Datacenter faces an uphill climb

Microsoft Corp. has made inroads into some enterprises with the Windows 2000 Datacenter Server that it launched amid much fanfare about one year ago.

Not unexpectedly, the company still faces a potentially lengthy, uphill climb as it tries to challenge high-end Unix systems. So far, fewer than 400 Datacenter systems are being used in production, as had been projected, said Tom Bittman, an analyst at Stamford, Conn.-based Gartner Inc.

Microsoft still lacks the sort of high-profile reference accounts that might persuade more corporate users to deploy their mission-critical applications on the most powerful Windows server operating system to date, analysts said.

“The major benefit to Microsoft is vocal, visible references, and it’s been too quiet,” said Bittman, adding that he expects that to change next year.

For its part, Microsoft recognizes that it needs to be patient to crack the high-end enterprise market. “We’re developing a reputation and a capability in that space, and it’s going to take a while to establish that. But it’s going well,” said Peter Conway, senior director of Microsoft’s Windows .Net server group.

While Windows Datacenter is well regarded among analysts, Microsoft faces an ongoing perception struggle in convincing corporate users that the operating system is scalable and reliable enough to handle their enterprise needs, analysts said.

Analysts said they’re not seeing many companies rip out Unix systems in favor of Windows Datacenter. Instead, users are more typically consolidating multiple Windows servers into one Datacenter-equipped box or running new applications on Datacenter.

“There’s a reality here of infrastructure and skills that are already in place in companies, and you don’t rip out and replace your infrastructure and skills,” Bittman said.

“The market it is challenging views Datacenter as an immature product,” said Rob Enderle, an analyst at Cambridge, Mass.-based Giga Information Group Inc. Also holding back Datacenter are the slow arrival of Intel Corp.’s second-generation Itanium processor, Microsoft’s pricing changes and the economy, he said.

“Overall, the market downturn has made it very difficult to move from technology to technology,” Enderle said. “Datacenter is a challenging product, and it’s going against entrenched offerings. Getting the budget to even do evaluations is much more difficult than it was a year ago.”

Some Blaze Datacenter Trail

But some companies have elected to blaze the Datacenter trail. Technology and Information Services (TIES), a St. Paul, Minn.-based nonprofit consortium of 36 Minnesota school districts, next month plans to start running its 250,000-student information system on a Windows 2000 Datacenter-loaded ES7000 server from Blue Bell, Pa.-based Unisys Corp. TIES will use 24 processors for Datacenter and the rest for testing software.

The consortium said it even plans to eventually move its financial accounting, payroll and human resources systems off its mainframe onto the Datacenter-loaded ES7000.

“Datacenter has many of the attributes that we’ve been used to having in the mainframe environment to ensure that we have a reliable computer environment,” said Lee Whitcraft, co-executive director of TIES, adding that Datacenter’s “marriage” with the scalable, reliable ES7000 “is the only reason we considered moving.”

Whitcraft explained that TIES’s business is increasing, and that adding 15 percent capacity to its mainframe might cost more than US$1 million, compared with $350,000 to $400,000 for the Datacenter-loaded ES7000 environment.

“Even if we’re wrong by 20 percent to 25 percent, we’re still going to be much less costly,” he said .

But there aren’t many companies running Windows 2000 Datacenter, which is sold only through computer hardware makers, on 32-processor machines.

Unisys is currently the only vendor shipping Windows 2000 Datacenter on boxes with more than eight processors, and only 28 percent of its customers run Datacenter in a 32-way environment, said company spokesman Steve Holzman.

Microsoft last week announced a 32-bit Datacenter Server Limited Edition Release, tuned and optimized for high transaction demands, to run on single-server machines with 16 or more processors.

So far, only Unisys has signed on as a partner, but Conway said two additional partners should be in tow by the time the product is available in the first half of next year. Also due in that timeframe are the full 32- and 64-bit versions of Windows .Net Datacenter Server.

Last year, Compaq Computer Corp. and Hewlett-Packard Co. had announced a plan to resell Unisys’ 32-processor boxes equipped with Datacenter, but both vendors backed down from that plan earlier this year.

“The reason we are no longer selling the Unisys [reseller] server is based on the lack of customer acceptance and the lack of scale-up applications for a 32-way server,” said Robin Hensley, director of Compaq’s data center group.

But Hensley said that Compaq has a development program under way for a 32-way server based on the second-generation, 64-bit Itanium processor. Hensley added that her company foresees “a very long life for the 32-bit” Datacenter product, which Compaq now sells on its ProLiant eight-way box.

“Datacenter has met our expectations. We are hitting the types of accounts in the enterprise that we expect to reach,” Hensley said, noting that her largest customer, a global financial institution, runs disaster-tolerant clusters in multiple locations.

Compaq, Unisys and Microsoft all declined to provide numbers of customers using Datacenter.