Dell Tech’s PowerOne approach to hybrid cloud
Hyper Converged Infrastructure is going through a period of dynamic shifts and disruption, hybrid and multi cloud architectures are also transforming how people think about infrastructure. And with this I am watching the vendor landscape go through a period of significant transformation.
For most traditional IT vendors, established norms and product roadmaps are in a state of flux as product lifecycles are being compressed. And new mega trends – AI, ML, containers and 5G, to name a few – are disrupting how IT is provisioned, managed and consumed.
We are also entering a market cycle of increased “coopetition,” where traditional on-premises vendors such as IBM, Dell Tech, HPE and Cisco (among others) are having product roadmaps and revenue projections upended by hyperscale cloud providers such as AWS, Microsoft with Azure and Google Cloud Platform. While these companies are continuing to work together strategically, it’s also easy to recognize that market conditions are yielding an increased level of competition among these same organizations. These shifts are driving the incumbent infrastructure vendors to make bold moves to stay relevant and continue to drive the growth so craved by shareholders and the innovation desired by their largest customers and users.
Beyond the shifting competitive landscape, we’re also seeing these forces lead companies to placing larger bets. A large recent example is IBM $34 billion bet on Red Hat, but over the years we’ve seen plenty of other big bets, from Dell Tech acquiring 90% of VMware to a plethora of acquisitions made by HPE and Cisco to augment their network and data center capabilities.
Over the past several weeks I have looked closely at the state of hybrid and multi-cloud across the OEM and hyperscale landscape, recently doing a deep dive into HPE, IBM and Microsoft. This week, on the heels of Dell’s recent Tech Summit, I wanted to take a look at what Dell Technology is focusing on as it pertains to meeting customers where they are in their hybrid journey.
Dell focuses on data and automation
As an analyst, I don’t spend as much time reporting as I do analyzing, but at the Dell Tech Summit last week in Austin I had the chance to hear from Michael Dell on his focus and wanted to start there to set the stage for what I see coming next. Dell, the company’s charismatic CEO and founder, focused his presentation on what the company is going to do to lead in the “next data decade.”
“This tsunami of data holds incredible promise to advance humanity more than any force, really in any time in history,” Dell said. “Now, just putting this technology in the hands of people is not enough; the greatest opportunity is to really put this data to work to help the most people.”
At the event, Dell unveiled a new autonomous infrastructure, PowerOne, which is included in the Dell Technologies On Demand program. PowerOne includes all of the company’s flagship server, storage, data protection and networking lines along with VMware vSphere and a new automation engine under a single pane of glass.
The Dell EMC PowerOne autonomous infrastructure is designed to make deploying, managing and consuming IT easier for organizations. PowerOne integrates PowerEdge compute, PowerMax storage, PowerSwitch networking and VMware virtualization into a single system combined with a built-in intelligence engine to automate thousands of manual steps over its lifecycle.
In short, PowerOne represents the marriage of Dell’s Idea of the next data decade with a set of hyper converged infrastructure tools and technologies that can be consumed on demand in an “IaaS” like environment. To me, this is Dell, EMC, VMware, Pivotal, Virtustream and RSA all rolled up into one and being offered “as a service”
Begging the questions: Will this work? Does the PowerOne Autonomous Infrastructure make Dell Technologies relevant for the next data decade?
Let’s start with a bit more as to what the PowerOne offering is. At the center of PowerOne’s autonomous operations is a built-in, advanced automation engine. PowerOne is architected to empower users to focus on their business, whether that means deploying workloads, applications, or developing new products and services. The intentions of this solution is very good as I have written extensively on the Human/Machine interface and feel this level of automation will be transformational for businesses that harness its potential.
For those readers struggling to make a real-world connection, let’s use the autonomous vehicle as a parallel. Similar to the AI and autonomous features that are proliferating in automobiles such as lane assist, navigation and other features in autonomous vehicles, the vehicle does the majority of the operations on its own while the driver/passenger must let the car know the desired destination.
PowerOne’s advanced automation allows administrators to state a desired business outcome – and the system calculates the best way to achieve the desired outcome. The automation engine takes advantage of a Kubernetes microservices architecture and uses Ansible workflows to assist users by automating the component configuration and provisioning, delivering a customer-managed Datacenter-as-a-Service.
The company touted that the system can handle ~98% of the datacenter operations autonomously, and fundamentally it could go to 100%, but some regression theories point to a fully autonomous infrastructure as being counterintuitive and damaging to the business as IT professionals would resist full automation.
For me, the real question is how this is delivered and how much of this can be seamlessly implemented into enterprise and other large IT operations. In my opinion, if Dell Technologies can deliver on the hype around PowerOne, I see this being a material differentiator for its stack as the company engages with clients looking to simplify IT operations, decrease time to market/value and streamline IT service provisioning.
