'Customers Lined Up' For New Dell Business Aimed At 'Subhyperscale' Space

Dell is counting on its success in hyperscale to help catapult a new business unit into the market for custom, scalable, flexible data-center solutions among customers that don't quite require hyperscale.

The new server unit is called Datacenter Scalable Solutions, or DSS. It takes the repeatable processes and designs developed by Dell's eight-year-old Data Center Solutions (DCS) hyperscale business, and uses that well-oiled strategy to address a growing market with a "semi-custom" solution for businesses that aren't quite a fit for hyperscale.

DSS isn't being introduced with any special incentives for channel partners, but Stephen Monteros, vice president of business development and strategy at Ontario, Calif.-based Dell partner Sigmanet, told CRN that the move makes perfect sense for the channel.

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"In theory, it's a good idea," Monteros said. "They're getting partners engaged in it. They've been successful with partners who are already engaged in these spaces. It tells me they already have a channel for this, and already have customers lined up for this."

These customers -- web-hosting companies, telecommunications service providers, the oil and gas industry and research organizations -- represent a $6 billion total addressable market, and it’s a segment growing three times faster than the traditional x86 server market, Dell argues.

These companies aren't hyperscale, like Facebook, Amazon or Google, but they're growing fast and they don't have the resources to build the kind of custom infrastructure hyperscale solutions like DCS provides, Dell said. DSS aims to provide agile, scalable technology, and a repeatable process in order to sell customers technology designed to their specifications and delivered exactly when they want it.

Dell started the DSS business in "stealth mode" last year, and said it has already had 200 customer engagements and expects to double that by the end of this year.

Ashley Gorakhpurwalla, Dell vice president and general manager of server solutions, said during a recent webcast with journalists and analysts that he expects the DSS business to "outgrow the DCS business in short order, and will be the fastest growth-rate business for us."

"We're really pouring energy and R&D dollars into our cloud business, our high-performance compute business, the virtualization business. We don't think it's worth staying in stealth mode; competitors are already talking about this, and taking notice," he said.

Other vendors taking aim at the so-called "subhyperscale" market include Hewlett-Packard and Ericsson, according to research firm TBR Inc. HP is actively targeting service providers with its Foxconn-backed Cloudline server portfolio, while Ericsson is doing the same with its Hyperscale Datacenter System 8000, TBR explained.

Round Rock, Texas-based Dell is taking a characteristically aggressive stance with competitors now that it has publicly introduced DSS.

"We have a heritage as a company that likes to show results before we talk about them. We are not a vaporware company," Gorakhpurwalla said. ’While others in the IT industry have been focused on marketing hype or reducing capex costs only, we’ve created a new operating model that is centered around flexibility," he said.

"I know this will be a huge success for Dell," Brian Humphries, president of Dell Enterprise Solutions sales and strategy, said during a recent webcast with journalists and analysts. "Our experience serving hyperscale giants ensures that we know what we're doing. DSS is already one of the fastest-growing lines of businesses within Dell."

PUBLISHED AUG. 24, 2015