IBM will announce new midrange Unix servers on Monday amid a tightening market that has IBM and its chief competitor, Sun Microsystems, at each others' throats. The new systems, the free-standing p620 and the rack-mountable p660, each can accommodate as many as 6 CPUs and cost tens of thousands of dollars. They're the first midrange Unix servers to use CPUs with IBM's silicon-on-insulator (SOI) technology, which allows faster speeds without higher temperatures. The new models arrive after new systems from Sun using its UltraSparc III chip and price cuts on older models. IBM always has been aggressive in its attempt to wrestle back some of Sun's market share, but dwindling spending on servers has spurred even more discounting off list prices, Sun executives said Thursday to explain shrinking profit margins. "With the [macroeconomic] picture having shrunk the available market...Hewlett-Packard, IBM and Sun fought more vigorously over every available piece of business," Goldman Sachs analyst Laura Conigliaro said in a research report Friday. Unix servers, at the center of corporate computer networks for essential functions such as accounting and inventory control, are a huge part of the computing industry. The Unix server market grew 14 percent, from $25.5bn in 1999 to $29bn in 2000, according to research firm IDC, with Sun keeping the lion's share. And the product is key to IBM's fate. Unix servers now account for the most revenue of IBM's four server lines, said Mike Kerr, IBM's vice president of marketing for the product line. "Unix is the largest server business for us now," Kerr said. The servers have been for sale since Tuesday but will begin shipping in volume Friday, IBM said. The Unix server market, once thought to be replaced by Intel machines running the Windows operating system, was rejuvenated by the growth of the Internet and Microsoft's inability to create powerful enough software. While the Windows threat has been kept at bay, though, Unix server makers now are up against a tough economy. The SOI chip technology debuted six months ago with IBM's p680 server. The new, faster CPU allowed IBM to refresh the S80 server that IBM considered the cornerstone of its years-long effort to recover from Sun's rapid ascendance to the top of the Unix server heap. "While still ahead of the Unix competition, we believe Sun is losing market share to other vendors," UBS Warburg analyst Don Young said in a research note Friday. Just as the S80 became the p680, the p620 and p660 are revamped versions of the F80 and H80, respectively. The new models improve performance 30 percent in most cases, Kerr said, and about 40 percent in top-end models that use IBM's fastest Unix server chip. In six-processor versions of the systems, customers may use 668MHz RS64 IV chips, Kerr said. With 1, 2 or 4 CPUs, IBM ships the systems with 600MHz CPUs. The previous CPU ran at top speeds of 450MHz. Sun's UltraSparc III chips currently run at 750MHz, but the company hopes to introduce in the summer a 900MHz version originally due by March. Analysts expect 1GHz models in December. IBM, unlike Sun, is a firm backer of the Linux operating system, a clone of Unix developed cooperatively by numerous companies and volunteers. On Monday, IBM also unveiled a new edition of its AIX version of Unix designed to work well with Linux programs. The "Linux affinity" feature of AIX 5L means that Linux software can be more easily brought to IBM systems by software companies or customers who have access to the "source code" underlying the software. The feature allows Linux programs to take advantage of AIX features such as higher performance and control over how many computing resources different programs get, Kerr said. The Linux affinity feature is intended to increase the number of software titles available for IBM's servers while bolstering use of Linux by large corporate customers. In the future, IBM will support Linux itself on its pSeries servers, Kerr said. Sun argues that IBM's fondness for Linux, which it's spreading across all its server lines, is an expensive distraction. Sun has only one operating system when it comes to paying programmers to improve it, encouraging software companies such as Oracle to back it and training customers how to use it. But IBM argues Sun is missing the boat. "When new waves of computing come through, if you're not aggressive in the beginning, you're going to end up not the leader when that change occurs," Kerr said. IBM's Unix servers lack a feature at the centerpiece of Sun's new machines, the ability to divide them into several "partitions", each with its own operating system. It's a feature customers like because it makes it easier to allocate computing resources to different jobs or to test new software. IBM, which has years of experience with partitioning from its mainframe computers, has yet to sell Unix servers with partitioning. Its coming high-end "Regetta" Unix server, due in October, will include partitioning that IBM and some outside analysts say will have substantial improvements over Sun's partitioning features. HP's high-end Superdome Unix server also has partitioning. Take me to ZDNet Enterprise Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Enterprise forum Let the editors know what you think in the Mailroom. And read what others have said.