Sun, HP to heat up high-density server market

The high-density server market will get red hot this month as three industry heavyweights -- Compaq Computer Corp., Hewlett-Packard Co., and Sun Microsystems Inc. -- introduce smaller, less expensive servers to an already fiery rackable-server market.

Compaq on Monday expanded its ProLiant DL line of high-density servers, introducing a 1U (1.75-inch) high ProLiant DL320. The new server is a single-processor version of an existing ProLiant server from the Houston-based computer maker, with a lower price to make it available to a wider range of customers, according to officials.

In sync with but running slightly behind the rest of the pack in the high-density server market, HP next Tuesday will introduce its first pair of 1U servers. Industry experts say the Palo Alto, Calif.-based company has been slow getting into the high-density server market.

The next day, HP neighbor Sun Microsystems will enter the high-density server race as well by leveraging its recent acquisition of server appliance vendor Cobalt Networks, adding a wide range of high-density servers and server appliances to its lineup.

"It will be a viscous, ugly, tight, tough market from here out, as everyone wants to be there," explained Joyce Becknell, director of computer platform and architecture for Aberdeen Group, a Boston-based industry consultancy.

There are three reasons why the market for high-density, rackable servers is becoming so heated, according to Becknell. First, they are inexpensive, making them ideal for front-end Web servers, which tend to multiply very quickly as an e-business grows. Second, their modularity means they can be added to a network quickly. Third, they work well for service providers by not only bringing down the cost of dedicated Web hosting -- in which each customer has its own stand-alone server instead of a shared or partitioned one -- but also by offering flexibility as far as how the servers are used in a network.

Mike Klass, the director of the Microsoft platform team at USInternetworking, an Annapolis, Md.-based provider of Internet services, said his company adds new high-density servers on a daily basis.

"[These servers] make us a little more nimble, and faster to react," Klass said. "Price is always of interest, but our focus is more about value and flexibility and being able to act, as we are adding servers daily -- we are always deploying services."

Mary McDowell, senior vice president and general manager of Compaq's Industry Standard Server Group, believes Compaq has the advantage in the market.

"HP is playing catch up from a timing standpoint," said McDowell, adding that she believes that the new Compaq offering running Linux will outpace anything Sun delivers from its newly acquired Cobalt arsenal of Linux-powered server appliances.

"Compaq is right that it has taken HP a year to roll out a [high-density server] when everyone else has one," agreed Becknell, who said HP's focus on high-end servers has put it behind Compaq and the other player in the high-density server space, Round Rock, Texas-based Dell Computer.

Becknell also observed that because Cobalt was acquired by Sun's Networking Server Group -- a division that deals with the front-end, Web and communications market -- Sun will use the servers acquired from Mountain View, Calif.-based Cobalt to deliver "a very specific appliance for the service provider and telco space."

This will make Sun a tough company to beat in terms of who ends up offering the lowest price to those customers, she said.

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