Stratus allies with NEC on fault-tolerant servers

With demand for fault-tolerant servers growing, Stratus hopes to use NEC's cash to fuel growth — especially in new markets like Linux

Fault-tolerant computer manufacturer Stratus Technologies said on Friday that it has signed two new deals worth a total of $9m (£5.3m) with NEC.

The two companies have signed a joint product development alliance and have also agreed a long-term hardware purchasing arrangement. As part of the deal, NEC's shareholding in Stratus has increased to 9 percent.

Stratus sells the Continuum line of servers, based on its own architecture, to some of the world's largest banks and other financial institutions that require guaranteed "five nines" (99.999 percent) uptime. It also had the open ftServer series for telecoms companies and W Series for Microsoft applications.

The company is targeting one of the faster growth areas of the market. According to IDC, the market for high-availability servers will grow at a compound annual growth rate (CAGR) of 14.3 percent through 2008.

In October, Stratus moved into the open source market when it announced a deal with Red Hat to support Red Hat Enterprise AS, which is designed for mission-critical applications. The Linux server portion of the fault-tolerant market is growing at a CAGR of 63 percent.

Under the joint product development agreement, Stratus and NEC will cross-licence technologies and collaborate on the development of future fault-tolerant servers, and provide "core fault-tolerant technology".

The primary responsibility for hardware will shift to NEC, which will design and manufacture "a common hardware platform", which Stratus will buy. Both companies will manufacture their own versions of servers for their own markets.

The first jointly engineered server is expected in late 2006. Stratus said it expects to reduce costs and headcount as a result of the deal but did not release estimates on the numbers involved.

Stratus posted a $4.6m profit in the three months to 31 August, after making a loss in the same period last year.