Dell moves to consumption-based model
If you didn’t catch the references to consumption and on-prem “As a Service” above, another important concept to note is that Dell is upping its game in flex consumption offerings. The company has been doing this for some time, and Dell even touted a near $20 billion in deferred revenue for the company’s services, but until this past week, the company didn’t have a real front end to marketing its solutions until now with the launch of Dell Technologies On Demand.
Positioned as a response to the oft-preferred consumption of solutions from IaaS providers AWS and Azure, but also as a much a response to what HPE is doing with Greenlake, Dell Technologies announced this week that it plans to increase focus on providing its range of on-premises hardware in a consumption-based models.
Upon early review and briefing on the product, I believe its differentiation is in the breadth of consumption-based and as-a-service offerings that the company is committing to market.
Much like others that have come before, HPE and Lenovo most notably, Dell Tech’s model is ideally suited for the way on-premise infrastructure and services are consumed today but considers the way many software and infrastructure services are being procured in the cloud. With the large swath of offerings, I envision Dell Tech will focus on how some competitors are addressing only a limited part of the IT ecosystem or only offering a one-size-fits-all approach to as a service, which actually may introduce more complexity that it resolves.
Dell was keen to point out that the number of products and full-stack hybrid cloud architectures available in Dell Technologies On Demand should be seen as a market differentiator. Almost all Dell products will be available in a consumption-based manner from storage, servers, data protection and networking to PCs and gateways. Additionally, Dell is enabling its larger architectures to now be sold as-a-service including its joint VMware stacks, Dell Technologies Cloud and Unified Workspace. Deep integration of VMware into the Dell Tech On Demand offering will be critical to its growth, as I believe VMware is the catalyst for Dell Tech’s growth in hybrid and multi-cloud.
Overall, I believe the move to Everything-as-a-Service and only paying for what infrastructure you consume in a consumption-based pricing model has become the defacto standard within the public cloud space. And with HPE, Lenovo and now Dell Technologies declaring their intentions to adopt this approach I see it becoming the way IT will be consumed regardless of the location.
The good news for the legacy IT vendors entering this space is it is still early days for public cloud with only around 20% of workloads. This means a huge opportunity for hybrid and delivering models that match buying behavior will be important. As finance execs and senior IT leaders have seen the public cloud transform how their IT budgets are allocated, I see this trend becoming the prevailing mindset for on premises infrastructure. I see this as a strong move by Dell Technologies and my opinion is that this will serve them well as they engage with clients in the coming months.
DellEMC shuffle the deck
Another area to keep watch of is appointments being made by Dell Tech and how products, services and people are being shuffled around to handle the transition to hybrid cloud.
21-year EMC veteran Jeff Boudreau took control of Dell Infrastructure Solutions Group (ISG) recently. Corporate statements issued by Dell Technologies were bullish obviously, claiming the announcement was to put in place a plan to “out-innovate” hyper-converged and software-defined storage competitors. Boudreau will be in charge of a $37 billion business unit that includes DellEMC storage, Dell hyper-converged systems, servers and networking.
Boudreau assumes the leadership duties of Dell veteran Jeff Clarke, who has transitioned to Dell Technologies vice chairman of products and operations. Boudreau will inherit a business with a strong revenue position and solid market share. DellEMC leads the field in Hyper Converged Infrastructure (HCI) and storage, while DellEMC PowerEdge leads in enterprise servers, according to market sizing data from IT market research firm IDC.
I look at the way Dell Tech is undertaking a transition in how it structures the Infrastructure Solutions Group, with the HCI products moving closer to Storage and Networking rather than where it traditionally sat previously in Server and Infrastructure. It’s hard to tell whether this is because of internal leadership politics, a response to market trends or the competitive landscape. It will be important to watch Boudreau in this new role. Clarke did a very good job driving this business and it will be important for Boudreau to continue this momentum forward as the competitive landscape grows in intensity. I will be watching this space carefully in the coming months to check on progress.
The role of VMware
I know it took a while to get here, but to talk about Dell’s hybrid cloud strategy without a big slice of VMware would have been pretty short sighted. While the companies still run separately, the deepening integration of VMware in everything Dell Tech has grown with the 90% share of the stock that is held by Dell.
On the surface, we started to see the integrations increase significantly with the acquisition of EMC and the purchase of the majority of VMware. We have seen Dell Tech integrate storage with VMware much more closely than previously when EMC owned VMware. This speaks to the strategy of deep integration as opposed to revenue combining.
Most will recall that EMC was largely hands-off with VMware, content to see strong growth, dominant market share expansion and to ultimately pocket the contribution to the parent company bottom line.
Michael Dell and Dell Tech see this completely differently, realizing that the tight integration of the Dell Tech portfolio with VMware serves as the core ingredients for success in the era of hybrid architecture. Michael Dell can regularly be heard on the record to talk about how Dell Tech plans to align VMware more closely to the strategic business within the Dell Infrastructure Group.