Category: Dell

Understanding The Significance Of Dell’s Acquisition Of EMC And The Emergence Of Dell Technologies

Dell and EMC intend to finalize the transaction whereby Dell acquires EMC on September 7, 2016. Under the terms of the acquisition, Dell and its owners Michael Dell, MSD Partners and Silver Lake, will acquire EMC Corporation. Meanwhile, EMC spin-off VMware will continue as a publicly traded company. The announcement to finalize Dell’s acquisition of EMC comes head on the heels of the receipt of regulatory approval for the transaction by China’s Ministry of Commerce after 98% of EMC shareholders approved the transaction on July 19. As a result of the merger of the two companies, EMC shareholders stand to receive $24.05 per share in addition to a tracking stock that represents their equity in VMware.  The newly created company, Dell Technologies, will operate immediately after the transaction is finalized. Dell’s acquisition of EMC signals the emergence of the “largest privately-controlled, integrated technology company” as noted in a press release. The confluence of Dell’s expertise in hardware and technology solutions for small businesses to mid-size organizations with EMC’s experience with enterprise customers, cloud computing solutions and security solutions means that Dell Technologies stands poised to benefit from the complementary synergies specific to the union of the two companies. The union of Dell and EMC promises to offer customers of Dell Technologies a rich portfolio of private cloud and big data solutions that draws upon an EMC corporate umbrella that includes Pivotal, Virtustream and VMware.

Expect the convergence of Dell’s experience with hardware and its relationship to small to mid-market companies, in conjunction with EMC’s storage, networking, cloud computing, big data and security solutions to enable Dell Technologies to offer enterprise-grade private cloud solutions geared toward the needs of small to mid-tier organizations as well as enterprises. Given EMC’s ownership of Pivotal and its concomitant specialties in big data analytics and the internet of things, the Dell-EMC merger has the potential to reshape the cloud computing landscape by giving Dell Technologies leadership in the hybrid cloud space while claiming Pivotal’s specialties in big data analytics and RSA’s suite of security solutions as further, notable feathers in its cap. Overall, the landscape for hybrid cloud computing stands to gain another significant player that has the means to tap into Dell’s relationships with small to mid-size companies that are increasingly ramping up their transition to the hybrid cloud. Moreover, with Pivotal under its wing, Dell Technologies promises to democratize big data and internet of things analytics by spearheading big adoption and developing progressively turnkey approaches to big data analysis. The implications of the Dell-EMC merger for the cloud computing landscape are huge, particularly in light of Rackspace’s recent acquisition by Apollo Global Management and the subsequent opportunity created in the private cloud market while Apollo Global Management and Rackspace recalibrate their long-term strategy.

Dell’s Project Fast PaaS Illustrates Currency Of Cloud Foundry

Dell is incubating a new platform as a service offering built upon the Cloud Foundry PaaS infrastructure. The product, Project Fast PaaS, claims enhancements to the Cloud Foundry PaaS project. Project Fast PaaS boasts compatibility with Ruby, Node.js, Java, PHP and Python in addition to support for MySQL, PostgreSQL, MongoDB and Redis databases as well as the RabbitMQ messaging system. An open-source solution, the product additionally features compatibility with application development frameworks such as Django, Grails, JavaWeb, Lift, Node, Play, Rack, Rails, Sinatra and Spring. Participants must already subscribe to Dell’s IaaS enterprise public cloud, Dell vCloud, in order to preview Dell’s Project Fast PaaS offering.

Dell’s investment in Project Fast PaaS illustrates the emerging currency of the VMware-EMC Cloud Foundry PaaS platform as the de facto standard infrastructure for Platform as a Service offerings. ActiveState’s Stackato, for example, which is similarly based upon the Cloud Foundry platform has recently been licensed by HP for HP’s Cloud Application PaaS offering. The other trend represented by Dell’s PaaS offering consists of the willingness of heavyweight tech behemoths such as Dell and HP to supplement their IaaS public cloud offering with a PaaS solution of some kind. IaaS customers are likely to want a PaaS offering as well, and correspondingly, PaaS may well end us serving as an originator for IaaS customers. The industry should expect to see more IaaS-PaaS combination offerings as public cloud vendors, in particular, strive to accommodate demands for preconfigured development frameworks from their customers alongside their IaaS platforms.

