HP, IBM eye Sun's server lead

With IBM, Compaq Computer and Hewlett-Packard redoubling their efforts to go after market leader Sun Microsystems in the red-hot Web server market, IT executives should be delighted at the likely benefits in the heightened competition, according to Graham Penn, general manager, IDC.

The recent M80, H80, and F80 server announcement from IBM, Hewlett-Packard's A-Class server launch, and the much-anticipated AlphaServer event from Compaq Computer arm the three companies with much stronger line-ups of Unix-based servers to cut into Sun's two-year lead in this market.

"Sun made a critical call back in the mid-90s when everybody took their eyes off the Unix ball except for IT," said Tony Iams, analyst at DH Brown.

"Back then it was Sun as the oddball for not embracing [Windows] NT like everybody else, but no more."

IDC's Penn believes companies such as Compaq, IBM and HP are all targeting the price-sensitive Unix space as "each of the vendors is trying to protect their in-store base and use new generation products too".

Penn also believes IBM sees a chance among Sun users - because of the late introduction of the next generation - UltraSparc III-based new generation processor from Sun.

"IBM is in a position where it can deliver and Sun is still coming," Penn said. Penn agrees it is a marketing challenge to see who can compete successfully in the marketplace.

Sun was also able to gain a comfortable lead in 1998 because it was the first to identify the marketing opportunity the then-emerging ISPs and ASPs (application service providers) represented.

And because many of these companies were start-ups which had no Y2K baggage to contend with, Sun was able to quickly mine those opportunities while IBM and HP's traditional corporate users delayed purchasing decisions for both Web servers and servers for more traditional applications.

"With HP and IBM going through a slowdown because of Y2K, Sun was unaffected because it got into so many greenfield accounts that didn't have large installed bases or migration issues," said Jean Bozman, an analyst at IDC.

For HP and IBM to cut into Sun's lead, they too will have to attract either new corporate customers or dotcom companies.

IBM is scheduled to make a local announcement about its new offerings, in the first week of June, an IBM spokeswoman said.

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