IBM aims to extend gains in Intel-based server market

ARMONK: International Business Machines Corp. on Monday launched a computer

for small and medium businesses aimed at solidifying recent gains in the market

for smaller servers run on Intel Corp. microchips.

Increasingly sophisticated Intel-based servers are taking on ever-more

demanding tasks and are a key battleground for computer makers, and IBM a year

ago was the distant third-place vendor.

IBM's eServer x235 computer, starting at around $2,850, holds one or two

Intel high-end Xeon microchips and runs Microsoft Windows and Linux operating

systems. A sample configuration had a slight price edge on a similar one from

Dell and IBM said it offered new technology, such as equipment that makes easier

real-time back up of data on a second disk drive, known as mirroring,

Hewlett-Packard Co. dominates the Intel-server market with its Compaq

ProLiant line, while Dell Computer Corp., known for its low prices, is second.

But IBM, which built its reputation on huge computers, was the only one of the

three to show an absolute rise in first quarter sales, according to research

firm Gartner Dataquest.

It ended the three-month period with 14.8 per cent of the quarter's nearly $4

billion market for Intel servers, compared with Dell's 18.5 per cent and

Compaq's 25.2 per cent. "I guess because of the (HP) merger news, they

(Compaq) have been sort of slow on the product releases," said D.H. Brown

analyst Sarang Ghatpande.

"Compaq is an established player in the market ... But it seems IBM and

Dell are dueling it out."

Dell has made a good impression with recent two-processor machines, but IBM

has come out with strong technology over the last six months, Ghatpande said.

"IBM is getting very aggressive."

IBM will begin shipping the system this month.

(C) Reuters Limited.