Storage Effect

Copying a page from their PC strategy for x86 servers and storage

Newsweek’s Roger Kay makes a convincing case for Dell as a serious contender in the server space.  And they’re doing it Dell Style – coming up from below, more direct in many ways than HP.

They’ve got a lot of momentum:

• Strong success supplying Microsoft’s datacenters
• A filled-out server line up
• Services that help customers adapt Dell servers to their applications
• Data Center Services (DCS) – a cloud-building unit with Yahoo, Facebook and Baidu as customers

Why is this important to a historically PC-centric company?  Roger sees it: 

Desktops tend to yield gross margins in the 8% to 12% range, and notebooks hit 12% to 18%; servers come in at a much fatter 18% to 26%.  

Add to the server success their Equallogic acquisition and an aggressive move into 2.5″ SAS storage, and Dell is looking well positioned in the fast-growing SMB IT space.