IBM`s re-badging of its server lines comes at the tail-end of a spurt of activity in the high-end server market, reiterating the fact that the days of Unix on Big Iron are far from over.
The news is not all bad for the vendors - the market is hungry for product, the industry has finally caught up, and there is money to be made at the high-end of the market.
Jason Norwood-Young, Technology Editor, ITWeb
Leading the pack was Compaq, launching its large AlphaServer series in the middle of the year. Its success with the boxes - some priced at over R1 million - probably caused the furious release of product from its competitors. Compaq expected to sell very few of these machines, but instead pre-sold numerous boxes before the product was even available.
Recently we have seen Hewlett-Packard and Sun following suit. Superdome is HP`s offering for users who need high performance and reliability. Not even a month after Superdome was launched in New York by HP MD Carly Fiorina, Sun Microsystems released its new boxes based on its third-generation RISC chip.
Corporate bandwagon
IBM is the latest vendor to try and get on the bandwagon, with its new eServer branding and products designed for the needs of the corporate world.
The flurry of vendor activity is obviously being driven by user demand - unexpected user demand for the most part. What is causing this need for these hulking monsters, and why were most of the vendors capable of delivering such systems unable to anticipate the rush?
I believe the answer lies in the Y2K issue, and vendors` reliance on research to spot industry trends. It also had a lot to do with the way different market segments reacted to the Y2K threat.
Faced with possible systems meltdown on 1 January 2000, the small and medium-sized business segment chose to tackle the problem with systems replacement. It was the cheapest and easiest way of dealing with the threat.
Unfortunately for the corporate market, such a solution was not open to them. They were encumbered with legacy systems and the software that ran on top of those old hulking machines. Instead of replacing hardware, this market segment chose to recode their business systems, thus removing Y2K problems from the software.
Growth curve
For the vendors and their research houses, the increase in spend from the small and medium enterprise (SME) segments produced an unrealistic growth curve, while the corporate market, which was using its budgets for software, produced a slump in high-end server sales. This did not stop the sales in this segment entirely, but it muted the actual growth curve, which resumed after Y2K. As a result, vendors have concentrated on the SME segment, while almost ignoring high-end equipment development.
Corporates are now picking up where they left off over a year ago, and are buying all the toys they have had on their wish-list for all that time. They benefit from the new technology that they would not have had a year ago - in essence leap-frogging one step of the technology staircase. This has left vendors trying to catch up with the users, rather than the usual converse.
The news is not all bad for the vendors - the market is hungry for product, the industry has finally caught up, and there is money to be made at the high-end of the market. Those fleet-footed enough to catch up will be able to capitalise on the high-value, low-volume Unix boxes.
However, there is a threat that they may have over-anticipated the SME demand, and have sped too far ahead for this market. The balance of under- and over-supply, and the dangers of getting it wrong, have been demonstrated all too clearly by the likes of Intel, which constantly struggles to anticipate chip demand.
Some say that having a product that is too popular cannot be a bad thing, but if you cannot deliver, there are always competitors waiting in the wings to capitalise on your mistakes.
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