Dell Paints Optimistic Picture for Business Tech

The company points to server successes in its earnings report and says to expect good things from developments like dual-core processors, SAS storage and Windows Vista.

Dell says we live in exciting times for servers and other corporate computing gear.

The PC maker, based in Round Rock, Texas, posted on Feb. 16 a higher-than-expected fourth fiscal quarter 2006 profit of 43 cents a share after a tax adjustment. Revenue for the quarter, which ended in January, jumped 13 percent year over year to $15.2 billion, the company said.

Dell executives, discussing the quarter in a pair of conference calls, expressed optimism about the technological state of affairs in the computer industry.

Some new technologies mentioned included dual-core processors, SAS (serial-attached SCSI) for storage and Microsofts Windows Vista for PCs.

"Were refreshing our entire server product line with ninth-generation servers that will incorporate all of these new technologies" such as dual-core processors, Kevin Rollins, Dells CEO, said in a conference call with reporters. "Its looking, technologically, to be a very healthy year."

Moreover, there are no signs of economic slowdown, Rollins said.

"Were bullish on the industry and think all of these technology advances can only be positive," he said.

Dell sees smaller, more powerful standardized servers coming to the enterprise thanks to dual-core processors and other improvements. As the bulk of corporate servers include one or two sockets or provisions for processors, this is "Dells sweet spot," Rollins said.

The companys ninth-generation servers will roll out during the first half of 2006, the executives indicated in the post-earnings conference calls. It seems unlikely those machines will include AMD chips at the outset, despite reports that Dell has been prepping AMD systems.

The executives said Dells current plans are to stay with Intel processors, pointing out that Dells server shipments grew 11 percent year over year and 7 percent sequentially for the quarter, outpacing those of competitors.

"We see no need to change [processors] at this point in time," Rollins told analysts on a call. "With that said were not an exclusive buyer of Intel only. We dont have an exclusive arrangement."

Dells new machines are more likely to use hardware such as Intels Bensley platform for dual-processor servers, which includes a dual-core 65-nanometer Xeon DP processor dubbed Dempsey. The platform has been upgraded to double the bus and memory channels, opening up the flow of data inside the machines.

/zimages/6/28571.gifRead more here about 2006 server processor plans from Intel and AMD.

Bensley will be able to accommodate Woodcrest, another dual-core chip, which is based on Intels forthcoming new processor micro-architecture and designed to use less power than existing chips, while bumping performance.

Turning to storage, Dells revenue in that area grew 41 percent year-over-year and 30 percent sequentially, the company said. It did not break out shipments for the quarter.

In the spring and summer of 2006, Dell will roll out new PowerVault and Dell-EMC storage products that take advantage of new technologies, including 4G-bps Fibre Channel connections, iSCSI, SAS and SATA (Serial ATA) hard drives, Rollins said.

Dell also sees the potential for a bump in PC sales from Windows Vista, the newest version of Windows, due out from Microsoft in fall of 2006. People will use Vista at home and demand it at work, Chairman Michael Dell said on a call with analysts.

Because of the changes present in Vista, "I believe this transition is going to be a pretty powerful catalyst," he said, adding that after using the operating system, people will go back into the office and ask, "How come my PC is no good?" That could lead to some corporate desktop upgrades after Vista starts to take hold in the consumer market, he predicted.

Thus, "We think its going to be a pretty exciting OS transition cycle," he said.

Next Page: Putting the focus on enterprise products.