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IBM Updates the Netfinity Line

Written By: R. Krause
Published On: May 5 2000

IBM Updates the Netfinity Line
R. Krause - May 5, 2000

Event Summary

Taking aim at the growing Internet infrastructure business, IBM introduced three new models - 4500R, 6000R and 5100 - to its Netfinity line of Intel-based servers. These new "R" servers complement their current rackmount offerings, the Netfinity 4500R and 8500R.

IBM officials said the 4500R is aimed at ISPs (Internet service providers) and ASPs (application service providers), while the 6000R is intended for companies looking to operate mission-critical applications such as ERP (Enterprise Resource Planning) software. The 5100 is targeted at small to midsize businesses with remote locations.

The 4500R is 3U high (three "rack units", 1U = 1.75"), can take up to two processors, and will be priced around $3700 for a base unit with one CPU, 128MB of RAM, and no hard drive nor OS. The 6000R is a 4U-high, four-CPU system that should sell for under $7000 for a basic model with one CPU, 512MB of RAM, and no hard drive nor OS.

The 5100, a pedestal/mini-tower model, is similar to the 4500R, with two processors and up to 4GB of memory. It is priced at under $3,000 for a base configuration.

Market Impact

We are sincerely glad to see that IBM finally seems to have gotten the message of "smaller is better" when it comes to rackmount servers. Until very recently, IBM's rackable servers had typically been at least 1U, and sometimes more, taller than the competition from Compaq and Dell. A 4U, four-CPU system is now commonplace, and HP has recently started shipping their 4U system capable of taking six CPUs, but at least IBM is back in the game.

Add to this the Netfinity 4000R, the first 1U, two CPU server from one of the Big Four Intel-based server vendors, and we believe IBM is on the verge of turning things around for the Netfinity. Although we still are unsure whether a 3U, two-CPU system (the 4500R) is what the market wants - even with hot-swap drives - denser offerings are now becoming a trend for Netfinity, rather than the exception.

If IBM sticks to its preliminary price figure (under $7000 for a 6000R with a single CPU, 512 MB of RAM, no hard drives), it will find itself very competitive with Dell - a similarly-configured PowerEdge 6450 is currently priced $200-$300 higher than the 6000R. The Netfinity 6000R does even better against Compaq's 6400R - $1500-$2000 better. The only caveat here is that IBM's pricing sometimes creeps up a little between announcement and shipment. (For example, the Netfinity 4000R was announced below $4000 and actually debuted higher.) Assuming the 6000R stays at $7000 for a bare-bones system, IBM will have taken a major step toward shedding its "solid but expensive" image.

IBM still has a lot of market-share ground to make up on Dell and Compaq. Leveraging its reputation for delivering highly reliable systems should help them to some extent. High reliability is often a key sales point for Internet infrastructure companies, which is where IBM is now concentrating. The next step for Netfinity is to refine/fix its product delivery model to be more "Dell-like". This will be tougher than changing their design styles - after all, putting ten pounds of stuff into a five-pound bag is easy compared to fighting internal politics and getting everyone charging in the same direction. (Compaq is an object lesson here.)

Our focus on IBM does not mean that Compaq and Dell should be overlooked. Each has its strengths and weaknesses, as does IBM. However, we believe IBM stands a good chance of regaining some lost market share.

User Recommendations

Assuming IBM gets its pricing in line with the rest of the players, users desiring reliable, high-performance servers without sacrificing density should look seriously at the new Netfinity products. Although some users may have a need for only one of the models, there will be many who can use all three models in multiple locations within their business.

Despite the PR information talking about the 6000R being used for database and ERP applications, these servers should not be aimed at the back office of very large data centers - they are not "beefy" enough to handle something like a large Oracle 8i database. Very large data centers are better suited to the Unix market, where IBM's RS/6000 series is putting out some serious performance figures. (IBM will also try to sell you an S/390 for data centers, but that's a different discussion.)

An added benefit is Netfinity's support for Linux and SCO-Unix. As enterprise Linux grows in robustness, this will become an increasingly popular choice for Netfinity customers. Customers still debating whether to go with NT/Win2000 or Linux will appreciate IBM's support for all three OSes.

 
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