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Dell enters workstation arena

The company introduces its first line of personal workstations, becoming the latest in a string of entrants into the fast-growing market.

Dell Computer (DELL) introduced its first line of personal workstations today in New York, becoming the latest in a string of recent entrants into the fast-growing market.

Dell will offer systems targeted for use in the mechanical computer-aided design (CAD), financial services, and software engineering markets, as reported on July 21 by CNET's NEWS.COM. The systems will run Windows NT and use Pentium II processors from Intel running at 266 and 300 MHz.

"Fundamentally, there's not anything exciting about the workstations themselves, but it's actually the right thing for Dell to be doing. Dell's formula for success is taking a reasonably established market where people understand what they want to buy and selling it more effectively than anyone else," said Peter ffoulkes, workstation analyst with market research firm Dataquest.

According to ffoulkes, Dell understands there are segments of the workstation market it can't reach yet but is "very well-focused on the markets they are going after and very price-competitive." After establishing itself as a credible supplier, the company can expand into other market segments, he noted.

With the introduction, direct marketer Dell will go head-to-head with other Intel-based workstation manufacturers, including Compaq, IBM, Gateway 2000, Hewlett-Packard, Intergraph, and Micron.

Long-time Unix workstation vendors Sun Microsystems, Hewlett-Packard's PA-RISC workstation group, Silicon Graphics, and IBM's RS/6000 group rank as the largest players. Digital Equipment also has a significant presence--it offers workstations based on Windows NT and its own high-speed Alpha processors.

Workstations are high-powered computers for computing-intensive applications such as financial modeling and CAD. Sun Microsystems has traditionally been the dominant player in the workstation arena. Its Sparc processors work with the Unix operating system.

But research from Dataquest shows that Intel-based workstations from vendors such as Compaq, Gateway 2000, and IBM's personal computer division are beginning to make inroads into Sun-dominated Unix markets. Those findings are echoed by research from International Data Corporation. By the end of the first quarter of 1997, Windows NT workstations made up 23.6 percent of workstation unit shipments and 12.4 percent of revenue worldwide, according to Dataquest.

Most of the penetration has been made by systems using Intel's Pentium Pro processor. Only a few systems with the newer Pentium II processor have been introduced so far because the processor was missing design features necessary for workstations.

Namely, the Pentium II and its accompanying on-board memory chips did not support a kind of high-quality memory known as Error Correcting Code (ECC), required by many corporate IS departments. Pentium II chips introduced two week ago, however, include this capability.

Other performance enhancements to the Intel platform anticipated later this year include AGP (Accelerated Graphics Port) technology. AGP is a dedicated connection between 3D graphics chips and system memory, a connection designed to help PCs keep up with the demands of data-intensive 3D applications.

"We see that RISC/Unix still has a lot of strength," said Neil Hand, Dell's workstation marketing manager. "[But] on the performance side we're seeing the gap close between Intel units and Unix systems."

The Dell WorkStation 400 is priced from $3,705 for a system with a 266-MHz Pentium II processor, 64MB of memory, a 2GB hard drive, a 24X CD-ROM drive, and a 17-inch monitor. The WorkStation 400 with a 300-MHz Pentium II and two 17-inch monitors that can be used simultaneously is priced starting at $5,779.

Dell says that a WorkStation 400 with dual 300-MHz Pentium II processors, 128MB of memory, a 4GB hard drive, a 24X CD-ROM drive, a high-performance graphics card, and a 20-inch monitor is priced starting at $8,078.