IBM ad spree latest offensive in server wars

IBM will begin a multimillion-dollar advertising campaign next Friday, hoping a little noise will help undermine Sun Microsystems' dominance in the Unix server market.

IBM will buy full-page ads in The New York Times, The Wall Street Journal and other publications, as well as banner ads on Web sites for Forbes, EarthWeb and others, the company said.

Sun, IBM, Hewlett-Packard and Compaq Computer are locked in a struggle for dominance in the Unix server marketplace. This profitable market, populated by expensive but powerful computers, has grown more important with the boom of the Internet, the increasing adoption of computers in general, and the rise of alternatives to Microsoft's Windows operating systems.

Sun is the overall leader in the Unix server market, with revenues of $2.1 billion in the first quarter of 2000, 32 percent of the $6.6 billion in total sales. HP was in second place, with $1.7 billion and 26 percent, and IBM was in third, with $1.1 billion and 17 percent.

But in the mid-tier price bracket of $100,000 to $1 million, where IBM's top-end S80 Condor server fits, IBM has surged to the front of the pack with 25 percent market share. Sun has only 21 percent in this bracket.

The competition for Sun is getting stronger, what with IBM's S80 and Compaq's new 32-processor Wildfire server. In addition, HP plans to release its new high-end Superdome machine in coming months.

Sun, however, plans a counterassault. Its new UltraSparc III Cheetah processor is set to debut in October, and a successor to its high-end E10000 Starfire machine is scheduled to be released in January, a source familiar with Sun's plans said.