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Intergraph enters NT server fray

Workstation vendor Intergraph jumps into high-end servers with two new NT systems.

Workstation vendor Intergraph is jumping into the high-end server market with two new NT systems designed to compete with arch rival Compaq.

The InterServe 650tx and 660tx, which will ship in July, can be configured with two to four 200-MHz Pentium Pro microprocessors and include space for up to 4GB of memory. Both servers also contain 10 PCI slots, said Nik Simpson, systems consultant for the server product group at Huntsville, Alabama-based Intergraph.

A primary target for the new servers will be Internet Service Providers (ISPs) and data centers.

"The Web is becoming an application for a database," he commented. "Whoever is making a good database server is by definition making a Web server," Simpson said. Compaq is the seen as the natural competitor because of its market share in the NT server arena, he added.

The theme of the product seems to be overkill. Starting at an estimated street price of $24,500, the servers are competitive in price with similar offerings from other vendors. However, the line comes with more power and features, said Simpson. Rather than a two-channel SCSI controller with a 4MB cache, for example, the InterServe servers contain a three-channel RAID with an 8MB cache. Instead of being able to fit three of the systems in a six-foot rack, a user can fit four.

"That makes a big difference to an ISP," said Simpson.

Additional features include dual, hot-swappable power supplies, redundant fans, and Intergraph's InterSite server management tools.

Another strength to the server line lies in Intergraph's experience with graphics, said Jerry Sheridan, director and principal analyst at Dataquest. Both servers will come installed with graphics accelerator cards from Matrox. "A lot of workstations have it installed, but not many server people in the Intel space," he said. "Intergraph has a long history in graphics and it is leveraging that."

The switch from Unix to NT presents an opportunity and a curse for high-end vendors.

On the one hand, the lower price points for NT servers widen the market for hardware manufacturers.

On the other hand, gross margins are lower, forcing vendors to increase sales to maintain profits.

"With Risc/Unix, the gross margin is around 70 percent. With NT, you're lucky if you can get 50 percent in the Intel world, and that's for high end servers," he said.

Although Intergraph's revenues have been relatively static for the past couple of years, server revenues have been climbing steadily. Last quarter, the company tripled its server unit sales compared to the same quarter the year before, Simpson added.

"They get tremendous value out of their hardware. Their Web angle is that their machines are fast enough for ISPs" said Harry Fenik, vice president at Zona Research. "These will probably play in a similar class as a [Digital Equipment] server with a singular advantage. They will run any NT program."