Digital Equipment has slashed prices across its full line of Alpha-based servers and workstations in one of the most aggressive rounds of price cutting by any of the major computer manufacturers.
It is the second price cut by the struggling systems vendor in less than a month as it scrambles to recover from a string of disappointing quarters and responds to competition from the influx of high end servers that have begun hitting the market.
The cuts bring Alpha machines within 10 per cent of the price of equivalent, but slower, models based on the Intel processor. In the past 18 months, 70 per cent of the workstations Digital has shipped have been Intel-based and it is keen to redress the balance in Alpha's favour.
The company has cut prices on its midrange Alpha 4000 servers by as much as 45 per cent, on its 8000 series of enterprise servers by 30 per cent, and on Alpha Unix workstations by up to 42 per cent. Last month it cut in half the price of the Alpha chips it sells to OEMs.
?We can afford these price cuts because of the volumes we?ve been selling and the reduced cost of memory,? said David Cousins, server manager for Digital UK. Digital has also cut the cost of its memory modules by 55 per cent. ?We want to lower the cost of very large memory based solutions and keep competitive,? said Cousins.
According to the 'Wall Street Journal' analysts expect Digital to report earnings of between $15 million and $25 million on sales of about $3.4 billion for its second quarter, which ended on 29 December. This would fall well short of the $148.8 million earned for the year-earlier period, when revenue was 43.95 billion.
Resellers ought to welcome the price reductions. They have been guaranteed price protection on their stock.
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