November 1, 2005 3:38 PM PST

Sun to sell 'Niagara' servers this year

Sun Microsystems will begin selling servers using its new "Niagara" processor, an ambitious design the company hopes will restore the allure of its core Sparc server line, Chief Executive Scott McNealy said Tuesday.

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Sun CEO Scott McNealy talks with an analyst about the corporation's transition and plans for the core business.
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"We're bringing that product in and expect significant unit volumes this quarter," McNealy said in a conference call with analysts announcing quarterly financial results. Niagara has eight processor cores, each able to handle four instruction sequences called threads, and Sun hasn't been afraid to raise expectations for the chip's performance.

Niagara had been expected in 2006, but the move to sell the servers this year isn't entirely unexpected. Andy Ingram, Sun's former marketing chief for Sparc servers, said earlier this year that the company was considering releasing Niagara before the UltraSparc IIIi+, another Sparc processor for lower-end servers.

Niagara, to be followed by a higher-end Niagara II and in 2008 by the top-end Rock, is crucial for Sun. Even though it has begun selling servers using x86 chips from Advanced Micro Devices, most of its revenue comes from Sparc servers, but the company has lost share to IBM in the Unix server market.

Sun won't get a major financial boost from the new servers this year, though. Steve McGowan, Sun's retiring chief financial officer, said the systems would ship at the end of the current quarter, which runs through December. He also said Sun expected financial effects of the sales this quarter not to be materially significant.

Announcing products before they ship can be dangerous because customers sometimes postpone purchases to await the new models. Indeed, that was a problem with Sun's launch of the "Galaxy" line of x86 servers in September, McGowan said. "Though Galaxy was well received, there is some indication that customers may have delayed purchases for these products," he said.

But asked about whether the announcement could cannibalize Sparc server sales, Sun President Jonathan Schwartz indicated that's not a concern. "If it would, it already has," he said. "We're expecting to see a healthy backlog build around those products."

Schwartz also said Niagara software won't need to be revamped to take advantage of Niagara. "We hope the migration to that environment is as painless as can be. It will be more like a speed bump than a migration--just a pretty big speed bump."

But what about UltraSparc IIIi+?
Sun was less forthcoming about the schedule for the UltraSparc IIIi+, a more conventional member of the Sparc family, and how Niagara's debut will affect that schedule.

The IIIi+, code-named Serrano, is a revamp of the existing "Jalapeno" IIIi. It uses a more advanced manufacturing process than its predecessor, meaning it can have up to 4MB of on-chip cache memory, compared with 1MB for the IIIi.

David Yen, head of the Sparc processor and server group, indicated at Sun's analyst conference in February that Serrano would come out before 2006. "Later this year, we'll also refresh with IIIi+, followed by its speed bump," he said at the time, adding that IIIi+ would come out before Niagara.

But in September, Yen said that the IIIi products are selling well and aren't crying out for an upgrade. "The current UltraSparc IIIi, installed in the (Sun Fire) V210 and V240 and V440, are enjoying a good business. That's a pretty bright spot. They are doing fine," he said.

Early 2006 is a likely debut for UltraSparc IIIi+, Ingram said in April. "What will come out probably early 2006 will be the IIIi+," he said. Sun didn't comment on the IIIi+ schedule on Tuesday.

 

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