Dell Plots Public Cloud Provider Push, Does It Have The Chops?

Dell is mounting a major cloud computing offensive to take on Amazon and other public cloud providers with the launch of its own end-to-end public cloud computing play.

In a not-so-subtle tweet, Logan McLeod, Dell's cloud strategy director, vaulted Dell into the public cloud space and hinted that Dell is moving beyond its private cloud and server roots to become a full-on public cloud service provider.

"Dell as a public cloud end-to-end service provider? Yes. IaaS [and] PaaS. Coming soon. Dell DC near you," McLeod wrote from his Twitter feed about Dell throwing its hat into the public cloud ring. McLeod offered no additional information.

Dell would not clarify McLeod's tweet, but in a statement e-mailed to CRN the company said it "has already disclosed our plans to support Microsoft Azure to develop and deliver public and private cloud services to customers. We look forward to sharing more information at the appropriate time." Dell did not provide additional information.

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Under Dell's partnership with Microsoft, Dell Services will implement the limited production release of the Windows Azure platform appliance to host public and private clouds for its customers and provide advisory services, application migration, and integration and implementation services. Dell will also work with Microsoft to develop a Windows Azure platform appliance for large enterprise, public and hosting customers to deploy in their own data centers, which will leverage infrastructure from Dell combined with the Windows Azure platform.

Dell's partnership with Microsoft, however, is not a full, end-to-end Dell public cloud solution complete with IaaS and PaaS as McLeod's tweet promises. Becoming a full-fledged public cloud and hosting provider with true Infrastructure-as-a-Service and Platform-as-a-Service in addition to its current private cloud placement would be somewhat of a departure for Dell, which has largely played in private clouds, and solution providers and industry watchers wonder if the tech superpower can hack it in a market that, while young, is already fairly established by the likes of Amazon, HP, IBM, Rackspace and myriad others.

"On the surface, it just seems like a me-too kind of play," said Tony Safoian, CEO of North Hollywood cloud solution provider SADA Systems.

If Dell were to launch a full set of public cloud services and hosting offerings it would be under intense pressure to differentiate itself from the pack. And Safoian said he doesn't see any clear differentiators.

Safoian added a Dell public cloud service could be a move on Dell's part to recoup some of the services revenue that is slipping away as companies shift to the cloud.

"This is a play that could increase services revenue that the cloud is eating into," Safoian said. "It's sort of a me-too to stay relevant and, if successful, bring back some revenue they're losing to the cloud paradigm shift."

But Safoian said Dell is already at a major disadvantage; getting into the public cloud late in the game is a daunting task. Just ask some of Dell's competitors. "Even Microsoft is seeing how it'll be tough for them," he said.

Next: Dell Looking To Compete With HP, IBM In Cloud

But some industry watchers say Dell making the shift into the public cloud makes sense, and is a natural progression as it sharpens its cloud claws.

Bob Venero, CEO of Hollbrook, N.Y.-based solution provider and Dell partner Future Tech, stopped short of calling Dell’s public cloud foray a me-too play and called it a ’Dell-too’ offering. He said Dell, and its competitors, have large captive audiences, or captured environments where they already have a strong presence, into which they can sell cloud solutions. That being the case, it only makes sense for Dell to bulk up its cloud offerings as ’cloud becomes a huge part of its future strategy.’

’Dell is going to play in the corporate cloud environment. There’s no question they’re going that way,’ Venero said, adding that he’d call a Dell IaaS and PaaS play a ’quasi-public cloud scenario.’

But Venero said if anyone can crack into the quasi-public cloud -- quasi-public because large enterprises are going to have a mix of applications in both public and private clouds going forward -- Dell can.

’They have the client base to do it, the ability to stand up the infrastructure and they’ve got the sales force on the street,’ he said.

