Dell eight years ago launched its Data Center Solutions business, a unit aimed at delivering customized and optimized solutions to the handful of organizations that make up the hyperscale computing market, including Google, Facebook, and a few Chinese companies such as Baidu and Alibaba.
The driving idea behind Data Center Solutions (DCS) was that these companies, which also include Microsoft and Amazon, were looking for optimized hardware to run their particular workloads while also addressing various demands around performance, power, cooling and space. They also buy a lot of hardware.
Now Dell is targeting the next level down from these top-tier cloud providers with a new business called Dell Scalable Solutions (DSS). These companies—which include hosting organizations, telecommunications service providers, oil-and-gas firms and research organizations—have the same needs as their hyperscale counterparts, but not the same financial or engineering resources, according to Jyeh Gan, director of product management and strategy with DCS. They also deploy massive numbers of servers in the data centers.
“They’re all massive, but not as big as the other guys,” Gan told eWEEK during last week’s Intel Developer Forum. “They might not have the large engineering staffs that the big guys do. … We’re focusing on the next layer down.”
That next layer down represents a significant opportunity. Gan said the scale-out market is growing three times faster than the traditional x86 server space—at about 14 percent a year—and that it represents about a $6 billion total addressable market. In 2013, it represented about 17 percent of the overall x86 server market. That will grow to 25 percent by 2017, he said.
Like their hyperscale brethren, these scale-out companies are looking for systems that are customized and optimized for their workloads. They like Dell systems, but they need to make tweaks to the systems that will enable them to better compete in the market, Gan said. In addition, many of these companies are populated with executives who have migrated from the larger hyperscale players and who understand the importance of—and are used to—optimized hardware.
With DSS, which was announced Aug. 24, Dell has created an operating model that is designed to get these semi-custom systems built and delivered quickly to scale-out customers that often need new systems with short notice. Dell is relying on its strong supply chain and decades of experience to create a process that is agile, scalable and repeatable, officials said. They’re relying on the experience they’ve built up over the eight years of running DCS to enable the company to design the products to the specifications needed by the customers and get them the technology when they need it, Gan said.
The systems won’t necessarily be unique, but they’ll be differentiated from the traditional x86 PowerEdge systems that Dell sells to enterprises and will come with technologies to fit their particular needs.
“It’s not just about the product,” Ashley Gorakhpurwalla, vice president and general manager of server solutions at Dell, said in a conference call before the announcement. “It’s about addressing the customer’s needs.”
Dell Aims New Server Unit at Large Scale-Out Customers
The new program “serves as an apt reflection of Dell’s ability to aggressively target prime market opportunities amid its standing as a private company,” Christian Perry, an analyst with Technology Business Research, wrote in a research note. “This agility parallels the intended operating model of DSS itself, which aims to be quick and agile with optimized hardware designs, improved fulfillment models and accelerated product introductions. The imprint of Dell’s successful, proven DCS heritage is readily apparent in the DSS announcement, as Dell’s long-established business practices in the hyperscale space echo in the DSS plan.”
Dell, the world’s second-largest server vendor, according to Gartner and IDC analysts, is competing in a space that includes not only other OEMs—for example, Hewlett-Packard is partnering with Chinese manufacturer Foxconn to build inexpensive cloud systems for service providers—but also original design manufacturers (ODMs).
“But where ODMs fall short on the experience beyond the hardware, including consulting, strategy, integration and support, Dell excels through its well-oiled DCS machine that leans on proven, repeatable processes and designs developed across Dell’s wide network of data center engagements,” Perry wrote.
According to Dell’s Gan, the company has been operating the DSS business since early last year, under the code name “Strike Force.” Dell officials wanted to have the business up and running and have projects underway that officials could point to before announcing the program publicly. In one example, Dell built custom solutions for a global service provider that has an extensive test matrix to figure out what configurations are optimized for its workloads. In another, DSS worked with an oil-and-gas customer to build an alternate-cooling solution built on Dell’s infrastructure offerings that helped the organization maximize performance while driving down power consumption while running seismic processing workloads.
Dell’s Gorakhpurwalla said the company wanted to be able to talk about results before announcing DSS.
“Dell is not a vaporware company,” he said.
Dell officials said the vendor will roll out the first DSS-branded products in the fall, with the first offerings aimed primarily at the China market.