Sun, IBM Server Rivalry Reaches New Heights

Sun Microsystems IBM

The back-to-back server introductions is just one example of the intense rivalry between Sun and IBM in the Unix server space, solution providers and other industry sources said.

One channel source said the p670 was originally scheduled to be released later in the month, but its introduction was moved up to take some of the wind out of Sun's Starkitty debut.

Not to be undone, Sun reacted to the introduction of IBM's p670 by dropping the list price of its entire Midframe line of servers between 11 percent and 41 percent on Monday.

The reason for the price cuts varies, however, depending on who is asked.

Steve Campbell, senior director of marketing for Sun's enterprise system products, said the cuts were a result of cost savings after a year of producing the Midframe server line, including the 3800, 4800, and Sun Fire 15K. "The Uniboard [processor and memory boards are the same for servers from the 3800 to the 15K," Campbell said. "We were able to pass the savings on to our customers."

IBM executives and partners, on the other hand, said the price cuts were needed by Sun to remain competitive.

Michael Madigan, executive vice president at Symatrix Technology, a Portland, Ore.-based IBM solution provider, said the price cuts are part of an ongoing RISC server price war. "See how Sun drops prices up to 41 percent," Madigan said. "It's going to be a buyer's market for the next 18 months."

The price cuts have nothing to do with IBM and everything to do with beating the used equipment market, said Ed Gogol, director of enterprise systems at Solarcom, a Norcross, Ga.-based Sun solution provider.

"I see [the cuts as an advantage for us against people selling used equipment," Gogol said. "That's our biggest competition. Not IBM. Sun drops prices, but the used-equipment people are sitting on inventory which they have already paid for. It's not very difficult for us to sell against IBM based on technology."