compatibility across chip families would have a long term effect on software pricing. Despite the general trend, I don’t see the price falling far for leading edge software, he said.

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