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12/7/2004
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Dell Touts Grid Computing Over Proprietary Systems

Dell's CEO rejects the idea of buying IBM's PC business.

Michael Dell has seen the future and it's a 128-node "MegaGrid" running the Linux operating system on Dell servers at Oracle's lab in Austin, Texas.

Dell, founder and CEO of the PC maker, told attendees at Oracle's OpenWorld Tuesday that the grid configuration is a sign of how "industry-standard" hardware sold by his company and other vendors will replace large proprietary computer hardware such as IBM mainframes and Unix servers from Sun Microsystems and Hewlett-Packard.

Dell, EMC, Intel, and Oracle jointly built the MegaGrid to illustrate how their products can be configured into large-scale architectures for the biggest enterprise computing tasks. "Now small and (midsize) businesses can enjoy the same benefits as large companies and can deploy Oracle 10g solutions," Dell claimed.

Dell said his company has replaced Sun servers running Oracle databases in its Dell Europe data center with its own Intel-based servers running Oracle.

Judy Chivas, business development director at Dell, says the MegaGrid project is meant to demonstrate the cost savings of a grid approach over conventional computing for mission-critical applications. The project uses an application from Cramer Systems Inc., a global provider of network-provisioning software for telecommunications companies.

MegaGrid used two different forms of grids to match a 72-processor Sun Microsystems server, Chivas says. One grid incorporates four four-way Itanium servers at a cost of $160,000 that was a match in throughput to the Sun server. It also includes a grid with 10 Dell PowerEdge, dual-Xeon processor servers (for a total of 20 CPUs) at a cost of $68,500. Both grids matched a 72-processor Sun Microsystems server running the same application but represented a significant savings over Sun's $2.7 million price, both Dell and Chivas claimed. Whether the systems were directly comparable would be likely to be disputed by Sun representatives. Sun spokesmen couldn't be reached for comment.

Dell's description of MegaGrid as having 128 nodes couldn't immediately be reconciled with Chivas' description.

During a question and answer session, Dell was asked why he didn't consider buying IBM's PC business unit that was up for sale. He scoffed at the idea of growth through acquisition, saying that computer industry mergers and acquisitions are rarely profitable. "When was the last time you saw a successful acquisition in the computer industry?" he asked.

Dell said that IBM's sale of its PC business would fit with a pattern of IBM divesting itself of PC-manufacturing assets and reducing the number of employees in its PC division. "It's pretty clear this isn't a long-term strategic priority for them. I don't see this (sale) as being all that different," he said. Dell isn't considering acquiring any competitors outright. "We like to acquire our competitors one customer at a time," he said, citing Dell's growing market share in servers. "We think that's a more healthy and sustainable way."

Dell said most of his company's competitors have outsourced their manufacturing to companies in Taiwan or other places. "It's been a long time since our leading competitors actually made a computer," he said. Dell, by way of contrast, opened a new manufacturing facility in North Carolina last week, and new call centers in Oklahoma City and in Canada in Edmonton, Alberta.

This story was updated Dec. 8.

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