Sun kills COD server price premium
Capacity on Demand
Sun Microsystems Inc today will revamp its capacity on demand offering for its Sun Fire midframe and enterprise servers,writes Timothy Prickett Morgan
Sun was the first vendor to offer COD, jumping into the game in late 1999 one day ahead of Hewlett Packard Co. The original Sun and HP COD offerings for their Unix servers required customers to pay a slight premium to have excess capacity in their machines; IBM Corp's COD offering on its RS/6000 and pSeries servers also required customers to pay a high premium.
While COD is attractive to many customers, who fear the disruptions of processor upgrades and of unanticipated workload spikes, premium pricing for capacity - especially in this very aggressive Unix server market - is not very popular with server buyers. That is why Sun is eliminating that premium pricing with its COD 2.0 offering.
Sun's COD offering, announced in November 1999, was originally available only on its "Starfire" Enterprise 10000 servers. The base Starfire COD server, which had 20 processors in the box but only eight of them activated for use, cost $390,500. Activating processors nine through 20 cost $66,500 per CPU, which was more than double the list price of processors at the time. In 2000, about 20% of the Starfires that Sun sold had COD configurations. In June 2000, COD was extended to Sun's UltraSparc-II UE3000 through UE6000 and UE3500 through UE6500 midrange servers. With these machines, Sun set the COD premium to around 5% for typical configurations.
Even though the Sun Fire "Serengeti" line of servers have been available since 2001 - March for the midframe 3800, 4800, and 6800 and September for the high-end 15000 - COD has only been available on the 15Ks. Chris Kruell, director of marketing at Sun's Enterprise Systems Product group, says that Sun has been working hard to improve the COD packaging before rolling it out on the Sun Fire line. COD 2.0 includes a new automated system monitoring tool that means that Sun engineers and in-house system admins don't have to babysit the COD machine to see how much capacity it is using. "This was a bit of a barrier to some customers," says Kruell.
So was that premium pricing, which has been eliminated. Now, customers buying Sun Fire servers negotiate the price of a machine the same old way they would before, and then they only pay for the processing and memory capacity they activate. As they add CPUs and memory, they pay at the hardware price they negotiated in their deal. Kruell says that the self-monitoring of COD 2.0 and the removal of premium pricing for hardware removes costs and barriers to the adoption of COD among Sun's customers. Sun has figured out what the car makers have figured out: it is better to make a car and sell it without making money on financing the car than it is to have a competitor make a car and sell it without making any money on financing.
Kruell says that Sun has not implemented any configuration restrictions on the COD 2.0 model - meaning customers can fully configure a Sun Fire machine and then activate a small amount of the capacity if they believe this is what they need for their business. The old COD offering on the UltraSparc-II servers and on the 15K was less granular, too. Customers had to activate full four-way system boards and the full memory installed on the boards (8GB). But on the Sun Fire machines using COD 2.0, COD granularity is based on a single CPU and 2GB of main memory for that CPU.
COD 2.0 will be available on the Sun Fire 3800, 4800, and 6800 on November 18, and will roll out on the Sun Fire 12000 and 15000 servers at the end of January 2003. Solaris 8 and Solaris 9 are supported on these COD machines, just like on regular Sun Fire machines.
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