Unix-based systems, complex computers stuffed with dozens of processors and often costing millions of dollars, are moving to the forefront in the strategic plans of IBM, Hewlett-Packard, Compaq Computer and, of course, market leader Sun Microsystems. Competition has been heating up in recent years and will accelerate in the coming months as all of the main competitors release new flagship products.
Unix systems have always been important to the computing industry, but the growth of e-commerce Internet sites and application service providers, which rent access to these powerful machines, has increased their value. Simply put, demand is high and getting higher.
Moreover, high-end servers have become emblematic of a company?s technological prowess, and the battle to win business--and show off the goods--is pitched. Weeks and months are consumed in planning and consulting. Large contracts also can lure software developers to a manufacturer's platform, drawing them from a competitor's camp. Naturally, malfunctions are publicized widely.
Sun remains king of the hill, despite the fact that its top-end E10000 "Starfire" server has been on the market for two years. The Palo Alto, Calif.-based company was in the right place at the right time, focusing on Unix servers just as corporations began embracing the online medium and at a time when HP, Compaq and IBM were hedging their bets on Microsoft?s rival Windows NT server operating system. But the latter simply couldn't catch up with Unix quickly enough and ironically now faces competition from Linux.
Analysts are divided on how seriously the coming of new systems will threaten Sun's position. "When you've gained as much as Sun has, you get more people shooting at you," said International Data Corp. analyst Steve Josselyn. "I think until they're closer to announcement on (a) new line of products, there is some vulnerability there."
On the one hand, Sun raked in a record $4 billion in revenue in the last quarter and has more than a billion dollars worth of outstanding orders waiting to be filled. HP and IBM have been scrapping for second place, but Sun may be more worried about keeping up with demand than with fending off the competition.
On the other hand, Sun is already losing performance-measurement battles with IBM, and Big Blue will have upgraded its high-end line a second time by the time a replacement for the E10000 arrives. Certainly Sun faces a host of new competitors, also including HP's "Superdome" and Compaq's "Wildfire."
HP's Superdome will arrive in the fall or perhaps late summer, said Nick Earle, head of HP's E-services.solutions group. Compaq promises its Wildfire server will be the top performer when it arrives in May, and the company expects a billion dollars worth of sales of the product in the first three quarters, said Bill Heil, general manager of Compaq's business critical server division.
IDC's Josselyn said IBM has "definitely been able to sell very hard against their competitors, HP and Sun in particular, with a box that basically has No. 1 position in almost every benchmark out there."
IBM shipped 1,000 S80s in the product's first 100 days, ten times the rate of the first 100 days of the E10000 two years ago, said Technology Business Research analyst Jim Garden. The IBM machines cost less and offer higher performance than Sun machines, analysts say.
"It's fair to say IBM has made an incredible comeback in this space," he said. "The giant has awoken."
For example, IBM kicked out Sun as the company whose server runs Network Solutions' "A" server, the primary computer that remembers the names and addresses of all the computers attached to the Internet. The system is essentially the master card catalog for the entire Internet.
And HP beat Sun in deals at eBay and Amazon, said Morgan Stanley Dean Witter analyst Tom Kraemer in a report.
Merrill Lynch analyst Steve Milunovich sees the increased competition but last week said, "Competitors don't appear to be narrowing Sun's lead...Marketing momentum is keeping Sun in the driver's seat. IBM and HP are catching up on product specs, but Sun has the mindshare and is the default Internet server purchase."
Sun's 64-processor E10000, originally designed by Cray Research, currently faces competition from IBM's 24-processor S80 "Condor" machine and HP's 32-processor V2600. But the next-generation servers are more interesting.
Sun is preparing a new design around its "Serengeti" architecture based on its new UltraSparc III "Cheetah" chip. The early Serengeti machines--comparatively simple workstations and low-end servers--will be released midway through this year, with high-end products showing up in early 2001, said Sun spokesman Doug van Aman.
The next-generation Sun machines, called "Supercat" by some, will incorporate more than 100 processors--most likely 128, Garden said. In addition, Sun has said it plans to string several machines together with its Full Moon "clustering" software. Using clustering, as many as 1,024 processors could be working together in tandem.
However, Garden is concerned that this next-generation clustering software will not be as mature as it needs to be when Sun releases it.
IBM will add new low-end and mid-range Unix servers in May that have the copper chip and hardware design of the S80, IBM said. Then, in the fall, the S80 will be refreshed with a new chip that sources said will incorporate IBM's performance-enhancing silicon-on-insulator technology.
HP's Superdome will support 128 processors--four 32-processor machines hooked together with an ultrafast connection, said IDC analyst Jean Bozman.
Compaq's Wildfire will be called the GS320, will use the 729-MHz Alpha 21264A chip and will be faster than IBM's S80 at conducting transactions with a database, said Compaq-watcher Terry Shannon. A follow-on with next-generation 21364 chips is expected in mid-2001, he said.