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Thu, Jun 08, 2006 - Page 10 News List

Dell ships new servers to poach HP's customers

COMPETITION The new PowerEdge series focuses on server management, and the servers are faster and much more powerful

NY TIMES NEWS SERVICE , SAN FRANCISCO

Dell said it would begin shipping an upgrade to its line of server computers yesterday in hopes of grabbing market share from Hewlett-Packard (HP), the worldwide market leader.

The upgraded systems, known as the PowerEdge series, represent a new approach for Dell, focusing on simplifying the task of installing and managing servers, not just selling them.

Brad Anderson, Dell's senior vice president, said in an interview on Tuesday that the new servers were faster and more powerful than their predecessors, while offering a uniformity across systems that made them easier for corporate customers to manage.

"We're doing all the things you wouldn't think of Dell as doing," said Anderson, who joined Dell last year from HP. "We're making it easy to manage the chaos."

Dell, which is based in Texas, trails Hewlett-Packard in the worldwide market for so-called X86 servers, with a 24 percent market share compared with HP's 30 percent. IBM is third with 16 percent of the worldwide market, according to Gartner, a market research company. Dell holds the market lead in the US, but is outsold by HP in every other major world region.

The new emphasis on easy server management comes a few weeks after Kevin Rollins, Dell's CEO, told analysts that Dell would spend US$100 million to "regain customer experience leadership," referring to reports that Dell's customer service was lagging and driving away customers.

Last month, signs emerged that Dell was facing rising competition in all parts of the market for personal computers. It announced that its net profit declined 18 percent in the first quarter, to US$762 million. Revenue in the period grew 6 percent, to US$14.2 billion from US$13.4 billion a year earlier, largely helped by overseas growth.

The new servers are based on Intel's Xeon server chip, which Intel upgraded to provide faster performance and more efficient power consumption.

HP, which uses chips from both Intel and Advanced Micro Devices (AMD) throughout its product lines, is also set to announce an enhancement to its server line involving the latest Intel chips. IBM, a longtime Intel customer, is expected to do the same.

Dell said last month that after using Intel chips exclusively, it would start using Opteron chips from AMD in some of its high-end servers, but Intel would continue to supply the vast majority of the chips it used.

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