Forget EMC-VMware Cloud Services, Dell Teams With Microsoft On Azure-In-A-Box

One day after EMC-VMware unveiled a cloud services business unit, Dell rolled out a hybrid cloud solution co-engineered with VMware rival Microsoft that provides customers a flexible Azure-in-a-box-based cloud solution starting at $9,000 a month.

The new system, which was introduced at Dell World by Dell founder and CEO Michael Dell and Microsoft CEO Satya Nadella, puts into sharp focus the open systems technology high wire that Dell will have to walk in the wake of its pending $67 billion acquisition of EMC.

The new Azure service comes on the heels of the launch of the new 50-50 EMC-VMware-owned business unit, anchored by EMC's $1.2 billion acquisition Virtustream, which competes directly with Microsoft Azure.

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[Related: CRN's Coverage Of Dell World 2015]

Both Nadella and Dell voiced support for a hybrid cloud world where customers will have many choices for competing cloud services.

"We see a world of many clouds," Dell told the Dell World audience. "There are public clouds. There is Software-as-a-Service. There are private clouds and on-premise workloads. If you look at the enterprise workloads, you have about 160 million of these in the world. Roughly 10 [million to] 15 million of them exist today in what is known as the public cloud."

When asked about the new EMC-VMware cloud services business at Dell World, Michael Dell said: "We're separate companies for now, but we're comfortable with the steps that are being taken."

Nadella said he also sees a vibrant hybrid computing world. "Michael talked about all the other things that he will do along with EMC but we believe that by providing the choice that speaks to the realities of our customers, we will not only drive our partnership and our success but, more importantly, address the needs of our customers," he said.

Nadella said the Azure-in-a-box cloud system "democratizes" the cloud, making cloud technology available to smaller businesses and customers moving to cloud for the first time. The system underlines Dell's argument that "in the future the hybrid model will rule supreme," as well as Dell's commitment to openness and willingness to work with a varied and often competitive set of technology partners.

For example, the system comes with Microsoft HyperV off the shelf, but if a customer wants VMware or another product for virtualization, Dell will make that happen, too, the company said.

"The real world needs that flexibility. That's the kind of future we envision, and we have it now," Nadella said. "This brings hybrid computing to really everyone," Nadella said. "This is the way to deliver hybrid computing to customers."

"We've delivered a number of larger solutions to the world's largest companies," Dell said. "This brings the power of Azure to the hybrid cloud environment and with Dell Financial Services, it turns CapEx into OpEx. It's a great way for companies to enter the next stage."

Dell partners at the conference were optimistic about the system.

"Customers want to test everything, and this gives them the opportunity to test and, once you feel comfortable, you can move to more," Guru Moorthi, CEO of Dallas-based Dell partner Virtual Tech Gurus, told CRN.

"There's a lot of human psychology involved," Moorthi said. "We talk a lot about how to talk to customers and take them from a legacy hardware mind-set to a more cloud, automated mind-set."

The system is designed as a smaller version of the Dell Cloud Platform System Premium, a Dell-Microsoft co-engineered solution designed for the enterprise, hyper-scale customers and large installations.

Jim Ganthier, vice president of engineered solutions and cloud at Dell, said channel partners would be "completely enabled to exploit this partnership." Dell is also offering customers some financial flexibility.

The new system can be purchased using Dell's Cloud Flex Pay, the company said, which allows customers to start using the system immediately and figure out how they're going to pay for it based on how they use it over a six-month period.

To start, the system costs $9,000 a month for the first six months with no liability or capital equipment on customers' books. After six months, customers can extend that deal for another six months, pick a payment option based on usage, purchase the system outright or return it without penalty, Dell said.

Dell Cloud Platform System Premium comes with a rack of 32 nodes and can grow to four racks of 128 nodes. The new Dell Hybrid Cloud System for Microsoft, intended for small enterprise, starts with four nodes and can grow to up to 16 nodes.

Strategically, Dell is betting on hybrid cloud -- a mix of public cloud and private, on-premise -- as the "end state" for many customers that aren't considered hyper-scale and don't require large installations, Ganthier said in a recent webcast for journalists and analysts.