The Netezza Performance Server 8000-which was introduced to the marketplace just a few weeks ago-promises to do what general-purpose computers have thus far failed to do. It claims to reduce business-intelligence computing tasks, such as analyzing customers' buying behaviors and bill-payment patterns, that often take days and hours to complete, to minutes.

Jit Saxena, Netezza's CEO and co-founder, sees the opportunity for appliances even in this stagnant economy. In a nutshell, data growth is swelling 50 percent, year over year. Meanwhile, general-purpose computing power is growing at 30 percent per year.

"The gap between what you need to process that growth of data vs. what general-purposing computing can provide is huge," Saxena says.

What Netezza has done is no different from what Cisco Systems did with routing technology, or what Nokia did with security software. Saxena and his engineers have built a sleek appliance focused on a specific job: business-intelligence applications. And Netezza is another example of how specialized appliances are changing the face of servers, offering an alternative to general-purpose machines in a similar way that PCs became an alternative to minicomputers.

"Look at the average high-tech home," says Paul Judge, director of research and development at CipherTrust, Alpharetta, Ga. "People have a PlayStation to play games. That's an appliance. It's a dedicated PC designed to play games. It does nothing else."

There are plenty of areas experiencing this evolution, from storage to security to voice recognition. Companies such as Adomo, founded in 1999 and based in Anaheim, Calif., created an appliance that lets users access their Microsoft Exchange e-mail through voice recognition and the telephone. Blue Coat Systems, Sunnyvale, Calif., builds a Web-security appliance, and Emeryville, Calif.-based SafeWeb offers an appliance with the ability to deploy a secure extranet in less than an hour.

The appliance trend had its greatest push during the Internet buildout of the late 1990s, especially in caching and Web servers. "[Customers] really needed good solutions. They didn't have time to mess around," says Matt Eastwood, a research director in enterprise servers at International Data Corp. (IDC).

Vendors happily obliged, rolling out products. Since then, the economy has soured and, along with most parts of the technology sector, so have server sales. (IDC reports server revenue declined by 19 percent from 2000 to 2001, and server shipments declined by 2.1 percent during that same period.) Still, the appliance market has some hot spots, including Europe where the economy traditionally is dominated by more midsize companies.

"Network attached storage and security continue to have healthy demand," Eastwood says.

According to VARBusiness' State of Technology research, the majority of solution providers currently deploying network storage expect to sell or recommend an increased percentage of network attached storage (NAS). In fact, in the next 12 months, 67 percent are expecting to resell, recommend or influence NAS, up 12 percent, year over year.

The Draw of Appliances
Sliding into this technology evolution was a no-brainer for Jon Chun, CEO and president of SafeWeb. He once worked as a vice president of engineering for an IT supplier as well as a CIO for a health-insurance company in Silicon Valley. At both jobs, he was confronted with the same problem: how to reduce the overhead costs of day-to-day tasks and those associated with what is sometimes referred to in the business as "meatware," or the management of people.

"I went very aggressively looking for appliance solutions," Chun explains. "They basically allowed me to roll out a solution much faster than if I went out there and purchased individual components and assembled them myself."

But Chun didn't find a whole lot of choice out there, except for the Cobalt technology that was eventually purchased by Sun Microsystems. So he found himself rebuilding the same solution at each job. He was buying software and servers, hardening the operating systems and installing the applications. That kind of approach, Chun says, was no less wasteful than if the automobile industry required customers to call 12 different sources to get the parts to assemble a car.

"Then the 12 companies would drop the parts off while you hired somebody to put them together. And every two years, one of the parts would upgrade," Chun jokes. "That is why there is a strong financial argument for the appliance model.I think you are seeing this move because appliances effectively address what the end users want, which is solutions-not technology."

The trend is actually the fourth generation of distributed- computing architecture-a movement that reaches back into the 1960s and 70s when technologists looked to distribute computer functions more efficiently, says Dan Kusnetzky, vice president of systems-software research at IDC. Back then, people started to take out various computer components and house them in separate machines. Today, it's about separating certain security, and storage capabilities or application tasks. In the future, it will be about separating out database functions into specialized appliances-such as what Netezza and Teradata does.

"There are more than 12 servers in my portfolio, and my competitors have similar amounts of products," says Tom Bradicich, director of server architecture at IBM. "It's very much like the auto industry. There are many different servers, just like there are many different cars."

New software often starts on a general-purpose device and moves to an appliance when the technology goes mainstream. This most recent evolution of distributed computing, however, is mostly customer-driven. According to research firm ARS, La Jolla, Calif., server appliances are being used by small businesses because they are easy to use, deploy and maintain.

Big Solutions, Small Prices
In the near future, ARS predicts that special-purpose servers will cannibalize some portion of the general-purpose server market, but not too deeply, because appliances are not as flexible. A major selling point of appliances is they offer solutions at lower prices. The technology sector is in a slump, so IT managers and administrators are demanding products and solutions that fit into their tight budgets. Instead of deploying the solution on a four-way or eight-way server, a simple appliance does the job.

"Our customers are large banks, for example, with thousands of branch offices," says Charles Dauber, vice president of marketing and product management at Blue Coat Systems. "For them to put a general-purpose server with some security software in all branch offices where they don't have local IT resources is not an option...IDC says the firewall appliance market outsells the standalone firewall software market by 50 percent."

Some of Blue Coat's management team came from Nokia, which during the 1990s packaged Check Point's leading firewall software into an appliance. "You may know of Check Point as a firewall software, but it is actually deployed on Nokia's firewall appliances," Dauber says. Blue Coat, formerly known as CacheFlow, has shipped 12,000 units in the past couple of years to customers like the Salt River Project, the largest water provider and electric utilities supplier in Phoenix. The company has two product lines for Web security: the SG 800 and the SG 6000. Those products sit on the intranet/Internet boundary behind the firewall. All the traffic that runs in and out of the network goes through the firewall, but for Web applications to go through, the firewall has to open particular ports.

"We intercept all the Web traffic. We make sure it is clean, make sure it is secure, and we make sure it is going to the right person," Dauber says.

Neoteris, Mountain View, Calif., offers its Instant Virtual Extranet (IVE) appliance that acts as a secure gateway between the public Internet and internal corporate resources. All requests entering the IVE are encrypted by the end user's browser. Each request is subjected to an administrator-defined access control and authorization policy, or client-side digital certificates, before the request is forwarded.

Company executives say they made a conscious decision to move from a software organization to an appliance company. "As our sales vice president likes to say, 'We hit a gusher here,'" says Jason Matlof, vice president of marketing and business development at Neoteris.

On the technology side, appliances and the software that resides on them are heavily tuned for one job. For instance, CipherTrust's flagship product-IronMail-is another gateway solution that sits between a network firewall and mail server, including Microsoft Exchange, Lotus Notes, Novell GroupWise and Sendmail. The device protects corporate Web e-mail against hackers, denial-of-service attacks, and password and root cracks. Executives say it also protects against spam. IronMail also does content-filtering and policy enforcement.

And if you're looking for mobile access to e-mail, wireless phones aren't the only way to do it. Adomo's voice-recognition system-comprising an appliance that sits on top of the e-mail server-can be installed in less than an hour. It enables mobile workers to open, read and send e-mail via the voice system.

The appliance market is also creating new business.

"We've gotten some nice compliments like, 'We installed your appliance, and then we forgot about it,'" Blue Coat's Dauber says. "They didn't have to think about it. It just ran."

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Copyright© 2002 by CMP Media LLC, 600 Community Drive, Manhasset, NY 11030. Reprinted from VARBUSINESS with permission.