Mapping Dell’s path into the datacenter

It seems as though Dell announces another foray into another aspect of the datacenter every quarter. “If it’s a network device, we’re investigating it,” said Larry Hart, Dell’s switching product manager. When questioned about the possibility of a Dell-branded layer 3 core switch, Hart mentioned that Dell is in fact working on one and expects to ship a model in early 2004.

This announcement brings Dell much deeper into the datacenter and into a market that few tread easily. Cisco owns the lions’ share of the layer 3 LAN switching market, and they’ve earned that place with solid and scalable solutions proven over many years. Their solutions can also carry large price tags.

As a newcomer, Dell will have to earn trust in the same fashion as Cisco, but their pricing may accelerate the pace. Add the possibility of future Dell firewalls and routers, and suddenly every bit of the network could carry the Dell brand.

Picture this: With low pricing and one-stop shopping, a single Dell truck could arrive with everything required for a small to medium corporate network, from workstations to storage solutions, plus a few Dell technicians to put everything together. With attractive Dell leasing terms, that truck could arrive every three years carrying the latest hardware, all from a single vendor.

Potential lock-in and upgrade issues with such a heavy reliance on a single vendor aside, this could be a very attractive method of IT cost management especially for small and midsize infrastructures. If Dell makes an impact in established markets, competitors and potential customers cannot easily ignore Dell’s prices and heavy focus on free consolidated administration and management tools.

These endeavors could help Dell’s bottom line, but the real sticking point will be the performance of their solutions and the responsiveness of their support. Misbehaving server and workstation hardware is an unfortunately common event, but core network hardware has necessarily higher standards to meet. When failures do occur, parts replacement and available support are a must. For Dell to truly succeed in these markets, the robustness of their solutions must equal that of the established market leaders -- the price can be low, but reliability had better be high.