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Michael Dell Playing Enterprise Game To Win

A confident Michael Dell took the stage at Dell World Thursday to tout his company's services, virtualization and data center offerings--and asserted that the future of business tech isn't about Apple.

A confident Michael Dell took the stage at Dell World Thursday to parry Apple's thrust into personal computing and assert that the world of business remains an x86 world.

His talk contained elements of the typical Dell speech on the value of x86 computing and Dell's role in providing it. But he sounded more assertive about that future, and how Dell was positioned to supply follow-up services to server installations through Dell IT Consulting Services, and to offer services it has acquired via acquisitions, such as Kace appliance-based systems management or SecureWorks security monitoring and protection.

"Dell has $16 billion in cash. Our earnings per share were up 83% last year. Eighty percent of our revenue comes from business and organizations like you," he told a morning audience that numbered around 3,000 at the Austin Convention Center. Dell was emphasizing his firm was a business-oriented, not consumer-oriented, firm.

He also took a quick shot at HP's "the computer is personal again" advertising campaign, without naming them.

Around the world, 95% of disk drives going into x86 machines go into PCs, with 5% of them going into servers. Building its servers, Dell capitalizes on economies of scale that a more selective manufacturer can't match. Dell didn't need to hammer his message home: Instead of style, Dell delivers business value.

Dell is not neglecting its supply chain management and other core competencies, Dell asserted, but is now branching out to do some of the things related to effective use of servers. It's an "end-to-end solutions company," able to help implement applications, or build a modular data center, he noted.

Dell installed a modular data center unit on top of its own Round Rock, Texas, headquarters building, where it is operating without any attached air conditioning unit. It uses ambient air for cooling, even in Texas heat of 115 degrees. The unit contains 1,920 servers, 138 TBs of DRAM and several petabytes of storage. Its ability to run without air conditioning gives it a high PUE or Power Unit Effectiveness rating of 1.04.

Facebook publicized how it built a data center in Prineville, Ore., with a PUE of 1.07. (The lower the rating, the better.) PUE is a measure of how close a data center comes to using all the electricity that it consumes for computing , instead of supporting services, such as lights and cooling.

Part of Dell's confidence stems from the fact that his firm is producing rackmount servers and modular units for building out the public and private cloud. Dell said his firm ships 50% of the modular units sold. Microsoft used them in the first floor of its Chicago-area Azure cloud data center.

Dell said the future of the x86 architecture is bright as the manufacturer prepares its 12th generation of PowerEdge Servers for launch next year. They will ship with up to 1,024 cores, 40 TBs of DRAM, and 40 TBs of flash memory engineered to be close to the server sockets. "You can't get flash any closer to the CPU," Dell boasted.

Dell, for the first time, is emphasizing its own role in supplying equipment for the now widespread practice of virtualizing servers. "Unlocking innovation in the virtual era" is a theme of the conference.

Dell kept positioning his company at the heart of key IT trends. The company has established a Social Media Command Center, and Dell urged his listeners to visit a junior version of it at the show.

Technology is more deeply tied to the business and can no longer be distinguished as something separate from business processes, Dell added, reprising a theme he launched in a visit to Oracle OpenWorld in San Francisco last week. "As technology becomes more deeply embedded in the business, it delivers more business value," he said.

Microsoft's CEO Steve Ballmer will show off features of Windows 8 in talk Friday at the conference, Dell said.

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User Rank: Apprentice
10/14/2011 | 4:37:39 PM
re: Michael Dell Playing Enterprise Game To Win
Agreed, if people want to use Dell's strategy (buy a bunch of PC servers and virtualize them), why do they need Dell? They can buy white box for less cost with about the same level of quality and IP value, as Dell adds no IP.

Dell's strategy is to try to incrementally improve an inherently flawed architecture. It is ridiculous that large server customers settle for 30% utilization of assets. Would any business acquire any other asset that can only be utilized at 30%. For instance, would they buy a truck that could only be filled 30% full of products for distribution? x86 architecture is a heterogeneous, underutilized mess which requires a ridiculous amount of care and feeding.
User Rank: Apprentice
10/14/2011 | 4:56:58 AM
re: Michael Dell Playing Enterprise Game To Win
Simply look the comparison of Apple and Dell since 1997 when Mr Dell thought he know more about the industry than Mr. Jobs.
He was close to 200% wrong then and he is now.
Dell's logistics advantage is not proprietary and has been surpassed by all good operating companies (and bettered by the Asian leaders) and he is sone trick pony, and his trick was to sell for less than Compaq that is over and he has nothing else. He can retreat into the server room for a while but that is owned increasingly by no-name products (Google, Amazon, etc build their own intel oxen for the server farms and run Linux not MSFT) he is backing the company into a corner as he docent understand the market today.
User Rank: Apprentice
10/14/2011 | 12:07:09 AM
re: Michael Dell Playing Enterprise Game To Win
The unit contains 1,920 servers, 138 TBs of DRAM and several petabytes of storage. Its ability to run without air conditioning gives it a high PUE or Power Unit Effectiveness rating of 1.04.

Do they honestly expect people to believe that the most energy efficient way to run a data center is with 1,920 virtualized x86 servers all running at probably 30% capacity. They should consolidate those servers into maybe two mainframes running Linux engines. It would definitely require about 1/50th the amount of floor space and probably use about 1/50th the amount of power.
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