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Big Blue Takes on Dell on Price

IBM Corp. this week intensified a public relations battle against the notion that Big Blue means Big Bucks compared to Dell Computer Corp. when it comes to PC servers.

Using a total cost of ownership methodology borrowed from analyst firm Gartner Group, IBM claims major savings over Dell during a five-year period.

According to IBM, results of the tool show that a medium-sized business running generic applications on an IBM x220 could save up to $53,000 over a similarly configured Dell 1400SC server. IBM claims a savings of up to $550,000 over the same period at a large business.

Gartner calls its methodology a "return on availability" tool. IBM says it gets the results on the test because of new self-managing software it bundles for free in its servers -- an outgrowth of the Project eLiza initiative called IBM Director 3.1.

"What we're trying to do here is talk about real cost versus actual cost," says Jay Bretzmann, director of xSeries server marketing at IBM. "The smallest element of the cost of running servers is actual server purchase price."

Despite its reputation, IBM also tries to be price equivalent to Dell in the value server space and the rack server space, Bretzmann says. IBM charges a premium over Dell servers in the 4-way and above segments, Bretzmann acknowledges.

According to the IBM Web site on Thursday, the 2-processor-capable IBM x220 eServer starts at $849 loaded with a single 1 GHz processor and 128 MB of RAM.

The Dell system, also dual-processor-capable, was listed at $848 on the Dell Web site for a single 933 MHz processor and 256 MB of RAM.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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