RealTime IT News

Divergence in Server Strategy

On the heels of Dell's decision last month to abandon the high-end server market, IBM on Tuesday plans to introduce a sales program designed to lure away existing Dell infrastructure customers and migrate them to IBM's Intel Xeon-based eServer x440 systems, an 8-way processing system that is the top of Big Blue's xSeries product line.

The Armonk, NY-based computing giant plans to unleash a team of technical and sales specialists that will target existing Dell infrastructure customers in the hopes of migrating them onto a number of pre-configured eServer systems that scale up to 16 Intel processors or scale out with blade servers that should result in projected cost savings of up to 15 percent.

The move provides an example of how two of the world's leading server vendors are coping with the new economies prevalent in the current IT world.

Back in July, Dell said it would scrap development of an 8-way Xeon-based server in order to concentrate on entry-level commodity whiteboxes. But the Round Rock, Texas-based hardware company wasn't retrenching; it was merely refocusing on its core compentency, analysts said.

"Dell really wants to be seen as an enterprise server vendor. They've done quite well at the low end. But when you get into the 8-way boxes, you get into an area that requires a great deal of research and development expense to make it work right," said Charles King, research director at Sageza Group. "It's just not in their DNA."

But that said, the latest quarterly revenue numbers serve to validate not only Dell's business model but its execution on that model. In its latest fiscal second quarter, Dell's enterprise business revenue grew at 21 percent to about $1.8 billion while unit shipments rose 21 percent. Dell's success in the server market can, of course, be attributed to execution but also, in part, to the growing popularity and power of clustering smaller systems, which have become sophisticated enough that they can take on the workload of standalone boxes with multiple processor, King told internetnews.com.

"The argument is you can make two 4-way servers or four 2-way servers do everything that an 8-way server does," the analyst explained.

In turn, IBM said it has already shipped more than 10,000 eServer x440 systems since it was announced last year. And the company claims that its Intel server revenue has grown faster than Dell in each of the past four quarters. That's because customers understand that symetrical multi-processing (SMP) technology (as opposed to clustered) offers less latency and more predictable response times for computing intensive applications like a SQL server or Microsoft Exchange.

"Any database scales up better than it scales out," said Jay Bretzmann, manager of IBM's xSeries offerings.