Competition in the Unix market steps up

Despite the bluster of its Unix rivals, Sun Microsystems has retained its leadership in the Unix market, regardless of the delays to its UltraSPARC III processor architecture. However, going forward the Unix vendor is going to face intense competition from the likes of IBM, HP and Compaq.

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By  Zoe Moleshead Published  May 29, 2001

Unix market|~||~||~|Despite the bluster of its Unix rivals, Sun Microsystems has retained its leadership in the Unix market, regardless of the delays to its UltraSPARC III processor architecture. However, going forward the Unix vendor is going to face intense competition from the likes of IBM, HP and Compaq.

“For the next five years we certainly have no great fears about Sun’s viability,” says Andy Butler, vice president & group research director, Gartner Research. “Market momentum, software vendor loyalty and enthusiasm will be the main assets that will keep them ahead.”

The launch of the midrange SunFire servers over a month ago is the initial wave of its UltraSPARC III offerings. Later this year the Unix vendor will deliver Starcap its high end Unix box, based on UltraSPARC III. Gartner is also expecting Sun to introduce a four weight, low end system, below the vendor’s current low end offerings.

“By the end of this year I would imagine virtually all Sun’s server shipments will be UltraSPARC III, by then they’ll have completely geared up the new platform range,” adds Butler.

The rollout of UltraSPARC III is critical for Sun in maintaining its lead against its rivals in the Unix market, including HP and IBM. The move to reinforce its product line with UltraSPARC III is running later than analysts and perhaps even Sun expected. IBM, Compaq and HP all updated their platforms during 2000, forcing Sun to work harder to maintain its leadership position.

“[Sun] is going to have to work hard to the transition the UltraSPARC II installed base across to III. The reality is that Sun’s channel are convinced that they already have unswerving loyalty from their base — I’m not convinced of that,” comments Butler.
However, Sun is facing a challenging interim period as it integrates UltraSPARC III across its product range, and then begins to ship machines in volume, predicts Butler.
This will leave Sun in a vulnerable position, says Butler. Having to compete against rival vendors with fresher platforms.

“If you’re in a deal situation where Sun is up against HP or IBM or Compaq, which all have fresher platforms that are shipping right now, then there is no compelling reason why you would go to Sun,” explains Butler.

While Sun will be forced to graft a little harder, IBM is starting to carve out its position in the Unix market with an increasingly unified market strategy and a single server organisation.

“In the past people have looked at four totally different server technologies from IBM, frequently promoted by four completely different sales forces or channel infrastructures. They’ve been able to point to a lack of integration and leverage between them,” says the Gartner analyst.

IBM’s rebranding exercise early last year indicates its move to unify its server range. Big Blue is also touting the benefits of Silicon on Insulator (SoI) and copper technologies — for accelerated performance.

“IBM will typically be first to market with these technologies, [and] will probably maintain a six-12 months window of uniqueness. It will be up to them in their server designs to exploit the advantages,” contends Butler.

IBM is also touting the idea of self-healing, and the concept of dividing much of the server infrastructure into an independent management layer separate from the operating system. The eLiza project, still in the early stages, will leverage existing technology, stated a Meta Group report.

HP is also upping the ante in the server game. Technically Gartner gives HP the edge, and the Superdome is proving to be a strong performer and outstanding platform in Gartner assessments.

But worryingly for HP the market seems to be undergoing a crisis of confidence where HP is concerned. HP may have the technical lead, but according to Butler, HP’s execution and engagement model is letting it down.

“There is a softening in market demand for HP at the moment, and we can’t quite put a finger on it, there’s no tangible reason why the market should be losing short term confidence in HP,” adds the Gartner analyst.

Intel-based servers are also starting to push the Unix market towards the high end. RISC Unix vendors are pouring their R&D efforts into the high end, recognising the improving role of Intel designs in the low end.

Although Sun, HP and IBM all currently offer low end platforms the reality of selling one or two systems to the low end market will lead them to regard the market as “opportunistic” says Butler.

“They [RISC Unix vendors] realise that the market is basically pushing them towards the high end, centralised platforms, and much more sophisticated platforms. [These platforms] will then address a scalability or availability need that’s beyond the perceived reach of anything based on Intel today,” explains Butler.

Vendors are also starting to develop Intel platforms, with IBM set to release its 16-way Intel fabric later in the year, and the Unisys ES7000 Intel-based servers are expected to begin their push into high end enterprises.

Gartner figures show that Windows dominates the server market from $25,000 range and under, while Unix barely features. But these roles are reversed in servers from $100,000 up with 88% going to Unix, and Windows accounting for only 1%.

||**||Intel stakes its claim in enterprise server market|~||~||~|The Unix players are going to increasingly focus their attention at the high end of the market, as Intel boxes running Windows or Linux continue to gain momentum in the enterprise market.

“I think we will see Intel designs capturing more and more of the low end, sort of server as an appliance deployment,” says Andy Butler, vice president & research group director, Gartner Research.

According to the Gartner analyst, the low end of the market will become a more opportunistic proposition for the Unix players such as Sun, IBM and HP. Consequently, Unix vendors will be pushed towards the high centralised platforms, “which will address a scalability or availability need that’s beyond the perceived reach of anything based on Intel today.”

Though starting well behind Unix, Gartner statistics predict Windows-based machines will continue their steady growth path in Europe over the next four years.
“You will see that Unix should stay ahead or on parity with Windows for probably another eight or 10 years on that basis before Windows overtakes it,” explains Butler.

An analysis of the server market illustrates Windows popularity in platforms valued at $25,000 and under, as Windows gains ground on platforms like Novell and SCO, which are beginning to be squeezed out of the market. Unix scarcely penetrates this market.
But from $50,000 up the market picture is very different, with Unix dominating the market heavily. “When you look at a cut of a $100,000 and up, 88% are Unix, 10% are proprietary and other, and that includes mainframe, and 1% is Windows,” reveals Butler.

However, Windows server sales seem to be suffering now as a result of inflated growth in previous years, and has witnessed a massive drop in shipment growth.
Gartner figures highlight the high and lows of Windows at the server level over the last few years. The hysteria of 1998-99 witnessed growth of 170% for NT machines, but growth has now slipped to a more realistic 25% during 2000.

According to Butler, the drop can be in part attributed to the bursting of the dot-com bubble and Windows slower recovery from Y2K.

“What we saw happen around the moratorium of big projects around Y2K was that Unix seemed to recover faster. Enthusiasm to start rolling out big Unix projects definitely kicked off very quickly following the survival of Y2K,” adds Butler. “Windows hasn’t been so fast to pick up.”

The downturn also suggests a more realistic approach to Windows, and an acceptance that both Unix and Windows have their own roles to play in the market.

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