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Dell's DCS is a big shiny server star

Server-maker is bigger than IBM, and maybe the Googlefactory

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For the past several years - and some of them not particularly good ones - Dell's Data Center Services (DCS) bespoke iron-making forge down in Round Rock, Texas, has been a particularly bright spot in the company's enterprise business.

Although it serves only a handful of very demanding hyperscale data center customers, the DCS unit accounts for a growing part of Dell's server shipments and revenues. And just perhaps some profits, too.

DCS was set up in the spring of 2006 to chase the big server orders at Google, Yahoo!, eBay, Amazon, Facebook, Salesforce.com and similar hyperscale Web 2.0 companies, and by the fall of 2008, the company was doing a gangbusters business - but still had not landed Google as a customer, and probably never will because Google thinks it can do everything better than anyone else. (DCS names Facebook and Salesforce.com as customers.)

The unit has several hundred employees, who craft and build custom server kit for these picky Webby shops, where power and cooling issues actually matter more than raw performance. The high availability features necessary to keep applications running are in the software, so you can rip enterprise-class server features out of the boxes - they are like legs on a snake. By October 2008, when Dell was bragging a bit about how well DCS was doing (mainly because the great Recession had hit Dell and its server-making peers particularly hard), the company hinted that if DCS was a standalone company, its mere 30 customers would have made it one of the top five server-makers in the world. That was pretty good for a unit that was only 19 months old.

And DCS just keeps growing, even without Google on its roster of low-profile customers. Speaking to members of the press in New York recently, Steve Schuckenbrock, president of Dell's large enterprise group, said that when the numbers were tallied up in the second quarter, the DCS unit shipped more machines than IBM did across all of its product lines. That would make DCS the number three server maker behind, er, Dell proper.

As El Reg previously reported, the box counters at Gartner reckon that companies consumed 2.15 million server units in the second quarter, up 27.1 per cent compared to the second quarter of 2008, which had one of the worst downdrafts on record thanks to the poor global economy. HP shipped 644,172 servers in Q2 of this year, and Dell (including DCS and its other custom OEM server building biz where it makes and sells kiosks and server appliances, including Google's eponymous search appliances) shipped 542,799 units. IBM was the number three server-maker in the quarter, at 267,614 units, with Fujitsu coming in fourth with 60,974 boxes and Oracle fifth with a piddling 47,968. All other server-makers combined accounted for 581,512 machines.

In order for Schuckenbrock to be telling the truth about DCS shipping more boxes than IBM, then DCS had to ship more than 267,614 units. So to be a smart-alec, we'll say they shipped 267,615. And at that number, DCS accounted for just under half - 49.3 per cent - of Dell's overall server shipments. Back in October 2008, I calculated that DCS had to be somewhere between 10.3 and 53.5 per cent of Dell's total shipments for the second quarter of 2008 (based on vague statements Dell was making) and I thought the lower number had to be closer to the truth. Well, maybe not.

Which makes you wonder why IBM and HP didn't pick up Rackable Systems (which now goes by the name of Silicon Graphics) or Verari Systems (which went bust and then came back to life as Verari Technologies earlier this year) to get into the custom server racket. Well, IBM is not really a server manufacturer except for high-end machines (everything is farmed out) and HP sells plenty of boxes without needing to go down the custom box route. As long as DCS keeps its hyperscale customers happy, it will be very hard to dislodge them from an account.

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