Sun Fights Uphill Price War with Low-End Server

In an ongoing battle against Intel-based competition, Sun Microsystems introduced itslong-awaited four-processor “Cherrystone” server.

Cherrystone, otherwise known as the Sun Fire V480, has two processors and sells for aboutUS$23,000 in its base configuration. A four-processor configuration also is available.

The new machine is a junior model of the V880, an eight-processor server that the companyintroduced last October to target machines running Microsoft Windows. The entry-levelV480 replaces Sun’s UltraSparc II-based 450.

The Santa Clara, California-based company also is upgrading its V880 with fasterprocessors. Sun said the V880 now will feature 900 MHz processors, up from 750 MHz.

Higher Speeds, Lower Costs

John Davis, senior director of Sun’s volume system products, said the Sun Fire V480fleshes out the company’s entry-level server family. He added that Cherrystoneincorporates enterprise features and performance at prices that should attract bothWintel users and Sun’s traditional customer base.

“The Sun Fire V480 server offers high performance, a dense rack-optimized design, largememory and Sun StorEdge bundles to get directly at the heart of what enterprise customersare demanding today: better price/performance, more flexible systems and lower cost ofownership,” Davis said.

Price Wars

Indeed, the V480 is less expensive than the its predecessor, the 420R, which sold forabout $28,000. The move toward lower-cost, low-end servers is Sun’s latest strategy inits continuing price war against IBM and Hewlett-Packard.

Sun’s competition is fierce in the mid-range and high-end Unix server arena, but thecompany still dominates the market for lower-end machines and hopes Cherrystone willhelp it fight off a recent surge of Intel-based servers running Windows and Linux.

Giga Information Group analyst Rob Enderle told the E-Commerce Times that Sun has littlechoice but to compete more aggressively.

“Sun has to continue to release products that compete with the Intel-based technologiesthat are moving into the market,” Enderle said. “They are increasingly in a price war andincreasingly seen as a legacy vendor against platforms like Linux.”

Sun’s Woes

Indeed, the perception of Sun’s platform as a legacy offering might be the most troublingobstacle for the company in a market that is moving away from legacy vendors.

Sun’s new V480 might slow the migration away from legacy platforms, Enderle said, but he isnot convinced that it will be enough to stop it. “Price alone will not reverse anindustry trend,” he noted.

On a Unix bid, any low-cost, high-performance product from Sun will give rivals somethingto think about. After all, HP and IBM still bid Unix products. However, Enderle said,while a product launch by Sun might give vendors pause, it probably will not keep themajor players up at night.

“IBM can likely place a Linux-based product against this offering and win the business inmany cases because it’s a forward-looking platform and the hardware seems to be lessexpensive,” he noted.