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Desktops

Sun hopes 'Enchilada' will burn rivals

The company is looking to stave off competition from Intel-based machines with its two new low-end Unix servers, the first to use the new UltraSparc IIIi "Jalapeno" processor.

As part of a multiproduct debut Tuesday, Sun Microsystems will add two new Unix servers code-named Enchilada to its menu, low-end models that are the first systems to use the new UltraSparc IIIi "Jalapeno" processor.

The two-processor Sun Fire V210 and V240 systems, with prices dipping below $3,000, are a sign that Sun is fighting as hard as ever to stave off the onslaught of Intel-based machines from Dell Computer, Hewlett-Packard and IBM. Although the Santa Clara, Calif-based company hedged its bets by introducing its own servers with chips from Intel and later AMD, it's still trying to keep as many customers as possible buying its UltraSparc machines.

"The V210 and V240 are a good move to keep (competitors) from poaching on their customer base," said Giga Information Group analyst Richard Fichera.

The new servers will make their debut at a press event in San Francisco on Tuesday. Sun also plans to talk up a new direction for its services arm, changes affecting its software products, an update for a midrange storage system and several new product bundles.

The deluge of products is the second batch unveiled under a new quarterly announcement plan. Chief Executive Scott McNealy is trying to coax customers to focus on fully assembled computers rather than parts and software packages. McNealy, the son of an auto industry executive, likens the process to the annual rollout of new car models, arguing that customers don't care about the arrival of new piston rings.

"He likes attention. Maybe he wasn't getting enough attention for individual announcements," Technology Business Research analyst Bob Sutherland said, likening the strategy to that of Apple Computer CEO Steve Jobs, whose infrequent keynote addresses can command the attention of Mac loyalists for hours.

Indeed, McNealy expressed admiration for Jobs' stage panache in a 2002 keynote during which the Sun CEO dressed in a penguin suit to express his newfound love for Linux. "He's so good at marketing. He's the best. He's a magician," McNealy declared.

But individual components do have a bearing on the success or failure of a product. One of the most important components coming Tuesday is the UltraSparc IIIi processor, the tip of the spear in Sun's defense against low-priced machines sporting Intel Xeon processors.

The UltraSparc IIIi is built by Texas Instruments on a new 130-nanometer manufacturing process that uses 300mm silicon crystals, a process that permits each chip to have higher speeds, lower power consumption and more circuitry. With the UltraSparc IIIi, Sun integrated high-speed cache memory that with the UltraSparc III had been separate and consequently more expensive to manufacture.

"This should give them a much-needed boost in performance and lower cost at the low end," said Insight 64 analyst Nathan Brookwood. "The forthcoming UltraSparc IV can help them at the high end." That chip, which squeezes two UltraSparc III processor cores onto the same slice of silicon, is due in servers later this year.

Industry analysts are keenly watching such products for evidence that Sun is moving from the defensive to the offensive.

Sun led the Unix server charge in the late 1990s, capitalizing on booming demand triggered by Internet spending and flush corporate coffers, while competitors such as HP that had emphasized Windows servers missed out. But IBM and HP reinvigorated their Unix lines at the same time that the Internet bubble burst and Sun's quarterly revenue plunged from about $5 billion to $3 billion.

After two major layoffs, Sun is regaining some of its poise, but the company still isn't back to its old form, some believe.

"They're in a reactive mode still. They're getting back into that (assertive) territory, but they're not there yet," Fichera said.

Ahead of the curve?
Sun points to features in the V210 and V240 systems--which are rack-mounted models 1.75- and 3.5-inches thick, respectively--as evidence the company is ahead of the curve.

For one thing, each has four 1-gigabit-per-second Ethernet ports built in, said Souheil Saliba, vice president of marketing for Sun's volume server products group. Each can accept a specialized $695 "daughtercard" with chips to accelerate encrypted Web page transactions but that doesn't take up an extra expansion slot. A systems' individual personality is stored on a card that can be moved from one server to another. And the machines include hardware that administrators switch off and on and take other actions remotely.

A low-end system costs $2,995, but the "sweet spot" where customers are expected to be most interested will be two-processor machines with 2GB of memory that cost about $5,800, Saliba said. The V240 accommodates more hard drives and expansion slots than the V210. The V240 can also hold a maximum of 8GB compared to the 4GB limit with the V210. Future upgrades will double the capacity to 16GB and 8GB, respectively.

Sun plans use the Jalapeno chip in a forthcoming four-processor system code-named Chalupa, Saliba said. Faster versions of Jalapeno are expected at 1.2GHz, 1.4GHz, 1.6GHz and beyond, he added.

But the Enchilada systems, originally expected at the end of 2002, according to Saliba, arrived a few months late as Sun was vulnerable to competition. "Where we have struggled a bit is (with) a two-processor, 1U (1.75-inch-thick) and two-processor, 2U (3.5-inch-thick) box that are aggressively priced against the Intel servers from Dell, HP and IBM," Saliba said.

The market for low-end and thin "blade" systems is not only one of the fastest-growing segments, it's also becoming more important as the systems assume critical responsibilities once reserved for high-end machines, said IDC analyst Mark Melenovsky. That importance is the result of the gradual maturing of technologies such as Sun's N1 for grouping servers into pools of efficient computing power and Oracle's 9i RAC edition that splits a database across several low-end machines.

"When we look at...the advances being made in management and clustering, our projections are that these low-end and modular systems are going to represent about half the spending on servers in the next three or four years," Melenovsky said.

Sun also will announce new features to midrange and high-end servers on Tuesday. Some servers will be able to detect failing components and shut them down before they crash the server, a feature that will arrive in the Sun Fire 3800, 4800 and 6800 on April 25 and the 12K and 15K machines later in 2003.

Higher-end systems also figure in a number of new services Sun is introducing to help customers build common parts of a computing infrastructure. These services show how to pick appropriate Sun technology to accomplish tasks such as building a backup data center dozens of miles away from a primary site; setting up an e-mail system that can respond to surging demand; consolidating many lower-end servers onto fewer higher-end ones; and designing systems with sophisticated ways to authenticate computer users.

Expanding services
While those services continue in Sun's current direction, the company also is branching out, said Vivek Joshi, vice president of marketing and strategy for Sun services.

"Our intent is very different from a year ago or six months ago," Joshi said. For one thing, Sun will be doing more services work directly with customers it once left to business partners such as Electronic Data Systems. For another, Sun will work to embrace non-Sun equipment it formerly shunned, Joshi said.

"We're moving from a Sun-Solaris-only (approach) to heterogeneous," he said. Where Sun previously would try to coax customers away from Windows servers, for example, "We'll take accountability for the whole thing," relying on business partners to support the non-Sun equipment, he said.

In addition, Sun will promote services for "utility pricing," in which customers are charged for the computing capacity they actually use. "Invariably most people overprovision. They provision for peaks and beyond. That means massive capital assets are locked up, unused," Joshi said.

New financing mechanisms support the utility service. "Most companies want to move (computing costs) from being a capital asset purchase to an expense-based item," Joshi said.

Though Sun has long scorned services as an expensive way to cope with problems better solved with technology, the company's services revenue has grown more than 25 percent per year since 1994, and the company is beginning to place a higher priority on it, Joshi said.

It's important for Sun to change, said Technology Business Research analyst Humberto Andrade. "They're struggling to realize that services are supposed to drive (hardware) sales, not the other way around," he said. "I believe they are at least one year or 18 months behind HP and three years behind IBM."