IBM Releases Servers that Challenge Sun

The new Unix servers announced by IBM last week should close the widening price/ performance gap in the midrange market between IBM and rivals such as Sun Microsystems Inc. and Hewlett-Packard Co., users and analysts said.

IBM last week fleshed out its Unix server lineup with three new models that feature the copper technology and many of the features found on its high-end S80 RS/6000 servers.

New features include hot-swappable components such as hard disks and CPUs, dynamic CPU deal location for isolating potential processor problems, redundant power and cooling systems and a service processor for monitoring vital system signs. Also offered are high-availability services and technologies such as clustering, targeted at service providers and e-commerce applications.

Pricing for the least-expensive model starts at $18,995, and the top-end system starts at $67,995. This should make the new servers attractive to users, said Richard Fichera, an analyst at Giga Information Group Inc. in Boston.

"The systems look impressive and are certainly going to help IBM put some pressure on Sun and HP," Fichera said.

Ursus Telecom Corp., an Internet service provider in Sunrise, Florida, plans to deploy the servers worldwide for its Internet telephony offering, said S. Jay Chavez, a vice president at the company. "From what I have seen... they come in at about two-thirds the price of a comparable Sun system," he said.

"I think they are leapfrogging the competition," in terms of technology, said Hugh Hale, a senior information technology manager at BlueCross/Blue Shield of Tennessee in Chattanooga, which uses S80s to run its managed-care application.

IBM's latest midrange offerings come at a time when its S80 systems - announced last fall - may finally be gaining ground against Sun's popular E10000 servers, said Lee Kroon, an analyst at D.H. Andrews Group Inc. in Cheshire, Connecticut.

"IBM shipped 1,000 of those systems in the first 100 days. It clearly ruffled Sun's feathers pretty badly," he said.

Making an impression with such products is going to be crucial if IBM is to reverse its hardware slump, said Sam Albert, president of Sam Albert Associates, a consultancy in Scarsdale, New York.

IBM CEO Louis V. Gerstner last week told analysts not to expect dramatic growth from IBM this year because of companies' delays in buying enterprise servers after year 2000 lockdowns. Analysts promptly lowered their expectations for IBM for the rest of the year.

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