Dell Insight

October 2002

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Dell Insight: Information technology has evolved from supporting business to driving business, and many CIOs are making IT issues an important part of business strategy discussions. Even so, many enterprises still view the data center as a cost center rather than a value center. What is holding back the transformation?

Mark Melenovsky: In a word, legacy. Yesterday's data centers were built largely upon proprietary platforms or inflexible architectures. They take a long time to acquire and deploy. They require expensive and often scarce IT management resources. And, worst of all, they take huge bites of the budget to maintain and support. Traditional data centers have tried to meet the demands of e-business with an infrastructure of legacy systems or inflexible architectures, but the effort is causing a lot of pain. The pain is especially acute during challenging economic times when reducing the cost of doing business becomes an even higher priority than normal. The solution, of course, is standards.

DI: You mean replacing mainframes with enterprise-class UNIX servers and commercial applications?

MM: I mean something even more far-reaching and revolutionary. For years, vendors have been making individual UNIX® systems more robust, powerful, and scalable by adding more and more CPUs to close the gap with the large proprietary systems. But the way enterprises have been responding to demands of the Internet is showing us the wave of the future for the data center. To handle the rapid growth of Web traffic, companies are deploying dozens of less powerful and lower-cost servers in racks.

This trend indicates that data centers need a modular computing architecture with a simple, cost-effective, building-block approach to scaling applications and delivering network services. Hardware and software standardization makes this approach possible. Standardization is leading to the development of specialized servers that focus on specific tasks within the data center. These servers deliver a far less expensive solution while maintaining the reliability and scalability that enterprise customers demand.

DI: You're talking about server blades, right? Please clarify the terminology.

MM: Yes, server blades are a key component of this modular architecture. IDC defines the server blade as a compact, high-density computing system based on open industry standards. It is comprised of the processor, memory, network connections, and associated electronics on a single motherboard. Multiple blades can fit in a standard server enclosure that shares power supplies and cooling fans. A rack size that can hold 42 rack-optimized servers today will soon be able to hold hundreds of ultra-dense server blades.

DI: Explain how the technology translates into achieving business goals.

MM: CEOs and CFOs expect CIOs to reduce the cost of doing business through IT. An important part of accomplishing that goal is reducing IT total cost of ownership (TCO). Standards-based server blades are less expensive than traditional servers, but that is just the beginning of the savings. The advantages of a modular approach include lower management costs, easier serviceability, greater system density, smaller footprint, and lower power consumption per server.

DI: You also have suggested that a modular architecture based on standardized server blades would give businesses greater flexibility to respond to volatile market changes like the ones we have been experiencing.

MM: That's right. The idea is that companies could deploy computing power and resources as quickly as needed. They could just as easily and quickly reconfigure and redeploy as businesses see new ways to reduce costs, increase efficiency, improve customer service, and generate more revenue.

DI: How is Dell meeting the demand for a modular, flexible computing architecture?

MM: Some vendors have focused their modular strategies on niche applications and nonstandard products. The Dell^TM  enterprise computing strategy is to bring standard Intel^®  architecture servers (SIAS) to market as server blades with features that easily integrate into existing environments.

The Dell strategy for a modular computing architecture includes server blades and modular blades. Server blades contain price/performance-driven SIAS components—such as Intel Pentium^®  processors, Ethernet I/O, and SCSI disk drives—that fit into today's standard rack infrastructure.

Modular blades are scalable computing platforms that employ modules for CPU, disk, and I/O. These "building blocks" will allow customers to mix and match modules, thereby combining the flexibility of server blades with the power of traditional enterprise servers. These new modular systems, designed for large-scale enterprise applications, will include emerging standards-based technologies such as InfiniBand for improved system performance.

DI: What is the outlook for Dell server blades and modular blades in the data center?

MM: IDC expects the Dell PowerEdge^TM  blade products to be well received in the enterprise market, especially for workloads such as firewalls, virtual private networks, high-performance computing Linux^®  clusters, Web servers, and other infrastructure workloads at the edge of the network and data center. The Dell product line will extend into the heart of the data center as this market matures and as modular systems become a cost-effective platform for scalable symmetric multiprocessing (SMP) workloads such as enterprise resource planning (ERP) and customer relationship management (CRM) applications, e-commerce applications, and large messaging and collaborative solutions.

DI: What do you consider to be the strengths of the Dell enterprise computing strategy?

