Sun Stokes Server Price War

Sun Microsystems Inc. (Nasdaq: SUNW) has upped the ante in the server price war today by announcing plans to deploy the latest high-speed processors from Advanced Micro Devices (NYSE: AMD) in its Sun Fire V20z and V40z servers.

The new Opteron processors run at 2.6 GHz, compared to the 2.4 GHz offered on the previous version of the chip. But, as well as boosting performance, Sun is also slashing its prices in an attempt to win market share from rivals IBM Corp. (NYSE: IBM) and Hewlett-Packard Co. (NYSE: HPQ).

Prices on entry-level configurations of the V20z and V40z are being cut by 20 percent.

Sun is touting the servers for high-performance and grid computing environments. But The 1-rack-unit-high V20z and 3U V40z are a far cry from the mainframes that have become synonymous with many data center environments (see Mainframe Skills Shortage Looms).

Rich Partridge, analyst at Ideas International Inc., believes that the price cuts spell good news for data center managers, particularly as small form-factor devices grow in popularity. Many applications have been re-engineered to take advantage of working on large numbers of smaller machines,” he says.Running large enterprise workloads over a variety of smaller machines can offer price performance benefits to users, according to Partridge. “More and more enterprise applications are being re-architected to take advantage of systems like the V20z and V40z."

However, Sun is not the only vendor playing in this space, and HP’s Opteron-based DL585 is a direct competitor to the V40z, as is IBM’s Intel Corp. (Nasdaq: INTC) Xeon-processor-based xSeries 365.

But the market for entry-level and midrange servers is a cut-throat one, and Partridge believes that there are more price cuts to come. “Particularly down in the Xeon and Opteron space, it’s not going to stop,” he says. “These systems will remain competitive.”

If anything, Partridge believes that we will see this part of the server market emulate the commoditization seen in the PC arena.

But, despite all Sun's Opteron hullabaloo, the hardware giant is staying tight-lipped on its eagerly-awaited Opteron blade server (see 64-Bit Blades Battle).Graham Lovell, Sun’s Senior Marketing Director for x86 servers would only confirm to NDCF that the server is still in the pipeline, although he refused to reveal any other product specifics.

— James Rogers, Site Editor, Next-Gen Data Center Forum