Dell EMC's 'Embrace and Extend' Cloud Strategy Coming into Focus

NEWS ANALYSIS: AWS, Microsoft, Google and IBM provide compute, storage and networking infrastructure and a platform to abstract away needless details from developers. Dell EMC comes from a different perspective.


LAS VEGAS—If Cloud 1.0 was Amazon renting out its spare servers, and Cloud 2.0 is all about container-based and cloud native applications, then enterprises need to get ready for Cloud 3.0. The next-generation of cloud will be something that goes beyond technology to a business operating model. Or as Dell EMC calls it, "IT-as-service."

"The cloud operating model, to be able to provision services, deliver applications and charge for services as they are consumed, that is the cloud," said Dell EMC President David Goulden at a panel of executives at Dell EMC World here this week. "Once you start with that view of cloud, then the whole IT landscape is moving to a cloud operating model. It's not just about public cloud or private cloud, it's a combination of all of them."

In other words, all the major public cloud providers—AWS, Microsoft, Google and IBM—are providing compute, storage and networking infrastructure and a platform to abstract away needless details from developers. Dell EMC, sensing the desire of most of its customers to retain at least some on-premise applications and data, are building the same platform, but from a different perspective.

Building a Cloud 'from Inside Out'

Rather than go all-in to the cloud, officials said, the cloud operating model must be built from the inside-out. “We want to help customers transition their existing on-prem environments into a hybrid cloud, a big piece of which is the private cloud. We want to embrace the public cloud as part of that, to extend it,” Goulden said.

In this second Dell EMC World conference since the two companies finalized their merger last fall, there was plenty of nuts and bolts data center announcements. Dell EMC has refreshed its entire infrastructure line, including PowerEdge servers, flash storage arrays, converged systems and network switching.

But all of those products are a means to an end, which is Dell EMC's strategy around the future of the cloud and the data center. Forget what you already know about public, private and hybrid cloud models, officials are telling customers, because what is most important is the applications that will be needed to be developed for companies to compete in the digitally transformed world. Users can't build tomorrow's applications on yesterday's infrastructure.

A big part of that strategy is the "Developer-Ready Infrastructure," announced here, which a tight integration between VMware's software-defined data center products such as vSphere, NSX networking and VSAN storage, and Pivotal, Dell's growing platform-as-a-service (PaaS) product business.

Hybrid Cloud a Priority, but Public Cloud Still Important

Despite Dell EMC’s focus on the core enterprise data center, the public cloud still is an important piece for the company, and a key enabler is the Pivotal Cloud Foundry PaaS. “The lead public cloud partners for Pivotal are Microsoft and Google, and the lead public cloud partners for VMware are Amazon and IBM,” said Pat Gelsinger, CEO of VMware. “As those grow, our business is growing with them, but we truly believe the right answer is a hybrid multi-cloud strategy going forward.”

One Dell EMC customer who can speak about the pains of transformation is Ted Newman, Head of Cloud Services for Royal Bank of Scotland. RBS is in the middle of a massive transformation in which it is on its way to cutting the number of applications it manages by two thirds as it refocuses its portfolio in order to free itself "from the shackles of the mainframe and [IBM] DB2."

At this point, however, RBS's strategy has little to do with the cloud technology, and everything to do with improving internal IT and development processes and making them responsive to the business.

"We are trying to move towards being customer service centric organization," Newman said, which includes things like asking application owners what they want rather than forcing an inflexible infrastructure on them. "We are trying to take little chunks of irritation out wherever possible, but it is quite the undertaking."

Gelsinger: 'Objective is to Make Infrastructure Frictionless'

Dell EMC has a lot of customers telling the same story. Those customers are learning the “why” of cloud—agile, automated, repeatable, and CAPEX focused—and then determining which is the best environment for each workload or application before deciding whether they need new hardware solutions. “Fundamentally our objective is to make infrastructure frictionless—independent of location and independent of state or class of application that's running on  top of it,” Gelsinger said.

This is not to say that, once embracing the cloud mindset, the choices for enterprises will be easy. For instance, customers still have to wade through the dozens of options Dell EMC offers for its matrix of cloud models, which depend on the type of application—mission critical, general or cloud native—and where it runs—on premise, across clouds or in the public cloud.

One path is Dell EMC’s converged products—VBlock, VxRack and VxRail—which provide the “Easy Button” for users—curated solutions depending on the application, requirements and skill sets of the customer, said Chad Sakac, President of Dell EMC’s Converged Platforms Division.

Others may choose to extend from their existing VMware environments, with Dell EMC’s Enterprise Hybrid Cloud. Yet another option is Virtustream, Dell’s public cloud subsidiary whose specialty is mission critical applications such as SAP. Virtustream also announced a new Healthcare Cloud at the conference.

Dell EMC Wants to Do It All

Whatever the choice, Dell EMC says it has got customers covered. And yet it is far from done creating different kinds of Easy Buttons for building out the cloud operating model. It is thinking bigger than that.

“With VxRack we have the first generation of loosely disaggregated systems with programmable API interfaces,” Sakac said. “What I dream of how do we take the idea … and make it richer.” The long term vision is an “open Dell Technologies standard about how you program everything that comes from us—everything.”

Scot Petersen is a technology analyst at Ziff Brothers Investments, a private investment firm. He has an extensive background in the technology field. Prior to joining Ziff Brothers, Scot was the editorial director, Business Applications & Architecture, at TechTarget. Before that, he was the director, Editorial Operations, at Ziff Davis Enterprise. While at Ziff Davis Media, he was a writer and editor at eWEEK. No investment advice is offered in his blog. All duties are disclaimed. Scot works for a private investment firm, which may at any time invest in companies whose products are discussed in this blog, and no disclosure of securities transactions will be made.

Scot Petersen

Scot Petersen

Scot Petersen is a technology analyst at Ziff Brothers Investments, a private investment firm. Prior to joining Ziff Brothers, Scot was the editorial director, Business Applications & Architecture,...