Dell effect sets IT, networking worlds on collision course

As components become less expensive and more customers look for standards-based products, enterprise hardware vendors are starting to operate more like network equipment manufacturers.

Many companies are starting to re-evaluate how they operate, especially due to the Dell effect: the decrease

in prices as network equipment becomes a commodity.

Take for instance the way that new products are aimed at both the IT and network departments. Dell recently demonstrated how 10 of its new PowerEdge 1855 blade servers can fit into the equivalent of seven rack units. This helps manage bandwidth, power consumption and real-estate costs. While hot swappable drives are becoming standard features, a real value driver is the way blades deal with networking.

In the past, IT managers handled equipment requirements to support enterprise applications or databases hosted on hardware rack units in data centres. Network managers would handle cabling, routing and switching equipment housed on networking rack units in those same data centres.

Gigabit Ethernet controllers are now available on single pieces of blade hardware that can be configured to work in a clustering environment. There is more of a blur between the different departmental responsibilities. Web server administrators have direct access to network equipment and they are dealing more directly with vendors such as Cisco and Juniper.

In many large companies, separate yearly budgets are set aside for hardware and networking purchases. CIOs need to know how to deal with internal battles as decisions will need to be made whether to cut or consolidate the IT manager’s and the network manager’s budget.

Intel, traditionally known for processors, has improved motherboard hardware and now includes integrated video and wireless network cards. Many would agree Wi-Fi owes much of its success to laptops with Intel’s Centrino and built-in wireless network interface cards. As a result, the notebook makers — and Intel — were the largest suppliers of wireless client devices last year.

Although Intel is a processor manufacturer, it has one of the most important voices in the Ultra-Wideband and Wi-Max standards forums. This is territory that was traditionally catered by companies like Alcatel, Ericsson and Nortel.

Firms explore open source VOIP

To help prepare for more flexible systems, managers are starting to incorporate standards-based infrastructure that works with TCP/IP. Standards such as SMASH (Systems Management Architecture for Server Hardware) provide specifications for server management to help with data centre operations.

The Dell effect can be seen as the combination of Moore’s Law and Metcalfe’s Law. The decline in component prices and the need for more networked hardware has created an expectation that vendors can supply equipment that can perform many functions.

Web and Windows-based telephony applications running through SKYPE and MSN Messenger clients are also pushing the boundaries of network computing. Open source VoIP private branch exchange software packages, such as Asterisk and ATC-Linux, are creating a whole new round of alternatives that small to mid-sized businesses are trying out to provide more flexible standards for the future.

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Jim Love, Chief Content Officer, IT World Canada

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