What’s the Difference?
One of the challenges facing Dell is finding ways to differentiate its Intel refreshes from the competition. Each server vendor’s offering, Gartner research vice president John Enck joked, is so similar that each company “could’ve just changed PowerPoint presentations and delivered it.”
Enck said there is one huge area of differentiation: management software. Dell’s latest optional DRAC (Dell Remote Access Card) and free IPMI 1.5-based remote management software now feature Active Directory integration, continuous video, and virtual CD/Floppy capabilities as part of what Enck calls a “parity game,” among the leading vendors who continue to leapfrog one another.
Dell’s Ward said he sees the company’s level of standardization and cross-platform commonality as differentiators. Common hardware to makes it easier to apply the same build to multiple eighth-generation PowerEdge servers, Ward noted.
With Dell’s list prices constantly dropping, is pricing another differentiator? Yes and no. “For your average Joe, Mom and Pop SMB, Dell tends to be more price-attractive,” Enck said. For big-purchase enterprise negotiations, however, not so much. “Once they get into heavy negotiations, Dell hits a percentage point in the mid-20s and they won’t discount any further.” IBM and HP, he said, will “drive discounts lower,” and try to “make it up in storage or service.”
Place your AMD Bets
While Dell has put its money on Intel-based servers, AMD’s Opteron may be giving the company reason to hedge its bets. Gartner’s Enck said he sees the EM64T as only enhancing AMD’s appeal by validating the dual 32/64-bit architectural approach in the long run and providing a transparently common x86 platform.
So will Dell bite eventually? “I have a standing bet with Dell that they’re going to [add AMD servers] by the end of the year,” Enck said. He cites a stronger-than-ever Dell-Intel partnership factoring against such a move, but if HP or IBM win a few “really big [Opteron] deals,” Dell will “adopt it in a heartbeat.”
Enck said he imagines a Dell product manager with a “big old spreadsheet,” in which “there’s a calculation that says how much market share [loss] can they tolerate. How many server units can they lose before it’s cost effective for them?” Dell denies all — sort of: “As of today, we have no plans to offer AMD servers,” Ward said. “That’s not to say it never will happen. As soon as it makes business sense for us, we would do it.”
Dell’s Intel partnership and its HPC focus may explain why the 4-way PowerEdge 7250 Itanium server made sense on that “big old spreadsheet.” So far, Ward said, Dell has seen demand for the PowerEdge 7250 “exactly where we expected to see demand for it: in SQL, SAP enterprise and Oracle deployments.”
But Itanium-2’s limited appeal may be in danger. “There continues to be some traction loss in the market for Itanium because of this Opteron/EM64T technology,” Enck said. Some database customers previously on a course to adopt Itanium are now waiting to see whether Opteron and Nocona form an indisputable migration path, he said. However, Dell’s Ward sees Itanium-2 as useful, at least in the meantime, citing the fiscal quarters to go before Microsoft gets its operating system and database in sync with EM64T.
Dell has said outright only that its two-processor Nocona-based PowerEdge blade will be released later this year in Q4. But Ward and another Dell spokesperson seemed willing to speculate that such a blade might look a lot like other eighth-generation Dell servers, particularly the new PowerEdge 1850 1U system. The fundamental objective, Ward notes, “was to have it very common with our other platforms architecturally,” driving common Open Manage software and build usage. Dell is shooting for a 1.5 to two times denser form factor for its new blade than that of the comparable 1U PowerEdge 1850 rack server. Dell plans to price the new blade 20 percent lower than its non-blade sister, the PowerEdge 1850. Doing the math on the PowerEdge 1850’s $1,619 list price, you can expect a $1,299 per blade price tag.
Dell Remains Focused and Formidable
Dell’s seems unbeatable of late, particularly in the SMB market. Enterprise buyers, however, may want to pay close attention to Dell’s pricing during negotations. If you are seeking an adrenaline rush or scale-up servers, look elsewhere or consider an Itanium-2 offering.
It’s been a while since Dell released a blade and, for it to gain traction in that space, this one will need to be good. In general, however, as long as Dell sticks to its standard architecture with pragmatic consistency — while dodging any Intel lemons — it should enjoy continued success.