Dell Bundles VMware, Continues Push To Scale Out In The Enterprise

This is part of the Round Rock, Texas-based company's strategy to scale out its low-cost hardware in the enterprise data center. That plan has ignited a debate in the channel about VMware's channel strategy and Dell's ability to compete in this space.

The Dell-VMware Virtual Infrastructure configurations include two-way or four-way Dell PowerEdge 6650 servers running VMware ESX Server 2.0.1, VirtualCenter and VMotion; Dell/EMC Clariion CX300 or CX500 storage systems; and a Dell PowerEdge 1750 server running the VMware VirtualCenter Management Server.

Subo Guha, director of software product marketing in Dell's Product Group, said VMware not only provides load balancing of applications within a server, but also across all servers.

"This aligns with our strategy to help customers grow their server utilization by moving more applications to four-way and two-way servers for the best TCO [total cost of ownership]," he said. "Customers can start small and increase capacity as they grow."

Dell has gradually expanded its plan by adding scaled-out technologies to its offerings, said Guha. For instance, the company is already offering high-performance computing capabilities to customers via ISV partners, operating system partners such as Microsoft and Red Hat, and InfiniBand partners such as Topspin. Dell also offers grid computing capabilities thanks to a relationship with Oracle, he said.

The expanded partnership between VMware and Dell may not thrill all aspects of the channel, but it wasn't unexpected.

Partners say the handwriting was on the wall when EMC--a close ally of Dell--acquired VMware late last year. "This is going to really scare the VMware VARs," said one partner in the VMware channel. "Direct sales from EMC and Dell really blows up the VARs in the middle."

While some in VMware's channel aren't wild about the Dell deal, others claim there will be plenty of room for experienced VMware consultants to make money implementing that solution. "VMware requires lots of consulting and installation support and Dell does not have a consulting organization," said the same source, noting that the deal with VMware won't be exclusive since Dell will have to support Microsoft's forthcoming Virtual Server 2004 as well. "Dell has always been close to Microsoft and Intel. They are going to have to support Microsoft as well."

One VMware partner that is also an IBM partner said the EMC-Dell relationship could pose a threat to his business long term, but for now EMC is helping his business grow.

"We should have known that it wouldn't take long [for a bundled solution to emerge] with the EMC Dell relationship," said the partner. But I don't see it encroaching on my base. ... I imagine it will be a threat somehow, but I am confident that the IBM technology outweighs what Dell has. ... I was upset IBM didn't purchase VMware, but EMC is bringing VMware more leads."

Another ISV who wished to remain anonymous said that while the direct-sales forces of Dell and EMC will be the only beneficiaries of this bundle, VMware partners still are better off with VMware partnered with a major vendor than going it alone with Microsoft Virtual Server 2004 poised to hit the market.

He laughed when asked about VMware's downplaying the potential risk of Microsoft's entry into its territory. "Remember Lotus 1-2-3 and the market share they had," said the ISV. "Virtual Server has the identical function of [VMware] at a tenth of the cost. It'll be tough on the server side and workstation side for VMware, so running for cover with EMC was a good idea. VMware blinked."

John Palmieri, president of Computer Resolutions, a Bridgeport, Conn.-based VMware partner, said he is not worried about the Dell relationship because the vendor doesn't have a server that allows virtual machine technology.

"They don't carry eight-way servers," Palmieri said. "The sweet spot for virtualization technology is how many virtual machines you can put on a server. With IBM, you can virtualize 80 machines more or less on a 16-way xSeries server."

Computer Resolutions focuses on consolidation of Windows-based servers, the majority of which have a utilization rate of about 5 percent, said Palmieri. While someone could theoretically consolidate 20 such servers into one, industry-standard servers of the type Dell offers would be hit by I/O bottlenecks. "You also need the I/O," he said. "Dell uses industry-standard I/O, but it's too slow. You have to be smart to know how to consolidate."

However, said Steve Bishop, vice president of technology at VeriStor Systems, an Atlanta-based solution provider that hopes to sign on VMware once it stabilizes after the EMC acquisition, the bundling of VMware software and Dell four-way servers is a good idea.

"It depends on what people want to do," Bishop said. "Most people are not using CPU-heavy servers. If you take a [four-way server like the Dell PowerEdge 6650], virtualize in some utility servers or a disaster-recovery box, you can do it. The performance is not the best. But for these applications, that's not an issue."

That indeed is the case, said Michael Mullany, vice president of marketing at VMware.

Mullany said that VMware software supports up to eight virtual machines per processor, and that four-way servers are very popular for virtualization. VMware customers are consolidating everything from front-end applications to custom applications to print and file servers using the software, which is suited for most tasks except for high-performance computing and heavy traffic servers, he said.

"There are lots of workloads out there for 1-way and 2-way servers running a couple hundred MHz each," he said. "With virtualization, you can run multiple workloads on a single server."