Dell to Spend $1 Billion to Grow Cloud, Virtualization Capabilities

Dell is looking to become a larger player in the highly competitive cloud-computing field, where such stalwarts as HP, Microsoft and Amazon already have strong footholds.

Dell is investing $1 billion in its current fiscal year in new data centers, solution facilities and technologies designed to broaden its capabilities in such areas as cloud computing, virtualization and converged infrastructure.

Dell's strategy, announced April 7, includes building 10 new data centers over the next two years-which will be spread out around the world-including the United States, Asia and Europe-that will be stocked with Dell equipment and help customers adopt and deploy desktop-virtualization and cloud-computing environments, either on their own premises or hosted by the OEM. Through the data center, Dell eventually will offer cloud services based on Microsoft's Azure platform.

In addition, Dell officials plan to open 12 Global Solutions Centers this year, plus another 10 over the next 18 months, where customers will be able to learn about Dell offerings and work with Dell experts to figure out which technologies work best within their budgets.

As part of its aggressive cloud-computing/virtualization push, Dell also is rolling products and services designed to make it easier for businesses to adopt cloud-computing models. Key among those is vStart, a pre-assembled hardware and software package of Dell PowerEdge servers, EqualLogics storage and PowerConnect switches that can be delivered as a single unit and easily deployed with initial deployment services from Dell. Each vStart package will enable businesses to immediately run 100 or 200 virtual machines. Eventually, Dell will offer vStart packages that provide virtual-machine capabilities below 100 and above 200, according to Steve Schuckenbrock, president of Dell Services.

Dell's vStart initially will support VMware virtualization technology, but over the next few quarters will expand the number of hypervisors it will offer.

"Customers are really now more interested in buying [virtual machines] than they are in buying physical hardware that they have to put together," Praveen Asthana, vice president of Dell's Enterprise Solutions and Strategy unit, said during a press conference April 6. "Customers spend far too much time integrating and trying to optimize software for deploying virtual machines."

Dell's announcements are part of a larger strategy to grow beyond its roots as a PC and server maker and become more of a solutions provider, with an emphasis in such areas as virtualization and cloud computing. Dell officials have been aggressive in buying companies that enable it to grow its capabilities rapidly, including several storage technology vendors and services firm Perot Systems.

However, it's moving into a highly competitive field. Dell's large OEM rivals, such as IBM, Hewlett-Packard and Cisco Systems, all are pushing converged infrastructures, as well as data center and cloud services. In addition, as Dell looks to become more active in cloud computing, it will run up against public cloud giants like Amazon Web Services, Microsoft and Rackspace.

During the April 6 press conference, Schuckenbrock said that Dell's new data centers would be primarily focused on hosting customers' data center infrastructures. Dell is committed to bringing in the appropriate staffing, and he said that while Dell's ambitions are large, the company has experience in cloud computing. He pointed to the OEM's Data Center Solutions business as a proof point.

"You've seen some of the things we've done with our DCS business, and you can expect to see that kind of architecture with a highly scaled-out infrastructure," he said. "I think we've proven our ability to do hyperscale data centers that support some of the largest cloud capabilities in the world."

Dell's new data centers will "largely be modular and oriented toward hosting cloud capabilities, whether it's desktop as a service or private and public cloud capabilities," Schuckenbrock said.

Along with the data center and solution-center build-outs and the vStart offering, Dell officials also announced a three-year partnership with Microsoft that is designed to help businesses more quickly get up and running with virtualization and cloud technologies. They'll be offering management solutions based on Dell's Virtual Integrated System and Advanced Infrastructure Manager, and Microsoft's System Center. The virtualization offerings will be based on Microsoft's Hyper-V.

Dell also showed off a new email and fire archive solution, which includes a pre-configured reference architecture, ongoing maintenance and support, and storage products that offer high scalability and ease of use.

The OEM also is expanding its desktop-virtualization capabilities, offering a portfolio that includes pre-packaged services, and configured and tested hardware and software for fast deployment. With its desktop-virtualization solutions, Dell also is looking to accelerate the time it takes for businesses to implement a desktop-virtualization solution, and to support any computing endpoint anywhere.

"We do a lot of the pre-work for customers" in cloud and virtualized environments, Schuckenbrock said.