March 10, 2000
NEW YORK - IBM Corp. sold nearly three times as many high-end servers
for the Unix operating system as market-leader Sun Microsystems Inc. in
the fourth quarter of 1999, research company International Data Corp.
reported Friday. IBM sold 720 new RS/6000 S80 servers in the fourth quarter,
compared with Sun's sale of 255 of flagship E10000 servers, the report
said. The servers-powerful computers that manage other computers - are
designed to run the Unix OS aimed at industrial-strength business uses.
report came two days after Sam Palmisano, head of IBM's server group,
told analysts that growth in servers would come through improved products
and a more focused sales effort.
Hardware such as servers represents 30 percent of a $700 billion electronic
business market, he said. IBM's S80 Unix server, introduced last year,
was among the first products to use IBM's copper-based microprocessors,
which provide high performance from a lower number of processors, reducing
costs. IBM said the S80's sales strength was dramatic due to the fact
that they only began shipping in September. "This shows that we're really
outselling Sun in the top end," said Michael Kerr, vice president of product
management for IBM's server group. "We have every indication these numbers
are being sustained." IBM is also seeking to grow its server business
and redefine the competitive field by moving its copper technology to
the midrange servers, starting in May. "We're going to take that same
technology and move it further down in our family," Kerr said.
We don't really care about a single quarter's sales figures, especially
when some significant part of it probably results from pent up demand
for a product, as well as being compared to a year-old product. Sales
figures over the course of a year are much better indicators whether IBM
is truly "taking it to" Sun. IBM might have the edge in installed base,
and with two-thirds of the initial sales going to that base, the numbers
are not as impressive.
is interesting is that Sun's performance story (Unix/Solaris) is
now being attacked on two fronts. On the different-OS front, Compaq has
produced TPC benchmarks for a clustered 64-processor system (running Windows
2000) that surpasses Sun's E10000 performance by 30%, for about one-quarter
the price. Although comparing Windows to Unix/Solaris is a little risky
(apples-to-oranges, or maybe grapefruit-to-oranges), the point of a Windows-based
system pummeling a Solaris-based system should not make for celebration
in Palo Alto, the home of Sun.
greater concern to Sun will be the S80's superior performance in the TPC-C
and other benchmarks, including SAP R/3 two-tier and three-tier, BaanERP,
SPECweb96, and Notes Bench. These figures have all-but-eliminated (for
now) Sun's performance selling point; and they both run Unix. [Yes, we
realize that Solaris and IBM's AIX OS are different, but their strengths
and weaknesses - especially as compared to Windows-based systems - are
similar. Solaris is considered more robust than AIX in terms of reliability,
scalability, and compatibility than AIX, but those factors should not
be the only decision points.]
caveat regarding the performance numbers: a large part of IBM's price/performance
differential comes from two sources:
- IBM's deeper discount (40% on initial hardware costs, 36% total vs.
approx. 10% on maintenance only from Sun) which accounts for approximately
- Different pricing on Oracle 8 (Sun is paying about $1.4M more for
the initial license plus five-year maintenance) which equates to approximately
$10/tpmC. Given that Oracle has different discount structures for different
clients, Scott McNealy might consider having a "friendly chat" with
Larry Ellison about pricing.
still leaves IBM with an advantage, so Sun needs to increase performance,
or reduce prices, or both, to go head-to-head with IBM. Since the processing
power "growth curve" for the SPARC architecture seems to be rising slower
than that for Intel, Sun might want to spend more time in that area. And
focus less on going after Microsoft.
With a sticker price for a "nicely equipped" system upwards of one million
dollars, the S80 is certainly not for everyone. But it certainly is powerful
enough to run large data center operations or centralized ERP operations,
and its price/performance is very good for a high-end Unix system. The
combination of price and performance provides an alluring message for
users. IBM's hardware is generally considered more reliable than Sun's
(especially after the eBay embarrassments last year). As mentioned earlier,
users prefer Solaris's reliability, scalability, and compatibility relative
AIX. [Source: Computerworld]
wishing to buy (or stay with) Sun's offerings should consider negotiating
a better discount from Sun, so that the costs are somewhat closer to IBM's
offering. The higher-rated Solaris is a plus for Sun, we question whether
"my better OS" beats "your better hardware".
end result: there is no perfect system nor magic bullet answer. Users
need to assess their particular hardware and OS requirements, along with
performance and price needs, and map them appropriately to the systems
available. For more robust hardware and price/performance, IBM may be
the better choice; where OS robustness is the criterion, Sun should be
considered in the lead.