January 2007: Michael Dell Returns as CEO

It’s probably no coincidence that Dell’s reboot began when company founder Michael Dell returned as CEO from his chairman position in January 2004, replacing his hand-picked successor, Kevin Rollins. During Rollins’ three-year tenure, the company remained a world leader in selling PCs but its market share started slipping; plus, the company was distracted by an SEC investigation into Dell’s accounting and financial practices.

Dell had been reselling and servicing EMC’s midrange storage arrays for years, and it had been a profitable arrangement for both companies. EMC’s salespeople were able to concentrate on selling to large international enterprises, and Dell, which was already a major influencer in the small and midsize business sector, was well set up for those markets. But the relationship was chilled by one of Michael Dell’s first big moves when he came back as CEO: buying scale-out storage company EqualLogic for the midmarket, because now Dell owned its own storage. EMC wasn’t pleased.

Dell moved a step beyond servers and storage when it joined EMC and Oracle to build a new monster data warehouse, which back then was a complicated, clustered-storage project that used to take months to deploy to full production. With all the new automated IT in it, this DW could be made operational in only weeks.

This was by far Dell’s biggest indicator that the company was moving into the IT services business. Perot added key services that expand Dell’s enterprise capabilities in servers, storage, software and data center infrastructure, and this acquisition remains the foundation of Dell’s data center services division to this day.

Any journey wouldn’t be a real one without a few missteps. With the iPhone hitting the market in 2007 and making an immediate impact, Dell thought it, too, should join the party by marketing its Mini i3 Android phone in 2010. The company was late to the market, the i3 didn’t catch on and Dell ended up dropping the whole idea for good in 2012.

2010 was a key year for Dell acquisitions. It made a significant move to new-gen data center IT when it acquired KACE Networks, which makes an application virtualization hardware and software package tailored to the requirements of midsize businesses. The Kbox Systems Management Appliance offers a list of features, including device discovery, system inventory and asset management. Enterprises also use Kbox for power management software distribution and operating system deployment as well as for its application security features.

Dell, now competing nose-to-nose in IT infrastructure with Cisco Systems, Hewlett-Packard and IBM, added Scalent’s V/OE, or Virtual Operating Environment, into its control software. Centralized data center control is what it wanted—and what it got. V/OE allows IT administrators to manipulate all the elements in the data center from a single Web-based console, provisioning and reprovisioning them as needed.

Dell needed another key part for its data center software strategy, and Philadelphia-based Boomi was it. Dell early on saw software as a service (SaaS) as the future of application delivery. Boomi makes a SaaS application integration platform called AtomSphere that enables easy transfer of data between cloud-based and on-premises applications.

Dell lucked into a good deal here. A few months prior, the company had been locked in a bidding war for 3PAR, which Hewlett-Packard eventually won for $2.3 billion. But Compellent also makes a good storage array, specializing in automated data management features, including tiering and thin provisioning. Its main product, Compellent Storage Center SAN, is a combination of data storage hardware and storage management software. With the Compellent merger, Dell was able to focus on data management, thin provisioning, and storage for cloud computing environments. Dell now had modeled all its new storage production on Compellent’s Fluid Data system.

Dell had dabbled a bit in the virtual desktop space in the past, but a new deal with longtime virtualization partners Citrix and VMware produced some new enterprise desktop virtualization packages with much-improved performance attributes. These desktop virtualization packages can be cloud- or locally-based and incorporate prepackaged services with pretested hardware and software.

Dell got into big data analytics via a new partnership with Cloudera, the first commercial implementation of the open-source data analytics package that came out of Yahoo’s R&D division in 2006. For its part, Dell supplies new-generation PowerEdge C servers and networking components, services, and its vast channel and sales networks to complete the new implementation.

Following Dell’s acquisitions of EqualLogic and Compellent, its EMC reseller arrangement was strained, to say the least, and didn’t make sense anymore. Dell and EMC officially became storage competitors following the end of a complicated 10-year partnership that was originally to run until 2013; Dell officially discontinued reselling all EMC storage products. This includes Dell-branded EMC OEM and resold EMC storage products, including CLARiiON, Celerra, Data Domain and VNX.

The estimated $1 billion acquisition of SonicWALL gave Dell a new and powerful set of products and services to compete with Cisco Systems, Juniper Networks and HP in the enterprise switching and services business.

Dell made a strategic international software development community move when it announced a partnership with Ubuntu Linux provider Canonical to support Dell’s own OpenStack-Powered Cloud solution worldwide. Previously, the companies had made the solution available only in the U.S.

This deal is not all about thin clients, for which Wyse is well-known. Wyse also has come up with some respected cloud management software over the last few years that plays largely into this transaction, and Dell thought highly enough of Wyse to want it for its own catalog.