Dell Acquires Wyse, Leader In Cloud Client Computing

Today, Dell announced the finalization of an agreement to acquire Wyse Technologies, the leader in cloud client computing. As a result of the acquisition, Dell strengthens its positioning in the desktop virtualization space by obtaining access to Wyse’s portfolio of thin and zero clients as well as software for managing virtualized cloud client machines. The acquisition is intended to further Dell’s longer term business strategy of shifting its focus away from sales of PCs and servers toward cloud based products and services such as its OpenStack offering or desktop virtualization, whereby enterprises remotely store all of the software and data for a user’s machine on a remote server. Desktop virtualization, which typically leverages thin or zero clients with no expansion slots, CD-ROMs or diskette drives, gives enterprises greater control over software deployments while enabling multiple operating systems to run on one machine.

For Dell, the most significant business opportunity from desktop virtualization is likely to come from the cloud and data center investment that enterprises will need to make in order to implement desktop virtualization across the enterprise. Additional revenue will derive from sales of Wyse’s portfolio of thin and zero clients. Matt Eastwood, Group Vice President, Enterprise Platform Research, IDC, summarized the market opportunity for desktop virtualization in Dell’s press release as follows:

“The total market for desktop virtualization solutions should continue to see strong growth globally, with the larger revenue and margin opportunities coming from the datacenter infrastructure, cloud and services offerings that are tied to thin client and desktop virtualization technology sales. Thin client and desktop virtualization solutions typically drive high attach rates to data center solutions, including servers, networking, storage and services. The end-to-end datacenter infrastructure stack for these solutions is expected to exceed $15 billion by 2015.”

Importantly, the acquisition of Wyse gives Dell access to software for “remote device management for the extended enterprise” in addition to Wyse’s thin and zero client portfolio. Wyse has shipped more than 20 million thin clients to date and claims over 180 patents covering its hardware and software offerings. Dell’s Jeff Clarke, President, End User Computing Solutions, remarked on the acquisition by noting:

“Desktop virtualization can help organizations streamline IT management, improve productivity and security, and increase cost efficiency for discrete workloads or usage scenarios. The Wyse Technology desktop virtualization capability complements Dell’s strongest-ever device and computing solutions portfolio, and strengthens our position in offering customers among the broadest set of computing choices from the edge to the core to the cloud.”

As a market leader in the cloud client computing, Wyse complements Dell’s offerings by allowing it to catch up to HP in the thin client hardware market. The total market opportunity for thin clients is expected to be $3 billion by 2015, whereas the “the total addressable market for servers, storage, networking, and services sitting behind those thin and zero clients will hit $15bn” by 2015, according to David Johnson, Senior Corporate Vice President of Strategy at Wyse, citing IDC figures. Financial details of the acquisition were not disclosed although it is widely believed Dell acquired Wyse for roughly $400 million.

Dell’s OpenStack Solution Now Available In UK, Germany and China

At World Hosting Day in Germany, Dell revealed plans to expand its distribution of OpenStack-based cloud solutions from the U.S. and Canada to the UK, Germany and China. Dell’s integrated OpenStack offering will target enterprise customers as well as service providers interested in using OpenStack to deliver cloud solutions to third party customers. The solution will run on Ubuntu, OpenStack and Dell’s crowbar software. Dell’s open-sourced crowbar software will manage OpenStack setup from the initial boot of the server to the configuration of the OpenStack software components. Powered by Dell’s PowerEdge C servers, the Dell OpenStack-Powered Cloud Solution represents an out of the box cloud offering that allows customers to take advantage of Dell’s optimization of OpenStack for the solution’s validated hardware and software configuration.

