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December 7, 1997updated 03 Sep 2016 4:55pm

HP DEVOTES ALL OF ITS EFFORT TO PUTTING SUN IN SHADE

By CBR Staff Writer

Hewlett-Packard Co, which is going gangbusters after Sun Microsystems Inc in the Unix system market says Sun boss Scott McNealy has only got himself to blame for all the attention it is now giving the Mountain Viewer. HP said what got to it and galvanized its Enterprise server Group effort was when McNealy began bad-mouthing HP as a printer company exiting Unix with a Posthumous Architecture PA-RISC chip. Now everything that we do is Sun-related, says HP, whose $10bn Unix business is almost a quarter of its entire revenue. It’s sticking by its claim that the introduction of the V-Class 2200 server has put the skids under Sun, pegging its growth rate, a notion Sun refutes, claiming its server order growth rate in fact outpaced the 25% growth HP has said it’s experiencing. HP, which says high-end servers are now the most profitable part of its Unix business in percentage terms, is waiting eagerly to see Sun’s second quarter numbers to the end of December which it thinks might reflect some of the damage it is inflicting. It also wonders if Sun will be able to get out of the mess it’s got itself into over reporting those Starfire shipment numbers. HP thinks Sun could be taking its eye off the current technology ball (like HP did until McNealy restored its vision) with its current focus on Java and next-generation appliances – Gizmos of the world unite? Sun’s yet to do anything significant in the electronic commerce marketplace that HP and IBM Corp are happily carving up between themselves. It also believes Sun’s lack of a Windows NT product line is hurting margins as it can’t make money in that space and is having to pull back on the discounts of up to 70% it has made previously. HP figures that Sun will also feel the pinch as the effect of a declining Unix workstation market begins to bite – workstations are still 40% of Sun’s business even if it is ramping up its server business as fast as it can. The long and short of it is that a large part of the market is buying NT and Sun is not able to take advantage of it. HP admits it is discounting V-Class server prices heavily and claims it is able to having designed V-Class to match the price point of Sun’s Ultra Enterprise 6000 server, not the high-end, higher-priced UE 10000 Starfire. Although Sun characterizes Starfire’s scalability as a league above V-Class, which it regards as a UE6000 competitor, HP says a competitive tracking database it uses shows clearly that Sun always bids Starfire against V-Class. For its part Sun believes IBM Corp and not HP is its main competition. HP doesn’t see how Sun’s server orders can be growing by more than 25% as Sun has claimed when 40% of its revenue – which grew just 13% last quarter – is derived from workstations sales. HP says it will ship more V-Class servers than the number of Starfires Sun will shift and says it has over 200 orders for the new V-2200 model.

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