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Although Corporate killed the 1-800-DEC-ISIT Competitive Hotline, and
laid off half the staff last week, I still have some information that
I'll send you.
It's funny, we (the Competitive Hotline) were a group of 7 people. We
were the ONLY place for Sales, Sales Suppport and channels people could
go to to get competitive information, prices, tactical advice and
discounts on our competition. We handled more than 7,000 calls per
year and really helped the sales force win orders. I even carried
a pager after hours for "Emergency Situations" (and never asked for
additional compensation).
Our prime directives were to a) have a "live" person answer the phone
and b) IMMEDIATELY provide the caller with whatever they needed.
then POOF!! It's over......
I feel as if I've had my heart ripped out. I feel so empty and
helpless because now there's no place for the field to go to find out
what IBM, HP, SUN, or dozens of other companies have for products,
strengths/weaknesses, futures, etc. This was the most valuable job
I've ever had (15 yrs @DEC) and the most enjoyable.
Good Luck to all
Kevin Farley
formerly of the Competitive Hotline
1-800-DEC-ISIT (don't bother to call)
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Subj: MIS Report: Digital's New Alpha Servers: Ready To Shake Up th
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
| Please be advised that the information contained within this |
| report is copyrighted material. The following policies must |
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<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
Digital's New Alpha Servers: Ready To Shake Up th
Digital's New Alpha Servers: Ready To
Shake Up the Market
Weiss, G.
Gartner MCS Midrange Computing
2-MAY-1994
--------------------------------Summary-----------------------------------
Digital has begun what is possibly its most important offensive. For anyone
who thought Digital was sleeping, its new 2100 server represents a market
alert - Digital will not roll over, and users have new options on the vendor
table.
--------------------------------------------------------------------------
Copyright (C) 1994, Gartner Group, Inc.
Key Issue
Can Apha be Digital Equipment Corp.'s salvation?
Note 1
A Comparison of Configuration, Pricing and Performance
Digital's 2100 Server A500MP
o 190-MHz CPU
(expandable to four CPUs)
o 1 Mbyte of cache
o 64 Mbytes of RAM
o 600-Mbyte CD-ROM
o 2-Gbyte disk
o OSF/1
o Three-year on-site warranty
o Price: $26,900
o Performance (est.):
180 tpsA (low) to 200 tpsA (high)
o Hardware price/performance (est.): $142/tps
HP's H50
o 96-MHz CPU (non-expandable)
o 2 Mbytes of cache
o 64 Mbytes of RAM
o 600-Mbyte CD-ROM
o 2-Gbyte disk
o HP-UX
o One-year on-site warranty
o Price: $57,000
o Performance (actual):
184.6 tpsA (client/server Oracle 7)
o Hardware price/performance: $309/tps
Note: The H60 (which is expandable to two
CPUs) and a comparable configuration
costs $76,600.
Sun's SPARCserver 1000
o 50-MHz dual CPU
o 64 Mbytes of RAM
o 2.1-Gbyte disk
o 644-Mbyte CD-ROM
o Solaris OS
o One-year on-site warranty
o Price: $48,100
o Performance (est.): 150 tpsA
o Hardware price/performance (est.): $320/tps
Digital Equipment Corp.'s April 12 announcement of its 2100 Server Family is
likely to be the bellwether of Digital's fortunes. Digital's 2100 outguns Sun
Microsystems Inc.'s offering on price/performance, and it sets new, low pricing
levels, possibly reigniting price warfare in the midrange market. The 2100
also outperforms Unix revenue leader Hewlett-Packard Co.'s (HP's) scalability
in the market's sweet spot. While competitive reaction will not lie fallow, we
believe Digital's first 2100 Alpha SMP systems have reserve firepower for a
second volley in 2H94. The announcement is clearly a
buy-market-share-at-all-cost strategy, with floor-busting pricing and marketing
giveaway programs. It indicates that Digital is ready to deal seriously, and
to gamble on big volumes. Unfortunately, Digital also gambled on a positive
fiscal third quarter - hoping for a double whammy. Its well-publicized,
disappointing financial results turned what should have been a strong message
of rejuvenation into a sour note. Digital still has some of the best design,
engineering and technology talent in the industry, despite its poor execution
in sales and marketing and past strategic positioning blunders.
