Dell, others target special-purpose Net servers

Dell Computer, Maxtor and CacheFlow all announced new server appliances for companies building up specific parts of their Internet operations. Each of the products is designed to be bolted into racks, an increasingly popular configuration for setting up centralized computing operations.

Selling server appliances is a growing business, with Merrill Lynch estimating $16 billion in sales in 2004 and International Data Corp. estimating $12 billion for the same year.

The increasing seriousness of the market is visible in the fact that traditional server companies are getting involved and that the start-ups that pioneered the trend are delivering more mature products.

Compaq Computer has its TaskSmart line; IBM has caught the server appliance bug; Hewlett-Packard has deals with CacheFlow and Procom; and Dell debuted its PowerApp line in April. However, analysts expect server appliance sales could cut into the plump profit margins of general-purpose servers.

Dell released a new server today called a load balancer, a machine designed to intercept Web traffic on e-commerce sites and divvy up the work among several back-end servers. Three PowerApp.BigIP models cost between $7,900 and $30,500, said Gene Austin, general manager of Dell's Internet server products division.

With the server, Dell is taking on for the first time a new and very large competitor, Cisco Systems, the leader in load-balancing equipment, Austin said. Dell's hardware uses the software of the second-most-popular load-balancing company, F5 Networks, which also sells its own hardware.

"We're only taking the software. Eventually, we'd like to become their platform as well, to make it a two-way partnership," Austin said.

CacheFlow, meanwhile,

Gartner analyst Pushan Rinnen says the billions of dollars up for grabs in the server market will keep manufacturers jumping with new product announcements and innovations. see commentary

CacheFlow servers are used by Lycos, among others.

Maxtor, a manufacturer of hard disks that's expanded into storage servers, has released a new product that has 320GB of capacity in a unit just 1.75 inches tall.

The $4,499 device, which has four hard disks, mirrors data on each of the two pairs and has separate power supplies so it can keep running even if one power supply or hard disk fails, said Jon Toor, senior director of marketing for the product line. If a unit breaks, it will send an email to the customer, and Maxtor will ship a replacement within two days, he said.

Maxtor's MaxAttach product line fits into an effort by hard disk makers to make more money by selling servers instead of just hard disks. Seagate Technology has a deal with Cobalt Networks for similar devices, and Western Digital and Quantum have launched efforts similar to Maxtor's.

The MaxAttach effort began with standalone storage devices, but the rack-mounted models on sale since February have taken over as the most popular, Toor said. Regional Internet service providers are the most common customers, he said.

Server appliances may be all the rage, but traditional servers still are going on sale.

Toshiba today unveiled its Magnia 7100, which can accommodate as many as four Pentium III Xeon chips. Bare-bones models cost $9,010.

Dell also introduced a new low-end server, the PowerEdge 1400, with starting prices less than $1,700.