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Low-end Sun servers get UltraSparc III

The company will bring its new UltraSparc III chip to the battle against Intel with a new entry-level server system.

Sun Microsystems will bring its new UltraSparc III chip into the battle against Intel on Monday with a new entry-level server system, the company said Friday.

The Palo Alto, Calif.-based company said it also would be releasing a new model as part of its Netra line, servers that are designed to meet telecommunications companies' stringent requirements, withstanding extreme heat, cold, smoke and other perils.

In a research note, investment brokerage Salomon Smith Barney said several lower-end UltraSparc III servers are in the works at Sun. Six of seven models now use the older UltraSparc II chip, but an upgrade, along with the new top-end Starcat server, could improve profit margins.

Salomon Smith Barney analyst John Jones predicted that information technology spending would pick up in mid-2002, roughly the same time as revenue from UltraSparc III systems will surpass that from UltraSparc II systems.

Sun promised its entry-level server would offer more computing power for less money than servers using the Windows operating system and Intel chips. These "Wintel" systems have been steadily encroaching on Sun's turf for years, but Sun has been able to stay ahead with systems that work better with the Internet.

But with sales to dot-coms and other Internet companies diminishing, Sun is scrambling to find business customers willing to pay the price for its prestigious systems. One of Sun's chief advantages, though, is the large base of software companies that support its computers.