We believe Digital missed an opportunity for even greater impact when it chose
to benchmark VMS/Rdb, with a TPC-A result of 265 tpsA (uniprocessor) , rather
than benchmarking OSF/1 - a greater marketing opportunity. Without an official
TPC-A, Digital estimates 180 tps on OSF/1 with a third-party RDBMS, leaving a
disparity of close to 70 percent between the two operating and database
environments. The Rdb four-way configuration yields 662-tpsA performance (62
percent linearity). Extrapolating from this, a four-way Unix system would
yield about 445 tps - an insufficient differential against HP (two-way H70 at
411 tpsA) and Sun (eight-way SS1000 at 400 tpsA). This forces Digital into an
aggressive pricing strategy. Digital will probably still tune the benchmark to
reach uniprocessor performance of 200 tps, and to improve SMP linearity to
reach or exceed 500 tps.
Digital's pricing is a dramatic example of its deliberate quest for market
share. For comparable entry-level hardware and performance configurations (see
Note 1), Digital has more than a 100 percent simple hardware price/performance
advantage over HP. This advantage is even greater if Digital's three-year
warranty is factored into a TCO, including maintenance charges (see Note 2),
and if an estimate of 200 tps is used instead of 180 tps. Moreover, large CPU
configurations bump the Digital price up by only $9,000 per CPU, whereas HP's H
series uplift from single to dual CPUs (the maximum) is $29,000. We believe
this will force HP to readjust midrange pricing, and to respond more quickly
with four-way SMP systems. The price differences are less dramatic against
Sun, but Digital wields performance as a price/performance weapon, where four
Alpha CPUs (at $9,000/CPU) approaching 500 tps compare to Sun 1000
configurations of 10 CPUs (at $24,000 per dual CPU boards).
Note 2
Digital's Marketing Programs
o 60-day free trial
o Three-year warranty
o VMS free software migration (until year-end 1994)
o Digital 4000 additional CPU in SMP at no charge (until June 30)
o Pre-configured third-party DBMS
o Incentive upgrades from various older platforms
We believe Digital will quickly launch a second marketing offensive to maintain
momentum. The 2100 enters with 190-MHz chips, but, by fall, it can move to
275-MHz chips (170 Specint92) if needed. At the high end, Digital will unveil
300-MHz (300 Specint92) systems capable of 12-way SMP by year-end 1994.
Additional performance tweaking will be achieved by doubling cache, while the
2100's 132 Mbytes/second PCI (see Note 3) I/O bandwidth is four times both
Sun's and HP's. While HP and Sun may be within striking range, IBM is in a
more precarious position as it unveils the first SMP PowerPC configurations.
We estimate (see Research Note I- 901-1457, 3/21/94) that four-way RS/6000s
will initially peak at 375 tps, putting IBM on the defensive right out of the
starting gate. IBM will have to react with aggressive pricing of its own,
further stimulating price wars and margin erosion in the midrange market.
Note 3
Why Digital Is Betting on PCI
o Fast bus speed (132 Mbytes/second peak)
o Big third-party market
o Low-priced third-party add-in components that contribute to overall
system price competitiveness
o Inability to afford building own duplicate function adapters at
competitive pricing
o Leverage across PCs, workstations and servers
o Quick time to market
o Synergy with the Intel world of high-volume commodity products
Digital will provide users with best-of-breed technology. If management and
financial issues were divorced from product and technology issues, user
confidence in Digital would likely return to historic proportions. In reality,
Digital deals with users from a weak hand, because of its sales and marketing
turmoil. Users can protect their investments by positioning Digital's Unix
strategy for optimum applications portability. Because it has one of the best
commodity and Unix standards strategies, Digital is less likely than other
vendors to lock in users. The biggest obstacle is regaining the market's
confidence, to sustain the volumes required by its dive-bomber pricing
strategy. We recommend that users raise Digital to qualifier status, and
re-level the competitive playing field accordingly. While it could mean big
savings for users, Digital's return to profitability will be that much more
difficult.
For a reprint of this document, contact Jane Katzen at Gartner Group,
FAX: 617-229-2208. Reprint prices are $1 (one dollar) each. ALLOW THREE
WEEKS FOR DELIVERY. Please include the following information.
@TITLE:94/05 GG-MCS Digital's New Alpha Servers: Ready to Shake Up the
Market
@SERVICE:GARTNER-MCS
@NUMBER:MCS Events, E-149-1476
@DISPDATE:May 2, 1994
@DATE:X940502
@AUTHOR:G. Weiss
@BEGIN:SUMMARY
This publication is published by Gartner Group, Inc. Reprints of this document
are available. Reprint prices are available upon request. Entire contents,
Copyright (C) 1994 Gartner Group, Inc. 56 Top Gallant Road, P.O. Box 10212,
Stamford, CT 06904-2212. Telephone: (203) 964-0096. Facsimile: (203) 324-7901.
