HP Looking to Lure SMBs From IBM, Dell

HP continued to chip away at its competition Monday with the release of two new server boxes aimed at small to medium-sized businesses (SMB).

The Palo Alto, Calif.-based computer and printer maker is enticing these sub-500 employee shops with its upcoming HP ProLiant BL30p blade server (due out before July) and the debut of its HP ProLiant ML100 server series
(starting at $499 with a Celeron processor).

The company said the strategy is necessary, considering how much is riding on SMBs these days. According to the Small Business Administration
there are more than 22.9 million small businesses in the United States.
Home-based businesses account for as much as 53 percent of all U.S. small
businesses. A new study from Yankee Group research indicates that U.S. small
to mid-sized businesses spend about half of their annual IT budgets on new

But the new ProLiant boxes are also HP’s latest attempt at stealing
server sales from low-price rival Dell and sales champ
IBM . HP is also in the midst of an aggressive campaign against Sun Microsystems . While neither of the products is taking advantage of the latest 64-bit extensions from Intel or the Opteron chip from AMD, HP is hoping to sell a large cache of two-chip blade servers as well as the uni-processor ProLiant ML110 with a Pentium 4, PCI-Express and DDR 400.

“We see a strong play on this product with our partners and we have a variety of upgrades,” Jeff Carlat, HP group manager of platform product marketing, told internetnews.com. “These are for small to medium businesses moving into a network server configuration.”

The ML110 server also comes pre-loaded with Microsoft Windows Small
Business Servers with internal storage up to 320 GB for ATA Models and 288 GB for SCSI Models. The server runs with an Intel Celeron 2.6GHz processor or the Intel Pentium4 2.8 GHz ($729) or a 3.0 GHz processor with 1MB cache.

When it debuts, the BL30p blade server will be based on “Prestonia”
edition Xeon chips and is expected to support both Windows and Linux. The servers will also come with dual port fibre channel and redundant Ethernet.
With 16 blades per 6U (10.5 inch) enclosure, a full single standard rack of
HP ProLiant BL30p servers can provide up to 192 processors.

“This is for smaller companies who want computational clustering, Web hosting, applications, grids things that don’t need a lot of storage,” said Steve Gillaspy, HP ProLiant Blade Group marketing manager.

Gillaspy said HP plans on staying ahead of the curve by offering
ultra-dense, two-processor blade servers in the second half of this year
running on either Intel 64-extended or AMD Opteron processors.

Still, HP must also deal with the current realities of perception. Of the SMBs surveyed by Yankee Group, 80 percent view Dell as either the perceived price leader or at least competitively priced. Regarding quality, 82 percent
of SMBs view Dell as the quality leader or maker of good quality computer

Dell is not without its challengers. HP placed second in low price
perception ratings among SMBs and IBM placed second for quality. Dell’s strength in the SMB market to this point is a direct reflection of its successful direct sales strategy.

Michael Lauricella, program manager for the Yankee Group’s small and medium business strategies advisory service said that a growing number of SMBs are looking for more comprehensive computing packages. Direct sales might not be enough to maintain Dell’s leadership of the SMB market.

“As SMBs require more complete computing solutions, channel partners will
play an increasingly critical role. Services from local integrators will be
needed to implement more complex IT systems,” Lauricella said. “This could
hinder Dell’s ability to effectively serve this very competitive market in
the long run.”

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