Hey, Don't Count Unix Out Just Yet

Hewlett-Packard, IBM, and Sun are running neck and neck for market leadership in a server sector that shows continued strong growth and high performance.

September 5, 2005

3 Min Read
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Given all the attention paid to the Windows and Linux operating systems during the past couple of years, you'd think that Unix no longer plays a significant role in business computing. But the facts tell a different story. The Unix business is strong and growing, and Unix servers remain the computers of choice for businesses that need high-powered computing.

While Windows and Linux may dominate the market for low-cost servers, businesses spent more than $4 billion in the second quarter on Unix servers. Sales of high-end machines (priced at $500,000 and more) grew around 20% in the second quarter, while sales of midrange servers ($25,000 to $500,000) grew more than 15%, according to research firm IDC. And competition among the three major Unix vendors is just as robust as the market.

"A lot of people thought Unix servers were going away, but not only are they not going away, they're playing an incredibly important role in the data center to handle mission-critical applications" such as databases, enterprise resource planning, and business intelligence, IDC analyst Jean Bozman says.

Richard Entrup is a believer. For the CIO of Byram Healthcare, a provider of medical supplies that has doubled in size through acquisitions during the past 18 months and plans to double again in the next year, Unix is the only choice for crucial apps like the company's ERP system.

Faced with upgrading its existing IBM p660 Unix server, Byram in May installed an IBM eServer p5-570 server to run IBM's AIX operating system and Informix Dynamic Server database. The machine provided "an exponential increase in performance," Entrup says. "Everything is running 10 to 100 times faster. Things that used to take days now take hours. Things that took hours now take minutes."Byram has more than 60 other servers running Linux for many applications, but Entrup wanted a system that could scale. The p5-570 is equipped with eight Power processors, but it can be quickly upgraded to a 16-processor system. "As far as I'm concerned, Unix is far from dead," he says.

Hewlett-Packard, IBM, and Sun Microsystems hope he's correct. They collectively control more than 90% of the Unix market and are fighting for market share. Which vendor is in the lead depends on which report you read.

Market researchers say more than $4 billion worth of Unix servers were sold in the second quarter of 2005, but they disagree on which vendor leads the market. IDC says IBM led with 31%, while Gartner says Sun took the top spot with 34%. Both agree that HP was No. 2 in market share.

IBM's Unix offerings are almost exclusively based on its Power processor architecture, and the company has gained 15% in market share during the past three years. Around 60% of the Unix servers shipped by HP continue to be based on its PA-RISC processor, which the vendor is phasing out in favor of the Itanium processor that HP co-developed with Intel, which can run the company's HP-UX operating system.

Sun is making a strong push to increase the use of Opteron processors from Advanced Micro Devices Inc. in the Unix market on its Solaris operating system. That will include the formal introduction on Sept. 12 of the Galaxy server platform, which was developed by Andy Bechtolsheim, a founder of Sun who rejoined the company in 2004. In addition, the company plans to reinvigorate its Sparc-based server line with the introduction of the next generation UltraSparc 4+ and UltraSparc 3i processors in the coming months, and its eight-core Sparc-based Niagara processor in 2006.0

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