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Dell shipping servers in Japan

The direct-sales manufacturer is competing for the first time in a server market that has been attracting a lot of attention.

Dell (DELL) said it has begun shipping workstation and midrange servers in Japan.

The direct-sales manufacturer is offering two models of its PowerEdge series, competing for the first time in a server market that has been attracting a lot of attention. Japanese corporate demand for servers has been strong, in contrast with slowing PC sales. NEC, IBM Japan, and other major manufacturers expect shipments to double in the current fiscal year.

Financial deregulation and other sea changes in the Japanese economy are partly responsible, the Nihon Keizai Shimbun reported last week.

Japanese acceptance of the client-server model since 1995 is another important factor, said Jerry Sheridan, a Dataquest analyst who focuses on servers. "Previously [Japanese companies] were 'host-centric'." That is, they relied on mainframes. "Now, we're seeing a significant increase in the number of servers being utilized," Sheridan said.

Dell's status as a U.S.-based manufacturer and its direct-sales model may pose entry barriers. But Dell desktops and notebooks did well in a survey of Japanese consumers this July, and Dell server sales have been rising in Europe faster than PC market growth, suggesting that direct sales can also work in the more-formal Japanese market. "The numbers we've seen indicate that Dell has been successful using that model in the European marketplace," Sheridan noted.

Dell's PowerEdge 2200 is available with dual Pentium II processors running at 233 and 266 MHz, up to 512MB RAM, 512K of ECC cache, and a maximum of three 9GB hard disks. The PowerEdge 4200 is also available with a 300-MHz chip and dual power supplies, and can accommodate up to six "hot-swapable" hard disks.

A PowerEdge 2200 with a 233-MHz Pentium II, 32MB RAM, a 2GB hard disk, and Windows NT 4.0 installed costs $3595 (about 435,000 yen). A PowerEdge 4200 with dual 233-MHz Pentium IIs, dual power supply, 128MB RAM, two 4GB hard disks, and Windows NT 4.0 costs $8,350 (around 1,011,000 yen).

Exact Japanese configurations and prices could not be confirmed.