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Dell not jumping on 'utility computing'

Although the concepts behind utility, or on-demand, computing are appealing, the technology "is not a reality yet," one of the company's top executives says.

Dell Computer will pass on so-called utility computing for now, one of the company's top executives said Wednesday.

Although the concepts behind utility, or on-demand, computing are appealing, the technology doesn't yet exist in a practical form for assembling disparate servers and storage systems into coordinated networks that can serve up data almost instantaneously or automatically adjust to spikes in demand, said Joe Marengi, general manager of Dell's Americas division.

"The picture is nice, but it is not a reality yet. The vision of on-demand, if you will, is three or four years away, maybe longer," he said during a conference call.

Under the utility computing vision, computing power will be served up like electricity or water. Ideally, outages will become less frequent and corporations will be able to use their installed base of hardware and software in a much more efficient manner through automated equipment provisioning and servers that can warn of impending equipment failures. Both IBM and Hewlett-Packard have sketched out strategies for providing large corporations with computing on demand.

Sun Microsystems has a similar program called N1, but executives have said the "pay by the minute" plans associated with some utility computing strategies aren't tenable.

Although some large financial institutions already are installing some types of on-demand computing systems, Dell will wait until utility computing becomes more formulaic.

"At some point it will be a reality, but right now you have to put in a massive amount of consulting hours to make it work," Marengi said.

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Formula, though, isn't exactly a fighting word at Dell. The company has continued to grab market share through its strong suit--selling equipment based around standardized components such as Intel processors or professional services that don't require a lot of customization.

In the first quarter, Dell sold 96 computing clusters made up of 6,500 servers to the high-performance and scientific market.

"Dell is No. 1 in this space by a long shot," Marengi said.

The Round Rock, Texas-based company also is winning 70 percent of the large contracts that it bids on, he added. In the past year, Dell has landed 4,500 new server customers in the United States and 2,500 new storage customers for the Dell-EMC line of storage systems.

"The enterprise itself is transitioning toward standardization and commoditization of products and services," Marengi said, adding that chief information officers are primarily asking their companies to "bring costs down."