PC Workstations Outflank UNIX Counterparts

HP Opens A Window Or Two Into The PC Workstation Market.

As UNIX workstations descend from the peaks of technical computing, Windows NT isscaling the heights. Industry watchers say they'll meet in the middle soon. So, what isthe state of the NT workstation market? Who does HP see as its major competition? And,what does the future hold?

The UNIX [workstation] market peaked about two years ago," says Scott Elder, aproduct marketing manager for HP Visualize workstations. "It's in decline now and theerosion is happening predominantly through NT."

Elder says that 90% of HP's customers are "welcoming NT into their PA-RISCenvironment," in some capacity, and technical users are no different than run of themill administrative users. They want a single system to run their mission-critical graphicas well as administrative applications. They need less expertise to maintain NTworkstations, which lowers their TCO and they have more vendors to choose from.

He adds that smaller companies, with just one or two applications on their networks,are generally much faster to add NT workstations into their mix. "As more [graphic]applications port to NT, small shops make the move easier. Large shops ... have to haveall their applications ported before they move."

Elder says that HP differentiates the segments of its NT workstation marketing strategyby segmenting the product lines and the sales approach for each category. At the lowerend, he says that the Kayak and Brio workstations are "similar to what IBM and Compaqare offering and our channel strategy meets the need for them."

At the higher end, in the P- and X-class workstations, the approach is one that doesnot just focus on the product but involves the channel as well. "We can marketdirectly through distributors or focused resellers that are identical in capabilities asour HP-UX resellers. They're just focused on the technical market arena. You don't seeIBM, Compaq or Dell doing that."

In assessing the major competitors he sees in head-to-head competition every day, Eldersees SGI as being the closest to follow HP's model. But because SGI, which hastraditionally been a UNIX-only provider, has just entered the NT market with its models320 and 540, at least initially they'll want to create a wider distribution channel justto get the product out there. As to the big three on HP's radar screen -- IBM, Compaq andDell -- he says that while IBM and Dell can sell direct, Compaq is "stillwavering."

This direct to the public approach, has served Dell well for PCs. "In largeenterprises, however, Dell rarely makes the short list," says Elder. The perceptionin those accounts is that Dell doesn't invest in boosting the quality and performance forthe mission-critical applications required by companies such as Ford or General Motors.


We asked Jay Moore, senior analyst for the Aberdeen Group (Boston, Mass.) for his thoughts on the players in the NT workstation marketplace:

HP -- I'm a little bullish on HP now. Their strategy of combining Kayak and HP-UX together [as one unit] in Ft. Collins, Colo. is a very good move. And they're starting to assimilate NT to folks who depend on performance.

Compaq -- Management problems have decimated the workstation division and it will take some time for the merger [with DEC] to wash out. The product line is in a bit of a rut. Customers see the Alpha as a server but not as a viable workstation. They're in a market gray zone: Low-price customers choose Dell and high-end customers choose HP and IBM.

Dell -- They took the [NT workstation] market by storm. They said 'We'll get the best performing boards, slap them together and sell them cheaply.' Workstation customers see themselves as being above the PC community, but when push comes to shove, they're still looking for the cheapest box.

IBM -- Customers on the RS/6000 are glad to see the IntelliStation. They've made some deals with important board suppliers. They talked about application performance long before anyone else and they present a complete story.

SGI -- The market is still evaluating their NT technology. Their box is locked out and you have to buy proprietary RAM. They have to build more of a product line and they're committed to doing it.

Sun -- There's no value for Sun to go to NT. They'd rather be the vendor customers think of for Internet servers.


Breaking Tradition

Unlike its more traditional UNIX cousin, where each vendor maintains a proprietary holdon the components in the box, each NT workstation vendor starts on common ground: with anIntel CPU, usually the Pentium XEON. What differentiates them, says Elder, is the approacheach takes to the graphics subsystem employed.

"Every Intel-based PC can run Excel and Word. With technical workstations, there'smore opportunity for things to go wrong between the application and the system." Headds that customers want ISVs to say what systems are certified to run their software andhow well they run it. "The quality and performance of the graphics subsystem matters.It's important to maintain good relationships with the ISVs to assure thesecustomers."

HP's Visualize subsystem, while comprised of industry standard components, is availableonly on HP workstations. "HP chose to make that the differentiator," says Elder."Compaq, IBM and Dell each integrate off-the-shelf commodity components so there's novalue add. SGI has its own memory controller, which is a very custom design. That putsconstraints on the graphics [software you can run]."

As to what the near future holds for the NT workstation market, Elder says, "Theindustry is going to see a bump in the road this fall with the new Intel processors."Those expected new processors are a follow-up to the Pentium III, code named"Coppermine" and a follow-up to the Xeon, code named "Cascade."

Elder sees the Cascade focusing more on multi-process technology, making it moreattractive as a "high-performance server chip." But the proposed integratedcache, able to run at the same speed as the processor, will make the Coppermine the frontrunner as the new workstation standard. "We think customers will be very satisfiedwith Coppermine and Xeon will be a smaller percentage of workstation sales.

"HP's focus will be to take [Visualize] graphics as seen today and move themforward transparent to the applications and how to deliver better application performanceat the system level," he adds.

And, in keeping with the trend towards open systems, Elder says to look for Linux onVisualize workstations this year. "The big gap is still application availability. ButLinux is finding its place in certain areas." He says that home grown Linux graphicsapplications are starting to appear and some others are porting to Linux more reliablythan to NT.

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