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Stratus debuts delayed Windows server

The high-end-server maker will take a step into the low-end market Monday when it introduces its first machine using Intel chips and Microsoft's Windows 2000 operating system.

High-end-server maker Stratus Technologies will take a step into the low-end market Monday when it introduces its first machine using Intel chips and Microsoft's Windows 2000 operating system.

Stratus sells high-end, crash-resistant machines for jobs such as running 911 emergency call systems or ATM networks, where the operators can't afford to have a machine go down. To ensure that its servers are reliable, the company uses carefully tested software and backup hardware components--"redundant" components--that keep running if the primary unit fails.

Until now, the 1,100-employee, Maynard, Mass.-based company has used Hewlett-Packard's PA-RISC chips in systems that ran either the HP-UX version of Unix or Stratus' VOS operating system. These systems typically cost $200,000 to $300,000, said Chief Executive Steve Kiely.

The new Intel and Windows-based ftServer 5200, though, will start at $28,000, with typical models costing in the mid-$30,000 range, Kiely said. This price difference will let the company tackle customers looking for affordable systems to handle less-critical jobs such as e-mail.

The cheaper price tag means the company expects to earn more revenue from the Windows machines than from its other lines in the fiscal year ending Feb. 28, 2002, Kiely said. The profits will change over the year after that, he said.

But the system is late: The company said last year that the ftServer would arrive in September 2000.

"It wasn't ready," Kiely said. "It was more important to have it absolutely perfect than it was to ring the bell on time to market."

Stratus, long a niche player, will face heavy competition as it tries to move into the Intel server domain dominated by giants such as Dell Computer and Compaq Computer. Sun Microsystems could provide a challenge, too, as it cuts prices on its own Unix servers.

Stratus' plan, though, is to sign "original equipment manufacturing" partnerships so these potential rivals will sell the Stratus systems under their own brands, Kiely said.

The company has trumpeted one such deal, with NEC in Japan, and it has others up its sleeve, Kiely said.

"We have OEM partners signed on in Japan. In the U.S., we have a couple signed up but not announced," he said.

It can be tough for niche players, though. Network Engines, which pioneered superthin two-processor servers, is beseiged now that major server makers have their own designs. And Unisys has been struggling to spread its high-end CMP server design.

The ftServer 5200 is a four-processor machine, though double- and triple-redundant components mean it's actually built with eight or 12 CPUs. The system uses Intel's latest server chip, the "Foster" Xeon model based on the Pentium 4 design.

More ftServer models are on the way. The lower-end ftServer 3200, co-developed by NEC, is expected in July. That system is a two-processor setup, with only double redundancy available.

And in late 2002 or early 2003, the company will release a model using the second-generation version of Intel's top-end Itanium CPU, Kiely said.

The company also will use Windows 2002--the server successor to Windows 2000--on which Stratus has been working in conjunction with Microsoft.

"We want to make the operating system as indifferent as possible to changes in hardware state," Kiely said. That would include changes that make it easier to swap out hardware components without shutting down the machine, he said.

Stratus, though privately owned, is profitable, Kiely said. Though the spending downturn has hurt the company and spurred expense cuts, no layoffs were required, he said.

"We're hoping (the market) will recover in the second half. We're optimistic, but not betting on it," Kiely said. "We had enough of a cushion in operating margin that we're...not reducing staff."