Server Price Wars: Sun Fires Back April 9, 2002
(http://www.informationweek.com/story/IWK20020409S0008)
The company unveils its new midrange Unix server--and lower prices--a day after IBM launched a new eServer
By Christopher T. Heun
Sun Microsystems on Tuesday unveiled its Sun Fire 12K, a Unix server with features borrowed from its high-end 15K server and priced between $500,000 and $1 million, a price range in which the company previously did not offer a server.
The new midrange server was launched as a price war escalates between Sun and competitors IBM and Hewlett-Packard. In response to IBM's new midrange eServer, which was unveiled Monday and undercut Sun's prices by 34%, Sun lowered the prices on its Sun Fire 3800, 4800, 6800, and 15K servers by 41%.
The Sun Fire 12K incorporates the company's Uniboard technology, which is interchangeable among all Sun Fire 3800 to 15K servers. It also scales up to 52 UltraSparc III 900-MHz processors and as much as 288 Gbytes of memory, running on Solaris 8. The company expects customers to use an average configuration of 32 processors.
This system is ideal for cost-reduction projects, such as server consolidation and mainframe rehosting, under way at IT departments, says Shahin Khan, chief competitive officer. He expects the 12K, which is available now, to be popular in Sun's traditional markets: telecom, government, and life sciences.
"Sun historically has not had the penetration we'd like to see in that price point," says Clark Masters, VP and general manager of enterprise system products. Previously, "we had a void in the product line and had to force customers in either the high end or the low end."
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Sounds like the right product at the right time. Do you think they still are making 40% margins even with the price reduction?
As long as Sunw continues to invest that spare cash in R&D and fill their pipe line with new innovative products, the company can gain market share and ride the next big growth curve in this space.
I like the concept of the Uniboard technology. It provides for a clean upgrade path between their mid-range and high end products. |
