Dell Cuts Prices for Enterprise Products

by Timothy Prickett Morgan

Just after Hewlett-Packard announced in its financial results that it might have cut prices a little too low on certain products in the most recent quarter and therefore missed profit targets, rival Dell rubbed a little salt in the wound by announcing price cuts across its whole line of enterprise products. Dell also cut prices on some consumer products such as laptops.

Dell's biggest price cut is aimed right at HP's belly, where it cut prices on the four-way PowerEdge 6600 tower servers by $2,800, a 22 percent price reduction. The PowerEdge 6600 uses Intel's "Gallatin" Pentium 4 Xeon MP processors running at 2 GHz, 2.5 GHz, and 2.8 GHz; the machine supports up to 32 GB of main memory and has eight drive bays. This is a core midrange Wintel and Lintel box, and is a suitable class of production machine for millions of businesses. Prices on rack-mounted PowerEdge servers were as much as 10 percent. To keep the heat on, Dell is also offering instant rebates across the PowerEdge server line that range from $100 to $500 above and beyond the price cuts it announced last week. Prices for base rack-mounted servers range from $899 for a PowerEdge 650 (a 1U machine that has a single 1.8 GHz Pentium 4 processor) to $1,599 for a PowerEdge 2650 (a two-way, 2U machine using the "Prestonia" Pentium 4 Xeon DP chips).

On the corporate desktop front, Dell sliced prices on Optiplex desktop computers by $50. (That may not sound like a lot, but these boxes have very low prices and $50 can make the difference between Dell making a tiny bit of money on a PC or losing money.) Dell cut prices on certain models in the Precision workstation line by $500. HP said that it had underpriced some desktop machines and had shortages of flat-panel displays, so Dell dropped prices on Dimension desktops by 6 percent and cut Inspiron laptop prices by 3 percent. It also dropped the prices on flat-panel displays by 20 percent.

In addition to the price cuts, Dell announced that it will begin shipping Red Hat Enterprise Linux ES, the lower-cost implementation of Red Hat's Advanced Linux Server, on its PowerEdge server line. Dell will ship it on PowerEdge 1650, 2650, and 4600 servers--and not on the entire PowerEdge line. Customers buying other Dell machines have to acquire the software and have Dell burn it on the machines, or buy the software and do it themselves.

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