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7/25/2003
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The Farmer In Dell

CEO Michael Dell has cultivated a company and a culture that are delivering profits when the rest of the industry struggles to stay even. And his company is gaining in enterprise servers, storage, services, networking, printers, and PDAs. Read our exclusive Q&A with Dell about Dell.

Dell Inc. is closing in on its 20th anniversary as an influential provider of information technology. CEO Michael Dell might not have been able to foresee this level of success two decades ago, but he feels he's got his finger on his customers' pulse. InformationWeek editors Paul Travis and Larry Greenemeier recently sat down with Dell to talk about a possible economic rebound, "scale-out" server architectures, and close contact with customers.

InformationWeek: How do you see the economy and IT spending? Is it coming back to life?

Michael Dell: If you look at the last three quarters, it's been slightly positive, certainly better than it was if you go back four or five quarters ago. We've been in the fortunate position where we've been growing even while the market has been down. If you take Dell out of the market, it goes down. During the first quarter, we grew units in 29%; the rest of the industry was down 1%. It looks like there are incremental signs of improvement here and there, but not a massive rebound or recovery.

InformationWeek: One of the things we've been hearing from a number of IT managers is their desire to consolidate a large number of servers to a much smaller number. What's the challenge in terms of making your scaling-out approach more appealing than a competitor's approach of selling a scaled-up, Intel-based server with lots of processors?

Michael Dell: I think the problem you're highlighting is that the original idea of client-server computing was, "All right, get an application, get a server." The problem with that is that all of a sudden you end up with 3,000 servers and you've got one per application. This one is used 5%, this one is used 20%, this is used 30%, and this one is used 0%. That's not what we're talking about. What we're talking about is basically aggregating all the computing power and being able to dynamically allocate resources among a pool of shared servers, as in a cluster. Most likely, they're all in the same data center physically and attached using very high-speed, serial-type interfaces.

So scale out is really leveraging the high-volume industry standard economics of microprocessor chip sets, high-volume disk drives and other components built-in hundreds of millions of units per year to run large databases and applications. Oracle and SAP are really embracing this scale-out idea not only for better price/performance but also for better availability and better scalability.

InformationWeek: Are you seeing a lot of demand for eight-way or 12-way Intel-based servers?

Michael Dell: If you look at the demand for eight-way servers, it's gone way down. The industry forecast for eight-way servers has gone way, way down partly because four-way servers can now do the job of eight-way servers. This is one of the problems with scale up. Let's say I'm a really smart engineer and I've developed this fantastic 64-way server. I've got to develop this microarchitecture and memory and chipset; it takes years to do and by the time I got this thing--oh, there's another processor that's four times faster, so my 64-way is now just as fast as this other guy's 16-way.

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