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Commentary
Innovation Still Matters
Larry Singer, Sr. Vice President and Strategic Insight Officer
Friday, Oct 15, 3:00 PM PT
Today, IBM announced the latest in its series of POWER5 servers. While they are touting some impressive performance gains, it is clear that IBM has not invested as much effort in its UNIX operating system as it has with its hardware. AIX lacks key features and functionality that we deliver with Solaris, and the gap will increase with our upcoming Solaris 10 OS.
The launch of Solaris 10 is a once-in-a-decade, market-tipping event that will set Sun apart from IBM (and HP) by providing platform choice, predictability, and stability, along with disruptive innovations such as Solaris containers and DTrace, which gives customers the unique ability to diagnose real problems in real time.
Other than the OS story, it is interesting how similar IBM and Sun's technology strategies are. And a less obvious, but an important corollary to this development, is that HP is really struggling to articulate a clear plan. As a result, the enterprise server market seems to be consolidating down to two main vendors: Sun and IBM.
Consider the following:
- IBM's announcement reinforces that UNIX is a vibrant and expanding market. The fact that IBM is investing R&D in this space is proof and endorsement of Sun's strategy, and validates that vendors need to invest in R&D and offer customer value to succeed.
- Both Sun and IBM are making gains in the storage market, while HP is fumbling away the assets it got from the Compaq purchase.
- Both Sun and IBM are investing across the board in the enterprise space: chips, OS, middleware, storage--and many of these are no longer core competencies for HP.
- Both Sun and IBM have embraced multi-core processors, and laid out plans to deliver to customers. HP's multi-core strategy is Itanium and customers are not embracing Itanium. HP has not succeeded in getting ISVs to support Itanium, and in fact has recently announced they will no longer deliver Itanium-base workstations.
Since no customer wants dependency on a single vendor, there is always going to be room for two. In our mind, HP is becoming less relevant in this space. It is now a race between Sun and IBM to take share from HP.
We've said that Sun has a significant edge with the Solaris OS, but what are our other advantages over IBM? For IBM it's about services, not silicon. They have great technology underlying their services business. We have great technology underlying YOUR business. So if you're a company that is comfortable with an army of costly consultants that manage your IT environment, IBM is your vendor. If, however, you want to a more cost-effective, less complex solution, Sun is your vendor.
Finally, Sun is coming from a position of strength. Last quarter's market-share numbers (both IDC and Gartner) showed Sun leading in the UNIX server market. Leading both in revenue and unit volume. We're growing and have every intention of maintaining our leadership position.
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