Many users not ready for high-end Intel servers

The twin decisions of Compaq Computer Corp. and Hewlett-Packard Co. to stop reselling Unisys Corp.'s 32-processor ES7000 server raises questions about the readiness of corporate users for highly scalable servers based on Intel Corp.'s microprocessors, according to analysts.

Executives from Unisys insisted that there's a growing demand for such processing power and said they would continue to vigorously push the ES7000 system as the most scalable machine available for users of Microsoft Corp.'s Windows 2000 Datacenter Server operating system. "We are skating to where the puck is going," said Peter Samson, vice president and general manager of technological sales development at Unisys.

But Unisys won't have help from Compaq or HP. Compaq disclosed earlier this week that it was backing out of a deal to market the ES7000 as part of its Proliant server line, and officials at HP confirmed that it made a similar decision last month.

The defections by the two companies aren't very surprising given the current softness in the economy and the lack of overall user readiness for high-end server technologies such as the ES7000, said Joyce Becknell an analyst at Aberdeen Group Inc. in Boston.

"Not many people are ready to scale to 32-processor Intel servers just yet," Becknell said. For one thing, she added, Windows-based applications and the operating system itself are still relatively untested in large-scale enterprise environments. As a result, most users are likely to first turn to Intel servers with four to eight processors, Becknell said.

James Garden, an analyst at Technology Business Research Inc. in Hampton, N.H., said another issue is the unfamiliarity of Intel server users with the high-end concept of system partitioning. The technique of splitting servers into separate systems within the same box has long been used in the mainframe and Unix worlds, but Garden said it needs more time to gain wider acceptance among Windows users.

Compaq spokesman Tim Golden said about 95 percent of the company's high-end server sales involve its own eight-processor Proliant 8500 server line. That statistic, combined with the economic softening that has forced cutbacks at Compaq and numerous other technology vendors, prompted the company to focus its marketing efforts on the eight-way boxes.

But some users who are already using the ES7000 said it offers a great platform for consolidating workloads from multiple smaller Intel servers. Launched last year, the ES7000 is based on a proprietary Unisys technology called Cellular MultiProcessing (CMP) that, among other things, lets users partition a single server into multiple smaller boxes.

"This architecture is exactly what I had in mind," said Ray Pedden, executive vice president at Health eConnex, a Park Ridge, Ill.-based application service provider in the health care market. The company uses a 16-processor ES7000 to run a transaction processing application that would have otherwise required "a whole server farm to accomplish," he said.

The 60,000-student Santa Ana Unified School District in California has split a 16-processor ES7000 into two 8-CPU halves -- one for running student applications, the other for financial applications, said Paul Bewley, the district's director of IT. The applications were migrated off an older proprietary Unisys platform. "We wanted something that was bigger, faster and cheaper," Bewley said. "So far at least, it has been all of that."

Unisys has been positioning the ES7000 as a cheaper and more powerful alternative to Unix servers for tasks such as server consolidation and database hosting. Despite the loss of Compaq and HP, Unisys does still have reseller deals in place with Dell Computer Corp., Japan's Hitachi Ltd. and Fujitsu Ltd's U.K.-based ICL subsidiary.

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