Dell slings its "blade" server line

As expected, the new PowerEdge 1655MC server--a relatively slender modular machine designed fit into a rack with others of its kind--features dual Pentium III processors from Intel. Originally scheduled for introduction in the third quarter, it ran into a modest delay and comes to market later than blades from other hardware makers such as Hewlett-Packard.

The Dell blade server is part of a larger effort by the company to expand into areas beyond the PC. Though the company has reached the No. 1 spot in industry-standard servers, machines that are based on Intel hardware and the Windows or Linux operating systems--and though it continues to grow its market share in that area and in the overall PC market--Dell wants to continue expanding into higher-margin markets.

Meanwhile, IBM also announced general availability of its own BladeCenter server, a thinner, less blocky system than Dell's product. IBM's BladeCenter takes a higher-powered approach than Dell's initial systems, with dual Xeon processors on each blade.

The BladeCenter also missed a third-quarter shipping schedule. Server specialist Sun Microsystems has had trouble meeting deadlines too. Sun earlier projected that its blades would ship this year but more recently extended the deadline into the first quarter of 2003.

Blade servers fit nicely into Dell's expansion plans. The company could sell a larger number of servers using the blade approach and also package them with a range of its new services, such as doing the job of migrating companies' computer networks to blades from large numbers of standalone servers. Dell can also combine the servers with its storage products and services.

Blades as a category of server were designed to be cheaper to own and maintain--a major selling point in the down economy. That is because they take up less space than standalone servers, offer neater cabling and can be managed from a central console, making them easier and less time-consuming for company IT staff to administer.

Dell's servers are expected to be a little larger than some competing products, but the company argues that its machines are more powerful, less costly and easier to manage in that they use the same power supplies and network gear as its other servers.

Still, the new product isn't for every company, with the benefits accruing to those who plan to buy large number of servers.

"It's at three (blades) you'll have a cost savings crossing over to the new architecture," a company representative said. "Our strategy was to immediately provide (customers) a cost benefit they'd be able to use by taking advantage of shared components."

The new PowerEdge 1655MC product line allows a single rack to hold 84 servers, each equipped with up to two 1.26GHz Intel Pentium III processors and two hard drives with capacities up to 73GB each. Six servers fit in each enclosure, and 14 of the enclosures fit in a single rack.

The individual blade servers will start at $1,499 each and include a single 1.26GHz Pentium III and an 18GB hard drive. However, they must be purchased with an enclosure, which costs $1,799, bringing the price for a single server plus the enclosure to $3,298. A fully populated enclosure, which includes six servers, starts at $10,973.

IBM gives a starting price of $2,789 for its BladeCenter chassis and $1,879 for each blade.

IBM's designs permit the same number of servers, 84, to be fit into a single rack.

AOL Time Warner has been using IBM's blades, Big Blue said.

The blade servers from Hewlett-Packard, Dell and IBM all use chips from Broadcom subsidiary ServerWorks to handle communication between CPUs and other system components as well as from one blade to another.

News.com's Stephen Shankland contributed to this report.