New Game Plans - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Software // Enterprise Applications

New Game Plans

HP and Sun are trying to revive their standings in the IT industry with waves of new products. Will they convince customers they're still leaders?

Hewlett-Packard and Sun Microsystems have a lot to prove. The two struggling IT vendors this week will unveil a wave of products designed to patch weak spots in their product lineups and re-establish their former positions of strength. They're innovative additions, but the companies will have to do even more to keep up with Dell, which drives the market for high-volume, low-cost PCs and servers, and IBM, which dominates the high end with its mainframes, systems integration and outsourcing services, and army of consultants.

The stakes are highest for Sun, which many had written off in recent years as a provider of overpriced and underpowered proprietary systems. This week, it introduces the Galaxy server platform, an x86 line designed to help the company regain its position as a leading supplier of high-performance systems. Sun is billing the event as its "triumphant return to Wall Street." Hewlett-Packard, meanwhile, is adjusting to new CEO Mark Hurd and a 10% cut in its workforce imposed earlier this year. This week, HP is launching an initiative to foster virtualization across its product portfolio, making it easier for businesses to consolidate and shift workloads among fewer servers.


Chicago Mercantile is increasingly moving to blade servers. ''There's no one platform that does it all,'' CTO Troxel says. -- Photo by Sacha Lecca

Chicago Mercantile is increasingly moving to blade servers. "There's no one platform that does it all," CTO Troxel says.

Photo by Sacha Lecca
The financial-services market is the current battleground. Sun says 40 brokerages, exchanges, and financial-services companies are testing its new Galaxy platform, which is designed to win back customers in an industry that had been its core strength. "Not too long ago, the word on Wall Street was, 'How do we port away from Sun?'" admits Larry Singer, VP and strategic insight officer for Sun. "But now, the buzz is back."

Prestigious Wall Street wins are crucial for Sun because financial-services companies buy the most-powerful computers available and can serve as a proving ground for new technology that can then be sold to other key markets such as education, government, and telecommunications. But HP won't give ground without a fight. In the past six months, HP says it has moved 150 Sun customers to HP systems, generating more than $200 million in revenue.

Among those HP has lured from Sun is financial-services provider Currenex Inc., a foreign-currency trader that averages about $20 billion a day in transactions. Currenex in January moved from Sun servers equipped with Sun's Sparc processors to HP systems that utilize x86 processors from Intel and Advanced Micro Devices Inc. Sun wasn't demonstrating enough dedication to creating systems that used the Linux open-source operating system, says chief technology officer Sean Gilman. In addition, the performance of Sun's Sparc systems had waned, and the company's x86 effort was just beginning, Gilman says.

"In our environment, if you are 5 milliseconds faster, you win," Gilman says. "Transactions that were taking a second now take about 10 milliseconds." But Currenex upgrades portions of its server farm every six to nine months and will consider any vendor providing the best performance. "If Apple starts making their own chips, and they're the fastest thing going, we'll switch to Apple," he says.

Sun has been working for the past 18 months to address concerns like those voiced by Currenex. The computer maker introduced lower-priced Sparc systems with faster processors to compete better with high-end systems built on Intel's Xeon chip and refreshed its Solaris operating system. But Sun's boldest move was a decision 15 months ago to enter the x86 market with its first systems based on AMD's Opteron.

The Galaxy announcements represent phase two of Sun's x86 strategy, says John Fowler, executive VP of the network systems group for Sun. The first phase was simply to get Sun's first non-Sparc server out the door.

It's intriguing technology, but Sun is nowhere near the x86 big leagues yet. HP led the x86 server market with more than $2 billion in revenue in the second quarter, according to IDC and Gartner, followed by Dell and IBM with $1 billion each, compared with Sun's $100 million. Before it can challenge the big three, Sun needs to move past smaller players like NEC Corp. with $116 million in x86 revenue and Fujitsu Siemens with $212 million.

Sun is betting on the Galaxy systems to accomplish that, promising that the computers will provide as much as a 50% performance improvement while consuming a third of the power used by comparable Xeon-based systems. Initially, Sun is offering three versions of the Galaxy line. The X4100 and X4200 will be available with either single or dual-core Opteron processors, and a stripped-down X2100 will start at $745 for a single-core Opteron system. They're preloaded with Solaris 10 and the Java Enterprise System.

Sun points to interest throughout the financial-services community as proof that its strategy is working, citing HSBC, J.P. Morgan Chase, Mitsubishi Securities International, the Philadelphia Stock Exchange, Reuters, SunGard Trading Systems, and Thomson Financial as companies testing the new products.

Sun plans to address the high-performance market with an eight-processor version of Galaxy, which, with dual-core processors, will effectively provide a 16-way computing system, says Andy Bechtolsheim, a Sun founder who left for about a decade before returning last year to lead the Galaxy design effort.

Still, Sun is coming late to the x86 market, reluctant to shift the focus away from its Sparc-based systems. "Sun got a little away from its roots over the years, and Sparc became almost like a religious issue," Bechtolsheim says. "The Intel-compatible market is well over $20 billion, and with these new systems, we can address at least half of that market."

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
News
IT Employment Trending Up; Data, Cybersecurity Skills in Demand
Jessica Davis, Senior Editor, Enterprise Apps,  11/11/2020
Slideshows
The Ever-Expanding List of C-Level Technology Positions
Cynthia Harvey, Freelance Journalist, InformationWeek,  11/10/2020
Commentary
How to Approach Your Mission-Critical Big Data Strategy
Mary E. Shacklett, Mary E. Shacklett,  11/17/2020
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
Why Chatbots Are So Popular Right Now
In this IT Trend Report, you will learn more about why chatbots are gaining traction within businesses, particularly while a pandemic is impacting the world.
Slideshows
Flash Poll