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Technology Stocks : Compaq

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To: hlpinout who wrote (46406)12/4/1999 9:35:00 AM
From: hlpinout   of 97611
 
Eight-Way Servers Take Center Stage
-- New Units Provide More Power And
Greater Reliability While Supporting
More Users

CMP Media Inc. - Saturday, December 04, 1999

Dec. 03, 1999 (InformationWeek - CMP via COMTEX) -- The availability of Intel's
Profusion chipset this fall set the stage for major hardware vendors to deliver
eight-way servers that tap the power of 32-bit Pentium III Xeon processors.
Compaq, Dell Computer, Hewlett-Packard, and IBM, which are all shipping these
new systems, tout the boxes both for their advances in raw horsepower and their
superior reliability and flexible deployment. According to these industry leaders, the
machines churn through data 50% to 60% faster than typical Intel four-way servers
and can support twice as many users.

There's no doubt that eight-way servers provide a useful boost in computing power.
The question is whether the increase is merely in line with standard advances, a sort
of kissing cousin to Moore's Law-where not only does the chip speed double, but in
this case, so does the number of chips-or something more significant. Critics point
out that there are already faster chips making their way through Intel's pipeline,
notably the 64-bit Itanium (formerly called Merced). They also say eight-way servers
won't really reach their full potential until Microsoft ships Windows 2000 in the first
quarter of next year, and industry-standard machines using 16 or more processors
are already on the drawing board. Add to that the Y2K resource drain, which has
virtually frozen many companies' IT budgets, and this would appear to be a very bad
time to bring out a souped-up server.

Still, eight-way servers have the distinct advantage of actually existing, and even
running Windows NT 4.0 they provide a big jump in processing power. Some
analysts go so far as to say that the appearance of this new breed of eight-way
servers will let companies rearchitect their IT infrastructures, moving large, vital
applications to reliable, low-cost, standards-based servers.

"The term PC server just doesn't work anymore," says James Gruener, an analyst
with the Aberdeen Group. "These devices have matured to the point where, with
proper planning, they can become the centerpieces of an organization's IT
architecture." But Gruener adds that this first generation of Profusion servers is not
the proverbial silver bullet, but rather the first step in a process involving
improvements to software and hardware that will ultimately let clusters of servers
acquire strategic importance.

The major vendors of eight-way servers are unanimous in saying that early demand
has surprised them. IBM points to several customers who have ordered dozens, and
in one case hundreds, of its Netfinity 8500 eight-way servers. Compaq, the leading
Wintel server vendor in the United States, says it will have 95% of the Intel eight-way
market by year's end; it also says that some market projections for the devices will
fall two to three times short of actual sales in 2000.
Dell says that while some
customers are ordering the devices with only four processors, most are requesting fully loaded boxes.


While some customers are taking delivery of one or two machines for tire-kicking
purposes, others are plunging in and putting them to critical tests right away.
Nordson Corp., a $660 million manufacturer of systems that apply adhesives,
sealants, and coatings to consumer and industrial products, is making a major move
to enterprise resource planning and will use a cluster of eight-way servers from HP to
run SAP's R/3 system.

"The timing was right," says Kevin Beattie, director of corporate IS for the Westlake,
Ohio, company. Nordson wanted to move away from an IBM mainframe as part of its
adoption of ERP, saying that SAP R/3 running on Windows NT would provide the
biggest bang for the buck, and it had already ordered some four-way servers from
HP. The appearance of eight-way servers that could run NT 4.0 was fortuitous. So
Nordson took delivery of 14 LXr 8500 eight-way servers from HP and is busily
preparing to go into full production with its new ERP system in January.

The ability to upgrade from four-way to eight-way proved a major point in HP's favor.
Even more important was the existence of beefy servers outside the Unix world. "The
Unix alternative was much more expensive," Beattie says. "The price/performance of
these Windows/Intel devices is a big advantage over Unix solutions."

That's not to say everything works in Nordon's favor. The company would ideally like
to put the new servers into clusters of four, but it won't be able to do that until
Windows 2000 ships next year. In the meantime, it can only put two of the machines
together-the limit imposed by NT 4.0. And even though Windows 2000 is scheduled
to ship in February, Nordson won't snap it up immediately. Instead, the company will
wait for the green light from SAP. "An ERP investment is huge," Beattie says, "and
until they certify R/3 in a Windows 2000 environment and optimize their product for
it, we won't bring it in-house."

But if a fully optimized eight-way environment is a dream deferred, that doesn't seem
to bother Beattie much. He says that once ERP is in full swing, Nordson will look to
move Exchange and certain non-ERP database applications to eight-way servers as
well. By the middle of next year, the company will have 1,200 employees using its
ERP applications spread across a dozen eight-way machines.

Large database-intensive applications such as ERP are among the most likely uses
for eight-way servers, usually in a clustered environment where they can be
harnessed together as a sort of superserver. Another likely area is to support Internet
applications, particularly E-commerce.

That's the case at Enron Corp., the Houston energy company, which is launching a
new system devoted to trading natural gas and electricity online. "It's a bold initiative
for us," says John Tollefson, Enron's senior director of infrastructure and integration.
And the company, with $32 billion in 1998 revenue and an aggressive growth plan, is
wasting no time. "We're migrating to these eight-way servers now," Tollefson says.

