Compaq Backs Away from Unisys CMP Systems

Compaq Computer Corp. will stop reselling Unisys Corp.'s 32-processor 'Wintel mainframe' CMP systems. Compaq's pullout is a major blow to the Unisys effort to build industry momentum behind its high-end Windows architecture.

Tim Golden, Compaq's director of enterprise server product marketing, said Compaq remains committed to Windows 2000 Datacenter Server and the Windows Datacenter Program, in which the OEMs who sell Datacenter Server must certify complete systems running the high-end OS.

"Part of it is just the overall industry readiness for this class of server," Golden said in explaining his company's decision to discontinue marketing CMP systems. Compaq says its eight-processor systems accounted for 95 percent of its sales in the Windows Datacenter Program.

Economic conditions also played a part, Golden said. The relatively small source of revenue from the CMP servers was offset by system testing costs, he said.

Compaq's decision comes just two weeks after Unisys Chairman and CEO Larry Weinbach disclosed that Hewlett-Packard Co. had reversed course on selling the Unisys systems. Compaq signed onto the Unisys program last February in a deal that Unisys estimated would bring it $400 million in revenues over two years. The Compaq deal was a major endorsement of Unisys' technology.

In announcing its decision, Compaq stated that it is developing a 32-way system of its own. It joins HP and IBM Corp. as companies in the last month that have clarified their own plans for high-end servers that run Windows. Dell Computer Corp., ICL and Hitachi remain signed up as OEMs for the Unisys systems.

Golden indicated that Compaq remains impressed by Unisys' technology. "It's based on what we've seen our customers say with their purchasing dollar far more so than any factors that could be raised about the technology of the box," Golden said. He added that Unisys' recent announcements about performance on an SAP benchmark were "pretty impressive." (See ENT's coverage of the benchmark).

"The platform was significantly more expensive than the same number of processors and memory deployed in four of our eight-way servers. Fully configured, these things could be up to $800,000 or so," Golden said.

Unisys officials disagree about market readiness for the CMP systems, which it sells under the name ES7000.

"We're obviously disappointed that they've made this decision," said Peter Samson, vice president and general manager of Unisys technology sales development. "We're disappointed that Compaq didn't give it a little longer to measure the market for the products. We believe that our strategy is still right."

Unisys plans to add more than 200 new CMP sales and technical support positions, the company announced Tuesday in response to the Compaq decision.

Microsoft Corp. also rushed to support Unisys in light of the Compaq news with a quote from President and Chief Operating Officer Rick Belluzzo in the Unisys news release.

Unlike HP, Compaq had actually sold some of the CMP systems under its ProLiant ML770 brand. Compaq will support those customers, Compaq's Golden said. – Scott Bekker

Related Articles:
HP Reverses Course on Reselling Unisys CMP Systems
Unisys Puts 32 Processors to the Test

About the Author

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