Dell debuts first two AMD servers

The computer maker has launched two systems: the four-processor PowerEdge 6950, for higher-end tasks such as housing databases, and the two-processor PowerEdge SC1435, for high-performance computing clusters or hosting Web sites. The 6950 will be sold alongside its Intel-based equivalent, the 6850, but the SC1435 replaces the Intel-based SC1425, said Jay Parker, Dell's director of worldwide marketing for PowerEdge servers.

With the move, Dell finally joins the other three major server makers in selling AMD-based x86 servers. The Round Rock, Texas-based company long had sold only Intel-based machines. However, it announced plans for AMD servers in May and began selling AMD-based PCs in September.

"This is really the beginning of what we hope to be a long relationship," Parker said. "I would expect us to roll out additional server products over time with AMD processors."

Dell announced the move at the Oracle OpenWorld conference, where Chairman Michael Dell and AMD Chief Executive Hector Ruiz shared the stage earlier in the day.

"It's about time they did something," said IDC analyst Michelle Bailey. "They've seen so much competition in the marketplace, particularly from HP, that their customers are probably asking, 'Why don't you offer me this?'"

Computer makers sold $5.9 billion worth of x86 servers in the second quarter, according to market researcher Gartner Group, with Dell in second place after No. 1 Hewlett-Packard but ahead of third-place IBM.

One likely area for Dell-AMD expansion would be a mainstream two-processor model, with reliability features such as backup power supplies and better management abilities. But for now, Dell sells only models using Intel's "Woodcrest" Xeon 5100 processor--the PowerEdge 1950 and 2950.

"We feel real comfortable with our position in that part of the market," Parker said. "The competitiveness of the Intel-based products is excellent now."

But don't expect AMD chips to spread across the Dell product line like wildfire. "I think they'll be very cautious about this adoption," Bailey said. "Once they get the supply chain going and the capabilities built in-house, then they'll probably address the higher-volume piece of the business."

But adding AMD servers means Dell has an interesting challenge in positioning its products. In its news release, it boasts that the 6950 "eclipses" performance of its 6850 and consumes up to 20 percent less power.

Parker said that Dell will work to steer customers in the right direction, depending on what types of software they need to run. "We see a lot of customer confusion based on the competitors' agnostic positioning of Intel versus AMD. It leaves their customers in the lurch. As we roll out, we'll be providing specific guidance where appropriate," he said.

Intel indicated it's not going to stand passively by while AMD arrives at its previously most loyal customer.

"It's our job to continue to convince Dell and their customers that we have the best products for any computing need," Intel said in a statement. "Our server group is just coming off a record quarter, where we believe we gained share in the highest volume areas and now have the highest performing four-processor product according to TPC-C," a database server benchmark.

Dell prefers to stay above the fray but argues that the rivalry is healthy.

"In general, having competition in this space, both in marketplace and at Dell, will provide better value for customers in the long term and, ultimately, innovation in the industry," Parker said.

A 6950 with four 2.6GHz Opterons, 8GB of memory and dual 73GB hard drive costs $16,183; an SC1435 with dual 2.8GHz Opterons, 4GB of memory and an 80GB hard drive costs $5,653.

The AMD machines rely on supporting chipsets from Broadcom's ServerWorks group, Parker added.

Both the 6950 and SC1435 are available with AMD's "SE" Opteron, which consumes more power. But at 2.8GHz, it runs 200MHz faster than mainstream Opterons. Until now, only Sun Microsystems has offered the SE Opterons.

Dell and AMD's partnership has been a long time in the making, said Kevin Kettler, Dell's chief technology officer, during a briefing for reporters at OpenWorld. "We've been working with AMD for close to seven years, sharing customer requirements where we could make a intersection with AMD's products," he said.

Four years ago, AMD's name did not come up during a discussion of serious server vendors, Kettler said. He said that it took Dell time to build infrastructure to accomodate AMD's chips, once it had decided to adopt the technology.

Dell had other concerns about AMD's ability to supply Dell with a sufficient number of chips, said Marty Seyer, senior vice president of AMD's commercial segment.

"The message to us (from Dell) two to three years ago was loud and clear: AMD needed to put in place the capacity to meet the expected demand," he said.

Since then, AMD has expanded its manufacturing facility in Dresden, Germany, and signed a deal with Chartered Semiconductor for excess capacity. It has also announced plans to build a chip plant in upstate New York.

Also on Monday, in conjunction with Oracle OpenWorld, Dell announced that its OpenManage system management tools have been integrated into Oracle Enterprise Manager, letting customers of the latter manage Dell servers.