Blade Staredown

Vendors and customers waiting to see who will blink first as blade prices stay high

June 7, 2007

2 Min Read
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5:40 PM -- Enterprise storage buyers get called on all the time to decide between must-have technology and nice-to-have (but not now), which usually means too expensive. Continuous data protection (CDP) comes to mind, as does storage virtualization.

But I'm talking about another data center technology here: server blades. Great concept, blades -- with higher densities, lower power consumption, and greater flexibility on the processor front. Users love the concept too. Except once they see the price tags, they seem to make the not-right-now choice.

Sun was the latest server vendor into the pool today. (See Sun Flashes New Blades.) It's charging $3,695 for an Intel processor-based blade. The AMD Opteron blade is $3,995, and the UltraSparc T1 module costs $5,995.

Those prices are in the ballpark of its competition. HP's BL460c with Xeon processors runs between $3,500 and $4,500; the Opteron version is around $2,000. IBM's Xeon-based HS21 runs between $2,700 and $3,500; with the vendor's AMD-based LS21 ranging from $3,000 to $6,000.

Sun's entry dashed any hopes of a price war -- clearly the vendors are all anxious to preserve as much margin as they can for as long as possible. So it's a staredown of sorts, as customers wait for vendors to reduce prices and vendors wait for customers to relent and make necessary upgrades.The airlines have played these kinds of pricing games for years, though there's some welcome evidence this quasi-collusion may have run its course. While I'm not accusing server vendors of collusion, they're in sufficient lockstep with one another to give customers very little incentive to adopt blades now, no matter how much they may like the benefits.

For the next few quarters anyway, it looks like blades will continue to be nice to have rather than absolutely necessary.

Terry Sweeney, Editor in Chief, Byte and Switch

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