Edition: U.S. / Global

Ardent Computer Link To Stellar Is Disclosed

Published: August 30, 1989

In the face of slow sales and a keenly competitive market for the most powerful computer work stations, Ardent Computer Inc. and Stellar Computer Inc., will announce merger plans today, company executives said.

Ardent and Stellar were founded four years ago by computer industry entrepreneurs who expected rapid growth in demand for engineering and scientific work stations that combine near-supercomputer speed with tremendous graphics power. But sales have been slower than expected and the two start-ups faced fierce competition from established work station producers, including Sun Microsystems Inc., the Hewlett Packard Company and the Digital Equipment Corporation, which continually upgraded their equipment while slashing prices.

In a sense the merger will bring the founders of each company full circle. The two briefly considered starting a company together before beginning the two concerns in 1985. Allen Michels founded Convergent Technologies Inc. before starting Ardent in Sunnyvale, Calif., and J. W. Poduska started both Prime Computer Inc. and Apollo Computer Inc. before setting up Stellar in Newton, Mass. Faster for Researchers

Ardent and Stellar have tried to combine the number-crunching power of supercomputers with the ability to generate sharp three-dimensional images in one computer. They expected the machines to speed the work of researchers, like computational chemists or advanced aircraft designers, who previously needed to attach special graphics terminals to supercomputers to get images that would help them visualize their work.

The new company, to be called Stardent, will be a combination of equals, and stockholders will receive a half share in the new concern for each whole share they have now. In the new company Mr. Poduska and Mr. Michels will initially share the job of chief executive, but one Ardent official said a search would be made for a new chief executive.

The merger will bring together computer makers with contrasting strategies for penetrating the new market. Stellar, which introduced its first machine early in 1988, has focused on the performance of its custom graphics hardware, while Ardent, which also introduced its computer at about the same time, has emphasized industry standards like the use of microprocessors made by the MIPS Computer Company, which offer a wider range of applications.

Prices of the Ardent and Stellar computers were initially in the $100,000 range but have dropped sharply in the last year and a half. 'Robust Prospects'

''Basically there are robust prospects for the graphics supercomputer business,'' said Jeffry Canin, an independent market researcher. ''Unfortunately the discounting has been far more severe than any of the vendors expected.''

To date Ardent has sold about 400 computers while Stellar has sold about 250, Mr. Canin estimates. Both companies have sales of about $12 million a year - not very significant compared with larger and more established companies, he said. ''Both Ardent and Stellar are relatively small companies; both have had deep pockets from venture capital funding. Ardent is in a bit of a stronger position.''

Ardent is 44 percent owned by Kubuto Ltd., a Japanese conglomerate. Stellar is privately financed.

The Ardent official said the new company would adopt the MIPS computer chip and incorporate Stellar's graphics features in a future model. First, though, Ardent will introduce a desktop model based on its current design while Stellar is expected to concentrate on designing work stations with very high performance features.