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Dell means business with new servers, services

The company takes aim at the luxury end of the computing market with new high-end server and services offerings for business customers.

Dell Computer took aim at the luxury end of the computing market Tuesday with new high-end server and services offerings for business customers.

Analysts have criticized Dell for being too focused on the PC, without a broad enough line of products to embrace the computing needs of large or expanding companies.

The company is trying to answer those concerns with its release of the new servers and services.

"It's the next evolution of an answer," Terry Klein, Dell's vice president of the Advanced System Group, said in an interview. Klein said Dell's expanded server and services offerings would answer customer and competitor concerns.

"There is credibility when people come down and kick the tires and see if the wizard's behind the curtain," he said. "The combination of market share, as well our continued evolution and maturity in the product offerings and services, allow us to do more."

The most important component of Tuesday's announcement may be an agreement to license 32-way processor servers from Unisys. In February, Compaq Computer cut a similar deal with Unisys.

"It basically extends our whole portfolio of products to the most demanding application arena, like high-end databases, transaction-processing, e-commerce applications, and even customers considering server consolidation," Gene Austin, Dell's vice president of marketing for the Enterprise Systems Group, said at a New York gathering on Tuesday.

Dell also introduced new rack-mounted servers, the PowerEdge 1550 and PowerEdge 350. But neither server will be immediately available. The computer maker will begin selling the 1550 in January and the 350 in February.

Austin predicted Dell would surpass Compaq next year in server sales, but that claim may take some doing.

Compaq easily led the server market in the third quarter with 27.3 percent market share, according to IDC. Dell trailed IBM with 14.9 percent market share compared with second-ranker's 16.4 percent share. But Dell had phenomenal growth, 41.1 percent, while Compaq at 20 percent growth was four points ahead of the overall market.

Dell also announced enhanced services offerings for large corporations, with new consulting services offering infrastructure assessment, rapid design, and employment and performance tuning and testing.

Joe Marengi, Dell's senior vice president of the Relationship Group, said he wanted to "dispel the myth around the fact Dell doesn't provide enterprise-class services. Quite the contrary, we do. We do it in the direct model in our own fashion."

Marengi pointed out the Round Rock, Texas-based company established Dell Technology Consulting about 18 months ago, "again following this leveraged model the way we do with everything else."

In the first quarter, Dell plans to unveil four different levels of services, but Marengi would not go into details.

In repositioning its services portfolio, Dell hopes to overcome a shortcoming that makes the company's offerings appear inferior to that of competitors.

"We need to do a better job of marketing the services that we have," Klein said.

Services are increasingly seen as crucial to ensuring hardware sales, which is Dell's approach, Klein said.

"Our philosophy is services that feed hardware sales as opposed to hardware that feeds a services" group, he said.