Unix to battle Windows NT

Electronic News, Jan 5, 1998 by Carolyn Whelan

The big news in '97--namely, exploding demand for NT workstations and new entrants Dell and Compaq muscling in on that space--has set the scene for 1998. This year will bring intensified, more aggressive competition in the PC workstation area, while the big five in the Unix area fight to differentiate themselves from their NT counterparts, as well as each other, by pushing out more powerful graphics capability, more rapidly.

"Looking ahead, I think it's going to be a horse race," said Karen Seymour, a workstations analyst at the International Data Corporation (IDC). "Much like the PC market, there's going to be knockout fights to see who will lead the (PC workstation) market by 2 percent. IDC forecasts that the top 4-5 vendors will have equal market share by 1999 or 2000."

Ms. Seymour foresees the two major trends in '98 as the expanding low-end market due to PC upsizing--since PC users can now spend $1,000 more for graphics--coupled with some development on the high-end. "The amount of data being pushed around is incredible," she said. "Unix workstations are being pushed further and further upstream to the point of virtual prototypes."

High-end growth in terms of level of capability is still expanding, she said, since applications for oil and gas, mapping, geophysics and geoexploration can only use 64-bit processor workstations. Those areas of the market will remain UNIX for the foreseeable future.

"On the mid- to low-range end, we're seeing massive expansion in level of performance, performance that users would have had to pay $5-10,000 for," she said. Performance is going "through the roof" with demand for 3D graphics on the low-end pushing downwards towards a price point where it is available to nearly anyone. Graphics, she added, will continue to evolve and trickle down, since the software is there and in a reasonable package, propelling the low-end's projected 40 percent growth (IDC) over the next 5 years--a much higher growth rate than the 15-20 percent growth rate computer and PCs have been having and are expected to have.

Some longer-term issues include Intel's I-64 Merced processing technology, which, IDC says, could put a serious dent into the Unix market, since right now only Unix can manipulate large data sets. All that will change in 1999 with Merced. Merced is unique because it runs both Unix and MS Windows. Most companies will port their operating system to Merced when it emerges.

Ms. Seymour had predicted that Sun Microsystems would buck the NT trend, but that has since changed with Sun's December 16 agreement with Intel to port Solaris to Merced. She had also predicted that SGI would resist the move, but now she sees the company closer to Intel.

Other trends that will play out next year, according to In-Stat workstations analyst Norm Bogen, include the battle for faster clockrates, as companies compete on graphics performance, currently based on the Accelerated Graphics Port (AGP) that Intel introduced for faster workstation processing in the 440 chipset. Intel's planned introduction of the BX bus speed 440 BX chipset should increase system bus speed even more, research firm In-Stat said, from 66MHz to 100MHz. That, in combination with the AGP, will further improve graphics performance, according to the market researcher.

Processors and graphics control will be most impacted, as people introduce Pentium II workstations. The release of MS Windows NT 5.0 in the second half of 1998 will probably bring about a natural migration to that OS for workstation class products, Mr. Bogen added.

Unix Suffers A Setback

Looking back, most analysts agree that the biggest change in 1997 was falling sales of Unix workstations, largely due, but not only, to NT. Additionally, IDC says, the top five vendors misfired on major things, including not releasing the best products, management transitions, and, organizational problems like poor financial performance at SGI. In terms of units shipped in 1997, PC workstations outshipped Unix workstations by 431,000 units--a 53 percent growth rate, according to IDC. In 1996 only 716,000 PC workstations shipped versus 712,000 workstations. For 1998, In-Stat forecasts 1,858,000 PC workstations to ship compared to 734,000 Unix workstations--nearly a 50 percent growth over 1997.

Though PC workstations outshipped Unix ones, revenues on Unix are much higher because they are higher end, higher-priced products. In terms of revenue, in 1996 IDC says Unix workstations accounted for $11.5 billion in revenue. In 1997 that number is projected to drop to $11.4 billion, and is forecast to drop even lower in 1998 to $10.9 billion. Meanwhile, shipments of PC workstations increased substantially, with a rise in revenues from $3.6 billion in 1996 to $5.1 billion in 1997, and $6.8 billion in 1998.

Interestingly in 1997, the average price of workstations went up. The sweet spots may fragment, says IDC, with a lot of volume at the high end, but some products will evolve with multiple processors and graphics. The Compaq 8000 and 6X from Integraph, for example, are priced from $18,000 to $20,000, and a few more like those could emerge in 1998.