Blades front and centre of Dell’s strategy for business users

ROUND ROCK, Tex. — Having conquered the PC and the x86 server markets — it was No. 1 in Canada and the U.S. in the third quarter of 2004, according to IDC — Dell Inc. is again spreading its wings to further its Scalable Enterprise strategy.

In a press briefing at its headquarters last month,

the firm announced hardware and software offerings aimed directly at its business customers.

Since its first foray into blade servers two years ago, Dell has been notably silent on the technology. Blades, which currently only have a small percentage of the server market, are expected to become a US$7.2 billion market by 2008, according to IDC.

Dell said it is jumping back into that market with the PowerEdge 1855 blade, a dual-Xeon server with features designed to make an enterprise IT manager smile: Redundant NICs, two integrated Intel Gigabit Ethernet ports connected to redundant internal switches, PCI Express I/O technology, DDR RAM and redundant power and cooling.

Ten blades can be housed in the 7U chassis, providing up to 62 per cent more servers in a 42U rack (compared to the number of 1U servers that would fit in the same space), at less cost, according to Dell. Chassis prices start at $3,905, and blades begin at $1,956 each.

Paul Gottsegen, vice-president of worldwide enterprise marketing in Dell’s product group, said, “”Blade offerings must offer the same technologies, better density, better TCO before mainstream deployment can occur alongside rack servers. You have to strike a balance between functionality and density. A lot of competitors can’t deliver density.

According to Gottsegen, unlike the competition, Dell is not charging a premium for blade technology.

“”Dell has designed its blades to offer the right balance of performance and density at a price point that enables customers to deploy blades cost effectively alongside 1U servers,”” said Jeff Clarke, senior vice-president of Dell’s product group. “”Initial blade investments from Dell are no longer prohibitive and customers will save more with every blade they install — improving their TCO as they scale out.””

Sarang Ghatpande, research analyst for New York-based D.H. Brown Associates, says Dell is on the right track.

“”HP and IBM have products and solutions to back them up when they say they can do grand things with blades,”” he said. “”It is typical Dell strategy: At the leading edge, try to create a market for a product. It is well-positioned for what it is trying to achieve. Another thing that is key for this announcement: Dell is not charging a premium for blades; it is saying that blades are just another form factor.””

Blade management concerns

Ghatpande has some concerns, however, around the management of blades. While vendors such as IBM and HP offer special software stacks for blades, Dell is using the same OpenManage software it uses for its PowerEdge servers, he said.

“”Customers have high expectations,”” he said. “”Dell needs to step up and put more meat into the stack.””

Dell views this perceived weakness as a strength. Gottsegen said customers don’t want additional specialized software. They are saying, “”Don’t give me another tool to manage my blades.””

“”Our strategy is about driving standards into the data centre,”” he said. “”It’s one of the last places where standards are applied.””

To help standardize management, Dell and Microsoft unveiled a partnership that will see Dell’s OpenManage 4 system management software integrated into Microsoft’s Systems Management Server (SMS) 2003 this month. This will allow customers to manage their Dell servers, including receiving and installing BIOS, firmware and driver updates from SMS.

During a Webcast announcing the alliance, Dell’s president and CEO Kevin Rollins said, “”Simplifying operations in the data center is the key to scalability. Our customers’ No. 1 pain point and cost driver is in managing change. Customers need us to eliminate complexity for x86 servers.””

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Lynn Greiner
Lynn Greiner
Lynn Greiner has been interpreting tech for businesses for over 20 years and has worked in the industry as well as writing about it, giving her a unique perspective into the issues companies face. She has both IT credentials and a business degree.

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