The Round Rock, Texas, company in the fourth quarter will roll out new blade systems that will be more dense than those currently available from competitors, said Paul Gottsegen, vice president of worldwide marketing in Dell's product group. Gottsegen also said Dell will do in the blade market what it has done with PCs and is doing in other spaces such as printers and services—drive standardization and drop prices.

The new systems will be able to fit one and a half blades into the same space that systems from other vendors can fit one. That combined with the lower prices will give Dell a better price/performance offering, Gottsegen said.

Blades are slimmed-down servers that fit vertically into a chassis and share such features as power supply and I/O through the chassis's backplane. They got initial traction in the high-performance computing field, but are growing in the enterprise space as well.

Gottsegen declined to outline many details of the new blades, saying only that they will include the newest technology from Intel Corp., including the 64-bit extensions the chip maker is putting into its next generation of Xeon processors. Intel, of Santa Clara, Calif., this week unveiled Nocona, a 32-bit chip with the extensions that enable it to run both 32-bit and 64-bit applications.

Click here to read about Intel's Nocona.

Despite the density of the 1U (1.75-inch) systems, the new blades will offer the same benefits—such as redundant power supplies—as those found in competitors' blade systems. Users also will be able to run other non-compute blades—such as networking systems—in the chassis. However, while there is some customer interest, the new systems probably won't be able to run blades from others vendors, such as IBM and Hewlett-Packard Co.

Dell rolled out its first blade server, the PowerEdge 1655MC, in early 2002, but has not followed it up. Gottsegen said customers were demanding more from blade systems than simply smaller servers, and that they were concerned about the cost, which could run as much as 40 percent more than traditional servers. Dell also was concerned about the lack of standardization in the management software for blades and other smaller servers.

However, some customers interviewed earlier this year said they were anxious for Dell to come out with a new generation of blade servers. The 1655MC was powered by 1.4GHz Pentium III chips from Intel, and businesses looking to take advantage of the scale-out architecture for data centers were looking for such systems. Industry observers also said that the blade area was an area of weakness for the company.

While Dell was focusing more on its 1U and 2U (3.5-inch) systems, other vendors, particularly HP, of Palo Alto, Calif., and IBM, of Armonk, N.Y., were growing out their blade offerings. For example, HP—which recently announced it had sold more than 100,000 units—offers one- to four-way blade systems, and later this year will roll out blades powered by Advanced Micro Devices Inc.'s 64-bit Opteron processor.

IBM also offers a wide range of BladeCenter systems, including the JS20, that run on its own Power processors.

But Gottsegen said Dell is getting into the space at the right time. The blade market is still emerging, he said, but also is strong enough for the company to enter. Research firm International Data Corp., of Framingham, Mass., earlier this month predicted that by 2008, blade systems will be a $9 billion market and that the systems will represent about 29 percent of all units shipped.

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