Spending slowdown unlikely to squelch IT product schedules

Computer World –

Analysts and users say they're optimistic that the major server vendors will stick to their product schedules this year, despite a predicted slowdown in corporate IT spending.

Major enterprise hardware vendors such as Sun Microsystems Inc., Hewlett-Packard Co. and IBM have either just started shipping or are slated to ship major upgrades to their technologies this year.

Though some of these vendors have warned of weak demand in the coming months, so far none has announced any plans to slow or defer its product rollouts as a result.

Hardware Wish List

Enterprise hardware scheduled for volume shipment by major vendors this year includes:

Sun's UltraSPARC III-based Starcat: A successor to the current E10000, the server will support between 74 and 105 CPUs. As many as four Starcats can be clustered together to act as a single computer.

HP's PA-8600-based Superdome: A 64-processor server featuring hardware- and software-based partitioning with failure isolation functionality and support for up to 128GB of memory.

IBM's Z/900: First 64-bit mainframe from IBM. Supports up to 16 processors and delivers up to 2,500 MIPS performance. It features dynamic load balancing and support for thousands of virtual servers in one box.

"I am not concerned at all [about vendors delaying products this year]," said Dan Kaberon, a parallel sysplex manager at Hewitt Associates LLC, a Lincolnshire, Ill.-based human resources outsourcer.

Hewitt has just placed orders for six of IBM's new 64-bit mainframes, which started to ship late last month. Kaberon said Hewitt plans to upgrade as needed through the year.

'Brighter chrome'

"In fact, it's when things slow down that vendors push much harder to show something that has the longer fin and the brighter chrome," Kaberon said.

Such sentiments come at a time when corporate users are getting ready for some major product migrations. All of the server vendors have recently announced significant refreshes to their technology and are expected to ramp up to full production this year.

"These are all infrastructure products that are budgeted for," said Joyce Becknell, an analyst at Boston-based Aberdeen Group Inc. "I can't imagine a vendor saying they are going to delay rolling them out."

Other products expected in 2001 are new servers based on Intel Corp.'s upcoming Itanium chip -- the first of its new IA-64 family -- from all major vendors of Intel hardware.

"I don't see vendors holding back anything," said Bob Sutherland, an analyst at Technology Business Research Inc. in Hampton, N.H.

That's because doing so will only concede the market advantage to other vendors in an already tight situation, according to analysts.

Spending slowdowns are part of the challenge of being a global IT vendor, said Mark Hudson, a global marketing director at HP. In that sense, the current U.S. slowdown isn't very different from the Asian slowdown that HP faced some time ago, Hudson added. "Anytime there is a slowdown, you need to step back and look at the basics and make sure you understand what customers really want," he said. "But there will be no change in HP's product plans as a result."

"Nothing has changed," agreed Lynn Thorsen-Jensen, a director of strategic marketing for Compaq Computer Corp.'s high-end server business. The market slowdown may lead to a re-evaluation of demand-creation and awareness-generating campaigns, but it won't result in any product delays or changes, Thorsen-Jensen said. "The [high-end] markets we are focused on are moving forward strongly," she said.

"If anything, vendors are only likely to roll them out faster" to gain any advantage they can in a depressed spending environment, she said.

Any cost-cutting measures by vendors are likely to affect marketing and sales efforts instead of product and support, Becknell said.

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