HP drops Superdome server prices by 30 percent

Hewlett-Packard announced that it has reduced the pricing for its high-end Unix server by as much as 30 percent, spurred by a drop in memory component pricing and pressure from IBM's p690 server, formerly code-named Regatta.

With the 30 percent price reduction, the average price for the HP Superdome with a 32-way system is in the range of US$600,000 to $700,000, a spokeswoman said.

Gordon Haff, an analyst at Illuminata Inc. in Nashua, N.H., said HP dropped prices "to make it harder for IBM with the p690." HP's cost to manufacture the Unix servers has dropped, and the savings are now being passed on to customers, he added.

"Memory and other component prices dropped. Given how far memory pricing has fallen over the last couple of months," Haff said, HP can not only afford to drop prices, but it has also been pushed into it by the competition.

Mark Hudson, worldwide marketing manager for HP's Unix servers, acknowledged that IBM's release last month of the p690 high-end Unix server was one of the two motivating factors for the drop in the Superdome pricing. IBM is selling the Regatta to compete with rival Sun Microsystems Inc.'s Sun Fire 15K, code-named Starcat. The other reason, he said, is the drop in the price of components.

Hudson added that both IBM and HP are dropping prices to go after Sun's market share. Sun has been regarded as the leader in the market for servers that run the Unix operating system, according to analysts.

This announcement, as well as HP's last decision last week to discontinue its e3000 line, is part of a general trend among technology companies to focus on their biggest profit centers and isn't directly motivated by plans to merge with Compaq Computer Corp., said Haff.

"Having said that, if the merger does go through, both HP and Compaq will look very hard at their product lines and some trimming will take place," he said.

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