Micron agrees to buy NetFrame

Micron Electronics Inc. last week agreed to acquire NetFrame Systems Inc. a move that would bring together a direct PC manufacturer and an enterprise server vendor.

Micron Nampa Idaho markets notebooks PCs and low-end servers. NetFrame Milpitas Calif. sells high-end multiprocessor servers with continuous-availability features. The stock transaction is valued at $14 million. Both companies sell directly to federal customers through the General Services Administration schedule.

For Micron NetFrame "will give us a high-end enterprise server " according to Steven Laney a vice president at Micron. He called the enterprise server space a "critical piece" for completing the company's product set adding that it would have taken much longer for Micron to build its own high-end server."Our product line really rounds out their product line " added Steve Huey vice president of marketing at NetFrame.

NetFrame recently completed a transition from products based on proprietary components to products built around PC industry standards. The company last December began shipping its first PC-compatible product the ClusterSystem 9000 (NF 9000) which uses Pentium Pro chips and runs Microsoft Corp.'s Windows NT Server and Novell Inc.'s IntranetWare. The NF 9000 accounts for virtually all the company's sales today Huey said.

Moving Forward

NetFrame was founded in 1987 by Carl Amdahl son of Gene Amdahl who pioneered IBM Corp. plug-compatible mainframes. The company's aim has been to introduce such mainframe features as fault tolerance and redundancy to the network server market. For most of the company's history that meant relying on proprietary server I/O systems and other components. But the company's current-generation products employ such standards as PCI.

NetFrame's standards strategy was an "important influence" in Micron's interest in purchasing the company said Jeffrey Moeser director of desktop/server product marketing at Micron.

NetFrame has sold servers to such federal agencies as the Federal Emergency Management Agency which started buying NetFrame products in the aftermath of Hurricane Andrew in 1992.

Micron as a direct manufacturer has ridden the wave of surging GSA schedule sales. The company generated $59.1 million in sales during fiscal 1996 making the company the fifth-ranked Schedule B/C supplier.

NetFrame's Huey said it has not yet been determined whether the companies will maintain separate GSA schedules or will consolidate them.