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Dell cloud strategy could benefit from going private, partners say

Beth Pariseau, Senior News Writer

Talk of Dell going private might scare enterprise customers, as they may see it as a sign of ill health for the company, but when it comes to cloud computing, it could be a good

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thing.

Dell partners say it's in the company's best interest to go private, as it struggles to deliver a cohesive Dell cloud strategy.

The cloud is coming down the track like a freight train at the moment, and it's public knowledge that Dell's desktop and laptop business is diminishing.

Scott Houston,
CEO, GreenButton

Going private would potentially rid Dell's management of worries about its PC business, which has dragged the company's revenues down as of late, and it could free executives up to focus on new efforts like the cloud, said Scott Houston, CEO of GreenButton, a Dell partner that runs its cloud-based software management tool on a mix of Dell's vCloud infrastructure and Amazon Web Services.

"The cloud is coming down the track like a freight train at the moment, and it's public knowledge that Dell's desktop and laptop business is diminishing," Houston said. "This private equity buyout could potentially enable Dell's management to be slightly more nimble, and focus on some of these long-term strategic visions."

Private investors would probably see potential value in the services and cloud side of things, said Simon Anderson, CEO of DreamHost, a cloud service provider that sources hardware from Dell and has collaborated with the company on OpenStack development.

Dell's turbulent cloud history

In 2010, Dell pitched a variety of infrastructure products, including Hyper-V Cloud and the Dell Virtual Infrastructure System (VIS).

"VIS was a rapidly pulled together attempt to counter converged infrastructures from IBM, Cisco and HP," said James Staten, an analyst with Cambridge, Mass.-based Forrester Research Inc. "That was very much a rush job."

The company had big plans in 2011 to open 10 new data centers to supply Azure and VMware-based cloud services. By August 2012, officials admitted those plans had been partially delayed, namely an Azure-based Platform as a Service, but it has offered VMware-based cloud services, including on-premises prepackaged private clouds and a pay-as-you-go public cloud service that can be accessed by credit card.

In December, however, Dell committed to OpenStack as the primary cloud computing platform.

OpenStack offerings, which will also include a prepackaged private cloud and a public cloud service, remain in invitation-only private beta.

On the management software side of things, Dell still has several acquisitions to knit together, which it started to do in the form of a product -- dubbed CIO Powerboard -- that was announced at December's Dell World conference, and that integrates Dell Quest, KACE, SonicWALL and AppAssure products using Dell Boomi. How CIO Powerboard will fit into Dell's OpenStack plans or existing vCloud offerings remains unclear.

Finally, Dell was one of the lead investors in a $10 million funding round for Mirantis, an OpenStack cloud consulting company, announced in January. It's not a totally new relationship; for the past 18 months Mirantis has worked with Dell on an ad hoc basis, helping with joint customers like The Gap, which runs Dell hardware, and OpenStack. Mirantis is also helping to build Dell's public cloud using OpenStack.

The Mirantis investment "suggests that maybe they recognize that they need that kind of help to get OpenStack to market," Staten said.

Dell officials declined to comment on rumors about going private.

Read more about Dell's cloud computing strategy in part one.

Beth Pariseau is a senior news writer for SearchCloudComputing.com and SearchServerVirtualization.com. Write to her at bpariseau@techtarget.com or follow @PariseauTT on Twitter.


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