What Is Dell’s Cloud Strategy?
I spent a lot of time trying to figure out Dell’s cloud strategy at DellWorld over the past few days. I think I might have figured it out, but I'm not really sure.
The announcement during the opening keynote was surprisingly lacking in emphasis on the cloud agreement Microsoft is investing so heavily in Azure. I was not alone in being puzzled by this treatment of the only big news held back from the flurry of announcements the day before.
In order to get some clarity, I spent a lot of time talking to Dell executives about who their target customers are, and what their vision of the future looks like.
Speaking Different Languages
I discovered that Dell is talking about cloud, but it’s not the way that cloud native people talk about cloud. Confused? Precisely.
What I refer to as cloud native types are the ones who are firm believers in AWS and its version of public cloud. This is the world of developers, zero-state applications that scale horizontally, and NoSQL. It’s a brave new world that is all about apps and not about servers. The clouderati.
When enterprise customers of their own. It's a redefinition of the market, and it makes certain assumptions about its structure over some assumed time period.
Dell is essentially positioning itself to provide all the components and assistance for the second tier cloud providers, as well as large enterprises, who want cloud-like interfaces to compute and storage, but don’t want to put all their data into AWS and friends. Dell also figures that those companies will prefer to buy from Dell, rather than to build their own servers as the hyper-scalers do, and that they won't be happy with the lower-end commodity gear for reasons including manageability features and failure rates.
Those are two very large assumptions.
Betting On A Vision
The clouderati are firmly in the camp that the vast majority of workloads will be on public cloud, with AWS as the major winner, and two, maybe three others with a significant market share, and a scattering of other, smaller players fighting over scraps.
Dell is betting that public cloud will only be a small to medium part of a much bigger market made up of a constellation of ‘cloud’ providers. These providers will add things to a base-model public cloud experience–perhaps greater service or extra features–that AWS doesn’t do. Organisations in Dell’s vision will keep a significant number of their workloads out of commodity ‘public’ clouds, and when they do choose public cloud, many of those workloads will be hybrids of cloud and something else. That something else could be on-site in an organisation’s own datacenter, it could be in a co-lo facility, or a managed service provider.
Cloud will be in the mix, certainly, but it’s won’t be the majority.
This is what I think is the underlying assumption for the decisions Dell is making about how to address the rise of public cloud. It’s not quite an inter-cloud structure, where workloads are free to move between multiple public and private clouds, like some sort of pan-global VMware cluster, but it could be the precursor to one. But that's a whole ‘nother discussion.
Speaking Enterprise Language
The way Dell is talking about their vision of cloud makes sense if you consider that they’re talking to their existing customers: the ones who buy their servers. Dell is talking to them in the way they’re used to, rather than immediately trying to ape AWS. If Dell did immediately start talking in the cloud-native way, their existing customers would be terribly confused because they’re not ready yet. The clouderati lament that large enterprises change slowly and “just don’t get it”, but if the clouderati are right about that, then that implies that Dell should do exactly what it’s doing. Why would Dell sell its customers on the AWS vision? Customers would just run out and buy AWS instead of Dell servers, and I don’t believe they’re that crazy.
What puzzles me is that Dell isn’t being really clear about their alternate vision of the future. Every CIO is being asked by their CEO and board what their plan is around public cloud. They need to have a plan for how much to use, when, and what for. I’m not sure customers are getting a clear message from Dell about this alternate vision of the future, and that makes it harder for them to factor it into their plans. It certainly wasn't made clear to me in the opening keynote, which seems like a perfect opportunity gone begging.
What Does Winning Look Like?
As for whether Dell will end up right about the structure of the industry, well, that all depends on the time horizon we’re talking about. It’s the structure of the industry right now: most workloads are not in public cloud.
Anyone who’s done a data migration or application re-platforming project will know that these things take time. What’s not clear is how much time will be needed. If it takes ten years for everything to move to public cloud, does that mean Dell was wrong? What about twenty?
What exactly does it mean for public cloud to ‘win’ and is that incompatible with what it looks like Dell wants to achieve?
The answer to these questions is still far from clear.
This article first appeared in Forbes.com here.