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The blade bloodbath
July 06, 2005
The time it takes for a new, premium IT product to turn into a cheap commodity grows ever briefer. Latest exhibit: blade servers. The early movers, like IBM and HP, were able to charge a premium price for their blades, telling customers they'd eventually recoup the costs through space, energy and management savings. Then, last November, Dell belatedly brought the full force of its familiar, low-cost strategy to the market. Already, as David Berlind reports, the price premiums are evaporating as IBM and HP struggle to defend their market shares against the Dell onslaught. Berlind says he hears that "it's a marketshare bloodbath behind closed doors and that IBM and HP are offering steep discounts off their street prices."
"In the long run," Michael Dell once said, "all technology tends toward low-cost standards." And that's a good thing.
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