Dell racks up Microsoft as data center customer

After finding itself on the losing end of a number of deals, Dell creates a special unit aimed at getting its gear inside the world's largest data centers.

Ina Fried Former Staff writer, CNET News
During her years at CNET News, Ina Fried changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley.
Ina Fried
3 min read

When it comes to picking a spot for a data center, Google and Microsoft often have the same sites in mind. But when it comes to how they build, the two companies take far different approaches.

Google relies largely on its own design expertise, contracting for and building its own server designs. Microsoft, meanwhile, relies on outside companies to build the hardware, though it certainly takes an active role in designing the centers themselves.

A custom Dell server known as Xanadu built for an unnamed data center customer. Dell

Dell is one of the companies that helps power Microsoft's server farms, including the ones that power Microsoft's operating system in the cloud, Windows Azure.

Data centers have been a bright spot for Dell, which has struggled in recent years. On its own, Dell's data center business would be a top 5 server vendor, said Forrest Norrod, the Dell vice president who heads its data center effort. In its most recent earnings conference call, CEO Michael Dell called out Facebook, Microsoft, Amazon.com, Akamai, and Baidu as key customers in that arena.

The story of how Dell got into the data center business is an interesting one. A couple of years back, the company was noticing that its share of the largest data centers was less than it might expect. Plus, it noticed that whether it won or lost a bid, the terms tended to be such that Dell didn't stand to make money.

"That was curious," Norrod said.

It turned out that customers at the highest end didn't really need some of the hallmarks of Dell's servers. Built-in management code and redundancy might appeal to the average business, but to a customer that expects to burn through their servers, such features are costly and unnecessary.

Meanwhile, other features like extreme power efficiency and density were the things that companies would pay a premium to get.

Dell data center chief Forrest Norrod.
Dell data center chief Forrest Norrod Dan Farber/CNET News

At the beginning of 2007, Dell set up a separate unit to explore this area. Its mission was to look at the 50 biggest data center customers worldwide and work to understand what those companies needed.

It turns out there are a lot of things you don't need when building a server that is going to go in one of these data centers. For example, expansion ports are definitely out, as are legacy I/O ports. Memory slots need to be limited to the minimum necessary (and then kept full so they don't change the thermodynamics).

Instead of redundant fans or power supplies, Norrod said, Dell learned what customers really needed was one good one, since a system wasn't likely to be touched until it failed, at which time it would be replaced.

Norrod said that Dell has learned a lot by working with Microsoft, including the need to start a system's design by knowing where the server is going. And that is a rapidly changing environment as servers move from racks, to pre-equipped containers and even to entire prefabricated data centers.

"Whether the room is a room or a container, looking at the environment is one of the key parameters in system design," Norrod said.

And companies like Microsoft are looking to get rid of anything they can.

"They want computers and servers sitting in a field with a power cord and network cord going to them. Period," Norrod said. "Everything else is overhead--the building, the rest of the infrastructure. We're at the end game of how close can you get to that. "

Microsoft announced on Tuesday that its so-called Gen 4 data centers will consist of prefabricated buildings that can be up and running in three to six months.