From...

June 24, 1999
Web posted at: 11:48 a.m. EDT (1548 GMT)

by Steven Brody

(IDG) -- You might not find items like this at Sears, but if companies such as Compaq and Oracle have their way, buying a server and plugging it in could become as easy as getting a new washing machine.

Although server giants Hewlett-Packard, Sun Microsystems, and IBM continue to ramp up the power and speed of high-end, general-purpose multiprocessing servers designed to house everything from database to e-commerce to file-and-print services, a new trend towards using individual boxes for each of these functions is gathering momentum -- and with it a new profit model for server hardware and software.

The term server appliance has been coined to refer to these new single-function servers whose market is predicted to grow to almost $16 billion by 2003 (see chart below).

Among the most recent entrants in the burgeoning race are Compaq's TaskSmart Internet caching appliance -- a server devoted to running Novell's caching technology on top of a bare-bones version of NetWare 5 -- and Oracle's Raw Iron database appliance, introduced in December of last year, which runs the Oracle 8i database on top of a stripped-down Solaris kernel.

The value proposition is simple, say the companies: The devoted appliance performs better, is more reliable, costs less, is easier to administer, and is easily expanded -- just add another box.

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"There is a broad range of customers for server appliances," says Compaq's director of appliance and communication servers, John Young. "You can get customized or optimized solutions for a particular task, whereas a general purpose server trades multi-functionality for performance."

The TaskSmart Internet caching appliance, said Young, includes a NetWare kernel that has been rewritten exclusively to store Web objects, and the box itself has been optimized with five network adapter ports and improved I/O. What's more, says Young, these types of appliances and other pending designs can "radically simplify administration work and setup."

One would hope so, anyway. The word "appliance" is heavy with ideas of plug-and-play simplicity, but analysts believe there is much work to be done before these servers are as simple as their billing suggests.

"The issue is whether a collection of server appliances performing the same functions as one multi-purpose server can be administered as one computer -- inputting user names only once, managing the network from one management console, etc. Until that happens, it won't reach a high level of acceptance because of administrative costs," said International Data Corp.'s Dan Kuznetsky.

More often than not, says Kuznetsky, more hardware means more administrators, and administrators account for somewhere between 50 and 70 percent of an IT infrastructure's total cost of ownership (TCO). So while the cost/performance ratio of appliances may be lower -- because the cost of large multi-purpose servers is often driven up by packing huge amounts of memory, I/O channels, hard-drive space, and expansion capabilities into one box -- those savings could be more than offset by needing to hire new personnel.

"A TV is an appliance -- you just plug it in and watch it. A first generation IT appliance isn't going to be like that, " cautions Joe Barken, industry analyst at Gartner Group. "For 10 years we have been promised end-to-end management tools, but no one has delivered on it."

The promises continue, just the same. Compaq is pushing its Web-browser interface for administering appliances, saying the tool will be compatible with the company's as-yet-unspecified future server appliances. Raw Iron also features Web-based administration.

The utility room

While everyone agrees that server appliances are unlikely to eliminate the need for conventional servers, it is unclear where they will wind up carving their niche.

Any application which stands alone, loosely speaking, is a candidate, says Barken. That includes proven appliance-friendly applications such as file-and-print serving, and emerging appliances for Internet caching, proxy serving, and other applications that do not require extensive integration with other, third-party applications. Barken is therefore skeptical of Oracle's Raw Iron database appliance, saying that it may encounter difficulties integrating with the myriad other applications that interface with and manipulate a database.

Compaq's John Young foresees appliances in many markets where standards have been well-defined, as is the case in Internet caching. TCP/IP and Ethernet protocols are well-established, eliminating the need for extensive software to handle complex integration issues. Enterprise Resource Planning (ERP), in contrast, tends to be a highly customized group of applications, for obvious reasons, said Young.

Will Windows NT be a player?

In whichever market they wind up, server appliances will most certainly change the landscape. Most notably, appliances eliminate the need for a complete operating system to manage the multiple applications and protocols handled by conventional servers. At worst, this is a serious threat to companies who make their money on operating systems; at best, it's a challenge.

Ironically, single-purpose servers may pose the biggest challenge to the very company some say is partly responsible for the emergence of the new appliances: Microsoft.

"You could say that Microsoft has fed this," says Kuznetsky. "They said that the functional server approach was a way to build NT-based applications. They chose a single function because NT won't scale as large as Unix, so [they said] the way to handle large jobs is to split it over several machines. Once you've accepted that, it is a very short step to [server appliances]."

Server appliances may take Windows NT onto turf where it is not as competitive as other operating systems. Appliances don't require the Windows GUI that has helped to make NT so successful. Ideally, a small embedded operating system on an appliance is invisible to the end-user. In short, says Compaq's Young, "The OS has to be embedded; it has to simplify set-up and administration; it may need to be tuned for the application in question; it needs to be reliable; it helps to be small; and of course cost is always an issue."

To Kuznetsky, the right solution sounds less like NT than it does Linux, for example, or FreeBSD, or QNX. Microsoft's competitive alternatives, according to Kuznetsky, are Windows CE and embedded versions of NT. Windows CE, he says, is not well-suited to the server-side, having been designed for a single user. Windows NT, embedded or otherwise, says Kuznetsky, has three primary problems: "It's large, it's big, and it's huge."

What's more, adds Kuznetsky, a scenario where large, single servers are replaced by several boxes does not make NT any more competitive against free operating systems like Linux. To an OEM manufacturing, say, 500,000 appliances, the difference between a $1,000 operating system and a free one is clearly significant, Kuznetsky points out.

Other analysts, however, are not so quick to dismiss Redmond's ability to rise to the occasion.

"This is a challenge to Microsoft, certainly, and that is why embedded NT has to exist," says Gartner Group's Barken. "But they aren't going to price themselves out of the market. They may very well offer embedded NT on a one-off basis ... they aren't going to charge $1,000 per copy in volume. At the end of the day, five bucks for NT or nothing for Linux won't make a big difference."

Barken also counters that Windows NT is not too large for an enterprise-class appliance. NT requires 128 megs of RAM to run on a server, which, says Barken, is relatively little in a large server.

"They aren't total idiots up there in Redmond," said Barken. "They've made a lot of money for a lot of people, and you can't count them out."