Redwood City, CA Ð With its new software-only strategy, NeXT will compete for the emerging market for object-oriented, client-server operating systems. But to succeed, it must go head-to-head against industry leaders Micro-soft, Apple, and IBM.
"We have an opportunity to be a first-tier software company leading the object-oriented computing revolution," said CEO Steve Jobs. "We believe there are only three real competitors in the object-oriented operating-system market Ð Microsoft, Taligent, and NeXT. What we hope to do, with the help of partners, is create an alternative to Microsoft."
According to IDC analyst Steve McClure, the object-oriented operating system market could reach $3 billion by 1996, greater than the sales of traditional systems like DOS, Windows, and the Macintosh OS. Such systems are expected to play a key role in corporate moves to downsize mission-critical applications to client-server systems.
While the new strategy involves a major change in NeXT's product line, it does not change the basic marketing focus: NeXT will continue to sell the advantages of NeXTSTEP for rapid development of client-server custom applications. Besides NeXTSTEP, NeXT said it will also develop and sell ObjectWare, development tools, and groupware applications.
In the competition against Microsoft and Taligent, NeXT will take advantage of its multiyear lead in object-oriented development and its installed base of 50,000 NeXTSTEP systems. But those advantages could be temporary.
"Our competitors' products are vaporware, but sometimes it's easier to market vaporware than it is to market real software," said NeXT President Peter van Cuylenburg.
"This is going to be a real tough challenge," said Esther Dyson, industry analyst and editor of Release 1.0 in New York. "Not that Steve is wrong in his analysis, but people will often choose the safest technology instead of the best technology. If you need to build custom applications today, then NeXTSTEP is an option. But most of the world is still worried about moving over from DOS to Windows."
Other observers think NeXT can succeed by attracting early adopters of object-based operating systems. "Anyone who makes sense in this time of chaos is going to get market space," said Jim Opfer, of the ProNeXT organization of major NeXT customers. With operating systems, customers don't lightly change systems, Jobs said. "Once NeXT-STEP is embedded, it's not going to be trivial to weed it out."