Big Blue Steps into Server Appliance Market

IBM today outlined plans for a family of server appliances aimed at Web-site hosts that need inexpensive machines that are easily managed and quickly deployed. The first product will be the A100 server appliance, based on IBM's ultra-slim 4000R Netfinity server.

James Gargan, IBM's Netfinity marketing director, says the sub-$6,000 A100 "takes five minutes to unpack and install." Future A-series products will be tweaked for specialized applications such as network storage, Gargan says.

The A-100 ships with IBM's Netfinity Web Server Accelerator software, which is designed to facilitate reverse-proxy caching architectures employed by Web content distributors such as Akamai Technologies Inc. and Digital Island Inc.

Build-to-order PC maker Dell Computer is expected to unveil as soon as next week a new server appliance that reportedly will sell for less than $5,000. Industry watchers say the entry of Dell and IBM in the server appliance market is bad news for smaller players such as Cobalt and Network Appliance. "These new big guys on the block can simply buy the market. Expect a price war," says Rob Enderle, a Giga Information Group analyst.

Still, the server appliance market's rapid growth should support more than a few players for the foreseeable future. U.S. Bancorp Piper Jaffray predicts that the market will grow from $500 million in 1999 to $12.3 billion in 2004.