By Keith Regan E-Commerce Times
02/26/04 7:57 AM PT
"Given how fierce the competition is at the top of the server market, any delay or product change -- anything that could cause customer frustration or confusion -- is going to be an invitation for competitors to pounce," IDC vice president Jean Bozman told the E-Commerce Times.
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Sun Microsystems (Nasdaq: JAVA) has announced it will expand its HP (NYSE: HPQ) Away program
in a bid to lure Hewlett-Packard's Unix customers. The company will dangle its own Unix operating
system, Solaris, as an alternative to HP-UX.
Sun initially launched the HP Away strategy almost two years ago
when HP began to phase out its Alpha/Tru64 platform in favor of
Itanium-based servers. Since then, Sun claims 80 customers have
migrated to its HP alternatives, representing as much as US$200
million in additional revenue for the Santa Clara,
California-based company.
"We're expanding the program to take advantage of an inflection
point in the industry," Sun senior vice president Larry Singer said.
"We're addressing the disruption around HP's architectural roadmap
and its neglect of a key customer base."
Sun estimates more than 270,000 customers are using HP-UX or related
platforms. The company is dangling several carrots to lure HP customers to Solaris, including a lease buy-down program designed to level out the costs of migration, plus free two-week migration assessments that take into account the applications being
moved as well as how a company's data storage needs might change as a result
of the move.
Nothing New
HP could not be reached for comment. But as a top server-sales leader, it
likely has grown accustomed to having competitors attempt to use any means
at their disposal to grab market share.
Last year, for example, when HP announced it would phase out sales and
support for its venerable, 30-year-old e3000 server line, IBM (NYSE: IBM) tried to
use the occasion to highlight its ability to migrate customers from HP
servers to its own.
"Given how fierce the competition is at the top of the server
market, any delay or product change -- anything that could cause customer
frustration or confusion -- is going to be an invitation for competitors to
pounce," IDC vice president Jean Bozman told the E-Commerce Times. "With IT
spending starting to pick up, companies may have budgets lined up and be
looking for somewhere to spend them."
Sun's latest announcement comes as HP's customer base is still
digesting news that HP will begin offering servers loaded with AMD's (NYSE: AMD) 64-bit
processors while still trying to maintain as much loyalty as possible to the
Intel (Nasdaq: INTC) Itanium chip it helped develop. "Sun is banking on the news being confusing
and off-putting to customers who might be ready to make a change," Bozman said.
Market Fluctuations
The move also came as research firm Gartner (NYSE: IT) reported Sun is slipping in the
overall server market-share race. Gartner's data shows IBM extending its worldwide
lead, with Dell moving up and threatening to bump Sun from the number three spot.
HP occupies the number two slot.
Dell was the fastest-growing server seller last year, according to Gartner
analyst Joseph Gonzalez, and now sits only about 3 percentage points behind
Sun.
"The server market's really in flux," Gonzalez told the E-Commerce Times.
"On the Unix and Linux side and in the Intel market, the fight is going
to last for a while."
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"Java is everywhere," said Sun's director of strategy, Ingrid Van den Hoogen, speaking of one of the company's core technologies in today's conference. "It's not about just PCs, but everything of value on the network. Java technology runs on over 200 million cell phones around the world, 500 million Java cards, 550 million PCs and 80 percent of the enterprise servers in the world."
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IBM spokesperson Colleen Haikes called HP's move a "coup" for Big Blue, telling the E-Commerce Times that several high-profile customers already have switched to IBM servers in anticipation of the end of service support.
IBM Outpaces Sun, HP as Server Sales Stop Skid August 29, 2003
Large enterprises continue to hold back, with rising sales of servers in the under-$25,000 range suggesting that small and midsize enterprises are doing the most buying.
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