Compaq, Dell Announce Eight-Way Intel Servers

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Compaq, Dell Announce Eight-Way Intel Servers
R.A. Krause - September 3rd, 1999

Event Summary

Compaq Computer Corporation (August 17th) and Dell Computer Corporation (August 23rd) announced shipment of their new eight-way (8 CPUs) servers, based on Intel's Profusion chipset. (HP and IBM expected to ship by the end of September.) Early performance figures show an approximate doubling of performance (relative to four-way), and a narrowing of the gap between Unix and Intel/NT servers.

Market Impact

This means that Intel/NT servers are starting to move into the performance band historically owned by Unix servers. As this trend continues, non-Intel servers will have a tougher time gaining customers in anything but the very-high-end market. Four-way servers now get pushed down into the mid-range segment, which will result in price pressures. Compaq and Dell have a slight timing advantage (re: shipments) - IBM and HP, although they announced their competing systems in June, are not expected to ship systems until late September. This will reinforce the idea that the Intel server battle is now between Compaq and Dell, with everyone else trying to catch them. Demand is not expected to be high immediately, but is expected to grow - especially if Merced slips beyond September, 2000 (20% probability), and customers look for a transition product to "tide them over" until Merced ships. In addition, eight-way servers will hasten customers' server consolidation, replacing four older two-CPU models with one eight-CPU. (Note that this consolidation will not be appropriate for everyone, nor should it be.)

User Recommendations

Because of the delays due to the release of the Profusion chipset, customers may want to exercise caution, or at least ensure they have adequate guarantees, before purchasing an eight-way server. (Profusion may be robust, but customers should always be wary with any new technology.) If the systems are shown to be robust, then customers should also assess their needs to see if an eight-way provides sufficient returns, or if it is just to have the latest, best systems.

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