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HP signs Cisco for plum server account

Hewlett-Packard has won a multimillion-dollar contract to provide its new Superdome servers for the core of the networking giant's computer network, sources say.

Hewlett-Packard has won a multimillion-dollar contract to provide its new Superdome servers for the core of Cisco's computer network, sources say.

Sources familiar with the hotly contested bidding said Cisco would buy several Superdome servers in a deal worth close to $35 million. The computers will be used for the heart of Cisco's business operations system, systems that long have run on servers from Sequent, now part of IBM.

The deal with Cisco, a networking hardware seller that's one of the biggest computing companies around, is an important vote of support for HP's Unix servers. The Superdome server is HP's spearhead in an uphill struggle to prevent leader Sun Microsystems from taking away any more market share and to stave off resurgent Unix server interest from IBM.

"I think it's a pretty big deal. Cisco is a plum account that I'm sure a lot of the Unix vendors are interested in," said D.H. Brown Associates analyst Tony Iams.

Illuminata analyst Jonathan Eunice concurred. "They have the pick of the litter" from HP, Sun, Dell Computer, IBM and Compaq, he said.

Representatives for Cisco and HP declined to comment on the deal.

The Unix server market, once considered destined to be superceded by Microsoft Windows servers, experienced a revival in the last two years as Windows servers proved unable to meet the demands of high-end computing requirements and as Unix servers proved popular for running Internet sites. IBM, HP and Compaq all have been pursuing Sun, the top Unix server seller.

Superdome, a machine that can accommodate as many as 64 CPUs, is the spearhead of HP's effort to reclaim its former prominence in the Unix server market. But it hasn't been easy.

There was a conspicuous gap between HP's announcement of the server in September and when the company actually began shipping it in December.

On top of that, December turned out to be an ugly month, when HP faced a spending slowdown that dented high-end system sales just when the company hoped they would compensate for flagging PC business.

Finally, some have criticized Superdome itself, calling its performance tepid.

Royal family ties
The Cisco deal isn't the only sign of good relations with HP. Earlier in January, HP Chief Executive Carly Fiorina became a member of Cisco's board.

"You get up to a certain level, and it's kind of like the diplomatic marriages of old royalty," Eunice said. And Fiorina has shown herself to be adept at these subtler aspects of business ties among computing giants.

"She's very tuned to the realpolitik of vendor alliances," Eunice said. For example, when HP needed to make sure database seller Oracle was a firm supporter of HP's hardware, HP made it clear Oracle would be the company from which HP bought its CRM (customer relationship management) software to keep track of its customers.

"HP would not even talk to the other CRM vendors," Eunice said. "Fiorina understood that they had an issue with Oracle, a little bit of separation. She nailed it."

Superdome itself is technically sound, though not as powerful as HP had hoped, Eunice and Iams said.

"It was not as impressive as it should have been," though in the real world, raw performance is only one factor, Eunice said. For example, Sun's high-end E10000 isn't as good as top-end models from Unisys, IBM and Compaq, but Sun continues to lead the market, he said.

While some server designs are growing in importance, others are waning, and IBM's Sequent line is one example. IBM is interested in bringing Sequent technology to the rest of its four major server lines, but IBM hasn't been aggressively marketing the existing Sequent NUMA-Q 2000 servers themselves, Eunice said.

HP faced a similar problem when it moved its attention to servers built around Microsoft and Intel products. Sun sneeringly dismissed these "Wintel" systems, and eventually Compaq, IBM and HP followed the company back into the Unix server market.

Superdome, when combined with corresponding investments in HP's software, is a strong candidate to help bring HP back, Iams said. "From a technical standpoint, it's very clear they've been investing a lot in their Unix line," he said.

"They do have a long road ahead," Iams added. "Sun has not taken its eye off the Unix ball."