John Igoe, Dell’s Executive Director of Cloud and Big Data Solutions, spoke to the optimization of OpenStack within Dell’s integrated solution as follows:

“As early supporters of solutions based on open-standards like OpenStack and Hadoop, Dell remains committed to providing open, standards-based solutions that enable customers to integrate new technologies without sacrificing performance or existing IT investments. Utilizing and integrating the efficiencies of the PowerEdge C line with optimized software and tailored services, the Dell OpenStack Cloud Solution enables users to take a server out of the box and be up-and-running on an OpenStack cloud in mere hours. With Dell’s tested and validated designs in infrastructure, software, and services, customers can build out their IT presence and lower in-house costs.”

Even though Igoe notes that customers can “take a server out of the box and be up-and running on an OpenStack cloud in mere hours,” Andy Cash, Dell’s Director of Next-Generation Computing Solutions, commented that customers should not think of Dell’s OpenStack solution as an appliance. “We would be concerned about organisations thinking of this as an appliance… because it’s not,” Cash told ZDNet, noting that the costs and final hardware and software specifications would change on a “project-by-project” basis. Dell will provide consultative support in addition to the hardware and software required for OpenStack installations.

Dell’s OpenStack solution represents part of its broader corporate strategy to shift its strategic focus away from hardware sales toward enterprise cloud software and services. Dell announced the availability of an OpenStack solution in the U.S. and Canada at OSCON last summer. Having added the UK, Germany and China to the list of countries that can purchase its OpenStack solution, Dell intends to add more countries to its OpenStack sales base as customer demand grows worldwide.

Cloud Computing 2011: The Year in Review

Whereas Time magazine selected “The Protester” as the Person of the Year, the award for Technology of the Year surely goes to Cloud Computing. 2011 marked the year that cloud computing emerged with force and gravitas onto the enterprise landscape. In the case of enterprise CIOs and IT leaders pondering the use of cloud computing infrastructures, the question of the day suddenly morphed from whether to engage the services of a cloud provider to when and how. Over the course of the year, cloud providers grew, emerged, acquired companies or were acquired, raised venture capital and announced products at a dizzying pace.

Within months, the cloud computing landscape transformed from the Amazon, Rackspace, Joyent, Terremark, Savvis show to something radically heterogeneous and complex. As more and more cloud technologies proliferated, analysts and technologists alike began to feel that the term “cloud computing” itself was losing its meaning. Meanwhile, news agencies and blogs struggled to keep up with the pace of innovation and deployment as startups and enterprises alike announced new, exciting and powerful cloud technologies day after day, week after week.

Below are some of the highlights of cloud computing in 2011, the year of the cloud:

• In January and February, Amazon Web Services busted out of the gate in 2011 with the launch of Elastic Beanstalk and CloudFormation. Elastic Beanstalk automates the process of deploying an application on Amazon’s virtual servers. CloudFormation automates the provisioning of virtual resources using templates that streamline the setup of an infrastructure for deployments of new instances.

• In May, Citrix announced plans to launch Project Olympus, an IaaS platform that allows customers to leverage the OpenStack operating system code to create public or private clouds. Project Olympus marked the first commercialization of OpenStack and thereby inaugurated a series of commercial OpenStack deployments throughout the remainder of 2011.

• In May, Red Hat launched IaaS platform CloudForms and PaaS platform OpenShift. CloudForms signaled genuine innovation in the IaaS space because of its Application Lifecycle Management capabilities and hybrid infrastructure flexibility. OpenShift, meanwhile, presented direct competition to Google Apps, Windows Azure and Amazon’s Elastic Beanstalk because of the breadth of its deployment platform and claims about increased portability.

• In June, Apple announced details of iCloud, a software framework that synchronizes files across multiple devices such as iPads, iPhones and personal computers, and pushes software updates to a constellation of devices in unison. In a keynote address at the Apple Worldwide Developer’s Conference (WWDC), Steve Jobs famously remarked that iCloud would “demote the PC and Mac to being a device,” because “we’re going to move the digital hub into the cloud.”

• In August, Amazon Web Services announced the launch of GovCloud, a private cloud for government agencies that complies with regulatory and compliance rules for the Federal government such as FISMA, FIPS 140-2 compliant end points, SAS-70, ISO 27001, and PCI DSS Level 1.

