Dell Hones in on Blade Market

Dell has had an active few months since our previous server snapshot in May 2008. While there are largely incremental changes with regard to tower and rack gear, blades blazed the trail of innovation in the form of the PowerEdge M-series blade family. Rather than taking on IBM (Armonk, N.Y.) and HP (Palo Alto, Calif.), in an across-the-board blade server war, Dell appears to be targeting specific segments of the blade market with its M-series offerings.

Server Snapshot: For much of the past year, rather than attempting a winner-take-all strategy against IBM and HP, Dell has been targeting specific segments of the blade market with its M-series offerings.

“Dell is doing some interesting work in the blade space, where it’s leveraging Egenera’s PAN Manager to complement its own hardware design,” said Gordon Haff, an analyst with Illuminata (Nashua, N.H.). “However, it still trails market leaders HP and IBM by a good margin here in terms of sales.”

PowerEdge M-series stress power efficiency, good performance for virtualizationand a low total cost of ownership. While HP has been taking what might be termed a “blade everything” approach, Dell’s strategy is to release blades when and where it thinks it makes most business sense. This seems to be paying off, at least in the short term. According to IDC (Framingham, Mass.), Dell out-paced the industry with 60 percent growth in blades in the third quarter of 2008. The soon to be issued fourth quarter results from IDC will show just how much momentum Dell has been able to achieve.

Probably the most significant blade development was the introduction of the PowerEdge M805 and M905 full-height blade servers. The company characterizes this model as the industry’s most powerful and energy-efficient virtualization server blade. Designed from the ground up for virtualization, the M905 is also well-suited for memory- and performance-intensive applications and for applications that need highly available fully redundant connectivity. The M905 placed the number on the VMmark benchmark for 16-core blades.

According to Sally Stevens, director of platform marketing at Dell (Round Rock, Texas), the M905 uses up to 8 percent less power than comparable HP blades and up to 18 percent less power than comparable IBM blades. It is equipped with four Opteron processors, 32 DIMM sockets, and seven PCIe slots. The Dell PowerEdge M905 has a starting price of $4,999.

“The M905 delivers the industry’s best virtualization performance for 4-socket blades and is the first blade server to support 11 tiles and 66 virtual machines [VMs] in VMmark testing,” said Stevens. “The PowerEdge M805 delivers the same number of DIMM slots in a 2-socket blade that requires a 4-socket blade from either HP or IBM.”

Dell’s decision a couple of years ago to offer AMD as well as Intel processors means the company now tends to release more servers and server upgrades that it used to. In the past few months, for example, it introduced more powerful and more energy-efficient systems leveraging the latest processor technology. In September, it introduced PowerEdge servers and blades with Intel’s “Dunnington” processor. That was followed in November, with a series of eight enhanced blade, rackmount and tower servers using quad-core AMD Opteron “Shanghai” processors.

“The new PowerEdge systems with 45nm Quad-Core AMD Opteron processors offer up to 49 percent Java performance increase over previous PowerEdge systems with AMD and achieved the highest VMmark scores for 2- and 4-socket servers and blades,” said Stevens. “Dell enjoys strong relationships with both AMD and Intel; as a result, we can provide customers with the greater freedom of processor choice.”

Future Plans

What lies ahead for Dell in 2009? Stevens promises that the company will be pushing the envelope in terms of function and form.

“Our server design philosophy is not to chase innovation for innovations sake, but to push the technology as far as it can go without overburdening the cost or complexity,” said Stevens.

Will this be enough to propel the company further up the server chart? Haff said that in the area of the market where Dell plays, so much comes down to the numbers. It’s not so much about the qualities of particular products but of how many they sell overall and what their margins are.

“I see plenty of anecdotal examples where Dell has become the standard, or at least a major, server supplier for organizations looking for solid, basic servers at the lowest price,” said Haff. “But the ultimate proof of success is the bottom line; Dell had been on an upswing but is now seeing the effects of a weak economy. Relative to, say, IBM, Dell is much more dependent on basic volume hardware sales.”

Dell’s PowerEdge Servers, At a Glance