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Dell To Provide ARM-Based Servers For Small Number Of Customers

By Shara Tibken Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Dell Inc. (DELL) said it will begin providing a limited number of customers with servers powered by ARM Holdings PLC (ARMH, ARM.LN) chips, becoming the latest hardware maker to offer systems using the low-power processors. Dell long has partnered closely with chip maker Intel Corp. (INTC) for its servers, and it earlier this month introduced new low-power micro servers using Intel's x86 chips. Micro servers--computer-hardware systems designed to save space and energy--are particularly popular among companies that buy servers in huge volumes to run popular consumer websites or to crunch a lot of data. Dell on Tuesday said it will be introducing servers with chips based on the ARM architecture that's common in smartphones and tablets. Such chips are expected to sharply reduce power consumption and cost, and some hardware makers have started experimenting with the processors in data centers. Dell won't be selling the servers at this time or making them available to its entire customer base, but it will allow some customers to test the systems to determine their benefits and drawbacks. Along with providing a small number of systems to certain customers, Dell also will be installing ARM-based servers in some of its solutions centers to allow additional customers to try the products. And it will give servers to key partners, such as big data technology provider Cloudera, to support development and build the ARM-based server ecosystem. "It's unclear what reality is--whether ARM is the best choice or an x86 processor is," Steve Cumings, executive director of marketing for Dell data center solutions, said in an interview. "That's why customers want to test the servers. The reason they specifically want to test ARM is to understand the reality of the advantages." The ARM-based servers from Dell come as competition heats up in the sector. Intel and Advanced Micro Devices Inc. (AMD) have dominated the market for server chips, but companies making processors based on ARM architecture increasingly are targeting the market. ARM chips typically are lower power than those from Intel and AMD, making them attractive to companies looking for energy-efficient products. Start-up Calxeda Inc. has partnered with Hewlett-Packard Co. (HPQ) to develop low-power servers using its chips. Dell also has been working with Calxeda, but its first ARM-based servers will use chips from Marvell Technology Group Ltd. (MRVL). Dell has worked with the company for a long time, Cumings said, and the company likes that Marvell's ARM license allows it to modify the chip to add features attractive to servers, such as increased memory capabilities. Marvell wasn't immediately available to comment. Meanwhile, Calxeda's vice president of marketing, Karl Freund, said his company is working with Dell to release servers using Calxeda chips, perhaps later this year. "We're going to do everything we possibly can to make sure it happens," he said. While ARM-based servers are essentially nonexistent today, the companies making processors for the industry hope to capture a large percentage of the market. Tom Lantzsch, ARM executive vice president of corporate development, estimates ARM-based chips could address more than 50% of the server market in about a decade. The Dell announcement is "really a critical milestone along a path we've laid out that we think will result in us being in large deployments in 2014," Lantzsch said. Intel, meanwhile, has said the micro server market could represent up to 10% of servers by 2015, with most of the systems using its chips. Intel spokesman Jon Carvill on Tuesday said the company continues to view micro servers as an "emerging opportunity" and it expects to continue leading the segment with its new chips this year. He added that Intel-powered micro servers already are shipping with several hardware makers and include "full server feature sets." ARM chips currently handle only 32 bits of data at a time, but 64-bit processing--standard in Intel and AMD chips--will be available for ARM-based processor makers in 2014. That allows servers to tap into much larger pools of memory. Dell's Cumings said that 64-bit capabilities are likely to boost sharply adoption of ARM-based servers. Dell believes micro servers, whether powered by Intel or ARM, could be about 15% to 20% of the market in the next few years, he said. Cumings added the company could go into production with the ARM-based servers very quickly if customers so desire. But he said the ecosystem has to grow more to appeal to companies. "If we see a ton of demand, we will take it to production," Cumings said. Dell shares closed Tuesday up 1.6% at $12.66, while ARM rose 2.5% to $23.82. Marvell slid a fraction to $13.05, and Intel increased 1.4% to $26.09. -By Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com

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