Commentary: Transmeta's server approach needs more work

Transmeta has targeted a market niche with real growth potential, but great technology by itself will not enable Transmeta to prosper.

The Web server market will continue to experience explosive growth, but the difficulty for microprocessor makers such as Transmeta is that many smaller companies have also entered the market. In addition, mainstream server makers such as Intel and Compaq Computer are eyeing this space.

	See news story: Transmeta-based servers boast power-saving chips

Nevertheless, Transmeta's new technology does have interesting potential and appeal, which could differentiate it from the offerings of its competitors. The California "power crunch" has only underlined what was already a growing problem for businesses, as well as Web-hosting companies. As their Web sites and e-businesses grow, the number of Web servers that must be housed multiplies, along with all of the problems they bring with them, such as the need for more space, electricity and cooling.

No magic solution for those problems will likely appear. Therefore, companies must mitigate the situation through incremental improvements and clever engineering. Although servers have become steadily smaller and cooler running, Transmeta's approach will further the maker's reputation for innovation--a decided advantage in a crowded market.

Still, Transmeta can make progress only with efforts beyond technology. In particular, the maker and its partners such as RLX Technologies must do a great deal of marketing to break new ground in this arena. It is an uphill battle against an established paradigm in the server world.

If their servers take hold, Transmeta and its partners will have to continue to build on any technological and marketing edge over the established leaders in the Web server market. That will be much more difficult if companies such as Intel and Compaq decide to enter the market.

(For related commentary on Transmeta's Crusoe chip, see TechRepublic.com--free registration required.)

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