In May last year, we reported that many vendors had begun to move
into the appliance server market, listing all the usual suspects
such as Dell, Fujitsu Siemens, IBM, Hewlett-Packard and
Compaq.
Amid all the hype Martin Hingley, vice president for Emea systems
at IDC, described them as "a very interesting proposition which
will take away from the server market", although he stressed they
were hybrid products.
He added that vendors were doing with appliance server products
what VARs would have done in the past. "They're pulling the point
of integration back into the value chain. But I don't think many
people have sorted it out yet - they're just experimenting with
it."
Which was interesting, especially bearing in mind comments by Tony
John, IBM xSeries brand manager for the UK and Ireland, to
MicroScope last month when he questioned the market's readiness for
appliance servers.
"The hype last year was around the product, it wasn't about
implementation or deployment. I don't think we've convinced
everyone. We need more education, we need to sell it more. There's
a lot of mileage for that," he argued.
Matthew Keep, Sun workgroup server product marketing manager,
partly agrees. He says there was a lot of transition in the
appliance server market last year. Until the middle of 2000, most
players were "pretty small" and didn't have the marketing capital
to push their brands or value propositions.
He points out that Sun acquired Cobalt Networks - which he
describes as "the leader in general server appliances (outside NAS)
in units and revenues" - in September last year (paying $2bn
(£1.4bn) for the privilege). "It's only now that the big boys have
got involved that people are starting to notice," he argues,
quoting research which suggests unit sales in Western Europe will
grow from 56,000 last year to 351,000 in 2004 with a value of just
under $3bn.
A very different story
He describes it as still a "very
nascent market" and argues selling an appliance server is a very
different proposition from a traditional server sale. "From the
reseller perspective, many sales guys are used to speaking speed,
processor and memory. Appliances are totally different because they
don't involve the hardware specification. It's the application,
what network services you want to deliver, defining the feature
set, the performance level and then, beneath that, you bolt on the
hardware."
Although Cobalt is based on AMD processors and runs Linux - which
puts it at variance with Sun's historically singular approach to
the server market based on its own Sparc processor technology and
Solaris operating system - Keep argues the underlying hardware
architecture and operating system don't make any difference to
appliance servers.
"You use whichever technology is best suited to the application.
The hardware platform is completely discretionary. We've not said
to the Cobalt engineers 'you must go to Sparc'."
Ask him who he perceives as the major players in this market and he
names his own company, as well as Dell, Compaq and Hewlett-Packard.
Then there are the smaller specialists, such as F5 and Cacheflow.
But Keep believes consolidation in the market will continue,
warning that the big players in appliances will be those which are
already strong in the general purpose server market.
One company which may not be in agreement with Sun or IBM over
appliance servers is HP. At least, it's not what you'd expect from
a vendor which has just announced "one of the broadest ranges of
server appliances in the industry designed to meet the needs of
service providers and enterprise customers".
Last month, the vendor unveiled 18 HP-branded products - the
distinction is important because a number of the products are
Intel's NetStructure appliance server line, which HP struck an OEM
deal to sell in December last year. The products cover a number of
areas, including caching, Web hosting, network and traffic
management.
All part of a cunning plan?
Intel was forced into a
rethink of its NetStructure server appliance strategy because it
was in danger of competing against its traditional server processor
customers like Compaq, Dell and IBM.
To avoid the charge of conflict, it decided to adopt an OEM
approach instead. Following the announcement of its change in
strategy, John Humphreys, an analyst in IDC's Commercial Systems
and Servers research programme said. Intel would be able to exploit
one "of the broadest product lines of Internet infrastructure
hardware while taking a role as a developer and manufacturer of
appliance technologies".
In a press release issued in December, Humphreys argued Intel may
have been planning to make the switch all along after increasing
industry awareness of the appliance market to increase
adoption.
"Intel's direct customer sales approach in the appliance market was
short and sweet," he said. "Its direct participation in the market
focused attention on the space and brought about a lot more
competition which, in turn, has put pressure on server and
networking companies to bring additional appliance products to
market. This strategy to bring attention to this market was almost
certainly always in Intel's plan." If so, it worked.
Just how important Intel's products are to HP was demonstrated by
the presence of Richard Lissenden, European marketing manager for
Intel's communications products group, in the press release
accompanying the announcement." Under this agreement, HP's
extensive NetServer offering will be complemented by Intel's
NetStructure technology to deliver one of the broadest server
appliance offerings in Europe," he said.
Alberto Bozzo, operations manager for HP's NetServer business in
Europe, was also bullish: "This new server appliance offering
complements a series of partnerships with best-in-class vendors
equally committed towards the service provider sector in Europe,"
he declared.
Billy MacInnes