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To: gnuman who wrote (66003)	10/7/1998 8:41:00 PM
From: Timothy Liu	Respond to of 186894

Good article, PC Servers = X86 servers. 2Q98 only half way over. I think sluggishness is due to the delay and backlog of Xeon. People are putting off buying PPro's and waiting for the Xeon. This is very typical in product transition. 2 million servers will mean 3-4 million Xeons to me (1-4 processors per server and at a price tag of $400-$500K why not 4, there are even 8 way systems now). If Intel can sell those at an ASP of 1000-2000$ a pop, the revenue growth of Intel for the next couple of years will be accounted for. Hope introduction of Merced family will accelerate the 17% growth rate of PC server market you mention. Tim My 0.02$, not Intel's

To: gnuman who wrote (66003)	10/7/1998 10:22:00 PM
From: Jeff Fox	Respond to of 186894

Gene, re: PC servers There are already two good post covering your questions. This article speaks mostly of what appears to be a normal product transition bump in the lowest end "server" market as Xeon begins to ramp up. While a part of Intel is busy with this, the Intel server initiative is more focused with the major program over five plus year time horizon. What does the term "PC Server" mean? Does it include devices like Alpha, Sparc, Mot, RISC as well as X86 processors? Apparently not for the purposes of this IDC bulletin. They addressed "PC Servers" meaning X86 boxes. Note that there is not any sharp line marking the server low end. In fact any PC can be configured as a server. The CPQ and Dell machines addressed in this article are typically used as work group servers, or as small office servers. Intel, I think, considers this as a separate segment from enterprise servers, which are machines costing $20,000 or more generally. One most sobering aspect of enterprise system is that if they crash, then hundreds to thousands of people are inconvenienced. In fact the productivity loss of a serious crash is often more than the cost of the server. It is in this realm that you find strong presence of Alphas, SPARCs, HP-PA, etc. The Xeon will compete here followed eventually by IA64 processors. Jeff

To: gnuman who wrote (66003)	10/8/1998 12:23:00 AM
From: rudedog	Respond to of 186894

Gene - An important fact about the IDC numbers is that they report sales from the manufacturer not sales to customers. Usually these two are pretty close but not so in 2Q98. CPQ cleared from 12 weeks of inventory to 4 in the channel. That means that although customers were buying CPQ boxes, CPQ was not making them - they were made in 4Q97 and were sitting in inventory at MicroAge, Vanstar, etc. And also, the excess inventory included a lot of servers, for the first time in a long time. That was also true of HP and IBM. So the reported IDC numbers may only represent 60-70% of the real numbers bought by customers, and the quarter was probably actually a great one in terms of sales to end users, maybe 25 or 30% growth. IDC is just reporting the mfg numbers, but the press does not know how to read them. I have covered this in gruesome and boring detail on the Dell and CPQ threads.