Survey optimistic on Sun Niagara servers

A Merrill Lynch survey of chief information officers finds them warming to Sun Microsystems' UltraSparc T1 "Niagara"-based servers, lower-end models introduced a year ago that are designed to gracefully juggle multiple tasks simultaneously.

According to the December survey, 41 percent of CIOs who already are Sun customers want to buy Niagara servers in the next 12 months, compared to 8 percent in July. And among CIOs in general, the purchasing intention increased from 3 percent to 12 percent over the same period.

The survey questioned 100 CIOs, about three quarters of them at companies with annual revenue of more than $1 billion.

"The results are encouraging for the prospects of Sun's Niagara servers," Merrill Lynch analyst Richard Farmer said. "We believe Niagara may have the potential to disrupt the x86 market through its low-power, high-throughput profile."

Each Niagara server has only a single processor, but each chip has eight processing engines called cores, and each core can execute four simultaneous instruction sequences called threads. That totals 32 threads per chip; Niagara 2, due in the second half of 2007, doubles the thread total to 64 per chip.

Farmer said the Niagara servers, which generated about $125 million in revenue in Sun's most recent quarter, combined with the $150 million contribution from Sun's "Galaxy" line of x86 servers, now provide nearly 10 percent of Sun revenue, and the Niagara line has the potential to improve Sun profit margins.

"We believe...Sun's turnaround is real," Farmer said.