Event Summary
In the wake of last year's highly publicized, extremely embarrassing outages at their online auction site, eBay has put out for bid a special contract for its infrastructure/back end. The present supplier, Sun Microsystems, is not a shoo-in for the contract, and is expected to face stiff competition in the form of Unix systems from Compaq, HP, and IBM.
The main eBay servers are Sun's E10000 "Starfire", their largest server product. IBM will try to beat that with its RS/6000 S80, its high-end Unix server, which recently has made headlines by surpassing Sun's best transaction-processing benchmarks.
Although valuable (we estimate the server price tag at $5-10 million), the contract's symbolic value exceeds the actual dollars involved. An indication of this is the dueling PR statements from Sun and IBM: "This is more than a blow to Sun's advertising campaign," James Sciales, an IBM spokesman, was quoted regarding their recent big win at Network Solutions Inc. "In Big Blue's fight to regain market share from Sun for computers that power the Internet, it's a case study of what IBM is best known for - leading technology."
Sun's Doug van Aman responded by downplaying the server shift. "IBM sold Network Solutions one system," he said. "We have many, many, many systems at Network Solutions. The (Sun) E450 server is a smaller server, while the (IBM) S80 is their largest server. They won one account, but we still have an extremely good relationship with Network Solutions."
Beating Sun is a big incentive to its competitors, so the companies are expending the extra effort to get this particular brass ring.
Market Impact
The problem with being (or claiming to be) the leader in a market, such as Web/Internet infrastructure, is that everyone shoots at you. With the highly visible - and to some, annoying - "we're the dot in dot-com" campaign, Sun painted a big target on its front, and back, and sides. In recent months, both IBM (with its RS/6000) and Compaq (with its 64- and 96-CPU ProLiant configurations) have beaten up Sun's E10000 (Starfire) server in transaction processing performance.
The highly embarrassing outages at eBay provided an opportunity for anyone with a reliability and performance story to take their best shot at prying Sun loose. The Network Solutions A.root server contract loss adds fuel to the "Sun is vulnerable" fire. If Sun gets displaced at eBay, the perceived impact will be far greater than the actual revenue lost - we can envision rivals referring to Sun as "the not in dot-com". This only increases the pressure on Sun and its rivals.
In Sun's defense: the Solaris OS is generally considered highly reliable, scalable, and powerful, and its users are generally very loyal to it. There are lots of applications written for it - something IBM/AIX and HP/HP-UX lack. We also appreciate Sun's tying of pay (for some) to system uptime - it shows a focus on what's important. We feel the UltraSPARC II is getting long in the tooth, so it will behoove Sun to get the UltraSPARC III shipped ASAP. OS loyalty can only carry a product so far; if the hardware is the cause of lowered performance, customers may find their patience tested a little too much.
One point of clarification: although Compaq is in the running for eBay, it is not the ProLiant series that is being considered, despite the mention of the ProLiant performance figures earlier. ProLiant is primarily a Windows-based line. The Compaq products being considered are its NonStop (formerly from Tandem) servers.
User Recommendations
The general corporate user will find the eBay dogfight of little interest (other than intellectual curiosity) in the short term. This is for two reasons:
What is of greater interest is the long-term effects:
Mainstream customers care about the first two questions, since the answers may make a difference in their purchasing patterns or the continuity of operations. Customers may find that the once-compelling Sun "story" is no longer far enough ahead of the competition to justify the high price tag. The third question is more for market watchers, and the answer is more dependent on the number of applications available for each product line than upon the hardware.