Updated: The PC maker plans to offer a four-processor server based on AMD's Opteron chip.
Dell, in a company first, is readying multiprocessor servers based on Advanced Micro Devices Opteron chip.
The Austin, Texas, PC maker, which has long been an Intel-processor-only shop, said on May 18 that it intends to add the Opteron to its multiprocessor server linemachines that offer four or more processorsbefore the end of the year.
Dell, which also announced first-quarter earnings 33 cents a share on revenue of $14.2 billionin line with its lowered estimateson May 18, said that the decision to use the Opteron chip was threefold, involving customer demands, technological capabilities of the Opteron, as well as the need to fill a gap at the high-end of its server product line.
"At the higher-end, the multiprocessor space, we think we could do better. We think now that the Opteron product can fill a hole there," Kevin Rollins, Dells CEO, said during a conference call with analysts.
Meanwhile, "There was a clear acceptance [of Opteron among customers.] The question of technology at the high end was a situation where AMD was very successful. The technology was good there and so were using it."
Previously, Dell executives have indicated that they had discussed using AMDs chips internally, from time-to-time. But the company never launched a product.
Click here to read more about anticipation surrounding a possible Dell-AMD partnership.
Despite what is likely to be seen as AMD getting its foot in the door at Dell, Rollins played down the possibility that the PC maker might move on to offer other AMD-processor products in areas such as its PC lines.
Moreover, he said the PC maker will continue to deliver Intel-based servers, including a ninth generation of machines based on Intels dual-core Woodcrest chipa processor Intel has said will bow in Juneas well as Conroe and Merom.
Conroe and Merom, otherwise known as the Core 2 Duo chip lines for desktops and notebooks, respectively, are due this summer. Conroe will come first in July, followed by Merom in August, Intel has said.
"We think weve got a winning combination of bringing winning technology to all of our customers in all categories," Rollins said.
"Intel has been a great partner [and] is going to stay a great partner. Theyve got great technology; they are still going to remain the vast majority of the processors that we buy."
At least one Dell business customer applauded Dells decision, saying it was something that he had been pressing the systems maker for months to do.
Lew Moorman, senior vice president of strategy and corporate development at Rackspace Managed Hosting, a San Antonio, Texas, company that runs more than 17,000 servers in five data centers, said that power and cooling are among its top concerns, while its customers care more about performance than processor brand-names.
"Were in the hosting business, and power is important," Moorman said. "AMD chips consume a lot less power than Intel chips, at least today."
Given Rackspaces experience with power consumptionroughly a third of its servers are Intel-processor Dell systems, while the rest are Opteron-based white-boxesthe company has been asking Dell for Opteron systems. But it has also been "aggressively looking at other suppliers" for Opteron servers, Moorman said, based on the belief that Dell was not planning to sell Opteron servers.
Thus the Dell Opteron server news took him by surprise.
"Well have to see how aggressive they are with this," Moorman said. "I certainly hope they are aggressive in their timeline and their breadth of offerings. Its good that theyre doing this, but it would have been nicer if they had done it before."
Is Dell too late to the party?