Swan and young

Enterprise’s Ugly Duckling Swans IT Up

Swan and youngEven after buying EqualLogic (storage) back in 2008, Dell’s enterprise credentials were pretty much restricted to commodity PCs, servers, and reselling EMC storage. Then it made a succession of other acquisitions, including Perot Systems (services), Ocarina (deduplication), Boomi (cloud integration), Compellent (higher-end storage), SecureWorks (security), and Force10 (networking). It also formed partnerships with a variety of OEMs, including Intel, Microsoft, Red Hat, Silver Peak, and SUSE.

Fast forward five years and Dell is playing with the large enterprise system vendors, and doing well, while its mainstay business, PCs, is down in the doldrums, along with the entire PC market. This transformation from enterprise’s ugly duckling to swan didn’t happen overnight, but IBM, HP, Oracle and Cisco now have a serious competitor who is quickly gathering momentum.  Here are just a few recent proofpoints that show Dell has come of age in the enterprise:

Just over a month ago a Dell supercomputer, the HiPerGator, was unveiled at the University of Florida. The $3.4 million system, which has a peak speed of 150 trillion calculations per second, features 16,384 AMD processing cores.

How about hyperscale servers? HP announced its Moonshot hyperscale servers in April, but for the fourth quarter of 2012, it was Dell, which trails both IBM and HP in total server sales, that accounted for more than half of the hyperscale servers sold. According to IDC, which defines hyperscale servers as “density-optimized” machines that companies use to support large data centers, Dell accounted for about 102,000 of 192,000 such servers sold, good for more than half the market and nearly five times the roughly 22,000 units sold by No. 2 HP.

The numbers are even more impressive when you look at the latest results for enterprise storage. According to IDC, EMC remained top in total disk storage systems in the first quarter, but while HP held onto second place, its revenues nosedived 17.4% year-over-year, while Dell vaulted into third place, powered by a 16.7% jump, over IBM which sank into fourth place on a 21.1% drop in revenues.

This is a huge transformation by Dell, but I think it only represents a part of the picture. Yes, it is gaining traction in the enterprise market, but more importantly to me, it is not forgetting — or abandoning — its SMB base, what I like to call the ‘computing for the rest of us’, the non-Fortune 1000/Global 2000. For a big part of late ’90s and early ’00s, the big enterprise players tried to play in the SMB space as enterprise spending slowed. But trying to sell a lot of things to a lot of customers is a lot more complex than selling a few things to a few customers.

However, that’s been a Dell strength, and if they don’t abandon old friends while they go after new ones, then the sky’s the limit.

Image credit: TomiTapio (DeviantArt)

About the author
Steve Wexler
Steve is a proficient IT journalist, editor, publisher, and marketing communications professional. For the past two-plus decades, he has worked for the world’s leading high-technology publishers. Currently a contributor to Network Computing, Steve has served as editor and reporter for the Canadian affiliates of IDG and CMP, as well as Ziff Davis and UBM in the U.S. His strong knowledge of computers and networking technology complement his understanding of what’s important to the builders, sellers and buyers of IT products and services.