Dell's latest tactic centers on cloud broker service
Dell's upcoming cloud broker service is its latest in a string of cloud strategies. Will this one be the winner?
Dell has once again changed course in the public cloud market as it seeks to be the go-to site for IT pros comparing services.
The Round Rock, Texas-based company plans to launch a cloud brokerage service on Dell.com sometime this year, and has partnered with some of the biggest vendors in the industry to do so. The offering is part of a larger plan to become a trusted voice in the cloud and gain a foothold in the growing market through its managed services.
Dell launched a private beta version of the site on June 30, and invited several dozen customers to use it before a full launch later this year. Customers will be able to use a simple interface for side-by-side comparisons of cloud services and will have a single shopping cart to purchase products, Dell said.
The company has a highly trafficked site and this service could serve as a catalyst for wary enterprises to embrace the cloud the same way the company helped push adoption of x86 servers and other technologies in the past, according to Dell.
The company spent more than a year developing partnerships with 12 major cloud vendors to help launch the brokerage site, including Amazon, Google, Microsoft and CenturyLink. Combined, the vendors' cloud services span 128 data centers, according to Dell.
The service is similar to how travellers use Priceline to book airfare, and customers won't have to use a Dell cloud, the company said. While there are no underlying costs for using the site, the potential benefit for Dell comes in the added services customers could purchase while shopping for cloud infrastructure.
Michael Cotéanalyst, 451 Research
The goal is to be more than just a broker, said Michael Coté, an analyst with New York-based 451 Research LLC. Dell wants to serve as a single source to sell cloud services with consolidated billing and to be the first point of contact for support and management.
"This fits well with one of the more popular Dell customer profiles: someone who just wants the old easy button and is perfectly willing to do it through Dell if they have the button," Coté said.
Bundling and reselling other cloud services with a layer of Dell technology around it is akin to how the company assembles PCs and desktops, Coté said.
However, Dell's brokerage service is far from unique. Other cloud brokerages, including Jamcracker Inc., also help corporations compare cloud services and pricing and offer additional management services.
Will this cloud strategy stick?
This is not Dell's first foray into the public cloud. In 2012, it planned to build an OpenStack-based infrastructure service to compete with other vendors, but scrapped that plan the following year in favor of partnerships with cloud providers including Joyent, ScaleMatrix and ZeroLag Communications.
Dell abandoned its public cloud program in 2013 because of what it described as a crowded, commoditized infrastructure as a service market, and feedback from customers that wanted help to manage the complexity of multiple cloud environments. The company also sells underlying hardware to some of the biggest cloud vendors, so it would be against Dell's best interest to compete against its own customers.
The company said its cloud strategy involves three pillars: private cloud migration away from traditional data centers, including an enterprise-ready partnership with Red Hat; off-premises, including vertically oriented clouds in highly regulated fields such as health care and government; and multi-cloud management.
Dell hopes that third pillar will grow through the brokerage site, as customers that trust Dell to help shop for products also trust the company to manage the various clouds. The service is bolstered by the May 2013 acquisition of enterprise cloud management provider Enstratius.
"It's a way to get in front of people's eyeballs that help upsell cloud," said Dave Bartoletti, an analyst with Cambridge, Massachusetts-based Forrester Research Inc. "That's the real opportunity."
Dell will have to offer more than a catalog, analysts said. It must offer reliable guidance to customers to match them with a cloud provider that best fits their workload. It also will have to be easier to use than simply going to the different vendor sites.
But Dell has always been innovative with how it provides a shopping experience, and this fits with the company's strength as a channel partner, Bartoletti said.
This plan could work because first-time infrastructure and platform buyers often have a hard time gleaning the difference among vendors' offerings, Bartoletti said. Most companies simply start with Amazon as the default offering and get locked in before understanding what the best fit is.
"There are so many different dimensions for customers to figure out," Bartoletti said. "We're going to start seeing a lot of companies use cross-cloud portals, and Dell is early to the game."
Trevor Jones is the news writer for SearchCloudComputing. You can reach him at [email protected].