MM: The Dell business model and approach to enterprise computing address many of the most important demands of enterprise customers today. For example, customers want rapid deployment of new and relevant IT resources; improved manageability; and reliable, scalable systems that provide excellent return on investment (ROI). Not only that, they want systems that can grow as the enterprise expands. Enterprise customers also demand consolidation of server and storage hardware to optimize the application of both technologies and their associated management resources.

DI: Enterprise data centers need extremely efficient service from their infrastructure suppliers to lower costs and keep pace with unpredictable demand. How does Dell address this issue?

MM: Dell is well positioned to meet this demand. While some vendors have attempted to use a utility-based pricing model to address this instantaneous demand cycle, the highly efficient supply chain and direct channel model at Dell have proven to be perhaps the best approach to maturing customer demand in the SIAS market.

By sourcing the latest technology from suppliers and passing on cost reductions to customers, the Dell supply chain and direct channel model provide a tremendous advantage to data centers. Having dozens of unused systems waiting months to be deployed or "switched on" is not a cost-effective method of hardware procurement—especially in today's environment of constrained IT budgets. The Dell model of custom-built systems and its direct relationships enable enterprise customers to procure and deploy infrastructure as they need it. Moreover, the model provides customers with access to the latest standards-based technology while simultaneously reducing inventory and procurement costs.

DI: You seem to be confident of the role of Dell in the data center. Why is that?

MM: I am confident of the role of standards and competitive suppliers. Dell is one of the premier companies driving industry standards in the IT industry. Over the past five years, Dell has helped drive cost-effective, industry-standard solutions, which has allowed the company to increase its market share substantially in the SIAS market every year. As SIAS technology continues to expand deeper into the enterprise data center, and as the price/performance and functionality of these systems continue to improve, so do the addressable market and growth potential for Dell.

Dell has developed one of the most innovative SIAS designs to improve efficiencies from both production and customer serviceability perspectives. For example, the Dell modular design has eliminated 90 percent of the cables inside the server—making nearly everything a plug-in component onto the motherboard. The design, coupled with color-coded components that easily identify both serviceable and hot-pluggable items, shaves off expensive service downtime.

DI: So there should be almost no doubt about the future of SIAS in the data center?

MM: The advantages of building server platforms based on standard components become increasingly clear when you look at the huge, rapid jumps in performance that a standards-based ecosystem can bring to the table within only a year and a half. The Intel Xeon^TM  processor at 1.6 GHz doubles the clock speed of the Intel Xeon processor available only a year ago. Memory bus bandwidth of the Dell PowerEdge server doubled from the PowerEdge 6450 to the PowerEdge 6650, and the I/O bandwidth quadrupled.

As members of the SIAS ecosystem—companies such as Dell, Intel, ServerWorks, Microsoft, Red Hat, and others—continue to enhance and advance their individual products, this market will push deeper into the data center and address workloads previously relegated to expensive and proprietary systems. In the race between proprietary and standards-based servers, users have voted increasingly in favor of the standards-based servers.

Functionality previously found in midrange and high-end server markets is now often available in lower-cost, smaller, standards-based servers. This potent combination of value and functionality has enabled standardized platforms to move deeper into the IT infrastructure, supporting an increasingly wide range of applications.

About the author: Mark Melenovsky is research director for IDC's Global Enterprise Server Solutions and Internet Infrastructure Hardware programs. He leads an analyst team that advances industry understanding of the standard Intel architecture server (SIAS) market, server blades, service-centric infrastructure, and the modularization of data center resources. IDC is a leading provider of technology intelligence, industry analysis, market data, and strategic and tactical guidance to builders, providers, and users of information technology.

Enterprising Dell

By investing in five key areas, Dell helps enterprise customers minimize TCO and maximize flexibility.

Modular enterprise systems.  Dell is building a complete portfolio of industry-leading products, services, and tools to drive server and storage consolidation on standards-based architectures, including innovative approaches to the server blade market and modular blade computing. Systems manageability.  Dell has invested in developing a flexible and compatible management solution to help customers maximize uptime and minimize costs without having to replace existing proprietary tools. Networked storage.  Using the same strategy that made it a leading player in the PC and server markets, Dell is building a strong presence in the network attached storage (NAS) market with standards-based solutions as well as forging partnerships with storage giants such as EMC to address larger, heterogeneous customer requirements. Enabling technologies.  Dell continues to drive the industry toward the adoption of technologies that facilitate the migration to open standards, such as Microsoft®  and Linux operating systems, InfiniBand, and Oracle®  and Microsoft Exchange implementations. Enterprise services.  Dell is expanding its professional services and adding managed services capabilities. Integrated service offerings are central to the Dell enterprise strategy.