As reported earlier, the new systems, the free-standing p620 and the rack-mountable p660, each can accommodate as many as six CPUs and costs tens of thousands of dollars. They're the first midrange Unix servers to use CPUs with IBM's silicon-on-insulator (SOI) technology, which allows faster speeds without higher temperatures.
The new models arrive after new systems from Sun using its UltraSparc III chip and price cuts on older models.
IBM always has been aggressive in its attempt to wrestle back some of Sun's market share, but dwindling spending on servers has spurred even more discounting off list prices, Sun executives said Thursday to explain shrinking profit margins.
"With the (macroeconomic) picture having shrunk the available market... Hewlett-Packard, IBM and Sun fought more vigorously over every available piece of business," Goldman Sachs analyst Laura Conigliaro said in a research report Friday.
Unix servers, at the centre of corporate computer networks for essential functions such as accounting and inventory control, are a huge part of the computing industry. The Unix server market grew 14 percent, from US$25.5 billion in 1999 to US$29 billion in 2000, according to research firm IDC, with Sun keeping the lion's share.
And the product is key to IBM's fate. Unix servers now account for the most revenue of IBM's four server lines, said Mike Kerr, IBM's vice president of marketing for the product line. "Unix is the largest server business for us now," Kerr said.
The servers have been for sale since Tuesday but will begin shipping in volume Friday, IBM said.
The Unix server market, once thought to be replaced by Intel machines running the Windows operating system, was rejuvenated by the growth of the Internet and Microsoft's inability to create powerful enough software. While the Windows threat has been kept at bay, though, Unix server makers now are up against a tough economy.
The SOI chip technology debuted six months ago with IBM's p680 server. The new, faster CPU allowed IBM to refresh the S80 server that IBM considered the cornerstone of its years-long effort to recover from Sun's rapid ascendance to the top of the Unix server heap.
"While still ahead of the Unix competition, we believe Sun is losing market share to other vendors," UBS Warburg analyst Don Young said in a research note Friday.
Just as the S80 became the p680, the p620 and p660 are revamped versions of the F80 and H80, respectively. The new models improve performance 30 percent in most cases, Kerr said, and about 40 percent in top-end models that use IBM's fastest Unix server chip.
In six-processor versions of the systems, customers may use 668MHz RS64 IV chips, Kerr said. With one, two or four CPUs, IBM ships the systems with 600MHz CPUs. The previous CPU ran at top speeds of 450MHz.
Sun's UltraSparc III chips currently run at 750MHz, but the company hopes to introduce later this year a 900MHz version originally due by March. Analysts expect 1GHz models in December.
