Hewlett-Packard will formally announce in New York later today details of its crucial new 'Merced ready' mid range server product, the N class.
HP is anxious that the N class server - previously codenamed Prelude - helps the company win back some of the ground lost over the past year to arch Unix rival, Sun Microsystems. The new server will run up to eight PA Risc 440MHz processors and cost between $50,000 and $200,000, based on US pricing.
The N class is a 'box shift' product, requiring users to buy a complete new server if they wish to upgrade from its predecessor, the K class. This, explains HP, is because the server is a completely new design with improved architecture and system bus that include the capability of a simple slot in upgrade to Intel's IA-64 processors.
HP believes this compatibility will be a major selling point to customers - it will need to be if it is to recoup the sales not made during the transition period to the new server. Customers have been holding off buying the K class in anticipation of the arrival of the N class.
Bill Russell, vice president of the enterprise systems group at HP, believes those customers are keen to get hold of the new product when it ships on 17 May.
"I am already very happy with the order book for the N class and it has only been on the price lists for a month," he said, although he admits that HP should have brought the N class product to market a year earlier.
Importantly, he noted, the N class is rack mountable where the K was not - a vital requirement for selling into the ISP and telco markets that require large numbers of servers with high performance but minimal footprint.
Part of the reason the N class is so important to HP is that this mid range product area generates between 60 per cent to 70 per cent of HP's Unix hardware revenue. Further, server revenue growth has slumped badly over the past year, particularly thanks to Sun's aggressive attack on HP's Unix market share.
Between Sun stealing sales and the N class product transition, analysts at finance house Merrill Lynch estimate the second quarter of this year will continue to be bad for HP, with a 15 per cent drop in revenue for the enterprise systems group.
The company already suffered a disastrous decimation of Unix server revenue in the fourth quarter of 1998 when manufacturing problems with its K class range meant it failed to ship a single server in December.
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