Sun Gets Serious About Low-Cost Server Sales

Sun Microsystems in recent months has broadened its portfolio of entry"level servers to combat stalled sales of its pricey systems. Its latest effort was the introduction last week of the B100x, a blade server that features an Advanced Micro Devices Inc., Mobile Athlon processor and is priced at less than $2,000.

The B100x shows further strengthening of the relationship between AMD and Sun, although Sun once treated the X86 architecture as a competitor to its Sparc chip. The B100x follows the B100s, a blade server that uses a Sparc processor. Both servers run Solaris and Linux. With two options for processors and operating systems, Sun hopes to gain share in the blade"server market. It also last week introduced the B10p, a $13,800 blade server for security functions.

Blade servers, which slide vertically into a chassis and share functions and power with other blades, offer cost savings and flexibility. Sun has to offer blade servers if it wants to compete at the low end, Illuminata senior analyst Gordon Haff says. "Sun's bet on volume systems is a big one, but it's probably one that they have to make." The X86 architecture is popular with the low"end market; unit shipments were up 21% during the third quarter compared with last year, according to market researcher IDC.

Sun's cozy relationship with AMD raises questions about Sparc's future. "They are arguing quite eloquently that the next generation of Sparc will be optimized for higher performance on the low end," says Richard Chu, managing director of SG Cowen Securities Corp. But Chu says he wonders how committed Sun will be to Sparc if sales take off for its AMD"based servers.