Hewlett-Packard's claim of a successful migration program targeting Sun customers in Asia has prompted a sharp rebuttal and other counterclaims from its rival.
HP fired the first salvo in a display of one-upmanship, saying that during the first half of its fiscal year 2005 ended May 31, at least 75 reference-able customers in the Asia-Pacific region have approached it to migrate from Sun systems. It further estimates that these numbers are "a sampling" only.
In an interview with ZDNet Asia, Anthony McMahon, vice president of storage and servers in HP Asia-Pacific and Japan, took swipes at Sun's change of heart toward industry standards, most notably by supplying x86 servers and freeing Solaris source codes.
McMahon reasoned that Sun's turnaround from its Solaris and SPARC-only approach has opened an opportunity for its customers to now consider other operating systems like Linux. He said: "Their technology roadmap is at a crossroads…Sun for the first time is acknowledging the strategy we have been executing for a long time, (which is) around offering servers with industry standard x86 building blocks.
"The fact is Sun's revenue for its UltraSparc-based systems is declining…and is now trying desperately to deal with the shift to industry-standard offerings, thus their late entry into that segment of the market (with lower-end AMD Opteron servers)," he added.
In the Asia-Pacific region, excluding Japan, Sun's share in the Unix market fell from 32.6 percent in the first half of 2004 to 28.1 percent in the first half of 2005, according to IDC. HP's market share also dropped, albeit less drastically, from 32.7 percent in the first half of 2004 to 31.1 percent this year.
McMahon also criticized Sun's upcoming move to introduce a new set of internally-developed Opteron-based servers this month. He said: "Sun will further increase the risk to their customers…(We have witness) Sun make false starts into this market before, such as their entry and then quick departure into the blade market, (because of this) we know customers have concerns and are looking for alternatives."
Sun fires back
Not surprisingly, Sun took issue with HP's statements and shot back a few rejoinders.
In an e-mail response to ZDNet Asia, Chong Soon Cheong, product manager at Sun Asia South, hit back at HP, saying: "Given the active competition among the vendors, there will always be customers switching camps.
"However, I would like to point out that HP probably has a higher risk of losing customers. This stems from HP's proposal to their customers to migrate from PA-RISC customers to Itanium. If customers have to migrate, they may as well consider options other than HP."
He added that Sun has its own HP migration program and said that companies such as Australia-based utility provider ActewAGL have migrated to Sun from HP.
Analysts whom ZDNet Asia spoke to were quick to play down HP's claims, pointing out that acquisition programs to accelerate customer defection are common.
Phil Sargeant, Gartner Asia-Pacific's research director, servers and storage, said: "There is evidence from customers we speak to, that any vendor, be it Dell, HP, Sun, or IBM, win accounts from their competitors every other month… it's a never-ending circle."
He went on to put into context the 75 customers that HP mentioned, saying: "Per quarter, there's something like 230,000 servers sold. If you're talking about two quarters, you're talking about half a million servers being sold. (As for the) 75 customers across the Asia-Pacific…that's not a heck of a lot of servers."
Rajnish Arora, associate director of enterprise servers and workstations, IDC Asia-Pacific, echoed Sargeant's sentiments. He said: "Competitor attack programs are always on. One never really knows what is the scale of the (business coming) from these 75 customers…One really needs to understand the quantum of incremental revenue that HP is deriving from them (in order to judge its significance)."
Defending Sun's decision to develop its own x86 architecture servers, Arora added: "Sun is trying to strengthen its offerings in the market by investing its own chip architecture based around x86 that is differentiated. Isn't that what IBM is doing with its xSeries architecture?
"What Sun is doing now is what IBM has been doing in the last two years. x86 is a commoditized platform…(That's why Sun and IBM) are trying to create products that provide differentiated performance so that they don't have to compete with vendors like Dell in terms of price."
Playing the partner card
Despite the all-round skepticism, it is not game over yet for HP. McMahon hinted at a trump card which could impact Sun's fortunes.
He revealed that "in a couple of months, some large Sun partners in China, Japan, and India" could take to reselling HP systems. "Sun's change of heart is triggering a chain of reaction from their partners. They're becoming a bit more open-minded towards (reselling HP)."
When probed about HP's claim, Sun's Chong replied: "It is very difficult to comment on such a general statement. If HP is making such a claim, HP should be more specific as to when these activities will happen. Otherwise, these are mere speculations for which we reserve our comments."
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