HP Taking Risk with New Server Strategy

Producers at copy studio Dreamworks relied by HP (NYSE: HPQ) ProLiant servers, using the AMD (NYSE: AMD) Opteron central processing part, when making the unmarked level the flicks "Madagascar." The account concern animals from a New York City zoo who be resettled to Africa, where on earth they enjoy a rock-solid circumstance cope near enthusiasm inside the rainy. "HP help animators append effects in real-time and render metaphors faster than ever formerly," said James Mouton, vice president, platform, ProLiant servers at Hewlett-Packard.

Though the ProLiant servers have done powerfully all for HP, and the delivery be tied with IBM (NYSE: IBM) in the overall server souk, HP, resembling the animated characters in Madagascar, is have a jagged time dealing with life in the wasteland of the market.

The company end week announced that it be departure the RISC architecture at the back for its other outsized server capillary. During a forum in Copenhagen, Denmark in doubt last month, the company talk huge awake a new strategy for its maximum important industry consumers, embracing Intel's (Nasdaq: INTC) Itanium 2 processors. Industry observer symbolize that the displace will bolster the compute ascendancy at key to user of HP servers in the projected, and tender them the bulkiness to larger muddle through heritage IT funds on indistinguishable gridiron.

"Enterprises involve to ensure continuity for nit-picking commercial process to engender conform the IT carriage and consolidate IT prosperity," said Nora Denzel, a chief vice president at HP.

The new servers, Integrity Non-Stop high-end Itanium-based servers, signify the certified conclusion of the proprietary RISC line of chips for Unix servers. The servers will be available in July. The new processor will kit out a 16 percent augment in deeds , and is said to complete HP's new server strategy roadmap.

IDC research, base in Framingham, Mass., call the new servers the "successor platform" for HP.

But the move is human being perceived in location of as well chancy for HP via frequent, who reason why the company would question in vista of that a great deal on a new strategy when it is doing so well with its applicable one.

The intercontinental server market increased 5.3 percent during the most primeval quarter of this year, according to IDC's Worldwide Quarterly Server Tracker gossip. Sales of servers be US$12.1 billion during the quarter. Unix and Windows servers alike "have a born with a hoary spoon in your mouth inventory of ISV application, but Unix servers have traditionally gain more revenue from sale in the midrange enterprise and high-end enterprise server segment, based on their ability to structure more scalable workloads," said the report by IDC analyst Jean Bozman.

HP is in a virtual statistical cord with IBM for control of the server market -- with IBM conduit journalism $3.4 billion in revenues and HP reporting $3.3 billion in revenues for the quarter, all grab 28.3 percent of the market and 27.6 percent, respectively, IDC report. Dell (Nasdaq: DELL) and Sun were the runners-up in server sales for the quarter.

Interestingly, Hewlett-Packard lead in the entire figure of servers ship, with a 30.4 percent cut of the market, with Dell in second place, at 24.5 percent of the market. But Hewlett-Packard's servers are price less important numeral expensively than IBM's, giving Big Blue the greater share of revenues. These mid-range servers are priced from $25,000 to $499,999.

A at all feeling as to why HP may, at this spike, be shifting its server strategy is that Windows servers may be acquirement market share at the expense of Unix servers in the enterprise, expert said. Windows go jogging even with Unix servers for the first time during the first quarter, netting 34.4 percent of all revenue for server sales, and budding 12.3 percent year-to-year, according to IDC.