"Dell's been working for some time to develop a management platform for servers, and this is it. It's an effort to increase customer satisfaction and in so doing improve Dell's ability to win business from competitors such as HP," Spooner said.

Customers so far have had to rely on third-party system management software on Dell servers, and with DMC, Dell has a response to HP's OpenView and IBM's Tivoli offerings, said Charles King, principal analyst at Pund-IT. However, Dell still has a number of steps to take before becoming a real threat to IBM and HP, which offer big-iron products such as Unix servers and more expansive integrated offerings.

Relying solely on x86 platforms will ultimately limit Dell's ability to effectively compete with HP and IBM in the high-end server and mainframe arena, King said. Dell might fill that product hole through acquisitions of smaller vendors, but that is unlikely to happen. Dell may be feeling pressure to jump into the high-end space, but it won't neglect its base in midrange and low-end servers, King said.

To that effect, the company on Wednesday introduced new PowerEdge servers, which will use Intel’s next-generation Xeon processors, designed to increase system speed and performance per watt of power consumed. The servers will also put system management and diagnostic capabilities into embedded chips. Servers usually ship with installation software on CDs, but the software will now go on the chip instead.

Dell is the second-largest low-end and midrange server vendor worldwide, behind HP, according to IDC. The new servers could help Dell gain market share if it can beat both IBM and HP on price, King said. IT budgets are flattening due to the recession, and Dell can deliver value to customers with the price advantage it already has, he said.