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Low-end Sun server aimed at Intel

The company debuts a new eight-processor server as part of its successful effort so far to keep Microsoft and Intel from extending their dominance in the desktop market into higher-end systems.

Sun Microsystems debuts a new eight-processor server Monday as part of its successful effort so far to keep Microsoft and Intel from extending their dominance in the desktop market into higher-end systems.

The Palo Alto, Calif., server seller will begin selling its UltraSparc III-based V880, which has been code-named Daktari, an important upgrade to the popular E450 that will help spur adoption of the new chip and its accompanying operating system, Solaris 8.

"We view the Wintel (Windows servers running on Intel chips) and Lintel (Linux-Intel) environment as ours to go get," said Neil Knox, general manager of Sun's volume systems group. "Buy a few V880s and kick out a boatload of Wintel servers," he said, reiterating the company's position that a Sun server can be used to replace several lesser machines, lowering management costs for customers.

A V880 with two processors will cost about $29,000, but most buyers are likely to favor a four-processor model for about $49,000, Knox said. Current customers include Texas Instruments, which is using the systems to control manufacturing lines in its factories, and Xerox, which is using it to handle print jobs.

Sun has a tough job before it, though. Intel can afford to sell CPUs more cheaply because it makes so many. In combination with Microsoft, Intel also can rely on sales forces from Dell Computer, Compaq Computer, Hewlett-Packard, IBM and others to bid against one another to keep prices down.

Sun, the top Unix server seller, may be going after Wintel, but it has Unix server makers to contend with as well. IBM recently introduced a new low-end two-processor pSeries 610 Unix server. Hewlett-Packard will refresh its four-processor L-class systems with the new PA-RISC 8700 chip near the end of the year and sees Sun as vulnerable.

In a research note Thursday, Salomon Smith Barney analyst John Jones said several lower-end UltraSparc III servers are in the works at Sun. Currently, six of seven models use the older UltraSparc II chip, but the upgrade, along with the new top-end Starcat server, could improve profit margins.

Jones predicted that information technology spending would pick up in mid-2002, roughly the same time as revenue from UltraSparc III systems is expected to surpass that of UltraSparc II systems.

Also Monday, Sun will introduce the Netra 20, a rack-mountable two-processor system 7 inches thick, which meets telecommunications-industry requirements for tolerance to heat, cold, smoke and DC power. The Netra 20 costs between $11,000 and $20,000, Knox said.

Now is not the greatest time to court telecommunications customers, Knox acknowledged. "Telecoms are going through a dramatic downturn in their business, but they're going to come back," he said. Telecommunications customers typically buy numerous systems for jobs such as voice mail or wireless phone connections.