Dell launches a VMware-based cloud; Azure next

Dell (s dell) has officially become a cloud computing provider with the launch of an Infrastructure-as-a-Service cloud built atop VMware (s vmw) technology. The move is just the first in Dell’s three-pronged IaaS attack, which will soon include clouds based on the Microsoft (s msft) Windows Azure and OpenStack (s rax) platforms. While Dell is busy adding a strong software play to its flagship server business, it looks to be rebuilding that business model in the cloud.

VMware first

According to Mark Bilger, VP and CTO of Dell Services, the initial VMware-based cloud is part of a broader partnership that also includes helping customers build, deploy and manage both private and hybrid clouds. Based on VMware’s vCloud family of products for cloud management, Dell is attempting to add value by integrating its recently acquired SecureWorks lineup of products and services into the offering.

Although it’s an IaaS cloud, which means it’s used for obtaining virtual computing and storage resources on demand, Bilger said the VMware-based offering isn’t meant to be a competitor to Amazon Web Services’ (s amzn) popular Elastic Compute Cloud. Dell’s cloud has three pricing levels — pay-as-you-go, reserved and dedicated — but Bilger said the pricing model is meant to make the latter two look more appealing. Those two options include a lower hourly cost per VM, but they require one-year commitments at a minimum resource level. The pay-as-you-go option is best suited for testing the service before signing up longer-term, said Bilger.

The pricing model is a among the biggest differences from the pay-as-you-go-based Amazon EC2, but longer-term contracts aren’t uncommon among VMware vCloud partners targeting enterprise workloads. One has to suspect Dell’s forthcoming Windows Azure and OpenStack-based offerings will offer better pay-as-you-go offerings to compete more directly with their natural competitors such as AWS, Rackspace, GoGrid and Microsoft itself.

Azure, OpenStack next

Bilger said clouds based on Microsoft Windows Azure and the open-source OpenStack platforms will come in the next several months. The VMware-based cloud came first because of VMware’s large footprint potential business customers. Dell’s mantra has been “open, capable, affordable,” he added, which is why the company is building such an expansive portfolio of cloud computing services. Often, he noted, “customers have a bent for one [cloud] or another,” so Dell wants to be able to meet their needs.

The data center is the new server

That strategy is an awful lot like Dell’s traditional strategy of selling servers full of other vendors’ software and components, only at a much larger scale. In this case, the data center is the computer. VMware’s vCloud, Windows Azure and OpenStack are essentially the operating system choices for this new model of obtaining IT infrastructure. An all-too-easy analogy is that Windows Azure is the new, well, Windows, and OpenStack is the new Linux. VMware vCloud is the new kid on the block that might well dominate in terms of market share.

Dell’s platform providers certainly see the opportunity to relive past successes in the cloud, too, which is why all three are building ecosystems of providers to distribute their platforms to as broad an audience as possible. Among their early distribution partners are fellow server makers Fujitsu and, potentially, HP(s hpq).

Bilger said Dell looked “very deeply” at one revolutionary technology to power a cloud offering, but ultimately decided that although it was highly efficient and very good, that platform required too much application-level change to make it a success among corporate customers.

There is one key difference between the server business and the IaaS business, though. Bilger noted that it took some time for Dell and Microsoft to form a solid cloud partnership because — in a big switch from its server OS business — Microsoft also sells Windows Azure directly from its own data centers. And OpenStack is a bit different from Linux, he explained, because it takes a fair amount of effort upfront to make it fit for a service offering versus simply installing Linux on a box.

However, it’s still a while before either of those options see the light of day. Dell’s VMware vCloud offering is available for public beta next month and will be generally available in the fourth quarter, Bilger said.