IBM, Sun to release dueling servers
The companies next week will release dueling Unix servers one notch below their top-end models, fueling the flames in a price and market-share war.
On Monday, sources said, IBM will announce its p670, a 16-processor system featuring the Power4 processor, which was previously available only in the high-end, 32-processor p690 "Regatta" system that went on sale in late 2001. The p670 will bring to IBM's midrange product line "partitioning" features, allowing a single machine to be divided into several servers.
Sun, meanwhile, will counterattack on Tuesday with a system code-named Starkitty, designed to fill the midrange slot. Shahin Khan, Sun's chief competitive officer, acknowledged that the midrange market has been overlooked in Sun's product line.
The company was able to design the new system relatively quickly because the main "Uniboard" building block can be used across Sun's entire Sun Fire product line, Khan said, adding that Starkitty will fall between the 24-processor 6800 and the 72-processor 15K.
Both products are important to their backers because they shore up any weak points in overall strategy, analysts said.
"Sun really has never had a presence in that $500,000 to $1 million price band. Starkitty hits it right in that sector," said Giga Information Group analyst Brad Day.
As for Big Blue, Power4 systems now will be available at an "unheard of" price, Day said. A p670 with four processors and 4GB of memory will cost about $175,000.
"We never thought they could bring what's such an expensive class of technology to that system so quickly," Day said. In contrast, a fully configured Regatta server cost more than $1 million as of the product's release in October of last year.
Heart of the market
Unix servers, often used for important business tasks such as managing inventory, accounts and orders, account for the largest slice of the overall server market. Of the $47 billion in total server sales in 2001, $21 billion was made up of Unix servers, Gartner said. Sun grabbed the top spot, with 35.2 percent of that market, Hewlett-Packard took 22.5 percent, and IBM snatched up 20.3 percent.
The new systems from IBM and Sun put pressure on HP, which bolstered its midrange Unix server stronghold with the eight-processor rp7410 in February and the rp8400 in September.
Battle heats up
The result has been a no-holds-barred rivalry.
In the fourth quarter of 2001, though, IBM's $745 million in midrange Unix server sales gave the company 30.3 percent of the market, very close to HP's $773 million in sales and 31.5 percent market share, according to research firm IDC.
At the same time, HP has enjoyed success in high-end servers. Giga's Day predicts that sales of the company's SuperDome server will cross the 1,000 mark in 30 or 60 days, largely on the strength of sales outside the United States. New customers include Bell Canada, Nestle, Reebok, Talk America and Blue Cross/Blue Shield, many of them previous Sun or IBM customers.
Sun and HP both criticize IBM Power4 systems for missing an essential component of software: Oracle's database. Oracle 9i for IBM's AIX 5L--the operating system required for the p690 and p670--is available in a developer release and will be fully supported by the end of May, an Oracle representative said.
Without Oracle, IBM has been a "one-armed boxer," Miller said.