IBM, HP to Joust With New Servers

IBM and HP have new server offerings to pump up their enterprise computing

IBM has begun selling eServer BladeCenter servers running single- and dual-core AMD Opteron LS20 chips, according to a page on the company’s Web site confirming rumors about the thin system.

IBM said the hardware will help customers boost performance on
high-performance applications, such as ERP or CRM applications from Oracle
or SAP. The LS20’s ultra-slim design delivers high density without
sacrificing server processor performance, supporting up to 84 servers in a
standard rack or up to 80 blades in an 84-inch rack designed for the telco

The blade is hot-swappable, meaning administrators can add or change servers
without disrupting the operation of others’ servers in the chassis, according
to IBM. The server runs operating systems Red Hat 4, SUSE Linux ES 9 Windows
Server 2003 & R2 and Red Hat 3.

The blade, pre-announced in April at the AMD Opteron’s second anniversary,
is already being sold on some sites. The item is sold out on, which
is advertising it for $3,172 and on Tech Depot, which is asking $3,334 for
the machine.

Sources told that IBM’s eServer Cluster 1350 will
support the LS20, making it the first cluster solution to use AMD dual-core
chips in a blade.

Launched two years ago, the Cluster 1350 offers provides high-performance for
enterprise applications in industries spanning financial services to life
sciences. The 1350 is also the backbone of IBM’s Linux Clusters, which power
a good chunk of the world’s fastest supercomputers.

The Cluster 1350 also allows customers to build cluster configurations based
on IBM’s Power chips, enabling IBM to offer corporations clusters built with
Intel, AMD or Power chips, or even a system using all three architectures.

Pund-IT Research analyst Charles King said the new IBM Opteron blade will
narrow that gap for general purpose server customers, and will also allow
IBM to pitch its BladeCenter solutions at HPC customers.

“It also leaves IBM with the largest overall range of blade solutions;
Intel, AMD, and its own Power blades,” King explained. “That model also
follows the company’s long established strategy of offering/supporting
whatever enterprise customers want.

IBM is currently king of the hill in the blade server market, garnering a
gaudy 39 percent market share, according to the latest figures from
researcher IDC.

Blade server sales continued to soar in the first quarter of
2005, totaling $409 million. Shipments increased by 68.2 percent and factory
revenue gained 106 percent.

IBM server rival HP, meanwhile, will have its own server news next week to
celebrate the shipment of its 10 millionth x86 server. As part of this
announcement, HP will be introducing a new HP ProLiant server and new
services for its BladeSystem servers.

HP will make the announcement at an event in its Houston manufacturing
facility in a ceremony with HP executives and customer Continental
Airlines, which will receive the 10 millionth server.

The event is part of a new aggressive marketing strategy to pump up HP’s
enterprise systems. HP is in the midst of a turnaround following Carly
Fiorina’s February ouster and Mark Hurd’s March appointment as CEO. The Palo
Alto, Calif., company had suffered some weak quarters in 2004 with regard to its
server and storage sales.

Under Hurd, HP appears poised for a comeback.

Hurd, who split up
the Personal Systems and Imaging and Printing groups this week, helped HP
inch closer to IBM with worldwide server systems revenue of 27.6 percent
compared to Big Blue’s 28.3 percent share, according to IDC.

HP, which grew server sales 8.8 percent from the first quarter of 2004 to the present, also
maintained its No. 1 position with 30.4 percent server shipments worldwide.

While HP continues to rave about Itanium, the vendor was able to sell enough
servers based on AMD’s Opteron chip to become the only top systems vendor in
the 4-way x86 server space to grow revenue year-over-year, IDC found.

King said HP needs to make as much noise as possible in markets with
potential growth, like blade servers.

“Can they get back on top? Not in the short term, though HP is in a pretty
good spot given that the blade market is basically a two-horse race between
it and IBM,” King said. “At this point, though, I think the race is IBM’s to
lose rather than HP’s to win.”

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