Get it on paper! Analysts warn Sun Microsystems' users

Sun Microsystems has confirmed it will offer trade-in options for users of its high-end E10000 Unix server, despite comments to the contrary from analysts from Gartner and the Meta Group.

Meta and Gartner joined forces recently to advise users to insist on investment protection guarantees when buying Sun Microsystems' high-end E10000 Unix server.

That's because each server - which can cost more than $1 million - won't be upgradeable to Sun's next-generation UltraSparc III-based servers - scheduled to ship next year - according to analysts.

As a result, companies that buy new E10000s during the next few months will need to get some kind of a guaranteed trade-in option from Sun under which they will be able to swap out their existing systems for the new servers, according to Meta Group's Brian Richardson, who authored the advice.

"We are advising our clients not to sign any contracts" until they have a written trade-in offer from Sun, said Tom Henkel, a Gartner analyst.

However, Sun's Australian national product sales director, John Fennell, admitted users would need to replace their existing server for the UltraSparc III upgrade but said trade-in options will be made available to the 50 local companies using the E10000.

Fennell said it was premature to predict the cost of the changeover for users as Sun has not yet determined the price of its next generation Serengeti servers and any upgrade would simply be part of normal depreciation costs.

"The cost will be equivalent to the company's depreciation rate and a swap-out policy will be offered to users if they do want to upgrade," Fennell said.

"Sun appreciates the E10000 is a substantial financial investment which is why we will provide a credit on trade-in and will assist with any changeover. However, users need processing power now.

"The E10000 will continue for two to three years after the Serengeti's introduction as there are ongoing product lines including CPUs, extra boards and memory.

"We are not simply dropping this product line with the release of the Serengeti," he said.

Among the 50 high-end users of the system in Australia are Telstra, Qantas, Centrelink and the Department of Defence.

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