The strategy is typical for Dell, said analysts, who expect Dell to strike it rich in the server appliance market. Dell executives see the market as mature enough to introduce a product with a good chance to succeed but young enough that the company can dictate the market's growth. But once they do, they quickly use their efficient manufacturing and distribution to roll over competitors. If Dell takes the plunge, it will dive into one of the fastest-growing hardware markets. Market researcher Dataquest forecasts 2.9 million server appliances will be sold this year, 3.7 million in 2001, 5.1 million in 2002 and 7.3 million in 2003.
Big markets mean big money.
Dell is expected to unveil the product before mid-April, sources familiar with the product said. As recently as two months ago, PowerApp was the leading candidate for the server appliance name, but that could change before it is introduced, sources said. A Dell representative declined to comment on any product plans but strongly hinted that Dell is preparing a significant announcement for the end of the month. Dell s strength as a successful seller online is likely to appeal to ISPs and their customers, say analysts. If anyone knows online transactions, it s Dell.