Sun Takes a Shine to Low-end Server Market

New products sure to put a little heat on rivals. Now HP, Dell, et. al. forced to compete for server sales in the bargain-basement price range.

by Clint Boulton [January 18, 2001]

The same week its scheduled to announces highly-anticipated earnings, hardware giant Sun Microsystems Inc. this week drew the curtain on its server appliance strategy with some new products for the IT sector, including a sub-$1,000 server.

Promising the same bang for fewer bucks, the Netra X1 server starts at a very attractive $995. The Netra line is also super thin—1.75 inches.

Like its Netra t1 sibling, the Netra X1 server fulfills service providers' need to deliver more applications—e-mail, messaging, Web hosting and DNS services—for their customers without taking up a lot of space.

Sun also put an old acquisition to use, as it unveiled two new server appliances under the Sun-Cobalt name—CacheRaQ 4 and RaQ XTR.

CacheRaQ 4 was created to speed network response time by storing content locally at the service provider or the client site. With this app, businesses will be less likely to find their network users reloading the same Web pages repeatedly and tying up network resources.

Its compadre, RaQ XTR, performs similar functions and then some—it integrates hardware, software, database and tools to maximize Web development.

Sun's bright news comes on the eve of its quarterly earnings report. Sanford Bernstein Toni Sacconaghi said he believes they will be in line or exceed expectations.

Sacconaghi also said he expects the company's growth rate to decelerate dramatically over the next several quarters, even if the information technology market is not affected.

While Sun isn't the only bellwether that analysts have been nervous about, many are waiting for Thursday to make their judgment on the high-end hardware sector, which has been hit hard by high-tech sales slowdowns.

Hewlett-Packard last week joined Dell, Gateway and Apple when it posted a profit warning. HP said it would fall short of analyst estimates, with improvement in sales growth not expected until the second half of 2001.

—End