Competitors criticise Dell for a lack of engineering expertise, but the company says one significant computer due to launch in November is its own design: its second-generation blade server, the PowerEdge 1855.
The PowerEdge 1855 -- and a successor, the 1955, due in February -- is expected to use a chassis 31cm tall that can accommodate 10 dual-processor blades, according to sources familiar with the design. With Dell's blades, 60 servers can fit in a single rack, which can accommodate only 42 of today's conventional dual-processor servers.
Though Dell says it's unashamed of its low development expenses and its reliance on partners' computing engineers, when it comes to servers, the company also touts its own research investments.
"We still spend probably 60 percent of our research and development budget on enterprise [products], and [they bring in] 20 percent of the revenue," says Chief Executive Kevin Rollins, in a meeting with ZDNet UK sister site CNET News.com editors at Dell's Texas headquarters. "As we come out with new products, whether they be blades, whether they be superthin architectures, whether they be new multi-core processors from Intel, we have to do that R&D ourselves. These aren't cookies -- they don't just pop out of a bag."
Dell speaks proudly about its work on the forthcoming blade server. "I designed my own product, and I'm pretty excited about it," says Jeff Clarke, senior vice president of Dell's product group. The systems are derived from Dell's eighth-generation servers, which debuted in August, along with Intel's newest "Nocona" version of the Xeon processor, he says.
The fact that Dell is highlighting its server research and development work could indicate that the company recognizes customers really are looking for expertise from a server maker, and not just a bargain. "Implicit... is that there's a very high bar in this marketplace, and price alone won't be able to compensate for that," says Sageza Group analyst Clay Ryder.
But Clarke's comment aside, it's not clear exactly how much of the product the computing powerhouse really engineered: The system strongly resembles a blade server Fujitsu sells, some familiar with the designs say, raising the possibility that the companies derived their products from the same original design firm or contract manufacturer.
It is possible that Dell relied partly on outside engineers, says Charles King, principal analyst for Pund-IT Research. "With a server environment as complex as blades are, a good way to get around product development costs is to go with an original design manufacturer," he says.
Counter Intel
An obvious partner to jump-start Dell's blade business would have been Intel, which designed the Itanium servers Dell sells. But Dell spurned an Intel-IBM blade alliance.
Dell executives would like a blade standard but disagree with IBM and Intel that their alliance sets it. "If we thought that was the case, we probably would have done it," Clarke says.
Regardless of whose engineers are involved in Dell's blade servers, the company has shown an ability to profit from the growing maturity of Intel server technology. It's currently the No. two seller of servers based on x86 chips such as Intel's Xeon or Advanced Micro Devices' Opteron.
"I think there is strong evidence, as seen by the encroachment of x86 servers throughout the entire market, that Dell's model is on-target and poised to continue to move up the food chain," says Technology Business Research analyst Brooks Gray.
Blade servers -- thin systems that slide into a chassis and share power supplies and network switches -- are a fast-growing part of the server market. The 1855 is Dell's second attempt to compete in the blade arena after a short-lived foray with its 1655MC systems in 2002.
In the second quarter of 2004, IBM had 44 percent of the $233 million blade market, while HP had 32 percent, and Dell held 3 percent, according to IDC. Blades are expected to be increasingly important, with one forecast saying they'll account for 29 percent of server shipments by 2008.
