Feeds

Dell boasts of cloudy server dominance

Whiteboxes on the rise

The Essential Guide to IT Transformation

Perhaps more than any other major server-maker, Dell has benefited from the rise of hyperscale data centers and the cloudy service providers which build them. The company is boasting that it not only rules the clouds in the United States, but also in China. The question is, can it hold out against whitebox suppliers which are getting better at custom engineering and bending metal?

Speaking to members of the press in Hong Kong, Amit Midha, president of Dell China, claimed that Dell has a 70 per cent share for servers peddled into cloud service providers in the United States, including Facebook, which is the poster child for Dell's custom server unit, called Data Center Solutions. Midha was also cited by Bloomberg as saying that Dell was also a supplier of servers to Google, which is either new data or an error as far as El Reg knows. A few years back, when Dell first started talking about the DCS business, the computer-maker had been lamenting that Google does not buy Dell boxes, bespoke or otherwise.

Midha said that Dell had around 60 per cent of the market for "internet servers" in China, with Baidu, Tencent Holdings, and Alibaba as its anchor customers.

While Dell has done well by providing custom server design and high-volume manufacturing for hyperscale data center operators, competition in this space coming from ODMs and OEMs in Taiwan and China will make it very tough for Dell's DCS unit in the future. And that is one reason why Dell has taken some of the minimalist cloudy server designs it made for Facebook and others and started selling them as the quasi-commercial PowerEdge-C line last year.

For one thing, Facebook is not buying DCS servers from Dell to populate its first data center, which is located in Prineville, Oregon. Rather, Facebook has worked with Taiwanese motherboard, PC, and server manufacturer Quanta Computer to make two custom motherboards – one for Xeon 5500/5600 processors from Intel and the other for Opteron 6100 processors from Advanced Micro Devices – and has open-sourced the motherboard and server chassis design that uses them under the Open Compute Project. At the launch of the Open Compute Project in April, Frank Frankovsky, director of hardware design and supply chain at Facebook, said that these home-grown servers cost about 20 per cent less than the boxes the company had previously been using – those made by Dell DCS – and had 22 per cent less metal and plastic in them.

That extra bang for the buck is the difference between profiting and not in the cloud biz, which Dell and other mainstream server-makers which crave those big sales are going to learn. Rather than being able to put those profits in their pockets, hyperscale data center operators are going to be sorely tempted, as Facebook has been – and eventually it succumbed – to go straight to Asia to get custom server components and have them assembled somewhere inexpensively.

That's certainly happening at Rackspace Hosting. Last month, Lanham Napier, president and CEO at the hosting company, said in a conference call going over its first quarter financial results that a shift to whitebox servers (from unnamed suppliers) has allowed the company to grow its server base to 70,473 machines, up 17.7 per cent compared to a year ago, while allowing it to expand its margins. The whitebox machines are being used to build out the Rackspace Cloud, the virtual machine hosting side of the company that is growing at nearly five times the rate of its plain-vanilla managed hosting services. ®

The Essential Guide to IT Transformation

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Microsoft says 'weird things' can happen during Windows Server 2003 migrations
Fix coming for bug that makes Kerberos croak when you run two domain controllers
Cisco says network virtualisation won't pay off everywhere
Another sign of strain in the Borg/VMware relationship?
VVOL update: Are any vendors NOT leaping into bed with VMware?
It's not yet been released but everyone thinks it's the dog's danglies
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.