Wintel server competition leads to more than low prices

IT pros looking to take advantage of heated competition in the Wintel (Windows-based, Intel-powered) server market can expect more than just lower prices through 2001.

In fact, low prices, better service offerings, and other deal-sweeteners from the top four Wintel server vendors -- Dell, Compaq, IBM, and Hewlett-Packard -- make the remaining months of 2001 possibly the best time to buy a Wintel server, according to Jonathan Eunice, a principal analyst with the Illuminata, an IT consulting and analyst firm based in Nashua, N.H.

"Any time there is any economic issue involved, even as small as the end of quarter where [server vendors] have to make their numbers, they tend to give better deals," Eunice said. "It could be services, it could mean better guarantees, or higher degrees of availability. And you can often get them rolled in as a deal sweetener."

Officials for build-to-order Wintel server maker Dell credit aggressive pricing for Dell's recent success in taking the title of No. 1 North American Wintel server vendor away from Compaq. Dell officials said the company will stick with that strategy.

"In tight economic situations, companies will be looking for ways to reduce their operating expenses. Dell is price leader and will continue to make that a prominent strategy in their servers," said Subo Guha director of marketing enterprise systems group for Dell, headquartered in Round Rock, Texas.

Neighboring Compaq is also cutting prices on Wintel servers while ramping up additional sales incentives, such as added technical support and zero-down leasing, according to David Petts, the vice president of Compaq's North American industry standard server group.

Petts said Compaq will meet certain Dell price points. The company already offers sub-$1,000 Wintel servers, he said. But Petts thinks the best Wintel server deals from Compaq right now are waiting for customers looking to purchase servers, infrastructure, and services.

IBM is also getting aggressive with its Wintel servers, which the Armonk, N.Y.-based company recently renamed eServers in conjunction with its eLiza "self-healing" server initiative. Like Compaq, IBM has a Wintel server bargain basement, but Big Blue officials say buying for services yields the best deal.

"We clearly see there are customers out there driven solely by price point. When customers are in this situation, when they are trying to get more out of less, services are a large part of that equation," said Jim Gargan, vice president of marketing for IBM's eServer xSeries servers.

Hewlett-Packard is trying to boost its Wintel server market share with a current promotion offering six-way LT- and LH6000 series servers for the same price as comparably equipped four-way servers from Dell, Compaq, and IBM, according to Marc Jourlait, North American director of HP's NetServer business.

HP is also tempting prospective Wintel server customers with what the company believes is an easier migration path to 64-bit Wintel computing, which begins to arrive later this year with Intel's 64-bit Itanium chip. HP was a co-author of IA-64 code.

Service offerings, creative discounts, and other value incentives are hot right now in the Wintel server space because Dell, Compaq, IBM, and HP must each leverage such incentives as reasons to buy when they have run out of room to keep lowering prices, according to Richard Partridge, a senior research analyst with D.H. Brown Associates, an industry research firm in Port Chester, N.Y.

"It's not a slam dunk in this [Wintel server] space anymore. Each company has to accentuate what they do best," Partridge said.

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