CNET también está disponible en español.

Ir a español

Don't show this again

Christmas Gift Guide
Tech Industry

IBM, Sun jockey for position in Unix server market

Big Blue wrenches away a part of the market from Sun Microsystems, which continues to lead overall in the fiercely competitive industry.

IBM wrenched away a part of the Unix server market from Sun Microsystems in the most recent quarter, but Sun continues to lead overall in the fiercely competitive industry.

Unix servers, once used chiefly by big business but now also in high demand from Internet companies, run much of the fabric of the networked computing world, and IBM is straining to catch up to the lead won by Sun. Hewlett-Packard and Compaq Computer, two other major Unix server sellers, also are eager to wring more revenue from their Unix server lines.

Analysts once predicted the demise of Unix servers because of the potential of Windows, but the Microsoft operating system and accompanying Intel-based hardware proved to be less powerful than expected, and adoption was slower. Meanwhile, Unix got a boost from the arrival of the Internet with its close ties to the heart of Unix.

The overall Unix server market grew 11 percent, from $5.9 billion in the first quarter of 1999 to $6.6 billion in the same period in 2000, according to research firm International Data Corp.

Of that, Sun kept the top spot, increasing its share from 28 percent to 32 percent, with revenue of $2.1 billion in the first quarter of 2000.

HP won second place, with $1.7 billion in revenue and 26 percent market share, up from 22 percent. IBM had third place with $1.21 billion, with market share increasing from 16 percent to 17 percent. Compaq, with $500 million in the most recent quarter, grew from 7 percent to 8 percent.

But IBM is making inroads with its high-end S80 server, which typically sells for less than $1 million, where Sun's high-end offering sells for more than $1 million. In the midrange Unix server market--which IDC defines as systems costing $100,000 to $1 million--IBM knocked Sun out of first place.

In this midrange market, IBM has 25 percent market share to Sun's 21 percent. Last year, IBM had 16 percent where Sun had 21.

IBM's S80 "Condor," introduced last fall, has better performance than Sun's top-end but much older E10000 "Starfire" design, analysts say.

IBM argues that its S80 systems, with only 24 chips compared with the E10000's 64, is much cheaper to manufacture. Although IBM is making a profit selling the S80s, the company acknowledges it's trying to keep prices as low as possible to compete with Sun.

"We wanted to be bold and make a move," said Mike Kerr, vice president of products for IBM's Unix server group. "We certainly elected to be aggressive on price/performance."

But the marketplace will change dramatically in coming months.

IBM plans to upgrade the S80 with faster chips using "silicon on insulator" technology this fall. Big Blue also introduced three lower-end Unix server lines in May, and systems using its Power4 chip are due in 2001.

Sun is planning a major overhaul of its own server line using its new UltraSparc III "Cheetah" chip and the accompanying "Serengeti" server architecture.

Compaq just introduced its new GS80 and GS320 "Wildfire" systems, from which it expects to earn $1 billion revenue by year's end.

HP's new top-end "Superdome" system is due out later this year.