Sun's Opteron Push Adds Fuel To Server Growth

Sun Microsystems' introduction of four-way Opteron servers comes at a time when the company is experiencing one of the highest growth rates of any server vendor, at least in terms of units.

A preliminary report on second-quarter 2004 server sales by research firm Gartner Dataquest shows Sun's year-to-year server volume growth at 35.5 percent, which outpaced all other tracked vendors and topped the 24.6 percent growth rate for the overall market, Sun executives said. In addition, Sun is the only vendor in the top five that had double-digit growth in terms of server volume on a year-over-year and a quarter-over-quarter basis, executives said.

One reason for Sun's fast server growth may be its development of entry-level servers aimed at markets targeted by rivals such as Dell. On Monday, Sun unveiled its long-expected four-way Opteron server offering: the Sun Fire V40z line, which starts at $8,495 for a two-way base model, said John Fowler, executive vice president in Sun's Network Systems Group. The company also upgraded the performance and cut the price of its Sun Fire V20z two-way Opteron servers and introduced two workstations based on Opteron processors and Nvidia graphics technology.

Along with the new pricing on the two-way Opteron servers, Sun is offering a subscription service in which the total cost of the server hardware--plus three years of Solaris software and services--is 40 percent lower than for a similarly configured Dell server, Fowler said.

"Since we own Solaris and can price it however we want, we are able to offer it 40 percent cheaper than a comparable Dell server with Red Hat Linux," Fowler said.For customers seeking a low-cost 64-bit option to Dell's and other vendors' products, Sun's Opteron servers can be purchased with SuSe or Red Hat Linux and with standard service, Fowler said. The servers also are qualified for use with Windows 2000 or Windows Server 2003, although those operating systems aren't sold by Sun, he said.

The bare server hardware is priced competitively with or better than servers from other major vendors, according to Fowler. "Even so, our bundle [with Solaris and services] is still 40 percent cheaper than if you loaded Windows yourself," he said. "You still have to buy the operating system from Microsoft or someone else."

John Murphy, executive vice president of Advanced Systems Group, a Denver-based Sun partner, said his company is already selling Sun's two-way Opteron servers running Linux and looks forward to selling the four-way models. "Four processors are getting to the point where we should care about them in the enterprise," Murphy said.

Sun's four-way Opteron servers are available immediately to the channel via GE Access, Arrow Electronics and Tech Data. Sun also sells them directly and through other channels, such as PC Connection. The new servers--including one unit signed by Sun Chairman and CEO Scott McNealy--are available through eBay as well.

Sales by direct marketers typically do not impact the channel, according to Murphy. "In theory, no. But in all practicality, maybe," he said. "[Direct marketers] are addressing a different segment of the market that we are not addressing. But as an alternate way to purchase, it could affect us. We'll know more over time."0