Unix servers, often used for important business tasks such as managing inventory, accounts and orders, account for the largest slice of the overall server market. Of the $47bn in total server sales in 2001, $21bn was made up of Unix servers, Gartner said. Sun grabbed the top spot, with 35.2 percent of that market, Hewlett-Packard took 22.5 percent, and IBM snatched up 20.3 percent. The new systems from IBM and Sun put pressure on HP, which bolstered its midrange Unix server stronghold with the eight-processor rp7410 in February and the rp8400 in September. All these Unix servers use each company's own chip and own version of Unix: Power4 and AIX for IBM, UltraSparc and Solaris for Sun, and PA-RISC and HP-UX for HP. They also boast partitioning abilities. Partitioning is key to the current "consolidation" trend among corporate customers, in which a single powerful server replaces several smaller ones, a move that allows hardware to be used closer to its full capacity and simplifies management headaches posed by what Day calls "server sprawl". The Unix server market had been growing fast during the Internet years but now is shrinking with the recession. The Unix server market dropped 18.7 percent from $25.3bn in 2001 to $20.6bn in 2000, Gartner said. Consequently, competition is fierce, with server sellers first cutting prices aggressively and now discounting services as well. The result has been lower profit margins for the server sellers. Servers still are a strategic market, however. They tow along lucrative support and service contracts as well as storage equipment and software. And because of the challenges of tuning and testing software to one particular system, it's easier to upgrade to a new server from the same company. Battle heats up
The result has been a no-holds-barred rivalry. "I think we're going to slam the door shut on Regatta," asserted Sun's Khan. IBM systems can't be upgraded through the addition of more Uniboards or by transferring existing Uniboards. But one can grab these boards from the cabinet of a Sun Fire 6800, say, and plug them into a Sun Fire 15K -- a move EarthLink's server guru said he expects the Internet service provider to make when its billing system reaches capacity. But IBM's Ravi Arimilli counters that the Sun Fire products overextend an older server architecture, while Big Blue has come up with "game-changing" Power4 designs. Arimilli is an IBM Fellow and the chief technology officer for the Power4. The p670, he said, allows high-speed communication between chips that bypasses the switch required of traditional multiprocessor servers. This, he said, makes for systems with twice the performance of other setups in a given price range. Plus, Arimilli said, customers aren't interested in swapping boards around. They prefer IBM's approach: selling the customer a 32-processor server at a 16-processor price and with 16 processors enabled, then charging extra when new processors need to be fired up. From yet another camp, John Miller, server marketing manager at HP, calls the p670 "a somewhat desperate move to counter our success in the 16-way space". In the fourth quarter of 2001, though, IBM's $745m in midrange Unix server sales gave the company 30.3 percent of the market, very close to HP's $773m in sales and 31.5 percent market share, according to research firm IDC. At the same time, HP has enjoyed success in high-end servers. Giga's Day predicts that sales of the company's SuperDome server will cross the 1,000 mark in 30 or 60 days, largely on the strength of sales outside the United States. New customers include Bell Canada, Nestle, Reebok, Talk America and Blue Cross/Blue Shield, many of them previous Sun or IBM customers. Sun and HP both criticize IBM Power4 systems for missing an essential component of software: Oracle's database. Oracle 9i for IBM's AIX 5L -- the operating system required for the p690 and p670 -- is available in a developer release and will be fully supported by the end of May, an Oracle representative said. Without Oracle, IBM has been a "one-armed boxer", Miller said.
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