HP struggles as Dell and Cisco push enterprise servers

HP struggles as Dell and Cisco push enterprise servers

HP is continuing to suffer as a result of Oracle dropping Itanium support while Dell’s enterprise strategy gains momentum, according to the latest market data from Gartner.

The company posted worldwide server supplier revenue of $3.7bn, 28.7% of the total market share for the second quarter of 2012, although revenue was down compared to last year.

Adrian Connell, a research director at Gartner, said,  “HP is having a challenging time (see box below). The business is suffering from weak Unix sales. HP has been suffering since Oracle said it would not support Itanium.”

In spite of winning a legal battle to force Oracle to continue Itanium support, HP was looking to increase the mission-critical aspects of its commodity x86 Proliant PC server platform. “The challenge for HP is to migrate customers from Itanium to x86,”  he added: “HP has always pushed the envelope of the x86 platform.”

Connell predicted that over time businesses still relying on high-end Unix servers will migrate to Windows Server and Linux–based x86 PC-server hardware.

HP is also coming under pressure from competitors in the x86 server market. Dell has been growing particularly strongly and Cisco with its unified computing system (UCS) is making inroads in the server blades market, where HP has previously been strong, according to Connell.

Over the last few years, Dell has been trying to become more enterprise-focused. Connell said, “Its product portfolio is very different compared to three years ago. Dell has also transformed how its sales force engages with customers. In the last few quarters we are seeing concerted benefits.”

Leading PC suppliers announce Windows 8 devices

Leading PC suppliers announce Windows 8 devices

Several leading PC suppliers, including HP, Dell, Asus, Toshiba and Sony, have announced products from laptops to smartphones that will run Microsoft’s newest operating system Windows 8, expected to be released in October.

Windows 8 supports the use of touchscreen technology and many of the new products announced are hybrid devices, combining tablet and laptop capability in one. 

HP announced a hybrid device, the Envy x2, which doubles as a notebook and a tablet by using a detachable touchscreen.

Dell’s offering is branded under its XPS range. Products include the XPS Duo 12, a hybrid laptop and tablet with a flip-hinge touchscreen display allowing the device to be used as a touch-driven slate as well as a traditional laptop. Dell also announced the 10-inch XPS 10 tablet, which will run the Windows RT version of the operating system (OS).

Toshiba has introduced its Satellite U920T, a tablet with a slide-out keyboard running Windows 8. Sony’s Vaio Duo 11 is a touchscreen tablet that also features a small keyboard which users slide to unveil.

Asus launched a number of devices in June, which also run Windows 8, including the Vivo range with a detachable keyboard, and the Taichi device which has a double-sided display and acts as a tablet when the lid of the laptop is closed.

Lenovo also announced a series of Windows 8 devices. Lenovo’s products are traditional laptops which are not hybrid or touch screen, however the S Series laptops will feature Windows 8 functionality once available this Autumn.

Seeing the big players announcing  products on the highly anticipated operating system is encouraging, but it won’t necessarily convince businesses to upgrade, according to Rob Bamforth, principal analyst at Quocirca.

“OS upgrades don’t happen quickly based on hardware, they tend to move based on software decisions. More often, if a piece of software isn’t going to be supported on a new OS, that pulls people forward to upgrade," he said.

“Businesses will like the direction Microsoft is going in, with mobile and desktop looking a lot closer and happier together, which it hasn’t in the past. This will be seen as encouraging but not enough to switch or upgrade.”

Microsoft’s two-pronged desktop and mobile approach puts the firm in a much better position than Blackberry and Android-based devices to compete with Apple in the growing bring-your-own-device (BYOD) trend, said Bamforth.

But he is not convinced that hybrid devices will take off in the enterprise market: “It’s not necessarily about replacing a specific device, but a way of working. It’s about how people work and how people are comfortable," he said.

“I’m not convinced by the transformer-type model. Tablets with detachable keyboards which can be left behind rather than forced to carry around, will take off more than the flip-type models. There are more usage scenarios where you don’t need a keyboard all the time - and people who do might just stick with a laptop.”

Dell expects tough next quarter

Dell expects tough next quarter

PC maker Dell has warned that it expects third-quarter revenue to be down between 2% and 5% on second-quarter levels because of the “uncertain economic environment”.

Dell also blamed “competitive dynamics” and “soft consumer business” for its negative outlook for the third quarter, and said it expects a “challenging” user computer environment in the second half of the year.

The warnings came in second-quarter financial results in which Dell reported revenue of $14.5bn, down 8% on the same period a year ago and narrowly below the level that analysts had estimated.

