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To: Mary Cluney who wrote (61930)	8/6/1998 1:09:00 PM
From: Paul Engel	Read Replies (1) \| Respond to of 186894

Mary and Intel Investors - The Year 2000 Hardware Sales Acceleration may be beginning already. The following article discusses Unix servers specifically, but the overall significance will still apply to Intel CPU sales. "The second factor helping HP, and all Unix in general, is the looming year 2000 mess. "We see many customers realize they can't fix their legacy code, so they are moving into a fast-track replacement, and they are looking at packaged software, with Unix servers as a solution," said Glessner." The complete article is listed below. Paul {====================================} techweb.com HP Tops Unix Market As IBM Stumbles (08/05/98; 8:18 p.m. ET) By Andy Patrizio, TechWeb A report on the Unix market has found Hewlett-Packard is the king of the Unix hill -- a hill that continues to grow despite the dire predictions of the prognosticators. IBM may be larger, and Sun Microsystems more visible in the struggle against NT, but HP's move into 64-bit computing appears to have given it an advantage. International Data Corp.'s (IDC) first quarter 1998 report on the Unix market found HP (company profile) had overtaken IBM in the midrange Unix server market, defined as servers between $100,000 and $1 million. The 24 percent market share helped HP overcome Sun's lead on the very high- and very low-end of the Unix market to give HP 23 percent of the overall Unix market in the first quarter, compared to Sun's 21 percent and IBM's 16 percent. HP's growth came at IBM's expense. IBM's piece of the pie shrunk from a dominant 24 percent in 1997 to 16 percent. "IBM was fighting pricing pressures on an older product line, and the RS/6000 hadn't been refreshed for a while," said Steve Josselyn, director of research for commercial systems and servers at IDC. "They just introduced new products to combat some of the holes they had in the line. It will definitely help stabilize this slide we saw in the first part of this year." HP says the growth comes from two factors. The first, is its 64-bit hardware, particularly the HP 9000 V Class servers and HP/UX 11 operating system, both of which were introduced and started shipping in late 1997. "We think that has provided a big boost for our momentum," said Dan Glessner, director of marketing for HP 9000 enterprise servers at HP. "Performance scalability is the most important criteria for buying servers." The 64-bit structure allows for much higher memory in the server, which enables much higher performance and running data-intensive applications like data-mining, he said. HP also has an extensive collection of alternatives to mainframe applications for everything from high availability clustering to enterprise applications. The second factor helping HP, and all Unix in general, is the looming year 2000 mess. "We see many customers realize they can't fix their legacy code, so they are moving into a fast-track replacement, and they are looking at packaged software, with Unix servers as a solution," said Glessner. Unix's 17 percent growth over the first quarter of 1997 shows it remains strong in the face of Windows NT's growth. "NT is not scalable enough, and the mainframe isn't capturing these new application-growth areas," said Jay Bretzmann, vice president of worldwide systems research at IDC. The mainframe hasn't lost its strong areas, like back-office applications and data processing, but it isn't expanding. Most year 2000-inspired system replacements involve ditching mainframes in favor of Unix systems with Enterprise Resource Planning software, like SAP R/3, said Bretzmann. "The general trend is that people are swapping in ERP for their old COBOL programs, and you tend to get your biggest bang for the buck on a Unix platform," he said. All of which bodes well for Unix. "The message that Unix is dying is premature," said Bretzmann. "We still have the Unix marketplace being the largest server environment into 2002, with twice the revenue of Windows NT," he said. The high-growth application areas of decision support and ERP applications are happening on high-end Unix servers.