As VNU Newswire reported yesterday, Compaq has conceded defeat and admitted it will be halting development work of its Tru64 Unix operating system for Intel's forthcoming IA64 Merced processor.

Instead, the company claimed, it will devote its energies to promoting Tru64 Unix, formerly Digital Unix, on its Alpha chip.

Compaq employees were notified about the decision in an internal letter yesterday from Bill Heil, vice president and general manager of its business critical server division.

The letter said that as the company moves forward with its, "aggressive Tru64 Unix and Alphaserver plans the management team recognises the need to reduce the complexity of our product offerings, strategy, and messages, as we drive for more focused execution internally and with our partners."

It continued: "As part of this simplification and focus, we are no longer planning to productise the port of Tru64 Unix to IA64, though we will continue to work closely with OEM partners such as CS&S, to ensure that their need for Tru64 on Alpha and IA64 are met."

Tim Yeaton, vice president of Compaq's business critical server division, said: "We are totally committed to Alpha as our overall business critical server strategy, Open VMS and Himalaya. By not productising the port of Tru64 Unix to IA64, it enables us to take a large investment that we were planning for Tru64 and concentrate on the single platform focus of Alpha."

Those positive sounding words actually reflect the depth of Compaq's recent problems and the extent to which new chief executive, Michael Capellas, will go to turnaround Compaq's poor performance.

The news also echoes Compaq's decision to end the development of Windows NT and its successor Windows 2000, for use on Compaq's Alpha chip. It came as no surprise to analysts who, despite Compaq's past denials, have predicted this for a while.

IDC analyst Kirsten Ludvigsen said: "The word on the street was that they would halt development after they decided not to have NT on the Alpha processor. They have been sending out very confusing messages and this will save them further development costs."

Alistair King, chairman of the UK Decus user group, said: "Most users in the UK are rather bored hearing about what Merced will do theoretically. They are interested in what is happening in the next three months not in years and want vendors to support the hardware investment they have today."

He added: "Merced is on the event horizon. It is good they are committing to their current hardware platform."

Terry Shannon, author of the Shannon Knows Compaq newsletter, said: "They have come to the conclusion they don't have very much to gain for Tru64 on IA64."

Shannon believes that Compaq being part of Monterey through its partnership with SCO may have affected the decision.

"They are in league with Monterey - that being the case, how can they differentiate with Tru64 on Merced. At the high end they have Alpha and Tru64. In the mid range if people want it they have IA64 with Monterey," he said.

Decus chairman King believes that although there may be no user concerns about the decision, there will be "a kick-back" from users about not being able to run NT on Alpha.

He warned: "People have not yet clicked they can't run Windows 2000 on Alpha but when it starts rolling out in a couple of years and they can't upgrade the kickback will happen."