NCR Pentium Announcement and Analysis On May 17 and June 7, 1993 a series of new Intel-based servers have been announced by NCR. These new servers are both i486 and Pentium- based. Below is an summary and analysis of the recent NCR introduction. Summary of New Pentium and i486 Systems Announced Additions to the NCR 3000 family include one workstation, ten new server models, and a host of Pentium processor board upgrades. These new systems are designed ("from the ground up") around Pentium processor technology and promise to delivery approximately 2x the speed of i486-based processors. NCR points that unlike many vendors that simply "plug in" Pentium processors, NCR develops its own ASICs on the motherboard specifically designed to maximize the benefits of Pentium. The new systems are: The NCR 3360 - a Windows NT software developer's workstation or client UNIX SMP-based 1 or 2-way Pentium system for commercial business users. (5/17 intro) The NCR 3410 - branch, in-store or departmental uniprocessor 33MHZ i486SX or 66 MHz 486DX/2 server. Upgradeable to Pentium. (5/5 intro) The NCR 3430 - System with 1 or 2 Pentium processors. Same as the 3360 but without graphics support. (5/17 intro) The NCR 3455 - scalable branch office or workgroup server with 1 to 6 Pentium processors. (5/17 intro) The NCR 3470 - replicated branch server bundled with NCR's LifeKeeper FRS (Fault Resilient Software) with 1 to 8 i486 50 MHz processors. This model consists of two 3450 servers.(6/7 intro) The NCR 3475 - replicated branch server bundled with LifeKeeper FRS with 2 to 12 Pentium processors. This model consists of two 3455 servers.(6/7 intro) The NCR 3520 - entry-level mini data center server expandable to 8-way i486 50 MHz processors and upgradeable to Pentium processor technology. (6/7 intro) The NCR 3525 - entry-level Pentium-based data center server for medium- scale OLTP and decision support applications. Supports 2 to 8 Pentium processors. (5/17 intro) The NCR 3555 - Mini data center for OLTP and decision support system with 2 to 16 Pentium processors. (5/17 intro) The NCR 3570 - fault resilient corporate data center bundled with LifeKeeper FRS. Supports 2 to 16 i486 50 MHz processors; upgradeable to Pentium technology. This model consists of two 3550 servers. (6/7 intro) The NCR 3575 - corporate data center server with 2 to 32 Pentium processors and with LifeKeeper FRS. This model consists of two 3555 servers. (6/7intro) NCR's Strategy NCR is attempting to mimic much of GSY's chapter II strategy. They are going to concentrate on market penetration to gain market share and will discount accordingly. The introduction of new servers adds to their scalability story and offers many more price points to compete with. NCR tries to sell their open strategy first instead of their boxes. In fact, they will sell first the fact that they support six different operating systems on their platforms before selling the hardware. They are also riding the Intel and Microsoft wave with their offer of Pentium servers and support for Windows NT environments. As long as the market is focusing attention on these trends, NCR will claim to be the leaading system vendor offering products with leading edge technologies. Positioning against S800 The amount of concrete pricing and performance information from NCR is very limited, especially pricing data. The positioning analysis below is an estimate and will be evolving as details become available. Currently, NCR has specifically told consultants that a price list will not be made available soon. We will continue to work with industry consultants to get more specific pricing information on NCR. Note: only the new systems recently introduced are included below. NCR Max Internal MAX MCA Price System CPUs Memory Mass Storage Disk Slots Range ---------------------------------------------------------------------- 3360 2-P5 256-512MB up to 6GB 5 $18-20K** 3410 1-i486 up to 192MB up to 6GB 7 $5-9K 3430 2-P5 8MB-512MB up to 6GB 5 $25-75K 3455 6-P5 16MB-1GB 500MB-18GB 504GB 7 $45-400K 3520 8-i486 64MB-2GB 500MB-112GB 3TB 16 $75-500K 3525 8-P5 64MB-2GB 500MB-112GB 3TB 16 $90-750K 3555 16-P5 128MB-2GB 500MB-112GB 3TB 16 $150K-1M Est Max OLTP Estimated Availability Performance Positioning vs S800* ---------------------------------------------------------------------- June 140-180 F30-G50, WB * June 34-45 F10-20,H20, WB * Q493 121-219 F30-G50 * Q493 300-340 G30-H70 * June 380-420 H30-I70 * June 680-700 H30-I70,890 ,TNT * Q294 1300-1350 890,TNT * * Positioning is based on anticipated performance and/or price range for typical configuration ** Price ranges includes 2 Pentiums, 32MB RAM, 535MB disk, 600MB CD- ROM, Ethernet or Token Ring, console, and pre-loaded Windows NT. NOTE: Prices range widely depending on the number of processors configured. Entry or base price usually contains minimal memory and disk (typically 16MB RAM and 535MB disk) and so would be much lower than listed