Big Blue Goes Small with New Intel Servers

In keeping with the current theme of driving down the cost of servers for smaller businesses, IBM introduced two new servers that bring mainframe features to its Intel-based eServer xSeries line.

The xSeries 206 and xSeries 306, priced at $499 and $1,339, respectively, were created to help IBM compete with rivals HP and Dell in the fierce battle for market share for small- and medium-sized businesses.

The new machines may come cheap compared to their xSeries predecessors, but they don’t skimp on features, according to Stuart McRae, manager of IBM eServer xSeries Products.

Designed with IBM’s X-Architecture for extending mainframe functionality to xSeries, the executive said the machines include new simple-swap drives based on the red-hot Serial ATA interconnect (define), as well as management and data protection features typically not seen in entry-level boxes.

The single processor x206 tower is geared for small businesses that need an inexpensive machine for file and print, e-mail and vertical business applications. Also a one-processor box, the x306 is a rack server designed for Web serving, firewall, VPN (define) and load balancing.

The new machines are the latest addition to the IBM Express portfolio, the crux of IBM’s strategy to curry favor to the cost-conscious small business owner. They include hardware, software, services and financing. They could also help boost IBM’s server market share even higher.

While the new IBM machines would seem to be just another offering in a long line of sub-$1,000 servers built to lure customers in the growing SMB sector, McRae said the feature functionality in the x206 and x306 offer important distinctions from products such as HP’s ML110 and Dell’s PowerEdge 700.

IBM's new xSeries 206 and xSeries 306 servers for SMBsThese servers, he alleged, are “souped up” desktop designs billed as “cheap” servers, noting that IBM believes that customers want added value to their inexpensive machines.

To wit, McRae said the x206 and x306 contain simple-swap reduces the time required to change a hard drive for customers who can’t afford to spend thousands of dollars on hot-swap SCSI (define). For example, in comparably entry-level servers from HP and Dell, customers who need to take a drive down for maintenance have to open the fixed hard drive for a manual fix.

Simple swap allows customers to open a panel and slide a new drive in, a feature patterned after high-end mainframes.

“This is a huge breakthrough in this space,” McRae said. “You don’t see these functions elsewhere for $499. Tech has evolved to where SMB customers should not have to sacrifice server functions because of the price.”

The new machines, which will be available by the end of March, also come equipped with IBM ServerRAID 7e, an enterprise-grade security technology, and remote power control to manage servers from afar.

IBM has been doing quite well against its opponents in the server space, according to the latest figures by research groups Gartner and IDC, picking up market share in Intel, Unix and Linux arenas. According to IDC’s Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market grew at 11.4 percet to $13.7 billion in the fourth quarter of 2003, marking the third consecutive quarter of positive growth. Worldwide server unit shipments grew dramatically by 22 percent, compared with the year-ago period. A favorable exchange rate was one factor leading to the very strong quarterly results, but the market grew three percent without the effects of the currency exchange rate.

IBM held on to the top spot in the worldwide server systems market with 37.9 percent market share in factory revenue, growing by 17.7 percent compared to the year-ago quarter, driven partially by a 33 percent growth spurt in its OS/390 business. HP took the number two spot with 25.8 percent share, growing revenue by 9.4 percent over the fourth quarter of 2003. Sun, with 10.4 percent revenue share, posted a 1.7 percent decline in revenue from a year ago. Dell grew revenue by 19 percent over the same period, ending with 8.6 percent revenue share. Fujitsu rounds out the top five list of server makers with 5.4 percent revenue share.

Adapted from

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