Dell’s $1B Cloud Efforts Pit it Against Cisco and Amazon

Dell s undertaking a sweeping effort to improve its place in the cloud computing market with several new data centers, services and a converged infrastructure system to compete with Cisco’s Unified Computing System. It’s a pretty significant change of pace for Dell, although not necessarily surprising, as Dell has been very active in buying and building new cloud capabilities for the better part of a year. At the least, it now has the pieces in place to compete on software, services and hardware along with IBM, HP, Cisco and other large systems vendors.

All-in-one infrastructure

Among the highlights of the news is vStart, Dell’s take at a converged infrastructure system a la Cisco’s Unified Computing System HP’s BladeSystem Matrix or IBM’s CloudBurst. vStart packs compute, storage, networking and management software into a single unit, and comes preloaded with VMware’s ESXi hypervisor. Colin Fletcher, senior solutions manager for vStart, said the goal is to give customers a product that “ready to run” right out of the box with no complex assembly required.

The product is somewhat of a change of strategy for Dell, though, which previously has stated it wouldn’t do converged infrastructure because it wanted to give customers choice in terms of the best networking and storage to go with their Dell servers. Now, however, Fletcher says Dell looks is actually giving customers choice, because while many customers still prefer to buy their gear separately, there are a good number who like this prepackaged, turnkey approach. And although he wouldn’t call it “lock-in,” Fletcher did note that vStart customers will have less choice in components, but, again, that’s part of pitch. Fletcher added that the first two vStart models are just the start of a larger lineup.

Interestingly, Dell’s converged infrastructure competition got a little stronger today thanks to a partnership between HP and Egenera whereby Egenera’s PAN Manager software will be available on HP’s BladeSystem family of blade servers. HP already offers its own converged infrastructure product called BladeSystem Matrix, but the goal clearly is to sell HP hardware at any cost to keep customers from buying Cisco, Dell, IBM or anyone else. It’s also a good partnership for Egenera, which leverages HP’s commanding lead in the blade market and gets to expand its list of hardware platform partners, which also include Dell and Fujitsu.

New cloud data centers

We knew this one was coming for a while when Dell started building large data centers, and rumors had been swirling for quite a while about it wanting to buy Rackspace. Now, we have the official announcement: It will build multiple data centers to offer IaaS, PaaS and storage as a service. Dell hasn’t officially announced what software will power these efforts, but company spokespeople have said previously that Dell will offer a PaaS service based on Microsoft Windows Azure, and it’s possible that Dell’s IaaS and storage services will be based on the OpenStack platform. Dell is an OpenStack project member.

All told, in combination with 22 “global solutions centers,” Dell’s infrastructure investments will cost it about $1 billion this fiscal year.

These are all big steps for Dell, which until now has been building its cloud computing identity through software products and partnerships to add value to Dell’s servers, and through some highly dense PowerEdge C servers designed for cloud data centers. With vStart and the promise of cloud services, Dell is showing that it wants to finally shake its commodity-box-maker image and hang with the big boys.