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The new family of so-called carrier-grade servers is meant to power services offered by telecoms operators, such as unified messaging, Web hosting, application hosting, and virtual private networking.
For mobile phone operators the servers can support an array of mobile-specific services, according to Intel. The servers can also be used as software switches, replacing large and costly hardware switches.
"As telecommunications operators offer more and more services, the need for more powerful computation grows," said Shantanu Gupta, manager of Intel's telecom platform office. The new servers were announced at Intel's Developer Forum in Amsterdam.
Intel is entering a new market, Gupta said. "These are the first Intel-based carrier-grade servers, which will meet stringent telecommunication standards including NEBS (Network Equipment Building Specification) and ETSI (European Telecom Standards Institute) standards. We did not have anybody selling Intel architecture based products in this area," he said.
Intel will deliver servers with better performance and more options at a lower price than Sun's Netra family of hardware, according to Gupta. The chipmaker is convinced that operators, even the cash-strapped ones, will appreciate the new products.
"The timing is right. Intel architecture is a lower-cost option and we can offer at least two or three times the performance at much lower prices than those Sun can offer to its best customers, " said Gupta.
One analyst said Sun has reason to be concerned, although it has been very successful with an estimated 40,000 Netra servers sold in Europe last year.
"These are fairly small rack-mount servers, something Intel does very well in the general purpose market. Intel can manufacture at a lower cost, because of the volume nature of its product. Sun should be somewhat worried," said Ian Brown, European research director hardware and operating systems at research firm Gartner Group, adding that Sun sells proprietary technology and architecture.
Another analyst said Intel's move to the telecommunication market was not surprising. There is certainly enough demand out there for several providers. It makes a lot of sense that Intel is engaging in a market where there is some profit to be made, the telco market is quite a strong vertical market," said Martin Hingley, vice-president of the European systems group at research firm International Data Corp.
Hingley added that Sun might lower its prices in response to Intel's competition. "If Sun is now the only show in town, it can pretty much ask what it wants. Sun could lower its prices," he said.
Intel will sell the new server products to OEMs and telecommunications equipment manufacturers (TEMs), which will resell and service the hardware. The rack mountable servers will have dual Pentium III processors and be 1U (1.75 inches) and 2U (3.5 inches) in size. The system supports the Linux and Microsoft NT operating systems.
By the end of 2002, Intel plans to launch carrier-grade servers with its Pentium III Xeon processor and the 64-bit Itanium processor. Gupta predicts the Itanium, Intel's heavyweight processor, will do particularly well.
"The carrier-grade server market is a significant opportunity for Intel and it has natural affinity with Itanium. It opens other markets for Itanium," he said. "We have calculated the opportunities and see this market to be significant. It is a small market today, but it's growing significantly."
Gupta said OEMs, TEMs and operators will soon start making announcements that they will start selling, or are moving to, Intel-based architecture.