Michael Dell Says 'No' To Building A Public Cloud


If you're waiting for Dell to rollout a public cloud offering to compete with Hewlett-Packard, Cisco Systems, Amazon and Google, don't hold your breath. CEO Michael Dell said he has no plans on entering the jam-packed public cloud market.

"I think the public cloud is a crowded space, with lots of guys playing there," Dell said in an interview with CRN editors. "In terms of building a public cloud to compete with partners, we are not doing that at all."

Dell said the market is too congested with established players such as Hewlett-Packard, IBM, Amazon, Google and Microsoft along with new entrant Cisco, which recently announced a new public cloud initiative. Instead, Dell said, his company will focus on the on-premise cloud market and being a hardware arms dealer to companies building their own public cloud.

"We have taken a different approach here," Dell said. "Instead of competing with all of those service providers and telcos, we are enabling them. There are also a number of firms out there like OnApp that are integrating our hardware platform and allowing VARs to create their own cloud platform."

Dell partners say the current slugfest between tech Goliaths is only intensifying and that Dell is smart not to "bet the farm" on building its own public cloud and instead focusing its attention on the highly lucrative private cloud market. John Freienmuth, owner of J&J Technical Services, a Rio Rancho, New Mexico-based Dell partner said, "The public cloud market has received too much hype with too many companies throwing huge investments at creating their own public clouds. The market is saturated. The capital Dell would need to become a major player with the scale of its competitors would be staggering."

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Cisco, for its part, pledged $1 billion on building its own public cloud offering last month. IBM recently upped its public cloud game when it purchased SoftLayer cloud services for $2 billion last year and then followed up the acquisition by spending another $1.2 billion on expanding the network globally.

Dell said by not entering the public cloud fray, the company enables partners instead of competing with them. "There are a number of firms out there like OnApp that are integrating our hardware platform and allowing VARs to create their own cloud platform," Dell said.

Michael Dell said his company is focused on selling infrastructure into the private cloud space.

IDC forecasts worldwide spending on hosted private cloud services to surpass $24 billion in 2016. By comparison, IDC says global public IT cloud services spending is growing much faster and will reach nearly $108 billion by 2017. It's that market potential that is driving the current public cloud craze.

NEXT: Partners Say Dell Is Wise To Wait