HP Changes System Focus

Plans to add 21 Intel-based Web server appliances to lineup as it moves away from Unix emphasis.

Marking a dramatic shift from its focus on Unix-based systems, Hewlett-Packard Co. last week announced plans to add 21 Intel Corp.-based Web server appliances to its stable of products over the next two months.

The move is a continuation of HPs efforts over the last two years—such as its recent bulking up of storage system offerings—to refocus on various markets it had previously ignored.

"I think its safe to say that HP is re-evaluating everything it is doing and seeing where its core competencies may lie and where it is better addressed by partnerships," said John Enck, an analyst with Gartner Inc., in Fort Collins, Colo. "This is a big transformation process for HP."

The new servers are Intel-produced NetStructure systems rebranded as HP servers. Along with the products, HP has partnered with Inktomi Corp., a leading provider of Internet infrastructure software.

Between now and June, HP will start shipping server appliance products ranging from Web hosting offerings to Web caching, streaming-media caching, traffic management and virtual private networking wares.

The push for servers may not be surprising. The server market, and in particular Intel-based server devices, is expected to experience relatively strong growth over the next few years, according to International Data Corp., of Framingham, Mass.

The appliance server market, dominated by Intel-based systems, could prove lucrative for HP.

IDC forecasts that sales of such systems will soar from $1 billion in 1999 to more than $11 billion by 2004.

Market research company Gartner Dataquest, in Stamford, Conn., is even more optimistic, predicting that the market will top $14 billion by 2004.

"Most of the growth in the United States has been fueled by e-business and a resulting demand for front-end Web, Web application and database servers," said Gartner Dataquest analyst Jeffrey Hewitt.

While HP previously served as a reseller for some Intel-based Web appliances, the decision to rebrand the systems means the Palo Alto, Calif., computer maker will provide support and services for the devices and integrate them more fully into the companys broader offerings.

"This is a very important market space. HP is aggressively moving into this space; its a natural extension of our server business," said Frank Harbist, general manager of server appliances at HP.

The move also helps fill an obvious and large gap in HPs product lineup.

"Theyve really been absent in this area," Gartners Enck said. "It was a way for HP to get up to speed really quickly with a relatively robust and full product line."