Dell: Good servers and PCs, but for storage ... oh dear
The view from Italy on Big Grey's possible avenues ahead
Comment Dell is a great IT company, but it is clear that they have to revise their storage strategy if they want to maintain some relevance in the IT infrastructure space. (and I’m talking about storage because I primarily cover this market … I’m sure that it wouldn’t be difficult to find similar weaknesses in fields like networking. From the outside they don’t seem all that brilliant there either).
Dell is good with servers
It’s quite clear where Dell’s DNA comes from. In fact, the servers and PCs are not that bad. Some quite amazing products can be found in their line-up. For example, I personally really love the XPS 13 and FX servers, which are quite impressive.
Dell’s server line-up covers most SMB and enterprise needs. Support and maintenance services, at least from what I can directly see in Italy, are good and prices are always aligned with the market if not better. They are not perfect (who is after all?) but they are quite competitive and all their sales/presales forces are very well trained to do this job.
For years now Dell has been wanting to be more present in the high-end and the large enterprises. Quite some time ago, they bought a service company (Perot Systems, primarily present in the US) and started an acquisition campaign which seemed to be going towards that direction. But it looks like the energy and effort to pursue that strategy have slowly dimmed down … and everything seems half-baked to me. I thought that becoming a private company would have made Dell much more agile and quicker in executing - but I was wrong.
Dell is good where there isn’t a storage problem
If you look at Dell’s storage products, you’ll find that they have decent ones for SMBs (more for small than medium sized companies I think). The company's last announcement saw an even more stripped down version of Compellent storage, which is still the primary storage platform for Dell. Some minor software updates, smaller hardware and some imposed limitation to justify the lower price. Zero innovation. A tactical move to attract more customers to its own products instead of OEM-based ones. Good for revenues in the short/medium term for sure though.
At the same time, both Equallogic and Compellent are still suffering from very old problems and there are no signs of any immediate solutions: future integration (remote replica across different systems for example), a common management platform, or any other thing that could help to change the situation.
And consider that Equallogic and Compellent are now direct competitors, at least from a price perspective.
Holes in the product line-up
When we start talking about enterprise storage, you can immediately see all the flaws with Dell. Where do I start? The list is very long.
- No All Flash Array - Well, if you talk to Dell, Compellent AFA exists, but from my point of view it is not credible when compared to modern AFAs. No in-line dedupe/compression, awkward use of tiering, not thought up for high performance and low latency. No cloud-based analytics. Just an old array refitted to look like AFA.
- No credible NAS (especially no Scale-out NAS) - Excluding the Windows-based NAS (which is good for some use cases), there is nothing really optimized to do that job, especially at scale.
- No object storage - Dell had a reselling agreement with Caringo years ago. But now that these types of solutions are getting a lot of attention, Dell has nothing to say. Shortsighted to say the least.
- No software appliances or hyper-converged - No VSAs (XC is Nutanix, Dell is merely reselling it). Other solutions, like Nexenta, simply suck. And if we look at all the software products, like in the case of data protection, you find overlaps, non-competitive products and so on.
- No cloud - No cloud gateways, No integration with cloud, nothing of any particular relevance for end users.
Ok, I suppose I should stop here. There is more but I think you get the idea. The best Dell solutions come from official and less-official reselling agreements. In fact, Nutanix is an example and I’ve heard about Dell selling Solidfire more than once ...
Closing the circle
From my point of view there are two options here.
1) Continue being a B player.
Continue to lose market share, and sales in the high end (except when Dell XC, aka Nutanix, or Solidfire come to save the situation) and tactically win deals here and there but without a real strategy.
Dell could pull it off simply by concentrating its efforts on PCs and servers and thinking about storage (and networking) just as secondary accessories.
2) Build a serious storage strategy.
This is not easy. Dell doesn’t have a storage culture and it has lost some key engineering figures in the past years. The company should start from the base, building a better storage culture and then putting some money into it to build a credible product line-up. Beginning from low-end solutions to scale later is always difficult, and most of Dell’s storage products are not suitable for high-end tasks today. Dell doesn’t shine in any product category, but it could be considered a good thing if you want to reset and reboot.
In the first case, but for different reasons, Dell is in good company with vendors like IBM (which is focusing its efforts on cloud) and NetApp (which is focusing solely on ONTAP!); just a couple of examples. It’s not all bad for Dell, it’s just clear that storage is not really their “thing” ... up until when something happens in the market that would put them in a bad position (like for example an EMC/HP merger).
The second scenario, Dell building and executing a strategy, involves a certain amount of money to be able to recruit the right people and acquire storage startups ... and also some time to re-organize and make things work. At the moment, the company is private and I don’t know if it has the money or the people and the patience to build something other than good servers and PCs.
Maybe it is enough for them … how are the server and PC markets doing? ;) ®