James Thew - Fotolia
Amid the rampant rumors of a shake-up at Dell Technologies Inc., another reorg within the company could impact customers in the near term.
Dell has dismantled its converged platforms and solutions division (CPSD) and merged the pieces into its core business units. The reorganization moves the Dell hyper-converged infrastructure (HCI) portfolio, including VMware products, along with Dell's high-performance computing teams to the company's server division. The converged infrastructure (CI) organization is now part of Dell's storage division, to more closely tie the VxBlock and Vscale product lines to the company's core storage business.
The decision to break up the Dell HCI portfolio could benefit corporate users in search of CI and HCI systems -- in contrast to any tangential benefits they'd see from a Dell IPO.
"Dell can gain economies of scale and commoditize CI and HCI through streamlining," said Mike Matchett, principal consultant and technology strategist at Small World Big Data. "Most users will see this move as leading to lower price points."
Dell may have felt pressure to reorg in response to mounting competitive pressures in the increasingly crowded hyper-converged infrastructure market.
"I think CPSD was doing pretty well, [but Dell] wanted things to move more quickly," said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy. "Competitors like Cisco and others are picking up momentum and they [Dell] had the notion things could move both quickly and profitably."
Part of the reason for this Dell HCI portfolio move is to leverage greater manufacturing economies of scale. "Dell is defaulting back to its expertise in volume manufacturing, where they take EMC's IP [intellectual property], scale it to Dell's supply chain and give it over EMC's enterprise sales reps," said Geoff Woollacott, senior strategy consultant and principal analyst at Technology Business Research Inc.
Mike Matchettprincipal consultant and technology strategist, Small World Big Data
Another advantage of the breakup is that it hands the CI and HCI portfolio to Dell's salesforce, which sells exclusively to the company's top 250 customers, a mix of Fortune 500 and midsize businesses. Dell's direct sales force has a tighter business relationship with these customers and may better understand their needs.
Others think the move won't significantly improve the fortunes of Dell hyper-converged and CI offerings. The company has had little success selling its own packaged up HCI products compared to market leaders Nutanix and SimpliVity, the latter now owned by Hewlett Packard Enterprise (HPE) Inc.
"Dell knows hardware, but my experience with its salespeople tells me they aren't particularly adept at the software half of hyper-converged," said one solutions architect with a large technical services provider. "I don't see how this move necessarily better positions them with HCI."
Moorhead said he believes Dell EMC has the necessary talent to successfully sell into the HCI market, but the company must ensure its software expertise and solutions capabilities stay up to snuff.
Ed Scannell is a senior executive editor with TechTarget. Contact him at [email protected]