Dell plans new line of 'cloud' servers this year

The company will take custom designs from its Data Center Solutions group and market them to a wider audience

Dell is hatching a plan to take some of the custom servers designed by its Data Center Solutions division for Web giants such as Yahoo and Facebook and sell them to a wider range of companies, including large enterprises, Dell executives said.

The DCS unit was formed about three years ago to help Dell get more business from large Internet firms. Its engineers often spend several weeks on-site with those companies to design low-cost, low-power systems that meet the special requirements of their search, social networking and other Web applications.

That hands-on role means the DCS group designs servers only for large companies, such as Ask.com and Microsoft's Azure division, which order tens of thousands of servers per year. But that's about to change, Dell executives said in an interview.

Later this year Dell will turn some of those custom servers into standardized products and sell them to companies that order lower volumes of systems, including enterprises building "private cloud" environments in their data centers, and a second tier of smaller Internet companies. They will likely be sold under a new brand, CloudEdge.

"What we've found is, there are a whole bunch of other customers who want access to those designs but who are not buying in those types of quantities," said Andy Rhodes, a director with Dell's DCS group. "So the big thing we're solving now, and we'll talk more publically about over the next couple of months, is how to provide more of that capability to many, many more customers."

Dell isn't discussing specific products yet and is still working out details, such as whether the servers will be sold by DCS or through Dell's standard server channels. But the goal is to offer the designs to a wider market, even while DCS continues to do custom work for very large customers. "We're not announcing anything right now, but that is definitely something we will announce this year," Rhodes said.

DCS aims to build highly energy-efficient servers that pack a lot of computing power into a small space. The systems often forego redundant power supplies and fans, for example, which saves on component costs and energy bills.

That also makes the servers less resilient to failure -- a trade-off large Internet companies are willing to make for lower operational costs. Companies such as Google and Yahoo design their Web applications to run on such "fail in place" architectures, so that workloads are rerouted around failed servers with little or no disruption to services.

"The main thing with these hyperscale systems is that the availability and resiliency are baked into the customers' applications rather than into the hardware," said Barton George, cloud evangelist for Dell.

That means the servers aren't suitable for most enterprise applications, and it remains to be seen how Dell will position the new servers for enterprise use.

"We're going to be very clear to our sales force and our customers that these are for those rarefied environments where you have this type of software infrastructure," George said. "If you were to run SAP or a database or a file server on one of these systems it would be a disaster. It wouldn't work."

Dell is likely to bundle the CloudEdge systems with software tools for a variety of usage scenarios, including building and managing public and private clouds. Rhodes suggested that tools from Microsoft and VMware will be offered, as well as provisioning and orchestration software from Dell partner Scalent Systems.

"The markets we're looking at are people building public clouds, but one tier below what we've been focusing on," George said. Large enterprises will also be a target, he said.

The systems could help Dell compete better with Hewlett-Packard, which last July announced a similar line of Extreme Scale-Out systems, and with IBM's highly dense iDataPlex servers. SGI and other vendors also target this market.

Dell doesn't break out the DCS group's financial results so it is hard to know how well it is performing, but Rhodes said the division has "grown massively in terms of revenue and units." The group is working closely with 20 customers, mostly household Internet names in the U.S. and China, he said.

That's fewer than the number of companies DCS has said it was engaged with in the past.

"What we found was, when you're developing a customized business, you really want to create customer intimacy and go deeper and partner much more with them. To do that, we scaled the customer list back slightly and we're going to serve the rest of the markets with these mainstream products when we announce them," Rhodes said.

The group hasn't disclosed many of its server designs, in part because its large customers demand secrecy. It has published details of one server that uses Nano processors from Via technologies, and crams 12 server boards into a 2u chassis. Most systems use Intel and Advanced Micro Devices processors.

Forrester analyst Frank Gillett said it makes sense for Dell to market its custom designs to other customers, but noted that "they're not designed for standard IT stuff and you need to know exactly what you're doing with them."

"It sounds like something for the oil and gas guys who need a bunch of servers to crunch seismic analyses, or the guys on Wall Street doing risk analysis," he said. "It's for the companies running applications that look like Web-scale or cloud-scale compute problems, which are not conventional applications."

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