HP denies 'tepid' Superdome server performance

HP's attempt to boost its Unix business just isn't enough, says analyst

Hewlett-Packard disputed unflattering remarks made by a prominent financial analyst regarding HP's new Superdome Unix server, the spearhead of HP's effort to win back the No. 1 Unix server ranking from Sun Microsystems.

Performance-measuring benchmarks showed Superdome to be "tepid", Thomas Kraemer of Merrill Lynch said in a research note Wednesday.

"It did not beat the high-end servers that IBM introduced a year ago and it was more expensive than Sun's on a price-performance basis," Kraemer wrote of Superdome, which HP began shipping in December. "As such, we do not think that this product will be a strong catalyst to produce a turn in HP's Unix business."

HP acknowledged losing out to IBM on the Transaction Performance Council's TPC-C benchmark -- a widely watched measurement of database transaction performance. IBM's performance was higher, with 221,000 transactions per second to Superdome's 197,000 and a cost per transaction 71 percent of HP's price. However, HP beat Sun and IBM on a real-world benchmark running SAP's business software, and HP expects its TPC-C benchmark will increase to about 300,000 this summer, said Mark Hudson, marketing manager for HP's Unix servers.

Benchmarks often improve as companies tune the hardware and software, Hudson said, and the Superdome benchmark was set using only 48 processors; the computer accommodates as many as 64. For example, when IBM's S80 was introduced, its TPC-C benchmark was about 105,000, less than half its current 221,000.

"I don't think (Kraemer) grasped the amount of tuning and learning that goes on" when measuring benchmarks, Hudson said. Over the course of Superdome's life, HP expects to quadruple its TPC-C score, Hudson said.

The Unix server market has been booming with the arrival of the Internet, the increasing computerisation of Old Economy companies and the slower-than-expected growth of Windows into higher-end servers. Sun is the top Unix server seller, with HP in second place, IBM in third and Compaq in fourth, according to IDC.

Sun's power in the Unix server market has led it to loft over HP and Compaq to reach second place in the total server market, which also includes mainframes, Windows systems and other models.

But corporate spending for servers appears to be scaling back.

Sun and HP both are concerned about declining revenues due to reduced corporate spending. In December, each company sent cautionary memos to employees about fiscal austerity measures to adjust to the harder times. Buckingham Research Group analyst Jay Stevens predicted Tuesday that IBM, HP and Sun will aggressively cut prices in an attempt to win as much market share as possible.

Also on Wednesday, IBM made a little progress in its effort to dislodge Sun, announcing that it persuaded Ultramar Diamond Shamrock to switch the computers at the centre of its oil and convenience store business from Sun to IBM. The company bought two top-end IBM S80 12-processor servers and eight M80 four-processor servers, IBM said. In addition, Ultramar Diamond Shamrock will use IBM's relatively new Shark storage systems, Big Blue said.

Kraemer also had rosier news for HP on the storage side of its business, where customers don't appear to be slowing down spending.

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