Dell Joins Server Blade Party

Dell Computer Corp. Wednesday revealed at a press conference in New York City that it is getting into the server
blade business, a niche that is all the rage in the hardware server sector these days. The Austin, Texas PC maker also rolled out
enhanced server software to accommodate the new products and partnered with Microsoft Corp. for InfiniBand technology.

The heart of Dell’s conference is the company’s new PowerEdge 1655MC, which holds up to
six servers with two Intel Pentium III processors in one rack. Server blades are thin electronic circuit boards containing one, two,
or more microprocessors and memory. They are used to perform such tasks as serving Web pages and can be easily inserted into a rack
with other blades.

Server blades reduce rack space requirements by as much as 50 percent and cabling by more than 80 percent to provide more room in a
world where refrigerator-sized appliances have long cluttered up information technology rooms. They also lower hardware acquisition
costs relative to traditional servers, while reducing costs for power and cooling. Compaq Computer Corp. and
Hewlett-Packard Co. already offer server blades, and Sun Microsystems Inc. and IBM Corp. have major initiatives on their menus for the future.

To be sure, the interest in blade servers is growing. Gartner Dataquest said in a February study that worldwide blade server
shipments will increase dramatically, growing from the 84,810 units it expects will ship in 2002 to more than 1 million in 2006. The
IT research firm also anticipates that revenue from blades will reach at least $1.2 billion during this time.

One of the potential snags in the server blade arena, according to analysts, is the lack of standards right now, as users will be
reluctant to install a blade server that appears to be proprietary. That is why HP created OpenBlade, an open specification for
blade servers designed to drive the development of standards-based blade server architectures and in turn provide enterprises with
interoperable, multivendor blade server solutions.

A new study conducted by IDC and sponsored by Dell may do a bit to assuage end users’ concerns. The report found that about 70
percent of the 340 IT professionals surveyed at mid- to large-sized businesses in the United States, Europe, Asia/Pacific and Japan
believe most barriers to using standards-based enterprise-class computers in their data centers will be overcome within two years.

Dell is doing more than just dipping its toe into the server blade water, as the firm pledged to add more designs based on Intel’s
low-power processors that offer greater density for Web processing applications, as well as next-generation “brick” servers, which
will combine the flexibility of blades with the power of traditional enterprise servers. These brick systems are designed for major
business applications such as database computing, customer relationship management and enterprise resource planning.

Also, both Dell’s blade and brick servers will rely on InfiniBand, a channel-based, interconnect technology that can provide much
higher data throughput performance for high-density racks. In fact, Dell inked a deal with Microsoft in which the firms will work on
hardware and software components for a standards-based InfiniBand solution.

Dell’s news met garnered the approval of one IDC analyst.

“While some vendors have focused on niche applications and non-standard products, we believe that Dell’s modular computing strategy
is very focused on key customer requirements, with the features that integrate easily into existing environments,” said Mark
Melenovsky, research manager for IDC. “Dell’s strategy for blades and bricks is one of the leading industry solutions that addresses
market demand for a more cost-effective and modular infrastructure.”

The PowerEdge 1655MC is a 3U (5.25 inches) enclosure featuring hot-plug, redundant power supplies and cooling fans, an integrated
management card and redundant Ethernet switches. Each enclosure comes with a Embedded Remote Access Module that monitors chassis and
server blade status, providing remote power control and out-of-band management capabilities. Dell’s OpenManage software, also introduced today, allows
customers to provision hundreds of servers from any location.

The PowerEdge 1655MC will be available worldwide in the third quarter, with prices to be disclosed later.

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