Dell Misses The Boat On Blades Jul 5, 2004 – By Barry Zellen
George Orwell once wrote that governments would maintain a state of perpetual
war without victory in order to keep the attention of the masses on the next
battle, and not the problems at home. While this 'Orwellian' viewpoint
concerned itself mostly with the totalitarian politics of 'Big Brother', one
top-tier IT vendor has taken Orwell's lessons to heart, and applied them
well. And that vendor is Dell, which has sought to obfuscate its own failures
developing blade servers by waging a perpetual war against its rivals,
attacking them with FUD while ignoring the fact they have succeeded where
Dell has failed.
>> Blades Left The Station Without Dell Onboard: In a new report on
Dell's strategy of failure on the blade battlefield ("Dell Blows Smoke on
Blades," July 1, 2004), IT analyst firm Illuminata harshly criticizes Dell
not just for the failure of its model to churn out a successful blade
product, but also for its unsportsmanlike efforts to disparage the efforts of
its rivals who have demonstrated far greater success. Illuminata notes "Dell
has been disparaging blade servers more often than not for at least 18
months" - and yet, it "has no decent blade server products" of its own and
"its several attempts have been failures." Illuminata points out that Dell's
failure when it comes to blades stands "in sharp contrast" to both its
top-tier rivals, HP, IBM and Sun, as well as its smaller rivals like
"Egenera, RLX, Tatung, and Verari, among others" - all who have succeeded
where Dell has not. Indeed, as Illuminata puts it, "the blade form factor has
left the station, and Dell isn't on it."
>> From Dud to FUD: Having failed in its own blade efforts, Illuminata
notes that "Round Rock's marketing solution" is to "disparage everyone else's
efforts, products, and successes" and to "suggest that blades are generally a
bad idea-or at least, not ready for prime time." By spreading "fear,
uncertainty, and doubt (FUD)," Illuminata says Dell is trying to buy time to
"lather, rinse, and repeat - at least until Dell can get a respectable
product out the door."
>> Dell Overemphasizes The Cost & Density Issue: Illuminata notes
that among Dell's complaints is the relatively high price of blade servers,
which by one measure can run 4-22% more than rackmount servers - and while
this price premium is "quite real," Illuminata explains that it "reflects not
only the more recent R&D costs for building this newer design, but also
the currently lower shipment volumes and higher mix of specialized,
customized components." Additionally, Illuminata argues that blades offers
"superior TCO" - and adds that enterprises "don't pay for just the equipment
purchase" but instead "pay for the total cost of ownership." And hands down,
Illuminata believes "blades have abundant superiorities over rackmount
servers that reduce ownership costs."
In addition to its price-argument, Dell makes the case that blades aren't
dense enough, but Illuminata counters that "blades are intended to compactly
implement 'low state' scale-out applications in which little or no data is
permanently associated with a given compute engine" - and "as a result, their
physical designs are optimized around having little or no on-board storage."
All in all, while issues like "density and price are not bad criteria" and
should remain "important factors for a wide range of datacenters, if not
every one," Illuminata believes that Dell, by "putting them first and
foremost," is being "so 2001! So dot-com. So yesteryear." As Illuminata sees
it, "these are the criteria of the first blade startups three years back, not
the current best thinking." Indeed, it adds, "it's no coincidence that most
of those blade startups are long gone, and the survivor who once preached the
density religion most fervently, RLX, has since converted quite completely to
a software-centric religion." And, ironically, "if software is really what
Dell believes is the utmost criteria, rather than density and price,"
llluminata notes that it's "not close to having estimable product in this
space."
>> Dell Model Fails On Blades: Illuminata argues that "Round Rock needs
to learn this lesson: the real value of blades is not created by a pure
density or price improvement, but a fundamental advance in datacenter
manageability," and this comes largely "through improving the core
interconnects, and from software and manageability built in from the get-go."
This in turn "leads to a different conundrum," as Dell is so strongly
"committed to a low-R&D 'fast follower' strategy based on high-volume
commodity technologies and a highly efficient supply chain and direct selling
apparatus," but in this particular case, such a strategy "isn't well-suited
to new technologies and design typeforms," since such "'game changers' and
inflection points need considerable research, development, market
experimentation, and software smarts," not Dell's strengths. That's why,
Illuminata observes, "blades have been nailed by companies that are expert in
those areas, not the Dells and other commoditizers of the industry."
>> Dell Can Do It, But Hasn't Really Started: Illuminata believes that
in spite of the shortcomings of its commoditizing model when it comes to
blades, Dell could, if it really wants, "put together a compelling blade
server product line," since in addition to its "supply chain skills that can
help it drive prices down, there are now plenty of good third-party software
components that can be integrated to create a low-cost, high-function
solution." But the real problem is that "Dell has yet to cross the real
starting line." Illuminata thinks Dell's energy could be better spent on
"getting its act together, rather than blowing smoke to obscure the gains
already being enjoyed by those deploying flexible server infrastructures
using, at least in part, today's strong blade products."
Dell Misses The Boat On Blades
