Dell goes for "value" in business server drive

 

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By Barry Collins and Reuters

Posted on 25 Mar 2009 at 08:22

Dell is introducing new server and storage products aimed at cost-conscious companies, betting that its emphasis on value can help win market share as competition intensifies.

The announcement comes as the corporate server market heated up considerably over the past week, with the much-anticipated entry of network equipment maker Cisco, and merger talks between market leader IBM and high-end server maker Sun.

Seeking to distinguish itself from competitors offering more expensive products developed on proprietary technology, Dell says its portfolio of 14 new products is designed to save companies time and money though improved efficiency, adoption of open standard infrastructure and virtualisation.

"We think simplifying IT, driving efficiency in the data center, helping our customers consolidate and virtualise to save costs is actually the strategy that will ultimately win in the industry," says Steve Schuckenbrock, president of large enterprise for Dell.

The new products include PowerEdge servers and workstations based on Intel's next-generation Nehalem processor, EqualLogic storage arrays and software designed to help simplify IT management in a single console. The servers will begin shipping on Monday, when Intel is expected to formally announce Nehalem.

Dell is also extending its ImageDirect service from desktops to servers, meaning IT departments can have their servers imaged at the factory, rather than having to do it in-house.

Industry analysts are positive about the products and the strategy. "What Dell's focusing on is trying to show customers a way to save money... so they can free up resources to invest in new applications and I think that is a good overall story and strategy for 2009," says IDC analyst Matt Eastwood. "One of the things Dell is really stressing is designing to value."

x86 cost-cutting

Charles King, an analyst with Pund-IT, says emphasising cost in the current environment is the right approach for Dell. "The value of x86 virtualisation as a technology for server consolidation is really beyond a doubt," he claims.

"I think it's hitting a lot of the right notes with this. We're at a critical point in the server business... if companies are going to move ahead with IT purchases they are doing so when the products are either going to save them money or make them money."

Dell claims customers saving money on its standardised equipment will reinvest that savings in new products and help drive growth and boost sales of its service and software offerings.

"The only platform in the world that continues to grow year in and year out is x86 open architecture and Dell is the only company that's pure to that architecture," Schuckenbrock claims, adding that cost-conscious customers are not looking for more expensive, proprietary solutions like those offered by IBM and HP.

Dell is the second biggest maker of x86 servers, and placed third in the overall server market, behind IBM and HP.

An IBM-Sun deal would pose a direct threat to HP in the high-end Unix server market, where Dell doesn't compete, but analysts warn Dell could face hurdles in the long run as its competitors are able to offer more comprehensive software and services alongside hardware products.

Dell chief executive Michael Dell says talk of IBM possibly buying Sun provides an "enormous opportunity" for Dell, as it helps accelerate the migration to x86-based servers.