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Compaq aims to shore up servers

Compaq introduces two new Pentium II systems as well as a final Pentium Pro upgrade in an effort to reinvigorate the middle tier of its product lineup.

Compaq introduced two new Pentium II servers as well as a final upgrade to one of the company's most popular server systems in an effort to reinvigorate the middle tier of its product lineup after a slow first half of the year.

The ProLiant 1600 and ProLiant 800 expand the capabilities of existing models and are targeted toward departments and smaller "workgroups," according to John Young, director of server marketing at Compaq.

Like other vendors, Compaq has been concentrating in the past few weeks on bringing out servers based on Intel's newest and most powerful Pentium II processor, called Xeon. However, the servers announced today will not support this chip. Instead, for the foreseeable future Compaq will use the latest versions of the standard Pentium II in this segment as a way to keep costs down.

Compaq is also releasing a final upgrade to the venerable ProLiant 2500. The system, based on the aging Pentium Pro processor, has been one of Compaq's highest volume sellers, said Young. But now that the chip is leaving the marketplace, 2500 customers will be directed toward the ProLiant 3000 or 1600, he said.

The ProLiant 1600 comes with one to two 350- or 400-MHz Pentium II processors with 100-MHz system buses, capacity for up to 1GB of memory, and faster, 10,000-rpm disk drives. Current versions of the server use older versions of Pentium II with the 66-MHz bus, hold up to 512MB of memory, and use the 7,200-rpm disk drives. Other new features include an increase in the number of "hot swapable" disk drive bays from three to five.

"We're seeing a 42 percent performance improvement over earlier versions, and up to 53 percent on [two-processor systems]," Young said. A basic configuration of the server with a 350-MHz Pentium II, two 4.3GB hard drives, and 64MB of memory sells for $5,752.

The ProLiant 800 comes with a 350-MHz Pentium II processor and capacity for only 512MB of memory. While less expandable than the 1600, it is also cheaper. A basic configuration with a single chip, 64MB of memory, and a single 4.3GB hard drive runs $3,408.

The ProLiant 2500 upgrade primarily centers around memory capacity. Current versions of the server can handle up to 1GB of memory and use Pentium Pro processors. The upgrade will allow the server to handle up to 3GB of memory and use Pentium II processors.

Still reigning as the No. 1Intel-based server vendor, Compaq saw its market share shrink in the first quarter due to an overall industry slowdown and an inventory glut. The PC giant's market share declined to 29.7 percent from 31.5 percent for the same period a year ago, according to a recent report from Amir Ahari, server analyst at International Data Corporation.

The oversupply is expected to inflict price pressure on Compaq and other vendors for the entire year, according to Ahari.

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