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Private Dell


January 14, 2014  


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Austin, Tex. – Now that he no longer needs to concern himself with the scrutiny that CEOs of all publically-traded firms must endure, Michael Dell and his executive team have embarked on a major overhaul of the company he founded in 1984, while still a student at the University of Texas.

The company officially went private on Oct. 29 with the completion of an acquisition by Dell and Silver Lake Partners, a private equity firm, valued at US$24.9 billion.

At the recent Dell World user conference held six weeks after the deal was announced, he said going private will allow the company to make some bold bets and take risks without “having to constantly be thinking ‘if we do this’ what is going to happen in the next 89 days.”

The bets will largely revolve around cloud computing, enterprise networks, data centre initiatives, mobility and security.

Dell added he is not prepared to walk away from the personal computing space, despite some lackluster financial results. Last August, for example, the company reported a 72% drop in quarterly earnings, the result of declining PC sales.

“The PC is continuing to evolve,” he said. “We have notebooks, tablets, convertibles, two-in-ones, three-in-ones. Every day I hear from customers that these devices are still incredibly important and remain extremely relevant. PCs for a lot of organizations are how things get done. We are investing, innovating and differentiating in this space.”

Another major area of investment is the data centre, which Dell said is undergoing a transformation: “It is no longer about systems of record, but systems of engagement. It is no longer transactional, but relational. It is no longer proprietary, but open, accessible and cloud based.

“Data centres are the backbone of the world and the key to the infrastructure world and driving your organizations and in fact, billions of people around the world and our entire society forward.

“Technology holds the key to solving the world’s greatest challenges. At the heart of these challenges is the fact they are really computational in nature Think about water, energy, climate, education and health care.

“Cloud, mobile, social, Big Data, security challenges – all of these are changing the way technology works. It is making possible a degree of productivity, efficiency and smart decision making like never before.”

On the cloud front, the company announced a number of announcements that included:

• A technology agreement with Red Hat in which the two companies will jointly engineer enterprise-grade, private cloud offerings based on OpenStack. Dell becomes the first company to OEM Red Hat Enterprise Linux OpenStack Platform

• Its intention to offer the Google Cloud Platform and its compute, storage and application services to developers through the Dell Cloud Partner Program.

• Deliver Windows Azure to its customers through the same program. The cloud platform allows organizations to build, deploy and manage applications across public cloud environments.

• The signing of a technology agreement with Accenture in which the two organizations launched offerings for cloud, security and application performance initiatives.

• The signing of a strategic partnership with Dropbox designed to help organization meet the needs of today’s evolving workplace and employees expectations for “easy anywhere, anytime” access to data.

• The expansion of Dell Ventures, Dell’s strategic investment arms, from a US$60 million fund to US$300 million. The company will use the capital to invest in “early-to-growth-stage companies” in emerging technology areas such as cloud, storage, big data, the next-generation data centre, security and mobility.

Laurie McCabe, co-founder and partner at SMB Group, a consultancy based in Northborough, Mass, said that while the cloud has been a murky space for the company in the past, with Microsoft, Century Link, Dropbox and Google on board with its expanded partner program, that is no longer the case.

“Dell’s journey to transform itself from a hardware company to a solution vendor has been ongoing for a couple of years,” she wrote in a recent blog.

“To achieve that, the company has been acquiring, building and blending hardware, software, services, cloud and open standards to broaden its technology footprint. But much of Dell’s progress has been buried in the drama of the fight to take the company private.”

Dell World 2013, she added, promised to be somewhat of a bellwether and while one event will not change things overnight, the company is off to a good start.

Another key area moving forward is the enterprise networking space. At Dell World, it announced upgrades to the Dell EqualLogic storage offerings and introduced a series of new enterprise switches, the company said are designed to “connect the modern workforce. Just as network architectures are transforming to accommodate new workloads, applications and delivery models, so too are campus network architectures.”

According to Brad Casemore, research director of data centre networks with IDC, throughout the last two years, building on its Force10 acquisition, Dell has bolstered its capabilities and portfolio in data center networking.

“Its data centre networking products fit into its integrated (converged) systems, and also represent standalone solutions for enterprises and cloud-service providers that are not inclined to adopt converged infrastructure,” he said. “Dell also is active in SDN and in software-defined infrastructure in the datacenter.

“An interesting development at DellWorld was the introduction of Dell’s N-Series of switches. Dell already had an SDN networking story in the data centre, but it now is broadening that capability to the enterprise campus. It sees campus applications for SDN around applications such as security and traffic isolation, as does HP, and we also see the potential for SDN applications in those areas. It is well placed to capitalize on the growth of enterprise SDN beyond the data centre.”

Further coverage from Dell World will appear in the March/April issue of Connections+ C+

 


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