Dell Adds to Its Data Center Virtualization Portfolio

| Jun 15, 2009 | Data Center | Competitive Intelligence Report

| Analyst: Steve Schuchart

Current Perspective: Positive
Vendor Importance: High
Market Impact: Moderate

Event Summary

June 17, 2009 -- Dell has expanded its enterprise technology portfolio to help organizations become more efficient through the innovative use of technology. The introduction of flexible and modular virtualization and data center consulting services, business-ready virtualization configurations, new Dell PowerEdge servers and EqualLogic PS4000 storage array will further simplify the planning, deployment and management of virtualized and physical IT environments.

Analytical Summary

• Current Perspective: Positive on Dell’s release of new servers, storage, and virtualization services offerings because it is a good enhancement to Dell’s virtualization capabilities across the market, from SME to large enterprise. Dell’s movement in the virtualization market is generally behind that of HP and IBM but the SME parts of this announcement should help Dell in its quest to equalize its virtualization capabilities with HP and IBM.

• Vendor Importance: High to Dell because virtualization in both the server and storage markets is a reality for many companies today and will be a reality for all but the smallest of IT shops. Dell needed to make these moves in order to begin catching up to HP and IBM in server and storage virtualization. With this announcement, Dell is even making progress in one of its strongest market segments, the small and medium enterprise. By addressing the SME with virtualization solutions, Dell may be able to even expand its position in that market segment.

• Market Impact: Moderate on server and storage virtualization markets, as Dell is playing catch-up particularly in the large enterprise segment. Dell is making steady progress with its virtualization products and messaging but is as of yet not the equal of IBM or HP. Dell will make the biggest splash in the market where it has the most pull, the small medium enterprise market.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Data Center | More information

Recommended Competitor Actions

• IBM and Hewlett-Packard can use their superior blade technology, much larger storage offering, and much larger services offering to counter Dell in the large virtualized data center market. Dell has a history of deliberately entering technology markets late in order to undercut competitors and virtualization is no different. Stronger product and service offerings can counter this strategy especially considering the complexity of initial setup for data center virtualization or conversion to virtualization.

• Cisco needs to emphasize the ease of use of its UCS system as well as the integration and unified networking properties when competing for large data center accounts with Dell. Cisco should be able to use the strengths of UCS in good effect against Dell. Cisco should simply demur when it comes to SME opportunities, currently it does not have enough products or strategy built up in that market space to compete with Dell.

• Sun Microsystems should emphasize some of its traditional strengths such as the reliability of its server offerings. Sun can also show customers its VirtualBox technology and storage products to entice customers away from Dell. However, Sun will have to reassure customers that when its acquisition by Oracle Corporation completes that all of these products will still be available.

• Competitors in the SME market in general will need to show both virtualization templates for the SME data center and a willingness to match Dell on price point. Price isn’t everything but it is a much larger consideration for SMEs than in the large data center market. Dell is a favorite among SME customers and the new products and services will only strengthen it in the SME market segment.

• In general, competitors should point out that Dell has been in general late to the virtualization party and show potential customers how experience does matter, especially in the planning stages of a virtualization deployment. Customers should be told how to avoid some common difficulties with virtualization such as virtual server sprawl. In particular, competitors should point out support for Microsoft Windows Server 2008 R2 Hyper-V is currently lacking. This tactic will be the most effective in the SME data center market.

Recommended End User / Customer Actions

• Customers in the SME data center market should look into the hardware, software and services offerings Dell has for virtualization. The SME data center can save money with virtualization and Dell understands the price sensitive nature of the SME business.

• Customers who don’t want to slog through Dell’s press release should contact a Dell reseller and talk in specific about the announcements contained therein. Resellers will have been briefed by Dell and have studied the release thoroughly. The reseller will be able to address the parts of the release that could be of potential impact for that specific customer, be it large data center or SME data center.

• Current Dell customers in the large data center market segment who are evaluating virtualization or embarking on the next phase of virtualization need to do a serious comparison between Dell’s offerings and that of competitors. Customers need to be sure that Dell can offer a similar level of software, hardware, and services as competitors such as HP, IBM, Sun, and Cisco. Dell has been lagging in its large data center virtualization efforts.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Data Center | More information

Top