News

HP Reverses Course on Reselling Unisys CMP Systems

• By Scott Bekker
• 04/19/2001

Unisys Chairman and CEO Larry Weinbach slipped the news into an investor briefing this week about Unisys earnings for the quarter.

The CMP systems, which Unisys sells under the e-action ES7000 brand, are the only greater-than-eight-processor systems available for Windows 2000 Datacenter Server.

Fully configured with 32 processors, the Unisys systems matches the highest SMP capacity of the 32-way capable Windows 2000 Datacenter OS. Unisys has recently been publishing CMP results on the SAP benchmarks, showing comparable results to pricier Unix/RISC systems.

HP announced in Fall 2000 that it would join Unisys' OEM reseller program. At the time it joined Compaq Computer Corp, which had committed in February 2000 to selling the systems. Dell Computer Corp. joined the reseller program later. ICL and Hitachi also resell the systems.

Gary Erickson, product marketing manager for HP's NetServer platform development, said HP's mid-March decision to pull out of the CMP program was a complicated one.

"When we looked at the timing of when we would be able to finally bring to market the CMP implementation, and we looked at some future systems we're working on based on McKinley, it doesn't make a lot of sense," Erickson said.

The Unisys CMP system supports both 32-bit Xeon processors and 64-bit Itanium processors. Erickson says HP is basing its own high-end Intel processor systems currently in development on Intel's follow-on to Itanium, the 64-bit McKinley. McKinley is coming sooner than HP originally expected.

"We'll have [McKinley] in protosystems this year," Erickson said. "We expect it to hit volume shipments in 2002."

HP had not booked any customer orders for CMP systems, although the company had invested in marketing plans and had begun the Windows Datacenter Program certification with Microsoft, according to Erickson.

Steve Josselyn, research director for enterprise server fundamentals at consultancy IDC, says HP's pullout shouldn't wound Unisys too badly.

"I think from a PR perspective, it's always not good to have people walking away from your platform, but in terms of volume, I'm not so sure it's that devastating a loss," Josselyn says. "In looking at the Intel-based business from all of the different folks out there, [Unisys has] got Compaq and Dell who are the real high-volume players there."

Josselyn also says the agreement to resell the CMP machines may have muddied HP's marketing message with respect to its own systems running HP-UX, since the target markets for the products overlap.

HP's Erickson denied that there had been a political battle over CMP between HP's Unix and Intel business units when asked.

"There was no conflict there. That was not in any way the reason for our decision to discontinue working with the CMP," Erickson said.

IBM Corp., the other party in the big four of Windows server sales, never jumped on the Unisys bandwagon. IBM recently announced its own roadmap for a 64-processor server that will run the Whistler version of Datacenter Server.

Meanwhile, sales of the CMP systems are not generating substantial revenues yet, but Unisys officials expressed cautious optimism about the product line.

Weinbach told investors Tuesday that sales of enterprise servers are down across all product lines, including the company's high-margin ClearPath mainframe systems. Weinbach attributed the problems to longer sales cycles as customers weather tough economic times.

"Our first-quarter ES7000/CMP server sales were impacted by the current economic uncertainties," Weinbach said. "As we continue to demonstrate the unique advantages of this new technology, we look for sales of our CMP-based servers to grow over the course of 2001. Of course, economic conditions could have an impact." –