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Dell follows workstation lead

Dell, not one to buck trends in the PC industry, will make its first foray into the workstation market with systems based on Intel's Pentium II processor.

Dell Computer (DELL), not one to buck trends in the PC industry, will make its first foray into the workstation market with systems based on Intel's Pentium II processor.

Following the lead of companies such as IBM, Compaq, and Hewlett-Packard, Dell will begin to sell workstations that run Microsoft's Windows NT operating system.

Dell's announcement follows closely on the heels of Micron Technology, which announced its first Intel-based workstations running Windows NT earlier this week.

Workstations are generally described as high-powered computers for computing-intensive applications such as financial modeling and computer-aided design (CAD). Before Compaq, IBM, and Dell entered the Intel-based workstation sector, the market was owned by companies like Sun Microsystems, which sells workstations that use its Sparc processors and run the Unix operating system. But according to International Data Corporation (IDC), Intel-based workstations are beginning to make significant inroads into Sun-dominated markets.

Dell's chairman and CEO agrees. "The growing momentum of industry-standard Intel technology and Windows NT make the timing right for Dell's entry into the workstation market," Michael S. Dell said in a prepared statement.

He added that the workstation market will follow a pattern similar to that in the server business, where Unix-based machines are often being replaced by powerful, but much less expensive, standardized network servers using the Windows NT Server operating system.

Analysts believe that Dell is simply following his instincts. Entrance into the workstation market "is a growing trend among corporate-focused vendors," said Bruce Stephen, a vice president of IDC.

"They do a lot of business in corporate America. This is an extension of the business desktop upwards," he added. Michael Dell said that more than 90 percent of his company's PC sales go to corporations.

Dell will build its workstations around the Pentium II processor, which will be announced next week by Intel. To date, companies such as Compaq, HP, and IBM have based their workstations on the Pentium Pro, the mainstay processor for NT workstations.

But this may signal a trend away from the Pentium Pro as the workstation processor of choice. In this vein, IBM is expected to announce a workstation-class PC based on the Pentium II next week when Intel introduces the processor. Toshiba is expected to do likewise.

Dell's first workstations will target the financial services, software development, and CAD markets, it said. The company has also created an internal organization focused on the workstation opportunity, led by Jeff Clarke.

Stephen believes that Dell and other Intel-based workstation vendors will also try to stage a "Mac attack" and try to penetrate traditional Macintosh strongholds. These include multimedia authoring, video editing, and music editing.