NEC Wants Everybody to Know Its Name


NEC Corporation of America is making a new play to raise its profile as a provider of server hardware in the U.S. market. A dominant company in its native Japan, NEC is not known as a major brand in the North American datacenter, but it’s looking to change that with new products and a greater sales effort.

In North America, NEC is primarily known for its displays, although it has had desktop PCs under the PowerMate brand for many years.

In Japan, however, it sells a wide range of server products, from single-socket servers for small businesses to mainframes running Intel’s Itanium. It also has a supercomputer business, the SX9, but was barred from selling them in the U.S. until recently due to government regulations that favored American computer firms.

Despite its low profile, NEC is no newcomer to the U.S. server market. The company has been selling server hardware in North America for 15 years, but it’s typically been doing so through a brisk trade in OEM deals with companies like Network Appliance and Stratus Technologies. The company claims nearly one of every three datacenters is estimated to have an NEC server sold under another company’s brand name.

However, that strategy is going to be changing soon, it said.

“We’re making a lot of money in the OEM business, so that’s nothing to sneeze at,” Ken Hertzler, director of departmental server products at NEC of America, told “We have had significant management change all the way down the ranks and significant restructuring and are looking forward to making some headway in the U.S. market.”

NEC is building distribution channels, starting with Synnex, the No. 4 distributor in the U.S. The company only had two partners, IBM and HP, and it wanted a third partner, Hertzler said. Low-end servers will be sold through Tiger Direct.

For now, things at NEC’s sales are fairly “grassroots,” as Hertzler put it. It has about 30 people in sales, half working the channel and the rest working directly with customers. In addition to Synnex, the company hopes to add another distributor. It also has signed 150 VARs , a figure the company expects to double during the next six to nine months.

Good luck, said Forrester Research analyst James Staten.

“I’ve yet to talk to a customer who is clamoring for a new server vendor,” he told NEC “would have to significantly differentiate their product line and show that it is so different that the traditional vendors don’t have it on their near-term roadmaps.”

However, Hertzler added that NEC is not going to try to win an outright market share battle with IBM (NYSE: IBM), HP (NYSE: HPQ) or Dell (NASDAQ: DELL), because it simply won’t to be able to.

“We want to start being known as a branded provider, and there are a couple of points on that,” he said. “Our overall positioning is that we have the broadest server product line on the market available today.”

Intel inside everything

NEC of America’s product line is based entirely on Intel (NASDAQ: INTC) processors, a decision made in Tokyo, Hertzler said. The systems run all of the standard datacenter operating systems available for Intel — Windows Server, Red Hat Enterprise Linux and SuSe Linux Enterprise, as well as VMware ESX.

NEC offers minitower servers for small businesses, rack-mounted servers and blades in its SigmaBlade line. He said the SigmaBlade chassis was designed in partnership with HP, which is why it looks identical to HP’s c7000 blade server. The two are not interchangeable due to firmware differences, however.

The SMB market will be its first area of focus with its fault-tolerant servers. Hertzler said NEC’s 320F fault-tolerant server starts at $17,000, far cheaper than other fault-tolerant servers, such as HP’s NonStop servers, which start around $500,000 and above.

“Providing the fault-tolerant market into SMB is where we see ourselves,” he said. “The Fortune 2000 is a tough one because they are well-entrenched with IBM and HP. Not that we will ignore them, but for our market, we are looking more at the volume play and focusing on companies with blades as our flagship products.”

A fault tolerant server is akin to a RAID storage system, but offers redundancy the whole system, not just disks. It’s essentially built around two servers in one box — a primary and a secondary — that operate in tandem, with the secondary doing everything the primary is doing. If anything happens to the primary, the secondary takes over immediately and there is no interruption of service.

Hertzler thinks that will make for a good virtualization story.

“Fault tolerance for virtualization had been a niche product but it is coming into the datacenter because people are saying, ‘Maybe our apps should not run on this, because it’s one thing if one app fails, but if eight fail, that’s a different story’,” he said. “And there’s nothing in software to protect against certain hardware faults, there is no way to [migrate] those apps off in time if a piece of hardware fails.”

Forrester’s Staten said that if NEC can demonstrate fault tolerance on par with Unisys and HP’s NonStop systems, it has a story to tell.

But he added that the feature is not a must-have for virtualized systems.

“For most people, their virtualized workloads are not mission-critical,” he said. “They are business-critical or non-critical, and in most cases, a fast restart is sufficient — and they get that today.”

New NEC servers

In addition to pushing fault-tolerant servers for virtualization, NEC has two new servers — blades and rack mount. The NEC Express5800/i120Ra-e1 server is a low-power 1U rack mount system designed to reduce power consumption by half from a typical rack, operating at 330 watts, compared to the 680 watts in a typical server, according to NEC. The i120 runs two low-power Xeon servers, with room for 3.5-inch Serial Attached SCSI and Serial ATA disk drives with optional RAID 5 capability.

The NEC Express5800/140Ba-10 blade is a four-socket blade for its SigmaBlade chassis. With 16 DIMM memory sockets, it can hold up to 64GB memory and NEC plans to release 8GB memory DIMMs in the future, which will allow for 128GB of memory in these blades.

Both servers are due in October. Pricing will be announced then.

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