here. The 3400 series architecture contains a dual system bus and dual I/O bus. The 3500 series contains dual system bus and dual ported memory as well as a dual ported I/O MCA-E bus interface. Note: Models below include 2 SPUs and LifeKeeper software and price ranges are unknown at this time. NCR Total Model Est Total OLTP System CPUs Consists of Availability Performance * -------------------------------------------------------------------- 3470 8-i486 2 x 3450 Q493 360-400 3475 12-P5 2 x 3455 Q493 500-550 3570 16-i486 2 x 3550 Q493 700-740 3575 32-P5 2 x 3555 Q493 1800- 2000 Estimated Positioning vs S800** ------------------------------------------------------ H40-I70 with SwitchOver/UX * G,H,I Series with SwitchOver/UX * I Series, 890,TNT with Switchover/UX * I Series, 890, TNT with Switchover/UX * * Performance is estimated based on a aggregate total for two SPUs less 5% which is NCR's current estimates. ** Positioning is based on anticipated performance and/or price range for typical configuration. LifeKeeper FRS: LifeKeeper is available today in volume and is priced ranging from $6K to $30K . LifeKeeper clusters will be available in second half of 1993. Systems in a cluster can be mixed and matched (e.g. uni- and multiprocessors) and claims performance of 2.4X for a cluster of 4 systems using Oracle Parallel Server. LifeKeeper will run on models 3445, 3447, 3450, and 3550. Later releases will expand to incorporate processing capabilities that will configure beyond two-three systems and beyond single room configurations. Competitive Situations with NCR As GSY continues to expand into new industries such as retail and financial services, it will become more and more common to encounter NCR in sales situations. NCR has maintained a strong presence in these industry segments and has taken specific steps to penetrate telecom and manufacturing which is HP's stronghold. The first indication of this developing trend is the request from the field for additional NCR information, primarily in Latin America and Europe. Listed below are some specific deals where we have run into NCR in the past few months. In most cases, details on deals were not readily available from the sales reps. Deals recently won by NCR: 1. Mainframe replaced with 3450 at Sparta Mills.2. MEAD Data Central chose NCR as key vendor (according to NCR), however, the fact is that HP is getting a tremendous amount of business from MEAD. 3. Teleway Inc's 800-Flowers bought 3550. 4. Green Point Savings Bank bought 2 3550s. 5. City of San Antonio's 911 emergency services bought 3450s and LifeKeeper. 6. H-E-B Grocery (39th largest company in US) bought 200 3445s as in- store processors. Deals won against NCR: 1. Airborne Freight Corp chose HP G30 over NCR 3445 to replace NCR UNIX boxes in remote office. 2. AT&T Customer Information Center; 827S won over NCR due to HP's stability & product strategy & price/perf. 3. Australia - Dept. Foreign Affairs & Trade; HP won due to price/perf., Open systems, BLS (Security), etc.4. Banamex - Banco de Mexico; HP was only vendor capable of demonstrating results using 827S as working model. 5. Cragin Bank; HP won with networking, open systems. 6. Ferrocariles (Mexico); won against NCR with price/perf. 7. Glaxo Pharmaceuticals Ltd.;support and open systems won this deal. 8. Home Depot; excellent support & staff, price/perf. and availability of products. 9. Mexico Secretary of State; won with price/perf. 10.NTT (Nippon T T);HP courted since 1987; willing to make specials, aggressive SRs. 11.Pemex, Petroleos Mexicanos; HP won with price/perf. 12.Sheraton Hotels;price/perf, easy upgrades, networking, & HP's world wide presence. 13. SIA - Societa Interbancaria per L'Automa; networking, rapport, price/perf, scalability, & open systems won against NCR. 14.Strawbridge & Clothier; HP won with open systems, references (Walmart & Home Depot) and application software. Deals shared with NCR: There are several examples where HP and NCR share the same account. Some of these accounts are MEAD, WalMart, BellSouth, & Florida Power & Light to name a few. In these accounts, both vendors are considered strategic and HP must fight NCR to win each deal. Beating NCR Strengths that should not be ignored: * Strong corporate image in banking, retail, and insurance industries and presence in Europe and Pacific Rim. * Parent company, AT&T, provides new opportunities for synergy and freedom to play the market share game. * Broad, scalable systems are beginning to prove themselves with good performance. * Systems support multiple operating system platforms (UNIX V.4, MP- RAS, SCO Unix, DOS, SUN's Solaris, OS/2, Windows NT). * Very large installed base is still loyal to NCR. (proven by the number of Tower systems sold in 1992) * Aberdeen Report has ranked NCR as #2 UNIX vendor in recent report further validating the design goals for the System 3000 family architecture. * Computer Reseller News has also