UPDATE 1-Dell confident on server momentum

* Exec says benefiting from a shift to x86

* Unveils new servers for large cloud computing ecosystems (Recasts with market share material from interview; adds byline)

By Gabriel Madway

SAN FRANCISCO, March 24 (Reuters) - Dell Inc DELL.O said it was confident it would continue to take share in the server market, as the company announced new servers designed for large cloud computing environments.

Steve Schuckenbrock, president of Dell's large enterprise business, said Dell would could continue to benefit as users shift move from competing platforms to x86 servers.

"Customers are moving to x86 infrastructure... we're going to continue to take advantage of that," he said in an interview on Wednesday.

Dell only makes x86 servers, low- to mid-range servers based on standard industry components.

The company is the world's No. 3 server vendor by revenue, with an 11.5 percent market share in the fourth quarter of 2009, according to IDC.

Although Dell badly trails International Business Machines Corp (IBM.N) and Hewlett-Packard Co (HPQ.N) in the server market, Dell gained share and outperformed both rivals in the October-December period by growing sales 4.5 percent, according to IDC.

Schuckenbrock said the company has picked up some sales due to the uncertainty around Oracle's ORCL.O acquisition of server vendor Sun Microsystems.

Dell on Wednesday unveiled its new PowerEdge C-series servers, which are targeted at dense, complex cloud computing environments such as Web service providers, social networking firms like Facebook, and those building "private clouds" that are used internally by individual companies.

Dell did not reveal the pricing for the new servers, which will be bundled with services to help manage clouds.

The so-called cloud refers generally to accessing applications or information stored remotely on servers in data centers, rather than locally on a personal computer.

The bulk of Dell's revenue still comes from PC sales, primarily to businesses, but the company has been trying to diversify into more profitable segments such as services and software.

In its most recent quarter, Dell was hurt by the margin performance in its consumer business, due in part to a larger mix of low-cost PCs. [ID:nN24236287]

But Schuckenbrock said the large enterprise business has made big strides in profitability.

"We weathered a heck of a hard economy in the first half of last year but if you go to the second half of last year you saw good steady margin progress quarter after quarter," he said.

Dell has formed a separate unit for communications devices, and the company is prepping to rollout its first smartphone in the Unites States with AT&T (T.N), the Aero. It has also shown off a 5-inch tablet device, although it has not yet made any produce announcements. [ID:nN22192315]

Schuckenbrock said devices such as tablets are not just for consumers, and have a range of uses and applications for business customers.

"We're going to bring some pretty interesting things to market and it will stun you," he said. "It's not just the device, it's a device integrated with an application that potentially solves a particular pain point for customers," he said.

Shares of Round Rock, Texas-based Dell fell 1.5 percent on Wednesday to close at $14.99 on Nasdaq. (Reporting by Gabriel Madway; Editing by Richard Chang and Tim Dobbyn)