This publication may not be reproduced in any form or by any electronic or
mechanical means including information storage and retrieval systems without
prior written permission. All rights reserved.
|
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What's the hottest selling rackmount system this quarter?
The Digital 2100 Rackmount, of course!
======================================
Why? o Because high availability configurations are available that
consume much less space than similarly equipped pedestal
systems, saving valuable floor space and improving manageability
of the systems.
o Because the client can select the rackmount building blocks
needed to meet application requirements now, and add to that
configuration later, without increasing footprint.
o Because it provides the same functionality and price performance
as similarly configured pedestal systems.
o Because it has large system features (Alpha AXP power) with
small system advantages (low cost structures), all within a
compact package.
****************************************************************
* Competitively (as reported in the May 1994 issue of US Selling
News) the Digital 2100 System:
- has the performance of the HP I50 at a third the price,
- more performance at half the price of the 8-processor SUN
SPARCsersver 1000, and
- more performance and expandability than the IBM RS/6000 58H at
half the price and a third the price of the 590.
****************************************************************
Details: o Announced on 4/12/94.
o First revenue ship (FRS) on 6/2/94.
o First volume ship (FVS) on 6/10/94.
o All Q4 units were sold out by FRS, but we're building now for
Q1 deliveries.
o PCI options are expected to be available in Q1.
o The Digital 2100 Rackmount Server is anticipated to be CSS's
highest volume product for FY94.
Action: o Sell Digital 2100 Rackmount Servers NOW for Q1 deliveries!
A True Story:
"So how bad are we?" said the Sun Salesman
From: Malcolm Wicks, Tel No: 830-3546 Date: 02-Jun-1994 07:22pm CET
WICKSM@A1_CHEFS@SUBURB@REO Dept: Environment/GIS
ESRI are our top GIS partner both in Europe and world-wide. Their world-wide
users conference, held two weeks ago, attracted over 4,000 delegates and more
than 1,500 of them filled in a contact form when they visited the Digital
stand. So what was the big attraction?
It was seeing a Sun machine on the Digital stand complete with a nice "Sun at
work" sign kindly supplied by Sun MicroSystems. Right next to the Sun SPARC
10/51 was an identically configured DEC 3000 model 600. Both were running the
same application designed by an independent GIS consultancy. The application
showed an aerial photograph and then zoomed in on the City Hall and drew in the
land parcels and boundaries. Time on the Alpha was 9 seconds, time on the Sun
was 16 seconds. Just to prove that this was not a fix we had three other ESRI
based GIS applications running which demonstrated that on average the Digital
machine was about 50% faster. As one customer remarked, "The Sun at work sign
should have the word "slowly" added to it.
It wasn't long before several Sun Sales people came over and asked the key
question. "How bad are we?" We showed them the demo and they asked a stream of
questions to check out that we had set up the machines fairly and correctly.
They agreed that we had and that it was a fair test. They appeared not to be too
surprised at the results.
Customers were somewhat more enthusiastic about what they saw, particularly when
we pointed out that the machines had a similar list price, IF Digital threw in
an extra 32mb of memory and supplied a 21 inch screen instead of the 16 inch
screen on the Sun. It was also great to hear the growing band of Alpha
customers telling existing Sun customers that these results fall in line with
tests that they have carried out for themselves too.
We also found out that about one in five visitors to the stand were in the
market for a server within the next 18 months. Customers hot attractors seemed
to be ranked: 1) Price, 2) IO, 3) 3 year warranty, 4) In cabinet storage.
The US based 2100/ESRI PowerChannel leaflets had to be reprinted 3 times to keep
up with the demand.
The Data General Sales people came over to see the 2100 because they are now in
the server business. (On their stand they were selling Silicon Graphics work-
stations with their servers). As we answered their questions we could see their
jaws drop further and further. They were last seen drowning their sorrows with
the Sun sales people. It would have been unkind to have told them that the
President of ERDAS said that running one of his software modules on an Alpha
based machine took 1 minute whilst "a competitors machine" took 30 minutes. It
would have been almost cruelty to show them the Kubota workstation spinning a
400MB image like a toy whilst competitors machines were still doing their first
re-draw. So being nice people we waited until the next day before telling them.
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