If Dell were still a public company, Jyeh Gan’s server division probably wouldn’t exist.
That’s because customized work is a fact of life for the Datacenter Scalable Solutions group, for which Gan is director of product management and strategy. Facebook and Google famously designed their own hardware, tailoring it to the needs of their data centers. DSS is doing the same for the not-quite-hyperscale data center.
Gan’s team has been at this since April 2014, amassing more than 200 customers. It’s taken a lot of investment and a team whose size Gan won’t disclose. It’s the kind of long-term experiment that isn’t always tolerated at a public company.
But if it works, DSS — being introduced to the public via a Dell announcement on Monday — could spearhead new business among some of Dell’s largest customers. And as the needs of this market coalesce, DSS’ work could eventually inspire off-the-shelf products that target these large deployments.
Hyperscale’s Second Wave
These customers represent a growing category that Patrick Moorhead, lead analyst with Moor Insights & Strategy, calls the “second wave,” the next generation of data centers following the hyperscale model, including the penchant for customized hardware.
“This isn’t a niche. It’s a very large portion of servers,” he writes in an email to SDxCentral. “What makes it different is that they are looking for some unique things in reference to chassis, power, and cabling, as well as different ways of procurement and service, spanning from a contract manufacturer, ODM and OEM, and even in some cases, an SI [systems integrator].”
“Today it’s still mostly those guys and China,” Gan says. “These customers view their IT as their competitive advantage.”
DSS is meant to serve the next tier of customer, the operation that’s not hyperscale size but wants to behave that way. Candidates come from web services, telecom (especially in light of video streaming), and the oil and gas industry.
The big four hyperscale players mentioned above constitute about 12 percent of the $38 billion-a-year server market, Gan says, and he and Moorhead believe the second wave is bigger.
“I believe that this segment could constitute at least 15 percent of the server market, and 25 percent of what I would call large servers by 2017,” Moorhead writes. “It’s big and is getting larger, as the second wave has hired people and adopts many of the same techniques as some of the largest data centers.”
Along the way, the second wave is cultivating an appetite for equipment that isn’t available off-the-shelf. For example, low power is paramount to some users, making bare-bones versions of servers desirable.
One DSS customer goes so far as to ask that the hardware be delivered un-assembled. Requirements change so quickly that the customer wanted flexibility in deciding how a server rack is put together, Gan says.
Liquid cooling is another area where special needs arise, he says. Some companies in the oil and gas industry immerse servers in mineral oil to keep them cool — creating the need for a chassis that can survive the process.
Dell went private in 2013, a nearly $25 billion deal putting Dell in the hands of founder Michael Dell and private equity firm Silver Lake Partners.
The move gives Dell leeway to nurture its prospects in businesses such as services and software without having to worry about quarter-to-quarter growth. Dell can be more sanguine about the decline in desktop PC sales and instead steer its business toward new ground.
“I’ve been at Dell 16 years, and since we’ve become private, I feel like Michael’s challenged us to make quicker decisions,” Gan says.
Being privately held gives Dell the patience for DSS’ customized products. But that doesn’t mean DSS wants to be a custom shop forever. “Scalable, repeatable processes” are a focus for the division, Gan says.
And DSS’ work can lead to new off-the-shelf offerings. In fact, the first DSS-branded products will be released in the fall, Gan says.
DSS is focused on servers, but Dell has also worked on the networking side of hyperscale data centers, through partnerships with the likes of Big Switch Networks and Cumulus Networks. “We have dabbled in some SDN stuff,” going so far as to develop an SDN setup for a customer that needed it and found nothing suitable on the market, Gan says.