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Reports of server delays disputed by Sun

Sun Microsystems' next-generation, UltraSparc III-based systems may arrive later than the company had hoped, analysts say, a suggestion the company contests.

Sun Microsystems' next-generation server computers may arrive later than the company had hoped, analysts said, a suggestion the company disputed.

Based on the Unix operating system, Sun's forthcoming "Serengeti" computers run on the company's UltraSparc III "Cheetah" chip, itself arriving later than expected. The chip was due in late 1999.

A delay would likely hurt Sun's bottom line, as the Palo Alto, Calif.-based company garners the lion's share of its revenue and profits from servers. As the Internet's explosive growth has increased demand for the computer systems that host Web sites and transact e-commerce, falling behind schedule also could mean lost sales.

"We believe that UltraSparc III-based servers may be delayed until late this year," said Merrill Lynch analyst Steve Milunovich, citing Sun's desire to completely debug current systems and strong demand for its current products.

Sun denied it is behind schedule. "Nothing has slipped. We're sticking to the road map," a spokesman said, stating the first Serengeti workstations are scheduled to arrive midway through this year, with mid-range servers later and high-end servers after that.

The UltraSparc III chips are in "volume production," the spokesman added.

Besides Milunovich, other industry sources have said Sun's high-end Unix servers will be delayed until early 2001.

Meanwhile, IBM is preparing a revision of its high-end S80 Unix server, which already "has established a new level of performance," Milunovich said.

IBM has said sales of the new server have been strong. Compaq soon will release its 32-processor "Wildfire" server, while Hewlett-Packard is working on its new high-end "Superdome" server.