Analyst: Intel's Itanium Chip Will Hurt Sun Most - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

Analyst: Intel's Itanium Chip Will Hurt Sun Most

Analyst says Sun Microsystems will lose share in the server market because of Intel's 64-bit Itanium chip.

There's more bad news for Sun Microsystems. One day after the company again set lowered revenue and earnings forecasts for the current quarter, an influential technology analyst said Intel's new 64-bit Itanium chip will cost the company "a significant loss of share within 2 to 3 years" in the server market.

In a research report issued Wednesday morning, US Bancorp Piper Jaffray analyst Ashok Kumar notes that all major Unix server vendors, with the exception of Sun, will offer their customers Itanium-based systems in addition to their proprietary offerings. Intel officially unveiled Itanium Tuesday after nearly two years of delays. At the same time, Compaq, Hewlett-Packard, and IBM, as well as PC-maker Dell Computer, announced systems based on the new chip.

Though most vendors haven't set pricing, officials at those companies have indicated in interviews that their Itanium-based products will sell for tens of thousands of dollars less than even Sun's mid-range products. For instance, a fully configured version of Dell's PowerEdge 7150 server with four 800-MHz Itanium processors will likely sell for between $40,000 and $45,000, say Dell officials. By comparison, Sun's Enterprise 3500 server, with four 400-MHz UltraSPARC modules, comes in at more than $90,000.

In his report, Kumar, often one of Intel's biggest critics, suggests Sun should give up its resistance to using third-party processors. "The major loser in this transition is Sun. Sun is the only major server vendor that's continuing to use a single-track strategy, offering only its proprietary SPARC platforms and its proprietary operating system," Kumar says.

For their part, Sun officials say the tight integration between SPARC chips and the company's Solaris OS adds up to better reliability and value. "You have to look beyond the price of the box and consider total cost of ownership, which is where we excel," says Chris Kruell, group marketing manager for computer systems at Sun.

Sun said Tuesday that it expects fiscal fourth-quarter revenue to fall between $3.8 billion and $4 billion, compared with $5 billion in same period last year and $4.1 billion in the third quarter. Sun also said it now expects earnings per share for the quarter, ending June 30, of 2 cents to 4 cents, excluding one-time events. Analysts surveyed by Thomson Financial/First Call had been expecting per-share earnings of 6 cents. Sun blames much of the shortfall on weak sales in Europe.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
2020 State of DevOps Report
2020 State of DevOps Report
Download this report today to learn more about the key tools and technologies being utilized, and how organizations deal with the cultural and process changes that DevOps brings. The report also examines the barriers organizations face, as well as the rewards from DevOps including faster application delivery, higher quality products, and quicker recovery from errors in production.
Slideshows
10 Trends Accelerating Edge Computing
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/8/2020
Commentary
Is Cloud Migration a Path to Carbon Footprint Reduction?
Joao-Pierre S. Ruth, Senior Writer,  10/5/2020
News
IT Spending, Priorities, Projects: What's Ahead in 2021
Jessica Davis, Senior Editor, Enterprise Apps,  10/2/2020
Register for InformationWeek Newsletters
Video
Current Issue
[Special Report] Edge Computing: An IT Platform for the New Enterprise
Edge computing is poised to make a major splash within the next generation of corporate IT architectures. Here's what you need to know!
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll