The End of the Cobalt Line

By Rawlson O'Neil King

January 19, 2004 -- (WEB HOST INDUSTRY REVIEW) -- The end of the Cobalt line of rack servers represents the end of an era. The servers, which helped define the Web hosting industry as it emerged, were discontinued by Sun Microsystems (sun.com) late last year.

Four years ago, most hosting service providers exalted Cobalt as one of the industry's most innovative hardware manufacturers. When Cobalt Networks, a Silicon Valley startup, introduced its line of servers, the company single-handily pioneered the idea of the server appliance – a computing device dedicated to one task. For most of the service providers that purchased Cobalt servers, that task was Web hosting.

The firm's RaQ server, a small rack-mounted unit, famously filled many data centers and was the center of popular advertising campaigns. Many resellers made their start in the hosting industry in the late 1990s by renting Cobalt servers from higher-tier hosting companies.

The RaQ server permitted its resources to be multiplexed, so a server administrator could offer virtual hosting to multiple clients. As such, the machine was one of the first concerted efforts to provide a higher degree of automation over Web hosting resources.

The device became so fashionable that in September 2000, Sun Microsystems purchased the company for $2 billion in stock. The server and software giant purchased the start-up so that it compete against other manufacturers such as Dell (dell.com) and IBM (ibm.com) who where shipping similar products, and so that it could bolster its own low-end server offerings.

The acquisition however became mired by many of the usual problems that normally affect purchased companies. A clash of corporate culture and management style lead to an exodus of a number of Cobalt engineers.

Though Sun was successful in adopting and selling the server line despite the difficulties, the reality of declining server costs in conjunction with growing consumer sophistication meant that server appliances were no longer seen to be a necessary cost saving option.

Andrew Butler, a Vice President at Gartner Research (gartner.com) notes that: "Sun purchased Cobalt in 2000 in good faith at the height of the hype over appliances. Cobalt led in the fledgling market. However, the demand for classic stackable appliances — typically with limited upgrade capability and tightly integrated software stacks and application portfolios — has been superseded by small servers, often based on x86 and Linux."

Indeed, with the emergence of sub-$99 dedicated servers, frequently single x86 boxes running Linux, virtual hosting as a primary option among consumers declined. The natural result was that Cobalt usage and sales also declined.

According to research and analysis firm Netcraft (news.netcraft.com), the number of sites hosted on Cobalt servers has declined since August 2002 when the devices served 3.1 million host names on 942,000 Web sites. Netcraft’s November 2003 hosting survey found Linux-based Cobalt serving 871,000 host names and 527,000 active sites. The survey also ranked the largest Cobalt hosts and found that Host Europe (hosteurope.com) was the top Cobalt host with over 35,000 active sites. EV1Servers (ev1servers.net) also maintains a large contingent of Cobalt customers with nearly 27,000 active sites. Interland (interland.com) also has retained the technology, with over 11,000 active sites hosted.

Because of the number of solid hosting companies and service providers still using the technology, Sun has said it would still maintain security patches and honor warranties on Cobalt products for the next three years.

Gartner however does not perceive the discontinuation of the Cobalt line as a major hindrance to the industry.

"The demise of Cobalt should barely affect customers. Sun will continue to support the hardware to provide most customers with an adequate support life," says Butler. "Sun has put the Cobalt custom code into the open source domain although support for this has not yet been tested. Customers satisfied with their Sun account relationship should consider Sun's own x86 servers as the logical Cobalt replacement. However, Sun could struggle to retain the loyalty of many Cobalt users, who will see vendors such as HP, Dell and IBM as more entrenched suppliers of x86 servers."