It is rare for IT vendors to admit to responding directly to a rival's actions, but Compaq's first entry into the midrange workstation market two weeks ago sparked countermoves from three of the top four companies jealously guarding their territory from the imposter. However, all those building machines, as Compaq is, around the Pentium Pro processor are likely to face delays in implementing their plans, as shipments of the Intel processors remain behind schedule.
According to several PC vendors, they are waiting up to two months for Pro shipments. Dell referred to a 6-8 weeks delay and Gateway said 4-6 weeks. Considering these are high volume OEMs, it may be supposed that the likes of Digital might wait even longer.
Digital Equipment, IBM and Sun all responded, the first two announcing their own Pentium Pro machines running NT, similar in specification to Compaq's, and the last slashing prices on its Risc range, which is directly targeted by Compaq.
Compaq has aggressively targeted its Pentium workstations at the technical user base currently dominated by Risc-based machines. "We have created the infrastructure necessary to compete in environments that were once the exclusive domain of companies like Sun, Hewlett Packard, IBM, Digital and Silicon Graphics," said John Rose, general manager of enterprise products at Compaq.
What Compaq will not do, Rose said, is go for Risc/Unix itself. Despite rumours that Compaq might renew its Ace consortium alliance with Digital and license the Alpha processor, Rose said this was not an option. ?We will not expand where the ducks are dying,? he said, claiming Risc/Unix was a combination with ?no future at all?.
A Digital source said its new models are partly designed to fend off the PC maker's challenge in the midrange sector. Howard Elias, vice president of Digital's PC division, said the new Prioris range was designed to increase the proportion of high margin products sold by the unit, to improve profitability, and to "be very competitive in features and price" with other Pentium Pro servers and workstations such as Compaq's.
Digital perhaps has the most to lose if Compaq makes a splash in the scientific and engineering space. Although its position among the top three suppliers to that sector goes up and down, it is more dependent than its rivals on the technical base where it has such strong roots.
IBM, on the other hand, tends to keep its Pentium models for commercial users and target its RS boxes at the scientists. It made moves in both ranges last week. It announced a new Pentium Pro model in its PC 340 line of desktops and servers, including the 325, which features a 200MHz processor and expandability to multiprocessing, like the Compaq Professional Workstation line.
"I don't see Compaq as being in the same league of functionality as the RS line," said a source, who indicated that new RS models would debut in the next few weeks. "Our Pentium machines compete with Compaq's as servers or mainstream desktops but I don't think they have the reputation in the technical market."
Sun, also heavily dependent on technical markets, bit back at Compaq with swingeing price cuts. The entry level Ultrasparc-based machines, the Ultra 1 range, are now half the price they were when they were introduced a year ago, though boasting memory doubled to 64Mbytes.
This sparked off a price/performance tussle between Sun and Compaq representatives that is sure to run and run. Compaq?s Rose said the Professional Workstations outperform Risc systems ?at prices up to 75 per cent less?, while Sun?s Gene Banman, general manager of desktop systems, claimed the Ultra line is now offering ?blazing 3D graphics, processing and networking highly optimised for power users, at PC prices.? This matches NT workstation prices, said Banman. Another Sun spokesperson claimed Compaq had just ?plugged a few third party boards? into a standard Pentium Pro box.
In fact, a 200MHz Compaq workstation with 128Mbytes of memory, 2D graphics support, Fast Ethernet and 4Gbytes hard drive costs #6,650 - up to #2,000 more for 3D graphics - while Sun?s Ultra 1 Model 140 is #6,500 with 64Mbytes of Ram, 2Gbytes disk and 2D turbo graphics. In other words, not much to choose between them - a bit more for your money from Compaq, but Sun?s arguments that it offers 50-100 per cent better graphics performance and a wider range of technical applications also carries weight.
The analysts are divided too. Dataquest, which has seen Sun?s number one market share in this sector grow from 36 to almost 42 per cent in the past year, does not see such a lead being dented ?for a good while yet?.
Tom Copeland, director of workstation research at IDC, commented: ?Compaq is very well positioned to become a significant player in the workstation market? and believes NT machines are starting to make an impact on traditional Risc/Unix territories.
It seems that Compaq?s new foray in to workstations may be better fated than its previous attempt, when it joined with Mips, Digital and Intel in the ill-starred Ace consortium - Compaq?s only serious sign of interest in Unix - three years ago. On that occasion it pulled itself back rather rapidly from this sector, but now, with stronger market base and financial performance to back it up, and the growth of NT on its side, it is having another go. It needs to broaden its base as widely as its NT/Intel technology will take it if it is to achieve its stated aim of doubling sales by 2000. Internet and other networking strategies, subnotebooks and personal digital assistants, and prepackaged vertical solutions for customers such as banks, will all broaden the Compaq range, but workstations present one of the highest margin opportunities - but one that the more established workstation vendors will be keen to deny the new pretender.
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