Dell wants your business business

Dell is a supplier of PCs and some related consumer items (PDAs, photo-printers and so on) and some "business" products (printers, presentation systems, etc) and that is about it. Or so goes the conventional wisdom.

Three years ago, Dell launched its first major line of servers and ever since, the company has been desperate to be taken seriously as a supplier of major business systems. It wants to compete with industry heavyweights like IBM and HP when it comes to persuading the largest business users — banks, consumer goods manufacturers, governments, etc — to part with very large amounts of money, rather than the £1,000 here and there that Dell is used to.

Last week, Dell organised its latest event to help promote its enterprise role Dell can and is playing in business today along with the launch of three new Dell servers.

So what is the place for Dell in the enterprise market. ZDNet UK spoke to Jay Parker, director of Dell's worldwide marketing for servers, to find out about this and Dell's thoughts on Linux, virtualisation and the knotty question of how to get power savings out from today's power-guzzling machines.

Your top server is a four way that retails at just over £1,500. Do you see any demand to push Dell servers further at the top end? Beyond two and four-way servers?
We don’t see customers demanding that. At one point we did see an eight way server, but as part of our scale-out and scalable enterprise strategy, we find that customers would rather scale in small increments and then have the server environment scale with their needs. They don't want to purchase the highest-end system that they can and increase utilisation over time. That is something different that we are seeing.

The important trend that is going on now is that as multi-core technology comes on line —  in the next six to nine months you will see quad-core and then eight-core — the need to buy anything with more processors than four is really minimal. If you look at the sales data today, eight-way machines are a tiny niche — essentially ninety percent is four-way on x86.

How do you compete against, say, HP when it is selling its bigger boxes? Do you compete solely on price/performance?
IBM and HP are in interesting positions because they need to talk about scale-out technology. That is the way the industry is going, but at the same time they have a big dependence on Unix and RISC.

The first thing we talk to customers about is purely the advantages they can get from scale-out. Once you explain it to them at some level of detail, most customers will start to understand the benefits associated with it. Then you have to overcome the customer’s fear of change in the core of their datacenter. Now price/performance is part of the equation, but if it is about mission critical applications, that will not make the sale. So the question they ask us is: how can you help me manage through this?

So a lot of our service offerings have to do with, say, Unix to Linux migration. As part of Dell Service we have managed over 500 Unix to Linux migrations. We see that growing, not shrinking, over time. As we have watched those systems progress — and by the way, one of them was Dell — and we show those success stories.

So Linux is a large part of your business?
It is a very large part of our business. I know for a fact that it is over a quarter of what we sell. It is a high percentage of our customers.