SERVING UP THE LATEST ALLIANCE

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AT&T and Silicon Graphics last week made a combined entry into the increasingly crowded video server market, an arena where both companies had played separately.

"We want to be the leading supplier of equipment in this market," said James Barton, the eight-year Silicon Graphics veteran who will serve as president of Interactive Digital Solutions, the new company formed by the 50-50 joint venture.

Interactive Digital Solutions will develop and deliver video servers for local telephone companies, cable TV systems and private networks.

Video servers act as digital lending libraries for movies on demand, home shopping and other interactive services on the information superhighway. They direct sound, video, data and graphics to specific customers and keep track of who ordered what for billing purposes.

Venture partner AT&T Network Systems is already providing technology for Viacom's interactive trial in Castro Valley, Calif., and is the prime supplier for Pacific Telesis Group's $16 billion upgrade of California's telephone network.

Silicon Graphics, a high-end computer marketer, is involved with Time Warner's interactive trial in Orlando. It recently won a contract for Japan's Nippon Telegraph & Telephone Corp.'s video trials.

The new company, based in Mountain View, Calif., is the first joint venture for video servers, though alliances of computer and telecommunications companies are increasingly common. Earlier last week, Tandem Computers, Cupertino, Calif., and software company On-Demand Technologies, Austin, Texas, announced their alliance to enter the video server market.

Oracle Systems Corp., Redwood City, Calif., has also made a high-visibility push into the media server market from its traditional business, database software for large companies that use mainframe computers. Oracle is providing technology for an interactive system Bell Atlantic Corp. is building in northern Virginia.

Microsoft Corp. last month unveiled its Tiger software designed to work as a media server based on large networks of personal computers.

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