"Standardization is leading to innovation, in that it lets users focus more on how they can apply IT," Rollins said. Companies are spending 80% of their IT budgets just to improve and maintain their infrastructure, with the rest going toward more innovative development work. Dell would like to see that 80%-to-20% ratio reversed. "Innovation is how astutely you integrate technology, not how much you spend on it."
Dell has taken reliance on industry-standard processors, operating systems, and other components further than rivals Hewlett-Packard and IBM. A fourth competitor, Sun Microsystems, has been even more reluctant to embrace the world of Intel-based computing. Although Sun does have Intel and x86-based servers, the company continues to invest in its UltraSparc chip architecture. In fact, the company on Wednesday launched its latest Unix-based server. The V440 runs four UltraSparc IIIi processors, which are designed to be a low-cost, low-power alternative to Sun's UltraSparc III processor line.
"It's not about cheaper hardware, that's only part of it," says Souheil Saliba, Sun's VP of volume systems products marketing. "We designed the V440 product and supply chain to target a certain cost." The starting price for the V440 is $10,000. Sun expects this price to make the V440 competitive with both Windows- and Unix-based four-way servers, which the company sees as in strong demand. "There are quite a few types of apps, including business intelligence and databases, that are being moved to four-way servers," Saliba says.
Central to Dell's server business has been its strategy of promoting clustered or grid-computing environments, which it refers to as "scale-out" computing, as opposed to the more traditional practice of replacing smaller servers with larger ones as a business grows, a practice known as "scale up." Intel has made great strides in increasing the power of its 32-bit Xeon processors and is delivering on 64-bit servers through its Itanium platform.
While Dell is testing the waters of 64-bit servers, the company has no plans to follow chipmaker Advanced Micro Devices Inc. or PC maker Apple Computer into the 64-bit PC market. Rollins acknowledged that the market is moving toward 64-bit PCs, but he said Dell's "efforts are best served in the server market at this time." AMD next week will formally introduce its Athlon 64 processor, which supports both 32-bit and 64-bit desktop apps. The company is positioning Athlon 64 as a way to protect investments in 32-bit apps while preparing for the emergence of 64-bit desktop apps.
For Dell, that emergence is too far away to register a pulse. Dell, the top provider of PCs in the United States, will know the PC market is ready for 64-bit when its hardware and software partners, namely Intel and Microsoft, start delivering products that make use of the increased capabilities, Rollins said. "At this point, it's premature to even speculate on timing."