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IBM seeks to eclipse Sun with new servers

IBM adds the design of its top-end Unix server to three new midrange models as part of its continuing attempt to dislodge Sun Microsystems' market lead.

IBM has spread the design of its top-end Unix server to three new midrange models as part of its continuing attempt to dislodge Sun Microsystems' market lead.

The company today bolstered its RS/6000 server line with the six-processor H80 and F80 models and the eight-processor M80, said Mike Maas, manager of the product line. The systems are emerging amid fierce competition for the Unix server market driven by the growth of the Internet and corporate computing in general.

IBM makes no bones about which company is its primary rival. "We are aimed directly at Sun," Maas said. "This is barrel two of the shotgun," the first being IBM's top-end S80 model, of which IBM has sold more than 1,600 units since its debut last fall.

The announcement comes after chief executive Lou Gerstner's confession this week that the company has made several significant missteps over the last year, including problems in manufacturing hard drives for storage systems and servers.

"We ceded the market to Sun, but we're coming back," Gerstner said. The company also announced today that Internet address registrar Network Solutions will use the new servers.

Although Sun is somewhat vulnerable as it awaits new servers based on its upcoming UltraSparc III chip, analysts credit Sun for having strong demand and a dominant position. Server sales led Sun to a record $4 billion in revenue in its most recent quarter.

IBM argues that the new midrange Unix servers beat Sun's systems in both price and performance.

Sun criticizes IBM for having so many different server lines and operating systems, confusing customers and diluting its own product development and marketing. IBM counters that it can sell servers to a wider range of buyers. "Our view is customer choice is most important," Maas said.

The new IBM servers use an improved Power chip from IBM with copper interconnect technology, which allows the chip to run faster and debuted in the S80, Maas said. The new servers also use the internal design of the S80, which allows faster transfer of data between the CPUs, memory, and input/output devices such as storage systems or network cards.

The next generation of IBM Unix servers, due to debut this fall according to sources familiar with the company's plans, will use chips incorporating IBM's new silicon-on-insulator technology, which allows even faster chips.

Hewlett Packard, SGI and Compaq, which also make Unix servers, are fighting for a part of the Unix server market as well.

HP has an aggressive program to get its servers into the hands of start-ups and application service providers (ASPs).

SGI expects to debut new servers based on its delayed R12K chip soon.

Compaq, which is scheduled to release its new 32-processor "Wildfire" server May 16, said in a Securities and Exchange Commission filing today that it has sold 120 systems and expects to ship at least 200 by the end of the first half of 2000.

The high-end Unix server market is expected to become more crowded once Intel releases its Itanium chip later this year. The Itanium, the first in Intel's family of 64-bit "IA-64" processors, will enable Intel-based servers to address large databases and perform other tasks previously only possible with 64-bit chips from IBM, Sun, Compaq, SGI and HP.

The H80 and F80 are similar in design, but the 8.75-inch tall H80 is designed to be bolted to a rack. The 14-inch tall M80 also can be rack-mounted.

Entry-level prices begin at $18,995 for the F80, $21,995 for the H80 and $67,995 for the M80, Maas said. However, most customers don't buy such bare-bones configurations.

More typical prices would be in the neighborhood of $40,000 for the F80 and H80, he said. An M80 complete with all eight processors will cost less than $200,000, Maas said.

Internally, the M80 uses a "crossbar" design, a switch that opens up high-speed connections between components, such as a CPU and a network card that need to exchange information. The F80 and H80 use a less sophisticated "bus" design, in which all the components are connected to a shared data pathway.