• In September, OpenStack, the open source cloud computing infrastructure that gained the backing of 144 companies including AMD, Canonical, Cisco, Dell, Intel and Citrix, released Diablo, its latest software version since the Cactus release in April 2011. Diablo, the first upgrade to OpenStack released on a 6 month schedule, upgrades its existing Nova, Object Storage and Glance components.

• Also in September, Joshua McKenty’s startup Piston Cloud Computing launched pentOS, one of the first enterprise grade versions of OpenStack for private clouds. With the launch of pentOS, Piston joined HP, Citrix Systems, Nebula and Dell in an elite group of vendors that commercialized the OpenStack platform in the latter half of 2011.

• In October, Rackspace revealed plans to turn over the leadership of OpenStack to an independent foundation. After founding OpenStack with the collaboration of NASA in the summer of 2010, Rackspace decided to hand over trademarks and copyrights to an independent foundation to ensure that OpenStack remains vendor neutral.

The meteoric rise of OpenStack constituted the cloud computing story of the year, by far. Commercial deployments of OpenStack by Piston Cloud Computing and other vendors underscored the emerging power of OpenStack as an increasingly competitive option to Infrastructure as a Service (IaaS) vendors such as Amazon Web Services and Rackspace. Moreover, OpenStack promised global cloud inter-operability and standards resulting from an open source organizational framework for which respect snowballed within the developer and enterprise community alike. Much of the story of cloud computing in 2012 will hinge on the ability of the OpenStack foundation to continue to promote the software framework’s adoption in the private sector and establish itself as a credible counterweight to first mover Amazon Web Services and other proprietary cloud vendors.

Quotes from conference call between Dell’s Steve Schuckenbrock and Sanford Bernstein

Select Quotes from Steve Schuckenbrock, President of Dell Services (April 5, 2011):

“You know the demand for IT and the torque frankly in the system for CIOs, when you balance the huge demand for efficiency with really sort of unprecedented levels of efficiency being driven through cloud like execution, and whether that’s a public cloud, private cloud, whatever the case might be, the reality is, is there’s a significant amount of standardization that’s occurring in the world. And that standardization brings all sorts of value from an efficiency standpoint, and places real pressure on CIOs to make sure they embrace those opportunities as quickly as possible.

And at the same time, there’s increased demand based on sort of any information available anytime, anywhere to basically any device for flexibility and for speed, and the ability to respond to this enormous sort of expectation. You know I guess probably best summarized by us as consumers, and our need for instantaneous gratification of any information available anytime.

And it’s this torque between these two things that I think creates a tremendous opportunity and a bit of an inflection point. Dell, I believe, is positioned exceptionally well to respond on both of those two fronts. We have terrific leadership in the standardization of technology. We are in fact very focused on standing up highly virtualized, highly efficient, you might even call it optimized data center infrastructures for our customers, and we are doing the same with our own data centers from a services standpoint.

And that certainly gives the counter balance that says, from a flexibility standpoint, you get greater speed, when there’s standardization, you can respond faster, you can innovate faster. And you get a repeatable quality and cost proposition as a result.

Cloud services is certainly something that brings new levels of efficiency as well as flexibility. When you look from a cloud services standpoint, it’s the ability to frankly deliver an infrastructure all the way through a set of applications in a manner that takes advantage of all the efficiencies of the cloud, whether that be a private cloud or a public cloud, but at the same time, responding to this need for speed. The fact that people want just in time kind of capacity, they want the ability to provision services themselves, and to be able to turn them on and turn them off at their whim, as opposed to these sort of monolithic, contractual structures that have been a part of the services industry for so long.

And from a talent factory standpoint, there is a huge need for access to the right skill sets in the right place at the right time, and sometimes those skill sets are local and consultative in nature, and other times those skill sets might be leveraged in a cost optimized location someplace around the world. But these talent factories are vital in terms of being able to help customers move their applications to the standardized or optimized infrastructure footprint that I described above. And I think all three of these capabilities are absolutely crucial to embrace what’s happening in the services space today.”

Source: See “2011-04-05-Services-Transcript.pdf”

DELL Inc.
Services Conference Call with Steve Schuckenbrock
Hosted by Sanford Bernstein
April 5, 2011