Dell returns to college with life sciences strategy

Dell Computer Corp. will announce a new program next week aimed at giving the company a foothold in certain knowledge domains, including the life sciences.

Called the Dell Center for Research Excellence, the initiative rides on partnerships with universities and research centers. The first, with the State University of New York in Buffalo, will be announced Tuesday by Dell founder and CEO Michael Dell, who will bless the school's new supercomputer consisting of a Dell server cluster.

The initiative signals Dell's realization that the life sciences and drug discovery markets are worth more attention. While Dell won't create the equivalent of an elaborate 250-strong life science division like IBM Corp., it's making a harder push into high-performance computing and academia, where the life sciences are firmly rooted.

Besides life sciences, the Dell Center for Research Excellence will focus on geophysics and seismic processing (for petroleum exploration); mechanical design, and financial services.

"Dell does not have domain knowledge in those particular areas," according to Randy Groves, vice president and co-general manager of Dell's Enterprise Systems Group.

While a Dell spokesman declined to talk about more specifics of the program, it includes funding graduate student research among other things.

Dell currently has 3 of the top 500 supercomputers in the world, according to the TOP500 list compiled by the University of Tennessee and University of Mannheim in Germany. "There'll be more than that by November," Groves promises.

Still, Dell faces an uphill battle in the supercomputer market, which according to the 19th TOP500 list released in June is dominated by Hewlett-Packard Co., with 168 spots, and IBM close behind with 164. Still, Dell counts Harvard University, Washington University, Georgia Tech, and the universities of Alabama, Nevada, Pennsylvania, and Missouri/St. Louis as customers for its server clusters, according to Groves.

Dell is also making "targeted acquisitions" to bolster its presence with knowledge domains. The first of these acquisitions was Plural Professional Services, a business and technology consulting services firm based in New York. However they will be more horizontally focused, as reflected by Plural's broad Windows practice.

But Dell, which preaches and practices a low cost of operations strategy, will not spend heavily to create a life science division like IBM's or Hewlett-Packard's. Neither will it begin to create anything approaching IBM's peerless research organization.

Rather, its overriding goal is to get 50 percent of revenues to come from services and enterprise products such as large servers and storage units. Currently, it generates 20 percent from enterprise products and 10 percent from services (mostly after-sale support).

However, when Dell has dipped its toe in the water before, its low-cost direct sales approach has usually been the business model to beat.

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