New Software, Services Offerings Mark Effort to Match Rivals IBM and HP
Story from the Wall Street Journal
Dell Inc. on Wednesday is expected to become the latest technology giant to introduce new hardware and services in an intensifying battle to control corporate computer rooms.
Dell plans to announce new, more powerful server systems along with software from other companies to manage the vast flow of information that passes through corporate computing systems, people familiar with the matter said. It is also planning a new system for keeping track of data-center traffic, and it will offer services to assemble, monitor and manage those computers, they addedDell has long sold what the industry calls "industry-standard" servers, machines that use microprocessor chips from Intel Corp. or Advanced Micro Devices Inc. and sell in high volumes. But the company is not a major software provider, unlike rivals International Business Machines Corp. and Hewlett-Packard Co., nor has it developed a services organization on the scale of those companies. The announcement follows a series of moves by rivals. Networking giant Cisco Systems Inc. last week said it will start making servers in an effort to broaden its penetration of data centers, and H-P has been increasing its investment in networking gear. The Wall Street Journal last week reported that IBM is in talks to buy server maker Sun Microsystems Inc., a move that would bolster IBM's
Roger Kay, an analyst with Endpoint Technologies, said Dell's broader attack on data centers represents the company's "first major pass" at moving from a provider of low-end servers to more complete data-center systems.
It's an important move for Dell, which ranks third in world-wide server revenue after IBM and H-P, according to market-research firm IDC. Competitors are angling to become one-stop providers of technology and services to data centers. In a report this week, UBS analyst Nikos Theodosopoulos wrote that the "battle for the data center" may lead to ongoing consolidation in the field.
Dell is two years into a corporate turnaround effort spearheaded by founder and Chief Executive Michael Dell, who returned to the company in 2007 after it lost the No. 1 position in world-wide personal-computer sales to H-P. Mr. Dell has tried to spark new growth by moving more deeply into consumer PCs and by increasing Dell's corporate offerings.
Dell has often considered expanding their service offerings relating to data centers and colocation in major markets across the United States. Currently, many Top Ranked Tier 1, Tier 2, and carrier-neutral colocation providers actually compete in the colocation sector, including these key markets:Combining hardware with software and services is key to expanding its offerings to big companies, said Endpoint's Mr. Kay. To help achieve that goal, Dell earlier this year gave its services chief, Steve Schuckenbrock, responsibility for corporate computing products as part of a larger reorganization plan. Mr. Schuckenbrock has spent nearly two years building up largely automated services like data-center monitoring.
In 2007, Dell spent $1.4 billion to buy EqualLogic, a maker of data-storage systems. Its new offerings will involve EqualLogic hardware, people familiar with the matter said, as well as software from Symantec Corp. and BMC Software Inc.
Asked to comment Tuesday, a Dell spokeswoman referred to an email that characterized Dell's coming announcement as a "new strategy and enterprise portfolio designed to free customers from the restraints of costly and proprietary business technology."
