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End of Dell Cloud Manager shows slow growth in multicloud

Shuttering Dell Cloud Manager, an early piece of Dell's move to trusted adviser in public cloud, underscores that the multicloud market has been more hype than reality -- at least so far.

Dell has pulled the plug on a moribund service that was once a central piece of its shift to being a trusted adviser...

to enterprises adopting public cloud -- though, in the longer term, IT shops still seem poised to adopt public cloud brokerage.

Dell Cloud Manager, the brokerage service launched two years ago with technology acquired from cloud management provider Enstratius, has quietly been discontinued. Cloud Manager was initially part of Dell's attempt to remain relevant in the public cloud market after backing away from building its own platform, but this move serves as a reminder that the growth of multicloud environments has been slower than expected.

The brokerage service was part of a larger strategy to be a central hub for cloud, with Dell providing a single portal for management, billing and shopping for cloud services. Dell bought Enstratius in 2013 and was integrating Dell Cloud Manager into its hybrid cloud systems to sell as a standalone software package or a software-as-a-service version. But the service never took off and the user base is almost nonexistent, currently with fewer than a dozen customers, according to an industry source familiar with the product.

Cloud platforms continue to rapidly evolve and providers are constantly improving native management tools, but there are still gaps that cloud brokers can fill across public cloud resources. The problem for Dell was multicloud management wasn't a viable market until about 12 months ago, when Microsoft Azure started to emerge as an alternative to Amazon Web Services (AWS), said Mindy Cancila, research director at Gartner.

"Dell was ahead of their time in terms of the market being ready for a brokerage platform," Cancila said. Strategically, the acquisition made sense, "but the problem was they never really integrated it, and I think they jettisoned the market just a little shy of the market being ready."

Dell had aspirations of integrating Enstratius into its enterprise management tools, but that never happened; furthermore, they let the intellectual property go stale due to a lack of innovation in the platform, Cancila said.

A Dell executive downplayed the role of Dell Cloud Manager, telling SearchCloudComputing it was just a small piece of the company's overall hybrid cloud strategy and any impact from the shutdown will be negligible because so few customers were using it.

Service providers began using Dell Cloud Manager for hosting with Dell Hybrid Cloud System for Microsoft, but it wasn't built for that, and they wanted 10 times the capacity of what the architecture could handle, said Glenn Keels, executive director of product management, engineered systems, high-performance computing and cloud at Dell. Among enterprise customers deploying the hybrid cloud system, however, zero used Dell Cloud Manager, he added.

Native integration in the hybrid cloud services with VMware, Microsoft, OpenStack and Red Hat are meeting the majority of enterprise customers' needs for multicloud management currently, Keely said. Dell also plans to build on what it learned from building and selling Cloud Manager, and customers should expect additional features in this space in the future, he added.

Dell continues to build out its hybrid portfolio and partners with public cloud providers, despite the struggles of Dell Cloud Manager, including reselling and installing Azure backup and infrastructure for its customers. It also offers Cloud on Demand partnerships with Amazon, Google, CenturyLink and other public clouds.

Dell also has been shedding business units ahead of its planned acquisition of EMC. This week, it sold its software division to a San Francisco venture capital firm, though it retained its cloud integrator service Boomi; in March, it sold its services division to NTT Data for $3 billion.

It's somewhat surprising Enstratius wasn't sold as part of the NTT deal, Cancila noted, though it would have been a blip on the radar in terms of revenue.

It's unclear exactly what Dell has planned for the assets it acquires from EMC, but it's reasonable to think it would take advantage of VMware's vRealize management and automation tools, said William Fellows, research vice president with 451 Research.

"Those would be the things really where it ought to be putting investments and momentum, rather than this other collection of things, which clearly never got any traction in the market," Fellows said.

Slow growth for multicloud

Enterprise adoption of multicloud strategies has been slower to emerge than some expected, with only 1% of IT pros relying on cloud brokers for a broad range of production applications, according to a 451 Research's most recent Voice of the Enterprise survey.

[Cloud management] got way ahead of expectations, and the tech investment community has been ramping this thing up and wanting it to be cooked a lot sooner than it is.
William Fellowsresearch vice president, 451 Research

"[The Cloud Manager shutdown] is not a complete surprise, but it kind of throws some water on this cloud management thing," Fellows said. "They got way ahead of expectations, and the tech investment community has been ramping this thing up and wanting it to be cooked a lot sooner than it is."

Still, industry observers remain bullish on the long-term prospects. That same 451 survey showed more than 20% are in the early phase of implementation or piloting the technology, with another 32% still evaluating it.

And the fact that the biggest system integrators and consulting service companies are getting into this space suggests it's going to be around for the long term, even if how that all comes together is more black art than science at this point, Fellows said.

There are four basic areas cloud management providers focus on -- cost, operational management, policy-based management and multiprovider management -- and no one is doing all of the above, Cancila said. That leaves a lot of room for vendors to roll up several of these attributes into one service. In the past few months, there has been a flurry of moves in the market, including IBM acquiring Gravitant, Cisco buying CliQr and CenturyLink acquiring ElasticBox. IBM, for example, now offers a cloud brokerage service, cloudMatrix, which includes a multicloud service piece for AWS, Azure and SoftLayer.

Management is sticky, and these brokers can be notorious for luring in customers wanting to avoid cloud platform lock-in at the same time as they lock them in directly to their own complex ecosystem, Cancila said. The scenario that played out with Enstratius is one that IT pros should be mindful of, if they work with a management provider that has been recently acquired or could be on the selling block.

"The key is innovation and continued investment," Cancila said. "The minute the investment slows down, that's when the red flags start to rise."

Trevor Jones is a news writer with TechTarget's data center and virtualization media group. Contact him at tjones@techtarget.com.

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Have you reached the point where multicloud management is needed for controlling your assets across platforms? Why or why not?
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Not really. Most of our cloud-based use is with one particular vendor. The only time we really use multiple cloud providers is for geographically distributing load when we test our websites. Even that’s not so bad to manage, but I remember when we first started using SOASTA that they really pushed their brokerage service, telling us moving forward without it was like opening Pandora’s box. That might have been a bit of an oversell.
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This has to be due to Dell's commitment to public cloud players and the integrations of their hybrid / multi cloud offerings and services. Microsoft's Azure Stack comes first to mind. Interested to see how it all develops.
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The logic here is invalid.  Dell exiting does not reflect slow growth in multi cloud. It reflects vision of an emerging market.  There are many variables involved in product and market success. 
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Three (or is it two?) words: vendor lock-in. Funny - when I went to Google and started typing in “cloud vendor,” its first suggestion for completing the search was “cloud vendor lock in.”
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"admit to everything, commit to nothing" - management on the cafeteria plan. Neither Dell nor HP would dare hire anyone entrepreneurial because it's just not their culture. Programmed failure. 
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