Pressure on Compaq at the high end server level caused it to slash its prices today, leaving competitor IBM in a quandary but causing satisfaction at other servor vendors including ALR and Dell.
Compaq UK cut prices of its Proliant 2500 6/200 M1 NHP by 21 per cent to #4,410 and reduced prices of its hot pluggable backplane version by 18 per cent to #5,360.
But the biggest cuts came on its Proliant 5000 6/200 512K model 1x, with 128Mbytes of memory, which fell by a massive 28 per cent from #14,465 to #10,375, and on its rack-mounted Proliant. The price of that unit, also with 128Mbytes of memory, fell from #15,480 to #11,520 - a reduction of 26 per cent.
In the past few months, high end server prices were uncompetitive, said Brian Green, product marketing manager of ALR UK. ?From our point of view they?ve put their prices back in line with ALR?s?, he said. ?This also puts them in line with Intel OEMs like Dell.?
He claimed ALR and companies like Dell had bitten into Compaq?s market share this quarter. ?Our four-way Pentium Pro box has been significantly cheaper than theirs,? he said.
IBM, which last week hit out at Compaq for its pricing strategy, has a policy of adjusting its own prices within 24 hours of the major opposition, instituted by Mike Lunch. David Cosham, head of servers at the PC Company in the UK, said: ?On the face of it, they?re catching up with us. Our objective is to close any gap with Compaq. If this move has taken Compaq ahead, we?ll match their prices.?
The price wars heated up after IBM?s Lunch accused Compaq of ?irresponsible marketing? last week.
No-one from Compaq was available to explain the prices slashes.
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