The target will be big companies and not so large.
The Texas-based IT company said the new line of business will be within Dell’s Enterprise Solutions organization. Dell introduced Data Center Solutions (DCS) in 2007 recognizing the unique needs of the hyperscale market. The DCS segment is growing three times faster than the traditional x86 server market, and represents a $6 billion total addressable market.
“They are now taking the best practices and learnings from their DCS business and addressing the distinct needs of the space just below the top tier hyperscalers,” said Matt Eastwood, senior vice president, IDC.
According to Dell estimates, the market for traditional IT servers is almost $40 billion, and the hyper-scale DCS market is worth about $9 billion. DSS’s target audience is worth about $6 billion, said Dell.
A Bloomberg report said Dell, like rival HP, is facing a change in the cloud market as large companies such as Baidu, Amazon.com and Google, design customized data center servers and have them built at a low cost by suppliers such as Quanta. This segment of the server market, called ODM Direct, grew 22 percent to $974.9 million in the first quarter and represented 7.6 percent of the worldwide server market, said IDC.
Dell had an 18 percent share of the total global server market on sales of $2.3 billion in the first quarter, but with a growth rate of 12.6 percent, according to IDC.
Dell is confident it will be able to sell to companies that have developed the kind of global logistics capability needed to buy servers directly from an ODM and get them assembled and sent to their data centers.
For instance, Dell DSS has assisted a global service provider, which focuses on providing end-customers with the quickest response time to data, to bring global supply chain capabilities and build custom solutions to build the exact infrastructure for its customers.
In another example, Dell supported an oil and gas customer to maximize performance while minimizing power consumption for their seismic processing workload.
“Dell Datacenter Scalable Solutions is a prime example of how Dell, as a private company, is able to be more nimble, make faster decisions and – most importantly – drive innovation on behalf of its customers,” said Ashley Gorakhpurwalla, vice president and general manager, Server Solutions, Dell.
HP, one of the main rivals of Dell, recently announced a joint-venture with Foxconn Technology to develop similar servers. HP enterprise CEO Antonio Neri said in June that venture has already resulted in about $1 billion of booked business.
Dell Financial Services will offer flexible warranty and financing options to assist enterprise clients to acquire the latest technologies including Datacenter Scalable Solutions.