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Dell doubles down on its concept of selling infrastructure

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June 25, 2015

Earlier this morning, Dell said it is doubling down on its initial concept of selling infrastructure, after retreating from its public cloud service provider plan.

The news don't come as a surprise to some observers in the IT industry. The company, which has carved out a big niche in web-scale server centres, will release its new plans in the next 6 months to guide others building their own clouds.

Blueprints will be for Microsoft’s Cloud Platform System (CPS) released late in 2014, OpenStack and VMware.

Dell is already partnering with Microsoft on CPS, delivering a version of Azure Cloud on Dell 1U and 2U servers.

The target demographic is enterprises building hybrid clouds and various service providers.

Blueprints are expected to target vertical sectors, such as oil and gas, retail or travel, and different workloads, such as analytics or mobile, and will be based on a combination of Dell hardware and software from outside Michael Dell's firm, such as Hadoop.

Dell had already been pushing those blueprints, but the expansion is significant and comes under the stewardship of Dell’s recently named vice president and general manager of engineered solutions and cloud, Jim Ganthier.

Ganthier joined Dell from server, systems and cloud rival Hewlett-Packard in January 2015.

The program is being driven by Paul Perez, CTO of Dell enterprise, who was parachuted from Cisco Systems, where he was vice president and general manager of computing systems.

Nick Hyner, Dell EMEA director of cloud services, told us at Cloud World Forum-- “We are coming up with various blueprints that will be released in the next six months.”

To be sure, blueprints are part of a broader policy of seeing off potential competition from lower-priced server rivals emerging in Asia such as Lenovo and Huawei.

It’s insufficient to simply try and undercut such companies on price, especially in the service-provider segment, where carriers are being squeezed to the max on price and could be guided to lower price points.

Also, financing will become an increasing part of a package that Dell offers such enterprise customers, beyond just the hardware itself.

Dell was still able to provide direct financing to customers when it was awarded a full bank licence by the Central Bank of Ireland in 2013.

Nevertheless, Dell will still need to offer some very creative deals, such as seeing customers commit to purchases of new servers and equipment, but not taking delivery or making full payment initially to lower their up-front costs.

In gaining that business, Dell will still assume greater risk on deals as a consequence.

Additionally, enterprise customers and service providers are seeking clouds that are no longer just 'plain vanilla' but which are specifically tailored to deliver specialized services for a business, such as mobile retail sales campaigns.

“Dell’s financial services division will be increasingly important,” according to Hyner. He told us that the future is more of a shared-risk model. “If you want them to build, you need more than just server technology,” he concluded.

Source: Dell.

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