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Intel hits roadblocks on eight-way server push

With the arrival of the eight-processor servers based on mass-produced Intel technology, computer makers and Intel have been stepping on each other's toes in a market that isn't yet that lucrative.

With the arrival of the eight-processor servers based on mass-produced Intel technology, computer makers and Intel have been stepping on each other's toes in a market that isn't yet that lucrative.

As Intel carries its technology closer to the core of giant corporate networks, it's treading on computer design territory that manufacturers consider to be home turf. And Intel's one-size-fits-all approach doesn't sit well with some of those computer manufacturers, who are trying to make their eight-way servers different from their competitors' offerings, instead of indistinguishable boxes, as in the case of desktop computers.

To add injury to insult, the parties may be fighting over a market that isn't even mature, say analysts. To further complicate matters, these eight-way servers use a Windows operating system that's getting better but still not up to snuff, face competition with brawny Unix products elsewhere in companies' product lineups, delays in the core technology from Intel, and a marketing staff that's used to selling Intel servers to a vastly different type of customer.

The control issue pits Intel against its biggest customers and the dominant makers of Intel-based servers--Compaq Computer, Hewlett-Packard, IBM, and Dell Computer. All those companies plan to introduce servers this fall using eight Intel Xeon processors tied together with Intel's Profusion chipset.

Compaq, for example, is trying to avoid the situation that exists in ordinary desktop computers, in which "Intel has a bag of parts, and you pick your color" for the computer, according to Mary McDowell, general manager of Compaq's industry standard server division. In that situation, the companies with the best manufacturing logistics and distribution win, she said.

The company that designs the valuable technology for a server wins a bigger slice of the overall profit from a sale, and Intel naturally wants to win a larger percentage, said International Data Corporation analyst Amir Ahari. "They will try to provide as much of the guts of the box as system vendors will comfortable with," he said.

The struggle has emerged most clearly in the realm of establishing the standard way that components such as network cards and hard disk controllers plug into the servers. Intel has championed Next-Generation Input/Output (NGIO) and has signed up the support of Dell. IBM, Compaq, and HP, though, back a different standard called Future I/O.

Controlling the computer design is an age-old struggle between Intel and computer makers. "Companies like HP and IBM and, to a lesser extent, Dell, want to come to market with an industry-standard platform, but they like to differentiate a bit," said Kelly Spang of Technology Business Research. Once Intel designs ingredients such as input/output and memory architecture, the manufacturers say, "'Wait a minute. Intel is basically relegating us to being the status of being a distributor of Intel,'" Spang said.

As Intel pushes its technology up into large computers at large corporations, "I think Intel needs to take a little bit of a hands-off approach," Spang said.

In addition to the struggle over who gets to extract profits from the servers, analysts say the eight-ways face a tough market situation: a product that's expensive and high-powered enough for data center but that's marketed by the same people used to hawking much lighter-weight servers.

What are they good for?
Computer manufacturers bill the eight-processor servers as good for hosting databases and for consolidating the proliferation of smaller servers used to store files on networks and send documents to printers.

"I think it's a fine product, but I don't expect a huge demand for it for quite awhile," Ahari said. Companies are expected to use them either for business programs such as enterprise resource planning and databases, or to ease server management headaches by replacing lots of smaller systems.

But Dataquest analyst Kim Brown is more skeptical. In particular, Windows isn't good enough, he thinks.

"The software is lagging the hardware tremendously," Brown said. "It comes down to operating systems. NT doesn't scale that far, and why would anyone use a file/print server with an eight way system?"

Looking different from the competition
The systems, expected to cost more than $20,000 for basic models, come with fancy features such as fans, expansion cards, and power supplies that can be swapped out while the computer is still running and services from manufacturers to help companies install and maintain the machines.

HP sees a performance gain of 50 to 70 percent over four-way machines with the current edition of Windows NT, and expects that to go as high as 80 or 85 percent with the forthcoming Windows 2000, said HP's Stefano Paoletti. Much of that boost comes with improvements in moving large amounts of data around in memory, he said.

Dell expects similar levels of improvement, said Tekas Vakil, vice president of server marketing at Dell.

HP also offers features such as a utility that automatically scours memory looking for errors, a one-button disaster recovery system that makes it easier to transfer the identity of a failed server to one that's working, and a package of services to help companies set up and maintain their servers.

IBM is offering its Lightpath technique of pointing to defective components with front-panel alarms and internal lights that direct troubleshooters to which fan, voltage regulator, memory module, or other component is misbehaving.

Dell, as is its traditional style, plans to compete on the basis of price, but also will add in services such as setting up and tuning the equipment, Vakil said.

"Differentiating" the servers by adding powerful features and sophisticated services makes the servers look more like their more expensive Unix cousins. But manufacturers argue there still will be savings: software and hardware will work on a broader base of machines and therefore will be less expensive.

Brown said it's necessary for manufacturers to sell eight-processor systems so they aren't perceived as lagging.

"This is all hype," Brown said. "You've got to have an eight-way to sell four-ways. This is part of the marketing game."