Unisys Touts Performance, Value of ES7000

Company says next revision of Windows Datacenter Edition will drive new ES7000 adoptions

• By Stephen Swoyer
• 12/12/2002

Unisys’ latest push occurs in the wake of encouraging financial news for the once-troubled computing and services company, along with speculation on the part of several analysts that the impending release of Windows .NET Server 2003 Datacenter Edition could spur an uptick in ES7000 sales.

The new TPC-C benchmarks Unisys announced were good enough to earn its non-clustered ES7000 entrant—powered by Intel Corp.’s new 2.0 GHz Xeon MP processors and an advance copy of Windows .NET Server 2003 Datacenter Edition—a place among the Top 10 overall TPC-C performers. Also perched at the top of the list were clustered entries from Hewlett-Packard Co. along with non-clustered Unix systems from Fujitsu, IBM Corp., NEC Corp. and Bull Systems.

Although Unisys’ 32-way ES7000 system was bested by Windows 2000-powered systems from HP and NEC in terms of transaction processing performance, it posted the lowest overall price per number of transactions per minute ($11.49) of any system in the TPC-C Top 10. Moreover, another 32-way Unisys ES7000 system, powered by Intel’s older 1.6 GHz Xeon MP chips and hosting a pre-release version of Windows .NET Server 2003 Datacenter Edition, also cracked the TPC-C’s non-clustered Top 10 list in November. That Unisys system boasted the next-to-lowest price per number of transactions per minute ($13.18) of any other non-clustered configuration in the TCP Top 10.

Mark Feverston, Unisys’ vice president of platform marketing, concedes that benchmarks such as the TPC-C enjoy a mixed reputation among IT decision makers, but points out that Unisys is a services-oriented company with substantial expertise in designing scalable online transaction processing (OLTP) environments, such as that simulated by the TPC-C. Moreover, he suggests, the price/performance of the ES7000 in OLTP environments may be impossible to ignore. “What we’ve done is said we’ve got the best overall one now, it’s simple to manage and we’re now rivaling the performance of those guys in the clustered environment, but we’re doing it at a much lower price.”

Improving Bottom Lines

Feverston says Unisys has thus far sold around 800 ES7000s and indicates that the last two quarters have especially resulted in significant increase in ES7000 sales. Moreover, Unisys itself is expected to meet its earnings targets for 2002, which are pegged at about 20 cents more per share than the company earned in 2001 before it adjusted its earnings for “special items.” In addition, Unisys expects to grow its earnings per share by an additional 20 percent in 2003.

By Feverston’s account, some of Unisys’ earnings success can be attributed to a spike in ES7000 adoption. The systems are usually sold in tandem with lucrative services contracts. Feverston says enterprise customers are starting to accept Windows—especially in its Datacenter Edition incarnation—as a mission-critical platform for enterprise computing. “We started to see a ramp-up in 3Q, and in 4Q we started to see an acceleration of people adopting the high-end Windows technologies.”

One such customer is healthcare giant Fortis Health, which has deployed three ES7000 systems to support a migration from HP-UX and AIX workloads to Windows applications, among other tasks. On one 16-way Intel Xeon-based ES7000 server, Fortis Health supports an Oracle database, which the healthcare provider has moved over from Unix.

On another 24-way Intel Xeon-based ES7000 server, the healthcare insurer plans to support a mix of heterogeneous workloads, including several Microsoft applications. On its third ES7000 system, a 16-way box populated with eight Intel Xeon and eight Intel Itanium microprocessors, Fortis Health plans to support a variety of memory-intensive applications, including multi-user software from Citrix Systems Inc. and a data warehouse.

Roger Jones, Fortis Health’s CIO and senior vice president, says his company made the decision to move from Unix to Windows largely because of the improved scalability of Windows 2000 Server Datacenter Edition, along with the reduced price of operating and managing a Wintel environment. “I think that what’s happened is that the ES7000 Datacenter has scaled up the Windows environment to a size that’s appropriate to support the needs of [our 3,000 to 5,000 desktop users].”

Sarang Ghatpande, a research analyst with consultancy D.H. Brown Associates, suggests that if economic conditions continue to improve, other customers may soon follow Fortis Health’s lead. By Ghatpande’s estimation, Unisys sold $70 million worth of ES7000 hardware through the first half of 2002. While he hasn’t yet put together any figures for 2002 as a whole, Ghatpande expects Unisys to finish the year with a flourish. “Although [$70 million in sales] is not spectacular, it is not bad, either, considering the cost of the box," which can reach nearly $1 million in some configurations.

In particular, Ghatpande points to Unisys’ introduction of its new “Aries” boxes, which are sold in configurations of up to 16 processors, as a possible means of expanding the potential market for the ES7000 in tough economic times. “The Aries boxes give them a broader market, a lower price, and let them compete with IBM, which has the EXA [16-way architecture].”

The Datacenter Factor

All parties agree that the introduction of Windows .NET Server 2003 Datacenter Edition will be important for the ES7000’s success in 2003. By its own accounting, Unisys sells Windows 2000 Server Datacenter Edition to about 50 percent of the customers who purchase ES7000 systems. Says Feverston: “That ratio can only get better when [Windows 2003 Server] Datacenter Edition starts shipping.”

According to Tony Iams, a senior analyst, also with D.H. Brown Associates, some potential customers have expressed reservations about Datacenter Edition, which they view as essentially a 1.0 version of Microsoft’s would-be back-end operating system. Iams expects that the next revision of Datacenter Edition should address some of these concerns: “What’s going to be happening fairly soon is you’re going to be having a new version of Windows, Windows .NET Server 2003 Datacenter Server, that is going to significantly increase the capabilities of Windows in the enterprise, with improved SMP, improved workload management, better security and reliability.”

An Increasingly Competitive Market

Although its fortunes have improved, Unisys faces a variety of difficulties in marketing the ES7000, including challenges from other vendors. After all, for most of its existence, the ES7000 was the only game in town. But that’s not necessarily true anymore.

NEC, for example, markets a 32-way Itanium-based system, the TX7, that outperforms Unisys’ best TPC-C benchmark—albeit at a greater cost. IBM’s 16-way Xeon-based xSeries servers, which exploit its proprietary EXA architecture, are expected to finally debut in 2003. Moreover, HP, which currently markets several small Itanium-based servers that support mixed workloads, has announced plans to ship Itanium-equipped SuperDome servers in 2003.

The rub of it all, points out D.H. Brown’s Ghatpande, is that Unisys’ competitors benefit almost as much from Microsoft’s improvements to the Datacenter Edition product as it does. “For a long time, Unisys with the ES7000 was ahead of where Microsoft was with Datacenter. Now, Microsoft is finally starting to catch up, and the playing field is more crowded.”

Not only that, but Unisys faces a tough sell of the ES7000 as a server consolidation platform in some accounts. After all, even a “low-end” 16-way ES7000 Orion system is a far more expensive proposition than, for example, four similarly equipped four-way PowerEdge servers from Dell Computer Corp. As Gartner analyst Ian Brown wrote in a recent assessment of Unisys’ new Orion systems, the ES7000 is simply too expensive a platform for every server consolidation scenario. “Simply taking four or five small four-way servers, each running a single workload at 25 percent or less CPU usage, and putting them into separate partitions on an ES7000 isn't going to offer much in the way of payback or do much to solve customers' management burden.”

In addition, Brown speculates, many corporate decision makers will balk at the prospect of spending so much money on a Windows-based server. “[S]elling the idea of a $500,000 Windows server to the CIO may be easy enough for the technology supplier that built the thing, but most CIOs will take a bit more convincing.”