Wintel server competition leads to more than low prices

IT pros wanting to take advantage of heated competition in the Wintel (Windows-based, Intel-powered) server market can expect...

IT pros wanting to take advantage of heated competition in the Wintel (Windows-based, Intel-powered) server market can expect more than just lower prices this year.

Low prices, better service offerings, and other deal sweeteners from the top four Wintel server vendors - Dell, Compaq, IBM and Hewlett-Packard - make the remaining months of 2001 possibly the best time to buy a Wintel server, according to Jonathan Eunice, a principal analyst with the Illuminata, an IT consulting and analyst firm in the US.

"Any time there is any economic issue involved, even as small as the end of quarter where [server vendors] have to make their numbers, they tend to give better deals," Eunice said. "It could be services, it could mean better guarantees, or higher degrees of availability. And you can often get them rolled in as a deal sweetener."

Officials for build-to-order Wintel server maker Dell credit aggressive pricing for Dell's recent success in taking the title of number-one North American Wintel server vendor away from Compaq. Dell officials said the company would stick with that strategy.

"In tight economic situations, companies will be looking for ways to reduce their operating expenses. Dell is price leader and will continue to make that a prominent strategy in their servers," said Subo Guha, director of marketing enterprise systems group for Dell.

Compaq is also cutting prices on Wintel servers while ramping up additional sales incentives, such as added technical support and zero-down leasing, according to David Petts, the vice-president of Compaq's North American industry standard server group.

Petts said Compaq would meet certain Dell price points. The company already offers Wintel servers for less than $1,000 (£697), he said. But Petts thought the best Wintel server deals from Compaq right now were waiting for customers intending to purchase servers, infrastructure, and services.

IBM is also getting aggressive with its Wintel servers, renaming them eServers in conjunction with its eLiza "self-healing" server initiative. Like Compaq, IBM has a Wintel server bargain basement, but Big Blue officials claimed that buying for services yields the best deal.

"We clearly see there are customers out there driven solely by price point. When customers are in this situation, when they are trying to get more out of less, services are a large part of that equation," said Jim Gargan, vice-president of marketing for IBM's eServer xSeries servers.

Hewlett-Packard is trying to boost its Wintel server market share with a promotion offering six-way LT- and LH6000 series servers for the same price as comparably equipped four-way servers from Dell, Compaq, and IBM, according to Marc Jourlait, North American director of HP's NetServer business.

HP is also tempting prospective Wintel server customers with what the company believes is an easier migration path to 64-bit Wintel computing, which begins to arrive later this year with Intel's 64-bit Itanium chip. HP was a co-author of IA-64 code.

Service offerings, creative discounts, and other value incentives are hot right now in the Wintel server space because Dell, Compaq, IBM, and HP must each keep coming up with such incentives as reasons to buy when they have run out of room to keep lowering prices, according to Richard Partridge, a senior research analyst with D.H. Brown Associates, an industry research firm in the US.

"It's not a slam dunk in this [Wintel server] space anymore. Each company has to accentuate what they do best," Partridge said.

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