August 14, 2003 12:27 PM PDT
Sun pushes low-end servers
A mainstay of Sun's business has long been low-end servers--networked computers for data storage and processing that typically cost a few thousand dollars. But after last quarter's financial earnings disappointment, Sun executives pointed to the lower-end category as an area in need of shoring up.
"We've got this reputation as a high-end supplier. We need to get the message that our volume products continue to get great customer acceptance," said Neil Knox, the Sun executive vice president in charge of lower-end to midrange systems that are designed to ship in large quantities.
Sun can point to some bright spots, though. It has released two new Intel-based servers, the V60x and the V65x, and it's selling a blade server chassis that accommodates both Intel or AMD "x86" chips or its own UltraSparc.
And the V210 and V240, dual-processor UltraSparc III servers, resumed shipping on July 31, resolving a delay of several weeks triggered by a faulty chipset from Broadcom subsidiary ServerWorks that resulted in a $50 million order backlog. "We should have it all dealt with this month," Knox said.
Sun has won some customers for its lower-end products. Among them are GetThere.com and Southwest Airlines, both of which purchased the V210, the V240 and blades, Knox said.
Sun's business is under increasing pressure from companies such as Dell, Hewlett-Packard and IBM whose lines use increasingly capable Intel processors. The arrival of Linux has augmented the threat, because its similarity to Sun's Solaris version of Unix makes it an easier substitute than is Microsoft's Windows.
Sun last year began selling its first general-purpose Intel-based server, the LX50, but the company acknowledges it didn't make much headway, in part because it used the Intel Pentium III Xeon processor nearly at the end of its lifetime. "The poor LX50 was a product done just as Intel end-of-lifed it. It didn't stand much of a chance," Knox said.
Sun's newer Intel server catches up with more modern processors. Knox declined to release specifics about how well the systems are selling, but he said the V60X "more than met its expectations for us" in the quarter ended June 30.
Sun sells the servers with either Linux or a version of Solaris for Intel processors. Though Sun executives have argued that customers will be drawn to Solaris' track record, Linux is more popular so far--it's used on a majority of the systems shipped, Knox said.
"The x86 Solaris (software) is starting to gain traction. There are a couple large deals we're pleased with. But it's fair to say that out of the box, Linux is the choice," Knox said. Sun doesn't have quotas or sales incentives for one operating system or the other, he added.
Two possible options for expansion of its x86 server plans include four-processor Intel servers and support for AMD's Opteron processor--which, like the UltraSparc, is a 64-bit chip--but Knox was noncommittal about both ideas.
"We're trying to determine if (Opteron) is really some sort of play for us. At this stage, we have no definitive plans," Knox said.
And Sun is happy at present selling only UltraSparc-based four-processor servers. Currently, single- and dual-processor Intel servers are "very much the sweet spot," Knox said. "But we're keeping an eye on the opportunity."