ranked NCR as #2 server vendor. * Sales force is very strong, motivated, and are fully equipped with "virtual offices" to improve productivity. * Strong relationship with Intel and Microsoft and solid strategy for Windows NT. Weaknesses If NCR claims to provide higher performance systems than HP, respond with these points: * Remind customers that migrating applications to Pentium will not automatically provide 2X performance increase. In fact, according to Intel Corp., only when taking special care in the choice and ordering of the instructions in your program, can the Pentium run at full steam. * Applications that are tuned for Pentium are not largely available due to Pentium optimized compilers not yet being widely available. Hand optimization would be required in the interim. Intel is stressing that the performance potential will be unfulfilled unless the program is optimized specifically to the taste of the Pentium. * Pentium-based systems are likely to experience shipment delays until Q493. * Batch performance is usually limited to the speed of a single processor. Pentium is approx. 30 level batch performance. NCR requires SMP to achieve the performance levels of HP's uniprocessor systems. * Promote that HP's performance claims are backed by published industry-standard benchmark results. In fact, HP has TPC-C and LADDIS results which measure complex OLTP and file server environments, respectively. NCR has only published four TPC-A results in three years. * Emphasize the benefits of PA-RISC being optimized for both commercial applications as well as engineering environments. * On the high-end, NCR only provides a 400 MB/second total bandwidth on the system bus versus 1GB on the 890. NCR uses two 64-bit buses operating at 25MHz with peak throughput of 200 MB/second each. When NCR claims to be a technology leader, respond with: * CISC technology is yesterday's technology and HP's PA-RISC has proven consistently superior. * NCR is not an innovative technology leader they are a follower. Ask what NCR technology is being followed by the rest of the industry. OpenView is industry standard vs. StarSentry which is not well supported. * NCR's Galaxy migration software has not completely proven itself thus holding back the installed base. This provides an opportunity for HP. * Sell HP's value proposition of proven performance and leading edge technology combined with price/performance leadership for the overall solution. * Show customers that NCR has very little experience in client/server and MFA environments compared to HP. Ask them to show references for how many mainframes they have replaced with 3000 systems. * Mention the fact that the 3600/3700 was introduced before 1990 and has still not yet delivered for OLTP environments. In addition, point out that the reality of the 3600 architecture in particular will make it difficult to perform highspeed backups on multiple data servers to a central location. Also, the architecture design approach of using query decomposition across multiple nodes has not proven itself to provide the OLTP performance necessary for today's demanding applications. If NCR claims to be the leading vendor of choice, repond: * NCR is not the first choice of key ISV and CASE tool vendors. They are 3rd-tier port, usually late. * HP has superior integrated solutions. NCR's availability of commerical applications lags significantly behind HP. Challenge NCR to provide proof of all the ISVs that have ported their applications to their platform first. NCR sales tactics: * Don't underestimate NCR's aggressive discounting tactics. A discount of 45% is common. * NCR Sales team is very professional and polished much like IBM so be prepared. NCR Sales team is not shy to call high in a corporation. They have sold into 30 out of the top 50 Fortune 500 companies. * High-level executives and focused consultants are frequently brought in to help close deals with accounts. * Emphasize HP's qualities as the #1 UNIX vendor. * Challenge NCR's solutions and request references. They simply don't add up to HP's references. * NCR tries to sell TopEnd as an open, multiplatform TP monitor and leverage sell their hardware. TOP END is only fully functional on NCR platforms, therefore, it is not truly open. HP's strategic transaction mangement technology is Encina. Go after TopEnd by showing that Encina is a much more open approach: (a)It is based on stardards - OSF's DCE, (b)It has been endorsed by IBM, HP, DEC and SUN, & (c)TopEnd does not have an open, distributed foundation and is not fully functional outside of NCR platforms. * NCR will try to sell pie-in-the-sky technology which sounds good and may intrigue customers. Avoid getting into these discussions and emphasize the proven PA-RISC technology. * NCR will try to convey itself as a full-service provider of services as well as hardware and software. Take a business-oriented approach and not a product/technology approach.