Dell abandons IaaS public cloud

Places Enstratius at the heart of its cloud strategy

TODO alt text

Dell has given its cloud strategy a shake-up by discontinuing its Infrastructure-as-a-Service public cloud "in favour of best-in-class partner offerings" through its IaaS Cloud Partner Programme.

It says in a blogpost that solely focusing on partners to provide public clouds in Europe will allow it to speed up its cloud business across the continent while lowering costs.

It adds that discontinuing its own product in favour of supplying partners will give its customers "freedom from lock-in".

The move gives Dell's recent acquisition Enstratius - which provides a platform for managing applications across private, public and hybrid clouds and supports more than 20 platforms - a pivotal role in its cloud strategy.

It also signals a U-turn from its previously announced intention to launch its own OpenStack-based public cloud as well as a public storage as a service offering.

Cloud choice

In a statement, Nnamdi Orakwue, Vice President of Dell Cloud, said Dell's customers want a choice of public cloud providers and the ability to compare workload performance as well as a simple management interface.

Roy Illsley, analyst at Ovum, told TRPro that positioning itself as a cloud management provider signals Dell's aim to become a significant player in the higher margin business of providing multi-cloud management.

"IaaS is widely available from a wide number of providers that have a better history than Dell," he said. "The current VMware-based IaaS offerings from Dell have not seen rapid uptake by customers, and are seen as expensive, and in terms of Dell's business have been a very small contributor.

"All of the acquisitions Dell has made recently including Enstratius is clearly backing the cloud broker role."

Illsley added that the move is also partly about Dell identifying the correct market in which to invest.

Profit source

"Being a provider to the cloud market is more likely to be profitable [than selling servers through its Data Center Solutions unit] as they can sell hardware and software to all service providers, and they can also be a player in private, hybrid or public cloud," he said.

He continued: "I would expect Dell to focus on the hardware and software as separate selling solutions, while increasingly adding the software to hardware so that the bundles are value added and make setting up a cloud fast and easy. Obviously, selling more hardware is central to Dell's success."