With the x86-server market growing, but undergoing a lot of turbulence – converged/engineered systems, Lenovo taking over IBM’s System X business and HP getting closer to its expiry date (in November it will become two mini-HPs), Dell is looking to increase its second-place position with new rack servers targeted primarily at the fading but still significant Unix market (the non-x86 market presents a $9.1 billion addressable market in 2015). According to the company, the 4-socket 4U PowerEdge R930 is designed for such enterprise applications as in-memory databases, customer relationship management (CRM) and enterprise resource planning (ERP). In addition to the R930, Dell also updated its PowerEdge VRTX and M1000e converged platforms, and introduced the PowerEdge FC830 and the M830 blade servers.
We’re pushing double-digit performance gains on something that was already leading the world, said Brian Payne, Executive Director, Dell Server Solutions. The company launched the R930’s predecessor, the R920 high-end server, 14 months ago, targeted at workhorse applications such as ERP, e-commerce and a wide-range of databases, i.e. workloads that often aren’t virtualized over reliability concerns. He said Dell will continue to sell the R920 for the remainder of 2015: a number of web sites are already offering discounts up to 40% on the line.
“There’s still a strong market opportunity for x86 servers and specifically 4-socket servers,” Payne told IT Trends & Analysis. One size will not fit all needs in the X86 server space, so Dell will continue provide a broad array of server solutions, he added.
Two weeks ago Dell extended its PowerEdge FX converged architecture, which was initially introduced six months ago, positioned as yet another Cisco killer (this time the alleged victim is UCS, not Catalyst). In addition to announcing three new FX modules, it stated the x86-based platform can host 72% more virtual desktop users in 10X less space than UCS.
According to the latest numbers from Gartner, server shipments grew 4.8% in Q4, while revenues increased 2.2%. Dell came in second behind HP (27.9% of revenue, up 1.5% year-over-year), with 17.3% ($2.42 billion), up a very respectable 16.9%. Not unexpectedly, the biggest swing came courtesy of the Lenovo purchase of IBM’s System X business, which saw the former soar 743.4% and the latter plummet 50.6%.
Dell’s server numbers are impressive, but they mask another trend reshaping the server market, the emergence of engineered or integrated platforms (i.e. workload-specific systems like Oracle’s Exadata platform) and modular or converged systems (i.e. Cisco/VCE/HP), according to IDC. While still just a fraction of the overall server market, since IDC started tracking these segments in Q1 13, sales of engineered systems have grown by about a third, averaging a little under $1 billion in recent quarters, but sales of integrated infrastructure systems have more than doubled and are set to push through $2 billion in a quarter or two. This is a relatively new focus for Dell, but does play a part in the R930 announcements.
Dell’s server prospects are brighter in the cloud space, according to another IDC study. It’s Worldwide Quarterly Cloud IT Infrastructure Tracker for 2014’s fourth quarter found that “total cloud IT infrastructure spending grew by 14.4% year over year to $8.0 billion”, accounting for 30% of all IT infrastructure spend. In this study, Dell again trailed first-place HP (15.7% market share), with $2.6 billion, representing 10.7% of the market, and ahead of Cisco, EMC and IBM. Not that these vendors should feel comfortable, as IDC noted that the big winners are a group of no-name original design manufacturers (ODMs) that accounted for 27.8% of the market.
In addition to seeking higher performance, lower cost of ownership and less complexity, IT organizations are also are feeling constrained and pushed for time, said Payne. “They’re now looking for us to help them provide an engineered solution”. First up is a preconfigured solution for Oracle 12c, to deliver quick time to value. “It’s about the platform, but it’s also about the evolution of Dell and addressing that change in the market where IT is looking for us and partners (such as SAP, Oracle and Microsoft).”
In other news from Dell, the company announced the SonicWALL TZ series, the ‘the fastest small form-factor business-class deep packet inspection firewall on the market.’ Delivering what the company calls enterprise-class security at a price point that is attractive for small businesses and large, multi-site distributed organizations, it features integrated 802.11ac wireless controller that combines with the recently introduced 802.11ac Dell SonicPoints to provide a dramatic increase in network performance to support faster Internet speeds, the ability to analyze encrypted SSL traffic and an integrated wireless controller.