Paul Burns, president of Neovise, a cloud computing analyst firm, said he was "somewhat surprised, somewhat not" in Dell's potential public cloud and hosting provider plans. Burns said IBM and HP have offered hosting services for years that they keep somewhat quiet as to not compete openly with their hosting provider customers and the channel. Dell will have to be equally as careful to not enter into direct competition with its cloud providers and cloud customers with a public cloud offering and hosting services.

"So, for Dell, I would expect the same model: Cloud-based IaaS that is targeted to many of their customers via services engagements," Burns said. "But I would not expect a big or separate Web presence going after IaaS generically. That would surely upset a number of their cloud hosting service provider customers that spend a lot on Dell servers."

Burns said Amazon and Rackspace have a large enough market share in public cloud that Dell's entrance into the market wouldn't impact them too much. It could, however, affect some of the smaller cloud players. Burns added that data center infrastructure powerhouses like HP and IBM may be Dell's biggest competition.

"But it is a huge and growing market, and I wouldn't expect Dell to target the broader market -- just their own direct enterprise customers, and particularly those with whom they have service engagements," Burns said. "I would view their competitors more as HP and IBM as other data center infrastructure providers. I would also see other professional services/managed service providers as their competitors."

Over the past several months, Dell has been pushing hard to establish a foothold in the cloud game. The company made its first big splash in the cloud market in March when Dell launched its official cloud computing strategy with a host of products and services, including cloud specific servers and integrated solution stacks, service and hardware to ease cloud deployment and management of cloud environments. Dell's cloud play features a turnkey private PaaS solution.

Dell has also made a series of strategic acquisitions that bulk up its cloud computing muscle. In November, Dell bought Software-as-a-Service (SaaS) application integration provider Boomi and its AtomSphere Technology that helps VARs and end users move data and applications between cloud and on-premise systems. This month, Dell scooped up SecureWorks, a security-as-a-service provider with offerings that include managed security, security and risk consulting and threat intelligence. And in November 2009, Dell acquired Perot Systems, which brings to 36 the number of Dell's worldwide data centers.

Next: Dell Predicts Blurring Of Public, Private Clouds

More recently, Dell said it will soon leverage its stable of VARs and solution providers with key cloud services offerings available via the channel.

And further fueling the rumors of a Dell striking while the public cloud iron is hot is a blog post in which Dell Cloud Evangelist Barton George said he foresees the distinction between private clouds, where Dell currently plays, and public clouds dissolving.

"In much the same way that we really focused on distinctions between Internet, intranet, and extranet in the early days of those technologies, there is perhaps an artificial level of distinction between virtualization, private cloud, and public cloud. As we move forward, these differences are going to melt away, to a large extent," George said in the blog post featuring excerpts from an interview he did with the Microsoft Windows Azure Team blog.

"That doesn't mean that we're not going to still have private cloud or public cloud, but we will think of them as less distinct from one another. It's similar to the way that today, we keep certain things inside our firewalls on the Internet, but we don't make a huge deal of it or regard those resources inside or outside as being all that distinct from each other," George continued.

As the line between public and private clouds continues to blur, it raises the question of whether Dell will launch its public cloud service organically, if it will make another acquisition or if it will partner with an existing cloud provider. For example, Dell could team with Joyent, with which Dell already works closely, or leverageRackspace's OpenStack open source cloud computing initiative, in which Dell was an inaugural partner. Burns said Dell will likely partner in building its public cloud provider offerings, as building cloud management software from scratch would be difficult and expensive. Burns predicts that Dell would utilize its own data centers and not acquire to get into the IaaS game.

And while IaaS may be a true possibility, Burns said he's not convinced that Dell would have a compelling PaaS story. Where IBM has Websphere and a host of middleware options, Dell offers nothing in that vein. Dell will most likely offer services on top of IaaS and call it PaaS or create PaaS extensions on top of its infrastructure offering.

Either way, Dell's public cloud strategy will require a delicate balance to not create conflict with its customers and cloud providers, Burns said.

"They can do it. Definitely. Should they? Probably," Burns said.