Dell ditches public cloud service for partner scheme
Own-brand OpenStack hosting to be replaced by partnership with smaller companies – all managed by Enstratius.
Having been teasing an
OpenStack-based public cloud since the end of last year, yesterday
Dell announced a change of strategy. Instead of providing cloud
hosting themselves, the company will partner with several smaller
suppliers, becoming a “central point of solution integration and
Essentially, this means that Dell will
sell hosting services from selected IaaS providers, which
initially consists of Joyent, ScaleMatrix and ZeroLag. Crucially,
all will be manageable through Dell’s recently-purchased cloud
This is a considerable departure from Dell’s existing
strategy, which was to provide IaaS hosting powered by VMware
vCloud. A new OpenStack-based product was due to be made generally
available at the end of the year, distinguished by a generous
The new strategy is a move away from being a direct
competitor to AWS and its ilk, instead becoming a middleman to
smaller brands. By providing access to a diverse range of companies
and products – all manageable by Dell’s Enstratius software – it
may succeed in attracting customers looking for a known brand, but
put off by the threat of proprietary lock-in.
Nnamdi Orakwue, VP of Dell’s Cloud division, said in
a press release that the new program would offer “a choice of
providers, flexibility and interoperability across platforms and
models, the ability to compare cloud economics and workload
performance, and a cohesive way to manage all of it”.
However, it could also be seen as a retreat from a
market increasingly dominated by AWS and, perhaps, less profitable
than it first appeared. Rackspace earlier this month reported
lower-than-expected earnings, speculated to be linked to the
company’s aggressive price cuts.
The move may provide long-term benefits to Dell, but
it likely means throwing out years of investment:
TechCrunch reported that a number of layoff notices were sent
to the 300-person Dell Cloud team. Dell declined to comment on the
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