Dell Inc has created a new business division to sell servers to customers large enough to warrant some light customization, but not so large that they are designing and assembling their own equipment.
The new unit for the closely held company is named Datacenter Scalable Solutions and targets customers who might need thousands of slightly tweaked computer servers at a week’s notice, but are not so large that they are designing and building their own servers with Asian companies such as Quanta Computer Inc (廣達).
The division sits between Dell’s traditional business and its eight-year-old Data Center Solutions (DCS) division that targets the largest data center operators.
“DCS is Savile Row. You walk in and you’re picking fabrics and cuts and everything for your custom suit, that’s the DCS world,” Dell Server Solutions general manager Ashley Gorakhpurwalla said in an interview.
Datacenter Scalable Solutions, by comparison, is more about alterations to existing designs, with a couple of areas of customization, he said.
Dell estimates the market for traditional IT servers is about US$40 billion, and the hyper-scale DCS market is worth about US$9 billion. Datacenter Scalable Solutions’ target audience fits between these two and is worth about US$6 billion and growing quickly, the Round Rock, Texas-based company said.
Dell, like rival Hewlett-Packard Co, is facing a change in the cloud market as large companies such as Baidu Inc (百度), Amazon.com Inc and Google Inc design highly customized data center servers and have them built at a low cost by suppliers such as Quanta. This segment of the server market grew 22 percent to sales of US$974.9 million in the first quarter and represented 7.6 percent of the worldwide server market, according to data compiled by Inter.
Dell had an 18 percent share of the total global server market on sales of $2.3 billion in the first quarter, but with a growth rate of 12.6 percent, according to data collection firm International Data Corp.
“Server design is like the PC market back in the ’80s,” Baidu Inc (百度) data centers architect Ali Heydari said. “You had the big names and eventually it became the Taiwanese companies.”
Dell has been catering to this competitive low-cost market for several years and counts large Chinese operators such as Baidu, Alibaba Group Holding Ltd (阿里巴巴), and Tencent Holdings Ltd (騰訊) as customers, Dell chief commercial officer Marius Haas said in an interview. The company believes it can maintain its grip on these customers through a combination of its logistical skills and experience, Haas said.
Dell has already talked to about 200 customers about its new Scalable Solutions products, he said. Dell is confident it would be able to sell to companies that, although large, are not so big they have developed the kind of global logistics capability needed to buy servers directly from an original design manufacturer and get them assembled and sent to their data centers.
Hewlett-Packard, meanwhile, recently announced a joint-venture with Foxconn Technology Group (富士康科技集團) to develop similar servers. That venture has already resulted in about US$1 billion of booked business, Hewlett-Packard’s enterprise chief Antonio Neri, said in a June interview.
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