Apr. 6--NEW YORK--Dell Computer Corp. continued its migration from PC maker to provider of all things Internet on Wednesday, unveiling new hardware products and services aimed at those who provide access to the Web and others looking to get on board the e-commerce train.
Dell launched a line of Internet appliance servers, which are stripped-down servers aimed at performing specific tasks such as hosting Web pages or handling e-mail. The company also said it will begin offering its own e-commerce know-how to customers under a consulting partnership with Arthur Andersen and Gen3 Partners. The venture will be called "E"xpert Services.
"It's a shift in our business model," Chief Executive Michael Dell told a press conference at The Pierre, a Four Seasons Hotel across Fifth Avenue from Central Park.
Dell sees the company being pulled both toward the "core of the Internet" -- providing the servers and storage equipment needed for the infrastructure -- and the "outside" with PCs that allow users to access the Web.
Dell executives are in New York for the company's spring meeting with analysts, an April rite where they outline plans for the coming year for Wall Street analysts.
Dell is increasingly branding itself as an e-commerce company rather than simply a PC maker. Now the company is exploiting its success in selling its own products on the Web -- generating more than $40 million a day in sales. In recent advertising, Dell bills itself as the company that "knows how E works."
It has partnered with or invested in a number of young Internet-related companies that value both Dell's e-commerce knowledge and large customer base.
That's where the partnership with Andersen and Boston-based Gen3 comes in. Many have wondered whether Dell would start a consulting service, charging for e-commerce expertise that it previously offered some customers as a way to win and maintain business.
Dell doesn't plan to create a full-blown consulting division. That's why it's partnering with Andersen and Gen3.
"They already have an army of people trained and ready to serve this market," said Dell Vice Chairman Kevin Rollins. "We bring existing customers, and they bring knowledge about how to complete a consulting project."
Dell also announced increased technical support for Internet service providers, application service providers and Web-hosting businesses.
"This is less of a PC play and more of an Internet and services play," said Carl Howe, research director at Forrester Research Inc. in Cambridge, Mass.
Kurt King, an analyst at Banc of America Securities, said he doesn't expect the initiatives to have a big financial impact for Dell just yet, but it's a timely move typical of the company.
"Dell has the most flexible business model in the industry," he said. "When it sees an opportunity come up, it reacts quickly."
The announcements Wednesday are the latest in a series of efforts by the company to take advantage of the dramatic growth of the Internet as a business tool. In recent months, Dell has unveiled a targeted effort to sell its products to Internet service providers and application service providers, launched a Web-hosting service and purchased a data-storage company, ConvergeNet.
With the new server offerings, Dell is chasing the so-called Internet infrastructure market for the hardware and services that drive the Web, which is estimated by International Data Corp. to more than double to $370 billion by 2003 from about $124 billion last year.
Dell sees demand for hardware, especially by Internet businesses, increasingly moving toward Windows- and Linux-based servers that offer fast capabilities in small packages and away from Unix-based "legacy" systems made by Sun Microsystems, Hewlett-Packard and IBM.
What the appliance servers lack in breadth they make up for with speed. An Internet appliance running on Windows 2000, for example, would have Microsoft's operating system for servers but not its ubiquitous word-processing and spreadsheet applications, Word or Excel. Designed to do a few jobs quickly and efficiently, the servers are built for the behind-the-scenes heavy lifting required on Web sites.
Dell, the No. 2 server provider, is hoping to continue closing in on the leader, Houston-based Compaq Computer Corp. Both Compaq and IBM also have recently unveiled appliance servers, though at a base price of $1,899 for its announced PowerApp server, its first new server product in two years, Dell may characteristically undercut its competitors.
"We're hoping to move from the No. 2 to No. 1 server provider," said Mike Lambert, Dell's senior vice president for enterprise systems.
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(c) 2000, Austin American-Statesman, Texas. Distributed by Knight Ridder/Tribune Business News.
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