Dell Sees Double With Data Center in a ContainerBy Ashlee Vance
The old Dell tended to let the other guys spend their time and money building big new markets. Then Dell would jump in with its vaunted low-cost model and begin taking market share.
The new Dell is proving to be edgier. In some cases, it’s willing to go after fresh product areas before there’s a market at all, and it’s prepared to chase sales in the dozens rather than thousands of units, if it means keeping demanding customers happy.
As a case in point, Dell has entered the fledgling market for data centers packaged inside shipping containers with a unique, double-decker design that is code-named Humidor. The company showed off its data-center-in-a-box for the first time during my visit last week to its headquarters in Round Rock, Tex.
Sun Microsystems and Rackable Systems were the first large hardware makers to embrace the idea of taking all of the servers, storage systems, networking gear and cooling and power units that make up a data center and packing them into a shipping container. Their rivals largely ridiculed the idea a couple of years ago but have all come out with similar products since then.
These types of systems could appeal to companies that have lost their will to build big new data centers. Rather than paying for a massive, expensive building, a company can order a data-center-in-a-container and plant it in the parking lot. Just add power, water and a network connection, and off you go.
Along similar lines, organizations like the military that need lots of horsepower quickly and in unusual places might adopt the container approach.
To date, however, the containers have been slow sellers. Sun has mentioned a couple of customers, while Rackable has struggled to move the systems, shipping none last quarter.
So why would a company like Dell, which prides itself on using volume to lower costs, get into the container game?
That’s easy: Microsoft.
Microsoft has been the main advocate of containers, saying they will form the basis of its future data center designs. Some of Dell’s first containers will go to a new Microsoft data center near Chicago, according to Forrest Norrod, the vice president in charge of Dell’s Data Center Solutions business.
And Microsoft’s interest in the container idea should inspire others to take a look at the technology.
“I think next year will be the year for this,” Mr. Norrod said.
Whereas competitors have put all of the requisite technology components into a single container, Dell has gone with the double-decker idea. One container is full of server, storage and networking systems, while another container handles power and cooling. By using this design, Dell claims it can stick with standard equipment across the board, saving customers money and making it easier to upgrade the units.
Each set of containers holds about 1,300 servers and consumes about as much power as the homes making up a suburban subdivision. The cost can easily top $500,000.
The container notion takes some getting used to for customers accustomed to housing their computing gear in a shimmering new facility. But those traditional data center concepts are starting to give way to practicality.
“The general perception of data centers as these pristine environments has been broken down,” said Drew Schulke, a product manager in Dell’s Data Center Solutions group. “These approaches are getting more credibility, especially with capital markets being where they are.”
The container work comes out of an unusual group at Dell that customizes server and storage systems for large customers.
The Data Center Solutions unit started in mid-2006 when Mr. Norrod presented Michael Dell, the company’s founder and chief executive, with a plan to create a kind of start-up within Dell.
The large server makers had failed to come up with systems that were compact, cheap and power-efficient enough to meet the needs of customers like Microsoft and Google. So Dell set to work tailoring products for customers who would purchase about 5,000 to 10,000 servers a quarter.
“Michael was a very active sponsor, to put it mildly, about going after this,” Mr. Norrod said.
According to Dell, the Data Center Solutions business would be the fifth-largest server maker in the world if its revenue was broken out, placing it behind Hewlett-Packard, I.B.M., Dell, Sun Microsystems and Fujitsu.