September 12, 2005 9:03 AM PDT

Galaxy remakes Sun's server strategy

Sun is launching the first members of its Galaxy server family, one of the single most important pieces of the company's effort to restore its reputation and business health.

As expected, Sun on Monday said it is selling the Sun Fire X4100 and X4200, lower-end machines using Advanced Micro Devices' Opteron processor and designed by Sun co-founder Andy Bechtolsheim. The Galaxy systems are joined by a lone Aquarius model, the X2100, a single-processor machine with a starting price of $745 and designed outside Sun. The systems will begin shipping in October

"It's probably not possible to be head and shoulders above the competition in the x86 space. There just isn't that much opportunity for being compellingly different," said Illuminata analyst Gordon Haff. "That said, they're nice boxes," with good management features, prices and performance, he said.

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What's new:
The Galaxy systems kick off Sun's effort to rebuild its image in the server market and move away from its reputation as a company that was overtaken by new trends.

Bottom line:
Analysts expect Galaxy servers to boost Sun's business, but competitors are eager to point out pitfalls in Sun's x86 future.

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The Galaxy systems spearhead an effort by Sun to rebuild its image in the server market and move away from its reputation as a company that was overtaken by new trends. "What I really need people to understand is that Sun is not proprietary, expensive and slow," said John Fowler, executive vice president of the Network Systems Group in charge of the Opteron servers. With the Galaxy servers, "We'll be the fastest out there, even compared to the other Opteron guys."

Future Galaxy designs are coming, including an eight-processor model and blade servers, though Sun declines to share details. In addition, Sun will show other systems to customers at the Galaxy unveiling event in New York, Fowler said.

Sun for years shunned the x86 servers in favor of machines running its own Solaris version of Unix and its own UltraSparc processors. But the server market growth has been with x86 systems running Windows and Linux, and Sun is working hard to make up lost time.

The Santa Clara, Calif.-based company has made steady progress. It rose to sixth place in the x86 server market with $109 million in revenue during the second quarter of 2005, according to Gartner, though it's still a long way from IBM at $1 billion, Dell at $1.3 billion and No. 1 Hewlett-Packard at $2 billion. Bechtolsheim said Sun's goal is to rise to fourth place by the end of 2006, which would require passing NEC and Fujitsu-Siemens.

The pressure is on for the x86 line. Sun has struggled for years to achieve revenue growth and consistent profitability, and few expect the company will be able to rely on its Sparc server business. "While Sun has held its own in Unix servers in our recent surveys, we believe that Unix market revenues are unlikely to grow materially going forward, and accordingly, that Sun will need to improve its (x86)-based share in order to generate meaningful revenue growth," Sanford C. Bernstein analyst Toni Sacconaghi said in a report on Thursday.

Merrill Lynch analyst Richard Farmer expects Galaxy to boost Sun's business.

Galaxy servers

"We expect Galaxy to trigger modest, though perhaps not lasting, share gains for Sun," Farmer said in a Friday report. He projects that Galaxy will add slightly more than $150 million in incremental revenue for Sun's fiscal 2006, which for Sun ends June 30, 2006, and more than $350 million in fiscal 2007.

Sun is touting its x86 version of Solaris--a product rescued from near death in 2002 and now, like Linux, an open-source project. But Farmer and others expect Linux will be a more popular option.

Despite a Galaxy delay, Sun is champing at the x86 bit. "We are going to bill them as the fastest, most energy-efficient and reliable x86 servers in the industry," Fowler said. "We have aimed these three servers at the bull's eye in the industry-standard market."

Sun's competitors are just as eager to point out pitfalls in Sun's x86 future.

"I don't see how they get there, honestly, without doing more in the Linux and Microsoft space, which are the volume operating systems in the x86 market," said Mark Hudson, vice president of marketing for HP's Enterprise Storage and Server group. And even with Sun touting

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Reliability for x86 may sound wierd, but there is need for it
Mark Hudson from HP said: "They're going to struggle to provide the proof of why this is so different and so unique in the marketplace to get customers comfortable buying from HP, Dell or IBM to consider it."

Comment: If Sun (or whoever else) will provide reasonably reliable 4CPU x86 servers, it will be a superhit. Current 4-way x86 servers from HP and IBM are just a joke - we have hardware MTBF of less than 2 months for x365 and 3 months for DL585! And it's not just a singular failure on a single server, it's a normal thing - we've got at least 3 different motherboard failures and 1 RAID controller failure. What's wierd, failures happen mostly on heavily loaded boxes (has it something to do with heating?). What's even more wierd, it's that MTBF for 4CPU boxes is about an order of magnitude worse than MTBF for cheap commodity 2CPU boxes (even with 2CPU ones running @ 50-100% avg CPU for weeks).

So having reliability in place (preferably with real MTBF measurements) would be great for x86 market - even if this reliability comes with a price (there are lots of mission-critical and pretty reliable Windows server applications out there, and having more hardware failures than application/database/OS failures combined is definitely not a good thing).
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