IBM is in talks with Compaq Computer about making Alpha processors based on Big Blue's copper chip technology.
The focus of the negotiations is Compaq's Alpha computer line, Compaq Laptop Battery sources familiar with the talks said today. This was first reported in Computer Reseller News.
The talks could also expand into other areas, sources said.
"There is no formal deal at this time but discussions are under way," Compaq EVO N600C Battery, Compaq EVO N610C Battery, Compaq EVO N620C Battery, said the source. "There is potential for a broad relationship."
IBM's Technology Group, which oversees the chip business, has been on a tear during the last six months, cutting deals with Dell Computer, Acer, and EMC for the supply of a wide range of IBM hardware, including chips, liquid crystal displays, and hard drives. Any agreement with Compaq would extend IBM's strategy of establishing a broad, flexible relationship with a customer, the source said.
Compaq manufactures Alpha servers and Alpha workstations for high-end corporate customers running software for databases and complex scientific applications. The Houston-based computer manufacturer inherited these from what was formerly Digital Equipment.
Samsung is currently a supplier of Alpha chips to Compaq. Samsung has stated that it is now shipping Alpha processors at 667 MHz and is planning to ship 1-GHz chips next year.
By comparison, Compaq EVO N600C Battery, Intel is preparing to begin shipments of a 600-MHz Pentium III processor on Monday and Advanced Micro Devices is expected to announce shipments of Athlon (formerly K7) chips in the next few weeks running at speeds as fast as 600 MHz, and later at 650 MHz and 700 MHz.
Compaq appears to be betting on IBM's copper technology.
"A copper [manufacturing] process provides better performance," said Nathan Brookwood, a principal at Insight 64, a Saratoga, California, consultancy. Though the economic viability of Alpha technology has been called into question by some analysts because of Intel's determination to close the performance gap with Alpha and its formidable marketing machine, Brookwood said that Alpha retains distinct, irrefutable advantages.
"Anybody concerned about floating point performance has a reason to stay with Alpha. Compaq EVO N600C Battery, Compaq EVO N610C Battery, Compaq EVO N620C Battery, This is way above Intel," he said. Floating point processing is critical for scientific and engineering applications.
Upcoming multiprocessor Alpha technology for servers also is ahead of Intel, Brookwood said
Compaq cuts server prices
Compaq Computer (CPQ) cut server prices from 6 to 18 percent today as a follow-up to its introduction of new models last week.
The price cuts are aimed at cementing Compaq's No. 1 position in the Windows NT-based server market, a lead which the company claims grew by two points last quarter.
Five ProSignia and ProLiant servers were discounted in the price action, Compaq EVO N610C Battery, which cut as much as $900 off of the suggested retail price of some models.
The ProSignia 200, a 233-MHz Pentium II workgroup server, was reduced from $1,960 to $1,761, a 10 percent discount. The ProLiant 850R, a departmental server which uses a 200-MHz Pentium Pro processor, was cut from $3,409 to $3,068, a 10 percent discount. Likewise, the ProLiant 800, a 200-MHz Pentium Pro server, was cut 10 percent, from $2,386 to $2,159.
Further up the server food chain, the ProLiant 2500, a 200-MHz Pentium Pro Server, was reduced from $5,682 to $4,659, an 18 percent discount. Meanwhile, the enterprise-class ProLiant 6000, a 200-MHz Pentium Pro server and one of Compaq's more powerful servers, was reduced from $10,798 to $10,170, a 6 percent discount.
"Compaq continues to deliver on our goal of providing customers with the industry's broadest selection of standards-based servers at the lowest total cost of ownership," said Jim Schraith, Compaq's vice president and general manager, North America, in a prepared statement. "We are taking every opportunity to provide superior products that offer customers the lowest risk and greatest value for their investment dollar."
The price cuts follow the introduction last week of four new ProLiant models. The new models are the ProLiant 5500, 3000, 1600, and 1200. Compaq EVO N620C Battery, These servers for the first time adopt Compaq's "Highly Parallel System Architecture" Compaq EVO N600C Battery, Compaq EVO N610C Battery, Compaq EVO N620C Battery, technology, said John Young, director of product marketing and business operations at Compaq.
Highly Parallel System Architecture allows the computer maker to incorporate two independent PCI "buses"--a bus is a high-speed data path in a computer--to eliminate data bottlenecks between peripherals such as hard drives and the system's memory and processor. The architecture also includes two memory controllers.
Other features offered by the new servers include PCI "hot plug" technology, which allows users to swap out drives, power supplies, and other parts while the server is still live.