Dell To Integrate Technology, Licensing, Service, Cloud Across All Storage Lines

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Dell's plans for 2012 include storage innovation beyond the technology. The company is also in the process of unifying the pricing methods and services programs it inherited with some of its acquisitions.

"Dell sees the opportunity to change the way people buy storage just like Dell did with servers," George said.

With its acquisitions of EqualLogic and Compellent, Dell inherited two unique software licensing models, each of which has strong adherents among Dell's solution providers.

With EqualLogic, the purchase of a software license includes every feature available. And, as new features become available, they are automatically included in the license as long as the contract is maintained.

Compellent, on the other hand, offers perpetual licensing of software so that, if a customer upgrades the hardware, there is no requirement that a new software license be purchased.

Dell is currently exploring the possibility of converging the two licensing models, George said. "We are looking at consolidating them into a new Dell software license for storage," he said. "We want to take the best features of both models for a common license that would work across the products lines. There still are a million things to solve, but we're working on it. And we're already seeing our customers fear the changes and starting to market against it."

George said Dell's motive is not to squeeze more revenue from customers. "It's to benefit the customers," he said. "If the customers don't see the benefits, we won't do it."

Such a new license would probably not be available for Dell's PowerVault line, George said. "PowerVault only has two licensable features," he said.

Both the Compellent and the EqualLogic licensing programs are very good, Winslow said. "With Compellent, customers say it's the only vendor that offers declining software costs over time," he said. "After 96 disks, there is no additional charge. And EqualLogic customers like how they are not nickled and dimed to death with new license costs for additional features. If Dell can combine the best of both, customers would love it."

Legacy Compellent customers love their pricing system, Mulvee said. "But if Dell makes it more like the EqualLogic pricing, I'm not sure how customers would react."

A big issue when adjusting licensing is the perceived impact by customers looking at how it affects their overall cost of storage, Mulvee said.

"It pains me when we work on a customer opportunity and they make the technology decision based on price without considering the value of the license," he said. "They will get some software, but not necessarily get the full value of the software."

With EqualLogic, customers like getting all the software features in a single license, but that license is tied to the hardware, Mulvee said. "We've had enterprise customers who wrote a check for the software but then leased the hardware," he said. "They want to leverage the software for a long time, and just replace the hardware every three to five years."

Mulvee said he will be closely watching how Dell handles the unification of its licensing. "At the end of the day, we want happy customers," he said. "I don't know which model works best. But we want happy customers."

Dell is also looking at how to expand its Copilot service program, which came as part of the Compellent acquisition, to its EqualLogic line.

Next: Expanding Copilot Services And Integrating The Cloud

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