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Technology Stocks : Compaq

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To: hlpinout who wrote (88813)1/12/2001 6:52:44 AM
From: hlpinout  Read Replies (1) of 97611
 
From Infoworld.com.
--
Sun, HP to heat up high-density server
market








THE HIGH-DENSITY SERVER market will get red hot this month as
three industry heavyweights -- Compaq, Hewlett-Packard, and Sun
Microsystems -- introduce smaller, less expensive servers to an already
fiery rackable-server market.

Compaq on Monday expanded its ProLiant DL line of high-density
servers, introducing a 1U (1.75-inch) high ProLiant DL320. The new
server is a single-processor version of an existing ProLiant server from
the Houston, Texas-based computer maker, with a lower price to make it
available to a wider range of customers, according to officials.

In sync with but running slightly behind the rest of the pack in the
high-density server market, Hewlett-Packard Company next Tuesday will
introduce its first pair of 1U servers. Industry experts say the Palo Alto,
Calif.-based company has been slow getting into the high-density server
market.

The next day, HP neighbor Sun Microsystems will enter the high-density
server race as well by leveraging its recent acquisition of server
appliance vendor Cobalt Networks, adding a wide range of high-density
servers and server appliances to its line up.

"It will be a viscous, ugly, tight, tough market from here out, as everyone
wants to be there," explained Joyce Becknell, the director of computer
platform and architecture for the Aberdeen Group, a Boston
Mass.-based industry consultancy.

There are three reasons why the market for high-density, rackable
servers is becoming so heated, according to Becknell. First, they are
inexpensive, making them ideal for front-end Web servers, which tend to
multiply very quickly as an e-business grows. Second, their modularity
means they can be added to a network quickly. Third, they work well for
service providers by not only bringing down the cost of dedicated Web
hosting --in which each customer has its own stand-alone server instead
of a shared or partitioned one -- but also by offering flexibility as far as
how the servers are used in a network.

Mike Klass, the director of the Microsoft platform team at
USInternetworking, an Annapolis, Maryland-based provider of Internet
services, said his company adds new high-density servers on a daily
basis.

"[These servers] make us a little more nimble, and faster to react," Klass
said. "Price is always of interest, but our focus is more about value and
flexibility and being able to act, as we are adding servers daily -- we are
always deploying services."

Mary McDowell, the senior vice president and general manager of
Compaq's Industry Standard Server Group, believes Compaq has the
advantage in the market.

"HP is playing catch up from a timing standpoint," said McDowell, adding
that she believes that the new Compaq offering running Linux will out
pace anything Sun delivers from its newly acquired Cobalt arsenal of
Linux-powered server appliances.

"Compaq is right that it has taken HP a year to roll out a [high-density
server] when everyone else has one," agreed Becknell, who said HP's
focus on high-end servers has put it behind Compaq and the other
player in the high-density server space, Round Rock, Texas-based Dell
Computer.


Becknell also observed that because Cobalt was acquired by Sun's
Networking Server Group -- a division that deals with the front-end, Web
and communications market -- Sun will use the servers acquired from
Mountain View, Calif.-based Cobalt to deliver "a very specific appliance
for the service provider and telco space."

This will make Sun a tough company to beat in terms of who ends up
offering the lowest price to those customers, she said.

Dan Neel is an InfoWorld senior writer.
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