IBM to bulk up server line with Sequent buyout

ARMONK, N.Y. - IBM's announcement last week that it plans to buy Sequent Computer Systems for $810 million raises lots of questions, but perhaps the biggest one is: Why does IBM need yet another server platform?

Sequent, a Beaverton, Ore., maker of high-end Intel-based servers that run Unix, Windows NT or both, will add its NUMA-Q servers to IBM's server lineup, which already includes the Netfinity, RS/6000, AS/400 and S/390 mainframe lines. Sequent's servers are typically used to run data warehousing, business intelligence and other heavy-duty applications.

IBM is high on Sequent's server architecture, based on a technology called nonuniform memory access (NUMA), which has the potential to enable a server to scale up to more than 250 Intel processors. IBM plans to resell Sequent's existing servers, which IBM says fit right below its high-end RS/6000s and above its low-end RS/6000s and high-end Netfinities. IBM also plans to work NUMA technology into its Netfinity and RS/6000 servers.

Bob Stephenson, head of IBM's server group, claims NUMA will be a "defining technology for the early 21st century for Unix and NT servers." IBM already has a group in place that is working on NUMA technology.

Sequent customers are encouraged by the deal, which they say has the potential to give Sequent's NUMA technology more visibility. Currently, Sequent and Data General are the most visible advocates of the technology. And Sequent has been struggling, posting a loss of more than $50 million last year on revenue of just under $800 million.

"The acquisition gives Sequent much better resources to compete with the HPs and Suns," says Dan Baker, vice president of ICG Com-munications, a competitive local exchange carrier in Englewood, Colo. "It gives them sales, marketing, support and maintenance resources to move their products."

However, not all observers are sold on the wisdom of the purchase, which grew out of a joint venture among IBM, Intel, Sequent and The Santa Cruz Operation. The effort, dubbed Project Monterey, is focused on building a version of Unix designed to run on Intel's upcoming 64-bit Merced processor.

"IBM doesn't need Sequent," says analyst Frank Dzubeck, president of Communications Network Architects, a consultancy in Washington, D.C. "The Sequent product lines don't fit into IBM's line." He says IBM, rich with cash, just thought Sequent was a good buy.

However, Dzubeck acknowledges that NUMA is a solid multiprocessing technology that could benefit IBM customers and become more prevalent with IBM's marketing muscle behind it.

The questions about overlap among IBM and Sequent product lines, as well as assorted marketing and branding issues, won't be answered for another 90 days or so, IBM says.