HP In on Unisys' 32-Way OEM Team - Company Business and Marketing

ENT, Oct 11, 2000 by Ted Williams, Scott Bekker

Unisys Corp. added another heavy bitter to the OEM lineup for its 32-processor, Intel-based Cellular MultiProcessing (CMP) server architecture: Hewlett-Packard Co., via its HP NetServer.

Add that to Compaq Computer Corp.'s ProLiant ML770, also based on the CMP structure, and International Computers Ltd.'s (www.icl.com) direct OEM of the Unisys product, and it looks like Unisys is on its way to making it big with the only box of its kind on the market -- especially with Windows 2000 Datacenter Server finally in the game.

"We've seen a substantial increase in our sales," says Steve Holzman, spokesman for Unisys (www.unisys.com), of the company's e-action ES7000. "We've had 120 percent growth in ES7000 sales in the third quarter, compared with all of the first half of the year."

It's no secret that Unisys is counting on the CMP to make a splash in the industry. Having top players like HP (www.hp.com) and Compaq (www.compaq.com) helps to increase volume, even though the product is sold under different brand names. But the credibility that comes along with major market players means as much as the increased profit margin.

"I wouldn't be surprised to see another large company or two sign on to OEM this product," says David Friedlander, industry analyst at Giga Information Group Inc. (www.gigaweb.com). "It's become clear that neither Compaq nor HP has gotten very far in developing its own 32-ways at this point or they'd be willing to wait. They must see a real market potential for this right now."

In its sales pitch, Unisys emphasizes the ability to partition the machine, which can be split into eight partitions of four processors with each partition running a different operating system and application. Compaq has emphasized the muscle of 32 processors. HP which announced its agreement with Unisys at Microsoft's recent Enterprise 2000 Server launch, plans to push both factors of the CMP platform.

"Going from four up to 32 processors works really well in Exchange when your trying to consolidate servers," says Rich Archuleta, vice president and general manager of HP's network server division. "There are a lot of applications where partitioning the server makes a lot more sense."

Friedlander says that according to Unisys information, the company shipped more than 100 ES7000 units to customers, and maybe 300 more are deployed as lab demonstration models or try-and-buy units. Of these, about 100 will produce revenue. Considering Datacenter sales aren't expected to take off until next spring or later, he considers those numbers pretty impressive.

"Obviously, having HP on board helps, although Unisys gets lower margins and no service revenue from OEM boxes," Friedlander says. "But I'd say Unisys has the opportunity to ship hundreds and maybe even thousands of units long before any mass purchase of Datacenter."

Holzman says benchmark tests for the ES7000 are expected around the end of the year.

The Unisys ES7000 and Compaq ProLiant ML770 are shipping now. The ProLiant ML770 with Datacenter Server costs $550,000. Its enterprise support package is an additional $52,992 per year. The HP NetServer 32-way is expected to be available early next year.