3 Ways for Dell to Rise Again

I’m not a big fan “top reasons to do x, or fix y” but I decided to go against my better judgment and publish three ways Dell can shake-up the industry.

One: BE DELL


Dell is a successful company that revolutionized IT by providing equal to superior products at a lower price while providing excellent customer support and service. Dell seized the opportunity to partner with companies like EMC to expand their footprint while continuing pushing costs down. Somewhere along the line, between AMD and Blade Servers, the competition caught-up and began to fight fire with fire. Meanwhile, Dell was left “Dell-less” and flat-footed; no longer nimble enough to change from the cha-cha to the tango.

Dell must make a critical choice; blaze their own path within this datacenter/cloud computing mess or follow HP, Cisco, and others. Currently, Dell has chosen the latter and has aggressively partnered with Juniper, Brocade, and others to attempt to match their rivals (similar to IBM’s strategy minus the power of IBM Global Services). Additionally, Dell continues to evangelize the concept of OPEN IT infrastructure. Ah, the old OPEN vs. Proprietary argument; does it hold water in the enterprise? Finally, Dell purchased Perot Systems as their long awaited entrance into services.

All these moves, while necessary, do not play to Dell’s core strengths. Why not use the vaunted Dell manufacturing capability to commoditize next generation hardware faster than the competition can recoup their costs; Cisco has spent millions on R&D and software development while HP has spent billions on R&D and acquiring complementary technology companies. If Dell could build a UCS-B/Nexus look alike with equal to superior performance at a lower price, then they could dominate the market.

Two: Public Clouds Need Not Apply

While the idea of public clouds is intellectually enticing, the reality is the money lies within private clouds. Does Google build their cloud infrastructure on commercial hardware from Dell, HP, IBM, etc.? By their very nature, public clouds are singular in nature; search, virtualization, CRM, etc. They require fine tuned operating systems and management capabilities that are linked to CPU, memory, power, and disk. In other words, go directly to the component manufacturers and build what you need. If something fails, weigh the cost of replacement vs. leaving it in place.

Private clouds require a delicate balance of performance, reliability, and management. Very few enterprises will entertain the notion of building their own hardware as they want the peace-of-mind and backing of giant corporations such as Dell. To capitalize on private clouds, Dell must blaze of new trail by concentrating on security, performance, reliability, management, and ROI.

How does Dell accomplish this? By calling BS on the current state of private clouds and offering real solutions to current challenges. How? Don’t just take tired old tools form 3rd party ISVs and announce that you have a cloud computing management strategy. Understand that cloud computing requires new paradigms within security, storage, networking, and compute power.

Three: Open Source Hardware

Open Source Hardware is a reactively obscure concept. Per Wikipedia, “Open Source Hardware is designed and offered in the same manner as free and open source software.” While HP Labs has dabbled within Open Source Hardware, Dell has the opportunity to take the lead.

Dell could offer a full line of Open Source Hardware publishing full hardware specifications as well as the software that runs these machines. Dell Laps and Open Source Division could work with customers to build cost effective systems. This is very similar to what they have done within their white label division; see Aster Data.

Wait, didn’t you say most customers won’t build their own hardware? Just because it is open source does not mean everyone will take advantage of this nor does it mean a lack of revenues; see Novell, Red Hat, etc. By publishing detailed specs and code, Dell becomes a revolutionary and IT professionals can finally make informed decisions. They may choose to have Dell build the systems, build them themselves, or purchase from a competitor. However, the thought leadership and vision comes from Dell

One area of low hanging fruit for Open Source Hardware seems to reside within storage. Rather than purchase expensive gear from EMC, IBM, etc. why not build a cost effective storage array? Of course, Dell would be cutting into their EMC partnership, but do they really want to work with a company that is dating Cisco?

In conclusion, I find Dell a fascinating company with explosive potential. Given the right vision and strategy, Dell could catapult ahead of the pack.

Tired of the Cloud: Introduction

I’ve been meaning to write about cloud computing for quite a few weeks. As a proponent and advocate for autonomic computing (servers, storage, security, and network), I have a hard time reading most blogs, analyst reports, and articles on the subject. Somehow, cloud computing is being described as the “next generation of grid computing” or “the natural evolution of the Internet”.

When I started my career at AT&T, people would often draw a cloud as the wide-area-network connection between two end-points. Sales reps and even technical sales people would talk about the benefits of the cloud and how it was superior to our competitors. To paraphrase a mentor of mine, “people who talk about clouds and draw clouds on white boards often have no idea what’s in the cloud and how it really works; don’t be one of those people.”

Today’s cloud computing discussion is fraught with old thinking, recycled products, and muffled innovation. Complicating matters is an effort to create a new architecture or a “Universal Cloud Interface” or API to explain cloud computing. Of course, these efforts are sure to benefit the usual suspects. This is analogous to a big oil company discovering a plentiful and easy to obtain alternative source of energy; while it may exist, where’s the profit in bringing it to market until the trillions of dollars of oil is pumped from the ground?

While working at Cassatt, Bill Coleman (CEO) often talked about “an inflection point” whereby the industry would break free of old-line thinking and realize that there is a solution. Are we really at this inflection point? Are we ready to accept that current silos, deployment, and utilization of servers, networking, storage, security, applications, and even virtualization within the datacenter are at a breaking point?

Whether it is cloud computing, utility computing, grid computing, web 2.0, software-as-a-service, application service providers, or whatever you want to call it, the industry must first face the titanic challenges of this revolution prior to realizing the rewards. We must be willing to re-examine the fundaments of the datacenters such as hardware, operating systems, system resources, programming languages, management systems, artificial intelligence, people (may be the most important of all), and more. For the future of the “cloud” is dependent on fundamental changes in all these areas and deep innovation must emerge.