Dell also saw its profits dive 33% in its first financial quarter of 2013 as consumer and large enterprise sales fell 12% and 3% respectively. Total sales in the first quarter were worth $14.4bn, compared with $15bn in the same quarter last year, a fall of 4%.

The second-quarter results caused Dell’s shares to fall by 3.7% in after-hours trading to $11.88, after closing at $12.34, according to the BBC.

Despite the warnings, Dell also said it expects continued solid growth in its enterprise solutions, services and software divisions.

Dell Enterprise Solutions and Services revenue grew 6% year-on-year to $4.9bn, which the company said represents 50% of margin and more than a third of revenue. The company also reported growth of 14% in its server and networking revenues.

"We're transforming our business, not for a quarter or a fiscal year, but to deliver differentiated customer value for the long term," said Michael Dell, chairman and chief executive.

Brian Gladden, Dell chief financial officer, said: “Our performance in the second quarter provided another proof-point that our long-term strategy is right.

“We continued our progress in shifting the mix of our business to higher-margin enterprise solutions, led by solid growth in our server, networking, services, and Dell IP storage businesses.

Dell Offers Quickstart Data Warehouse Appliance

It's a small step, but in bundling Microsoft's SQL Server 2012 database with its own data-integration software on an appliance, Dell is moving closer to becoming a business intelligence vendor and not just a hardware supplier.

The Dell Quickstart Data Warehouse Appliance 1000, announced and made available Wednesday, is aimed squarely at midsize firms as it tops out at five terabytes of user data. By bundling and preconfiguring the software to work with Dell PowerEdge servers, the vendor says it's making data warehousing easy.

"Limited IT resources and budgets have mostly prevented mid-sized organizations from building data warehouses and realizing the insights they need," said Dell's Ben Linder, executive director, data warehousing and business intelligence, in a statement. "Dell now offers the mid-market a comprehensive, robust, affordable, and simple data warehouse solution."

Data warehouse appliances are nothing new, and they've been available from data warehousing market leaders Oracle and IBM for several years. Microsoft has partnered with Dell, HP, and others suppliers to provide preconfigured hardware for Microsoft SQL Server-based data warehouse deployments.

Dell described the Quickstart Data Warehouse Appliance 1000 as going "a step beyond" typical appliances in that it includes data-integration capabilities from Dell Boomi, the software-as-a-service vendor Dell acquired in 2010. Dell said it's also providing start-up services and training with the appliance to get customers up and running, and it will follow up with quarterly health checks to ensure ongoing success.

The base price for the appliance is $69,990, including Microsoft Windows R2 SP1 Enterprise Edition, Microsoft SQL Server 2012 Data Warehouse Appliance Edition, and a one-year subscription to Dell Boomi. It also includes the required server and storage hardware to support 5 terabytes of user data and the support services mentioned above.

It's unclear just how "bundled in" Dell Boomi can be given that it's described as a "lightweight, subscription-based data integration service." Responding to email questions, a Dell spokesperson told Information Week that the subscription-based software includes a library of data connectors, visual integration tools, and a run-time execution engine.

As for query and analysis, what most people think of when the hear "BI," Dell said it recommends that those tools be run on a separate server. Even though Microsoft SQL Server 2012 is preinstalled and configured as part of the appliance, the appliance license does not include access to SQL Server Integration Services, Analysis Services, or Reporting Services.

"If customers already have SQL Server licenses on other servers, they can use those with the Quickstart Appliance," said a Dell spokesperson.

Microsoft confirms that Dell's new appliance is the first to be based on Microsoft SQL Server 2012, which was released in April. As such it's the first appliance to feature new SQL Server 2012 capabilities including the x Velocity In-memory Column Store, which is said to speed queries and optimize data compression.

Dell's push into data warehousing and business intelligence is part of a larger push into the enterprise software market, which was given a boost last week when Dell announced its $2.4 billion acquisition of Quest Software. Quest's portfolio includes BI, database-management, and Hadoop-related software that could find its way into future Dell data warehouse appliance bundles.

HP first mounted a push into business intelligence with its 2006 acquisition of the Knights bridge BI consultancy, but that initiative seemed to stall when HP's failed high-end Neoview data warehousing platform was abandoned in late 2010. In early 2011, HP acquired the Vertica database, and it subsequently introduced HP Vertica Analytic System appliances built on HP software.

HP's appliance is a much higher-end, big-data-scale offering compared to the Dell Quickstart Appliance 1000. In fact, despite all the hype about big data, the vast majority of enterprises manage less than 10 terabytes of data.

Dell is starting with the broadest base in the market, and it told Information Week that it will announce another member of the appliance family later in the year. So look for a bigger appliance and, perhaps, a deeper, more BI-capable software bundle.