Galaxy remakes Sun's server strategy

Company unveils first in Galaxy server family, a key piece of its push to restore its reputation, business health. Photos: Sun's new star servers

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Stephen Shankland
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Sun is launching the first members of its Galaxy server family, one of the single most important pieces of the company's effort to restore its reputation and business health.

As expected, Sun on Monday said it is selling the Sun Fire X4100 and X4200, lower-end machines using Advanced Micro Devices' Opteron processor and designed by Sun co-founder Andy Bechtolsheim. The Galaxy systems are joined by a lone Aquarius model, the X2100, a single-processor machine with a starting price of $745 and designed outside Sun. The systems will begin shipping in October

"It's probably not possible to be head and shoulders above the competition in the x86 space. There just isn't that much opportunity for being compellingly different," said Illuminata analyst Gordon Haff. "That said, they're nice boxes," with good management features, prices and performance, he said.


What's new:
The Galaxy systems kick off Sun's effort to rebuild its image in the server market and move away from its reputation as a company that was overtaken by new trends.

Bottom line:
Analysts expect Galaxy servers to boost Sun's business, but competitors are eager to point out pitfalls in Sun's x86 future.

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The Galaxy systems spearhead an effort by Sun to rebuild its image in the server market and move away from its reputation as a company that was overtaken by new trends. "What I really need people to understand is that Sun is not proprietary, expensive and slow," said John Fowler, executive vice president of the Network Systems Group in charge of the Opteron servers. With the Galaxy servers, "We'll be the fastest out there, even compared to the other Opteron guys."

Future Galaxy designs are coming, including an eight-processor model and blade servers, though Sun declines to share details. In addition, Sun will show other systems to customers at the Galaxy unveiling event in New York, Fowler said.

Sun for years shunned the x86 servers in favor of machines running its own Solaris version of Unix and its own UltraSparc processors. But the server market growth has been with x86 systems running Windows and Linux, and Sun is working hard to make up lost time.

The Santa Clara, Calif.-based company has made steady progress. It rose to sixth place in the x86 server market with $109 million in revenue during the second quarter of 2005, according to Gartner, though it's still a long way from IBM at $1 billion, Dell at $1.3 billion and No. 1 Hewlett-Packard at $2 billion. Bechtolsheim said Sun's goal is to rise to fourth place by the end of 2006, which would require passing NEC and Fujitsu-Siemens.

The pressure is on for the x86 line. Sun has struggled for years to achieve revenue growth and consistent profitability, and few expect the company will be able to rely on its Sparc server business. "While Sun has held its own in Unix servers in our recent surveys, we believe that Unix market revenues are unlikely to grow materially going forward, and accordingly, that Sun will need to improve its (x86)-based share in order to generate meaningful revenue growth," Sanford C. Bernstein analyst Toni Sacconaghi said in a report on Thursday.

Merrill Lynch analyst Richard Farmer expects Galaxy to boost Sun's business.

Galaxy servers

"We expect Galaxy to trigger modest, though perhaps not lasting, share gains for Sun," Farmer said in a Friday report. He projects that Galaxy will add slightly more than $150 million in incremental revenue for Sun's fiscal 2006, which for Sun ends June 30, 2006, and more than $350 million in fiscal 2007.

Sun is touting its x86 version of Solaris--a product rescued from near death in 2002 and now, like Linux, an open-source project. But Farmer and others expect Linux will be a more popular option.

Despite a Galaxy delay, Sun is champing at the x86 bit. "We are going to bill them as the fastest, most energy-efficient and reliable x86 servers in the industry," Fowler said. "We have aimed these three servers at the bull's eye in the industry-standard market."

Sun's competitors are just as eager to point out pitfalls in Sun's x86 future.

"I don't see how they get there, honestly, without doing more in the Linux and Microsoft space, which are the volume operating systems in the x86 market," said Mark Hudson, vice president of marketing for HP's Enterprise Storage and Server group. And even with Sun touting

Bechtolsheim's skills, it's hard to stand out: "They're going to struggle to provide the proof of why this is so different and so unique in the marketplace to get customers comfortable buying from HP, Dell or IBM to consider it."

Dave Turek, vice president of deep computing at IBM, predicted a tough business case for Sun with the low-profit margin x86 server business. "There's a short-term promise of some growth, but it's unclear it will be matched with growth in profitability," he said, and he predicted Sun's x86 work will dilute its ongoing Sparc-based server work.

And though Opteron has some advantages, Intel enjoys pointing out its own product line strengths: the company's move this year to a chip manufacturing process with 65-nanometer features, while most of the rest of the industry is still at the earlier 90 nanometers; integrated chip features for virtualization, management, security and communications; and partnerships and products to help software developers.

A rocky x86 start
Sun's first x86 servers were largely a dud--the LX50, introduced in 2002, was obsolete almost before it shipped, and successors such as the V60 and V65 didn't fare much better.

Sun failed to realize that customers demanded more than generic systems, Bechtolsheim said: "Success in this market isn't free. We can't just rebadge or relabel third-party systems and deliver value to customers."

But things changed in 2003 with Opteron, whose built-in memory controller and 64-bit memory addressing features gave it a leg up over Intel's dominant Xeon. Sun dropped its Intel designs and pared its x86 line down to the dual-processor V20z and four-processor V40z.

Those systems were designed outside Sun and lacked many high-end features the company's customers liked, such as remote management abilities and components that could be swapped without shutting the server down. But they helped Sun boost its x86 market share considerably and take advantage of AMD's switch earlier this year to dual-core chips--models that combine two processing engines onto a single slice of silicon. Intel's mainstream dual-core Xeon chips are scheduled to arrive later this year for four-processor systems and early next year for dual-processor systems.

Now, with the Galaxy overhaul, Sun sells three in-house Opteron servers, all rack-mounted models: the Sun Fire X2100, a low-end 1.75-inch thick system with a single processor; the Sun Fire X4100, a 1.75-inch thick system with dual Opterons; and the X4200, a 3.5-inch thick model with dual Opterons and more storage capacity. All the systems include Solaris.

The X4100 has a starting price of $2,195, but a midrange configuration with dual Opteron 254 processors, redundant power supplies and 2GB of memory costs about $5,095. The X4200 starts at $2,595; the price increases to $7,795 for two dual-core Opteron 275 processors, 4GB of memory, two 73GB drives and redundant power supplies.

Sun also is selling the X2100 for $40 per month if purchased with a three-year service plan.

The X4100 and X4200 use 2.5-inch Serial Attached SCSI hard drives--a new, smaller standard that eases air flow and therefore cooling. The machines can be completely managed remotely using a service processor and the built-in networked keyboard-video-mouse controls. They use hard drives, fans and power supplies that can be replaced while the server is running. And software certified to work on one 4000-series machine will run on the others.