Weekly Update

Why Dell’s Cloud Computing Prospects are Strong

Dell is often characterized as a mere server maker, but the company has been reshaping itself lately into a provider of more than just gear. Nowhere is this clearer than in cloud computing, a market in which Dell might well expect to shine thanks to its progressive, but focused, vision.

Servers, Cloud-Style

Dell’s acquisition of SaaS data-integration specialist Boomi earlier this week is the latest in a series of moves reshaping Dell as both an enabler and a provider of cloud computing. At a foundational level, Dell has been prepping its transition via its Data Center Solutions business, which sells customized servers to large web properties and high-performance computing customers. And business has been booming. The DCS strategy has even made its way into Dell’s primary server business in the form of the PowerEdge C Series, a lineup of ultra-dense, stripped-down servers targeted at small to midsize cloud environments.

Software, Too

But that’s still just selling servers, which is why Dell went a level up the stack with cloud management and scale-out storage software. It both invested in and partnered with Joyent to sell PowerEdge C servers equipped with the cloud provider’s SmartDataCenter software, a package Dell calls its Cloud Solution for Web Applications. For more-traditional enterprise applications, Dell bought Scalent and signed an OEM deal with DynamicOps, the integration of which comprises Dell’s Virtual Integrated System suite. VIS provides automated, self-service provisioning of virtual and physical compute, storage and network resources.

Dell also is one of the early partners for Microsoft’s Windows Azure Appliance. Yes, it’s another partnership, but it’s also so much more. For one, Dell is one of only three vendors (along with HP and Fujitsu) chosen to sell preconfigured Windows-Azure-in-a-box systems, so it’s a relatively unique offering. Furthermore, it completes a cloud trifecta of sorts for Dell — Joyent SmartDataCenter is IaaS for web applications, Dell VIS is IaaS for enterprise applications and Windows Azure is an all-around PaaS offering. That’s a pretty expansive array of internal cloud options for a run-of-the-mill server peddler.

Buying Boomi adds a SaaS element to Dell’s cloud story. That story is one of facilitating customers’ cloud desires, wherever they choose to host their applications. As I described in my post on the news, “Now, Dell customers will be able to host their own applications in their own clouds, and then easily integrate data between those applications and SaaS applications – and Dell makes it all possible.” Dell doesn’t have SaaS to sell, but supporting it makes Dell look like a more promising option for customers that want to use it.

Are True Cloud Services on the Way?

And Dell’s cloud ambitions might not stop within its customers’ four walls. As has been the case before, there was a rumor this week that Dell was going to buy fellow Austin resident Rackspace. It didn’t happen, but it might not need to for Dell to get into the cloud-provider business. The company already offers managed virtual resources as a result of its Perot Systems acquisition in 2009, and now it’s building a new data center in Quincy, Oregon, home of the webscale data center. Such a move would be a major undertaking, but not surprising. The Boomi buy is an acknowledgement that applications are moving into the cloud, and servers are next. In some respects, offering a public cloud service is only prudent if Dell wants to keep “selling servers” once the cloud shift kicks into overdrive.

Dell has multiple options as the software platform for a true-blue public cloud; one is reselling Windows Azure as a managed service, another is using the soon-to-be-service-provider-ready OpenStack software, a project led by Rackspace. Maybe it will license Joyent’s software or just buy Joyent. Maybe it will do all these things. After all, if, as Joyent’s Jason Hoffman suggested to me recently, the data center is the new server, then the cloud platform is the OS. Why not provide broad OS support?

Dell is still quite a way behind IBM and HP when it comes to offering a full complement of systems management software and hosted services, but the products it does have are unique in that they were built specifically with cloud computing in mind. All signs point to Dell furthering its software portfolio, too; a monitoring product seems like a wise next step. A public cloud offering would really advance Dell’s cloud claims. It might not be cut out to compete in legacy enterprise IT, but Dell is setting itself up to win in the cloud.

Question of the week

How would you assess Dell’s cloud computing strategy?