Michael Dell, CEO, Dell Computers, claimed that a broad shift to x86-based (PC) systems and automated management could trim $200 billion off the $1.2 trillion IT spending in North America. Following his own advice, Dell expects to save $200 million on his company’s own IT spending by the end of 2010.

Dell was speaking at OpenWorld 2009, the widely reported annual Oracle lovefest. Here is the mp3 link to a snippet of Dell’s talk. A larger snippet can be found here.

What Dell recites is the new catechism of the distributed commodity server age. You previously read about it here. It goes like this: Put your workloads on commodity PC servers and then use virtualization to consolidate them. The payoff: increased server utilization, lower energy costs, and a reduced server real estate footprint.

Many organizations large and small are buying into this. To an extent, it works as promised. However, there are some gotchas to this approach.

To begin with, the servers aren’t exactly cheap. These servers must be equipped with fast, multicore processors and lots of memory. Remember, Dell’s main business is selling servers like this, so he, essentially, is proposing that everybody rush out and buy lots of new, richly configured, Dell servers. Definitely good for Dell’s bottom line.

And you can’t stop with the servers. To get the full benefit, you need to virtualize and consolidate your entire IT infrastructure, including storage and network switches. There are advantages to virtualized storage, but again it will take an investment in new equipment. Dell sells this stuff, too.

This approach also requires new technical skills. Plan to train your IT people or hire people with these hot, in-demand skills. They don’t come cheap either.

Backing up the virtualized, consolidated environment has proven more difficult than expected. IT vendors are making headway, but it remains a work in progress. This is immature technology.

Ditto for management. Dell talks about automating management as the key to achieving the savings, and he is right. But again, management tools for virtualized, consolidated IT environments are just emerging. The ones that are available are immature, and they’re not cheap at all.

With the growth of cloud computing (discussed back in April here and in late August) and its related cloud-based services approach (software-as-a-service [SaaS], infrastructure-as-a-service [IaaS], storage-as-a-service [StaaS], and platform-as-a-service [PaaS] for application development), you may not need to invest in more servers at all. To the contrary, you might start getting rid of servers and applications altogether. In a few years, virtualized desktop devices and mobile phones connected to cloud-based services may be all that your organization needs. ###