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IBM targets middle market, Sun with new Web servers

Updated:
International Business Machines Corp. will introduce its newest class of Web servers on Thursday, taking aim at midrange market leader Sun Microsystems Inc.

The three new servers - called M80, H80 and F80 - are an addition to the RS/6000 line, which uses copper microprocessor technology pioneered by IBM in Austin. The market for midrange servers is estimated at $16 billion.

IBM's RS/6000 S80 was the first high-end UNIX server powered by copper chips, which are smaller and faster than conventional aluminum chips.

"Now we've copper-fortified our entire RS/6000 server line and are targeting the heart of the Web server market," said Rod Adkins, general manager of IBM's Web server unit, based in Austin.

A midrange application for the newest IBM servers would include enterprise resource planning, customer management systems, intranets as well as the Internet and supply-chain management.

IBM is betting on continued sales momentum in servers, along with software and services, to drive long-term growth. Earlier this week, in his annual talk to Wall Street, IBM chief executive Lou Gerstner said Web servers are critical to the strategy.

Amit Chopra, an analyst with Credit Suisse First Boston, said IBM is well-positioned to profit from the growing Web-based, networked world. "We were pleased to hear of IBM's intensifying focus on application developers," he said.

IBM used the occasion of the server launch to tweak Sun Microsystems by also announcing that Network Solutions Registry Unit, a global domain registry for the Internet, would replace Sun servers with 20 new IBM M80 servers.
Network Solutions, a Nasdaq company based in Herndon, Va., is a wholesaler to registrars of domain names ending in ".com," ".net" and ".org."

John Davis, director of work-group server marketing for Sun, said IBM's new servers "amount to adding new cufflinks to an old suit. We're still taking market share."

Network Solutions will continue to rely mostly on Sun servers, he said, despite the purchase of the new IBM product.
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