IBM Shuts Down Sequent's Numa-Q; Sun Makes Grab for Users

By Maria Trombly | Securities Industry News | June 10, 2002

In the mid-90s, Sequent Computer Corp. pioneered the use of a new kind of server architecture and grabbed a small but respectable slide of the high-end server market on Wall Street. In 1999, IBM bought the company and its Numa-Q line of servers for $810 million-only to shut it down completely last month, finally laying off its 250 Beaverton, Ore. employees amid a broader set of layoffs around the country.

Back in 1999, IBM said it would integrate the Numa-Q line-which used the then-innovative non-uniform memory access technology-with other IBM offerings.That didn't happen.

"IBM bought Sequent and seemingly largely abandoned it," said Gordon Haff, an analyst with Nashua, N.H.-based Illuminata. "It's an acquisition I never really understood. I didn't understand it at the time and I didn't understand it when IBM didn't do anything with the acquisition and I don't understand it now."

And because IBM didn't do anything with the Numa-Q line, there is nothing keeping users from switching over to competitors now that IBM is trying to move existing Numa-Q lines over to its other servers.

Sun, for example, has already launched "Project Blue-Away" and claims to have garnered $100,000 from a potential $750,000 Numa-Q market-a large chunk of which is in the financial services, according to Shahin Khan, Sun's chief competitive officer.

This could partly be due at annoyance at being abandoned by IBM.

"I think they would be understandably miffed that IBM bought Sequent and then didn't do anything with it," said Haff. "On the other hand, Sequent probably wouldn't be around today whether or not IBM bought the company because Sequent was a second-tier Unix player."

Its closest competitor-Data General-is already gone, he said, as part of an industrywide Unix consolidation. Like Sequent, Data General created its own brand of Unix to serve as the operating system on its servers.

IBM says that it will continue to provide support for users of the Numa-Q operating system, Dynix/ptx, until the end of 2006, and will provide Numa-Q hardware support until the end of 2007.

"And we are working with customers to help them migrate to the appropriate xSeries or qSeries product," said IBM spokesman Tim Dallman, who did not see Sun's Project Blue-Away as a big threat. "It isn't surprising that they would target our customer base, because we've stolen plenty of their customers with our products."

According to Sun's Khan, the Numa-Q was generally used for business transactions and back-end office purposes-as opposed to heavier-duty applications such as quantitative analysis.

"They were used for securities clearing and business transactions and for the traditional business applications, such as enterprise resource planning and customer relationship management, profitability analysis, things of that sort," he said.

These same tasks could be carried out on a number of Sun servers-ranging from the Sunfire v880 system all the way up to the Sunfire 15k mainframe-class system. "We have the technology that fits and the industry expertise that fits and we have the channel programs in place and the services in place and we are generally well-poised to identify this server base and serve it," he said.

Meanwhile, Numa-Q's innovative technology-both the Numa architecture and its way of building a modular server out of building blocks-have become common features of other server lines, including those from IBM.

"The general approach at the high level is actually very common these days in large systems," Haff said. "Almost all large systems are based on some form of Numa architecture."