Enron is moving SQL Server and Oracle applications to 10 new eight-way ProLiant
servers from Compaq, in some cases taking those applications off Unix. "It's not a
concerted effort to move away from Unix," Tollefson says. "After all, servers in that
environment can have up to 128 processors, not just eight. But we want to have
options." The servers will handle the back-end functions of Enron's E-commerce
effort, in which traders buy and sell energy-related commodities online. Enron got a
146% performance boost with eight-ways compared with four-ways, and it expects
an even bigger improvement once it rolls out Windows 2000. Microsoft's next
iteration of its server operating system is expected to provide major improvements in
scalability over NT 4.0, because it will support eight-way symmetric multiprocessing,
as opposed to four-way today. And the Data Center version of Windows 2000 will
support 32-way symmetric multiprocessing, which will not only let users get more
from the current crop of eight-way servers, but will accommodate the larger servers
coming in 2000 and beyond.

Just as important as performance is the issue of reliability-and that's an area where
vendors hope to differentiate themselves. Faced with selling boxes that all rely on the
same set of Intel chips, vendors are applying maximum creativity to the technology
that surrounds those chips.

IBM, for example, says its Netfinity product benefits from technologies used in its
midrange and mainframe computers, particularly in the area of reliable memory.
"With a much larger amount of memory packed into a tighter space," says Jim
Gargan, director of product marketing, "reliability can suffer over time." To guard
against that, IBM employs what it calls "chip-kill correction," which protects the
machines from any single memory chip that fails and any number of multibit errors
from any portion of a single memory chip. It's a component of the "X architecture"
used on IBM's mainframes, and the company says other technologies that give
those technologies superior scalability and manageability are also built into its new
eight-way server.

HP is taking a similar tack, claiming that its long Unix heritage provides an
advantage in uptime and reliability. The company's intelligent reallocation system
can identify failed parts and take them offline without the box failing. Moreover,
advances in memory scrubbing let it address multiple parity errors. Modularity and a
range of backup features are also common from most vendors.

Compaq can lay claim to being the first vendor to actually ship an eight-way Intel
server, although only by a matter of days. It is also the only company to offer more
than one model of eight-way server. Its ProLiant 8000 is an in-box upgrade to the
7000 series, while its 8500 model uses a new chassis designed for modularity. Four
drawers, each field replaceable in a matter of minutes, handle components ranging
from disk drives to power supply.

Dell vows to compete on price, claiming that eight-way servers are already, like their
four-way predecessors, so similar in technology that the company will simply rely on
the same business model that has been successful in lower-end machines.
Configured with eight processors, its PowerEdge 8450 server starts at $49,000.
While direct price comparisons are difficult because of the wide range of
configuration options from all vendors, that price puts Dell near the low end.

But that doesn't mean the company isn't touting other levels of differentiation. Its
Resolution Assistant can provide free remote monitoring and even dial-in to fix
problems. The other vendors, meanwhile, are also bundling a variety of service and
support offerings, some of them automated, with their machines.


Shopping, therefore, is either extremely easy or extremely difficult, depending on
users' willingness to parse an array of similar-sounding claims to end up with a
machine that isn't much different from the others. The bigger issue will be when to
buy, if at all. John Enck, a research director at Gartner Group, says eight-way
processors probably will not ship in meaningful volumes until mid-2000, when
Windows 2000 is not only shipping but installed and tested. "It doesn't make sense
to buy the hardware before the software," he says, adding that even by the middle of
next year eight-way servers will only be a niche product.

However, the machines may get a boost from Microsoft in ways that go beyond the
availability of Windows 2000. "Microsoft wants to become a force in the data center,"
Enck says, "and to compete with Unix in that regard, they need eight-way servers to
succeed. So from a software point of view, Microsoft is likely to exploit the
technology to its limit."

Even IS executives who were among the first to bring eight-way servers in-house
sometimes express a wait-and-see attitude. At S-B Power Tool Co. in Chicago,
director of operations Stephen Wolfcale says his plan to run an ERP system on
eight-way servers from HP was scrapped because the machines weren't in full
production yet. With no motherboards stocked locally for repair and replacement
purposes, he didn't want to take a chance. But S-B Power Tool, the U.S. subsidiary
of the $30 billion German auto-parts maker Bosch Gmbh, is using HP's LXr8500
server to run Microsoft Exchange and may roll out additional units to handle data
warehousing and other functions. "We think eight-way servers will play a bigger role
here," he says, "so we wanted to get experience with it."

Wolfcale, like many others, points to the increased headroom that eight-way servers
provide as a major selling point. "We acquire most equipment on a two-year lease,"
he says, "and we never end up oversizing anything. I'm sure at the end of two years
our eight-way servers will be stretched to capacity, even if right now we buy them
with only four or six processors."

Enron's Tollefson also leverages "technology heavily and can't wait for new
things-even if something better is just six months away. There may be servers with
12 or 16 processors coming, but we can use eight-way now. They open up many
options for us."

Those next-generation servers will, in all likelihood, use 64-bit chips being developed
by Intel and code-named McKinley, which is only fitting: President William
McKinley's second term was cut short by an assassin's bullet. It lasted only nine
months-a reasonable span for a microchip.

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