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HP, Intel Combine Forces For Server Appliance Products

Hewlett-Packard Co. is the first company to partner with Intel Corp. to offer Intel’s line of NetStructure server appliances to its customers. But HP is going even farther - starting next year, they’ll be building their own appliances based on Intel’s NetStructure technology.

As reported by ENT earlier this month, Intel announced that it had given up efforts to sell its line of caching, management and hosting appliances through its own channels, and decided to go through its traditional line of OEM partners.

HP has become the first of those. It will be mobilizing its giant worldwide sales force to push the NetStructure line, in addition to preparing its own line of appliances utilizing Intel plumbing. Expect to see the HP appliances on the market as early as next March.

“The Intel technologies to be adopted by HP include Web hosting, e-commerce, management, load-balancing, SSL and XML acceleration, and virtual private networking (VPN) appliance products,” Intel said in a press release.

John Humphreys, research analyst with IDC, thinks the partnership will be good for both companies.

“HP’s been prepping itself to get into the application server market for a few quarters now. IBM, Dell and Compaq have had product since the second quarter last year, and this brings HP up to speed with them,” Humphreys says.

He says it’s also “good for Intel. They wanted to bring a lot of attention to the space and cause the tier one guys [such as Compaq, IBM and Dell] to sit up and take notice.” Humphreys says it’s unlikely that Intel ever intended to sell directly to customers.

It also helps Intel’s cachet in the appliance market niche, according to IDC system software analyst Dan Kusnetzky. “Intel’s been trying to move forward” from just supplying chips for a number of years, Kusnetzky says. “It’s good for Intel to get a big-name player to say they’re going to use Intel boxes.”

Humphreys says that companies will look closely at the NetStructure line, since it provides a wide range of appliances. “NetStructure provides a really robust line, not just one or two or three different functions. There are around a dozen different products. With the NetStructure brand, [companies] can place appliances all throughout their infrastrucuture.”

The partnership will also likely help HP’s sagging sales. The company sent out a memo in December asking managers to hold off on pay raises for several months, cut back usage of temporary employees, and encourage workers to use vacation time, moves expected to help HP save at least $140 million for the fiscal year.

HP, like nearly every other PC maker in the country, has fallen short of revenue projections as the PC market continues shrinking. Earlier this week, Merrill Lynch downgraded HP’s stock to “neutral” from “near-term accumulate.” - Keith Ward

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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