Dell Dumps Its Public Cloud Offerings

itwbennett writes "Last week, Dell said that it would be 'refining' its OpenStack plans. Now we know that 'refining' means 'backing away from'. Although the company wouldn't answer direct questions on the subject, a press release spells it out like this: 'Sales of Dell's current in-house multi-tenant public cloud IaaS will be discontinued in the U.S. in favor of best-in-class partner offerings.' Interestingly, none of Dell's initial partners, including Joyent, ScaleMatrix and ZeroLag, have platforms built on OpenStack."

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[TheBestMerlinEver]

this is odd. given the Dell model was a huge cash cow for them.

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[gl4ss]

this is odd. given the Dell model was a huge cash cow for them.

you know what's an EVEN bigger cash cow? selling the service - the cloud service - at a premium and actually buying the service from whoever happens to be selling it cheapest that week.

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[TheBestMerlinEver]

but they lose the future profits....

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[spacepimp]

There are plenty of people making money offering cloud provisioning/services. This is more along the lines of: Dell accepted 2 billion dollars of cash infusion from Microsoft. Dumping open stack and not building ChromeOS or linux boxes is part of the agreement terms I suppose. Open stack has been fairly successful and the vendors who seem to be dropping support for it are to entertain ways of making more money in licensing.

Conspiracy theory 101

[spacepimp]

This is what a two billion dollar cash infusion buys? They are the new Nokia apparently.

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[Anonymous Coward]

Except that there is no mention of Microsoft. You'd think if there was a conspiracy by Microsoft to get Dell to drop OpenStack, you'd see Dell recommending Azure.

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[Dunbal]

Dell was good when they were charging IBM prices for PC's. They were innovators to some extent. I had a few early Dell machines and they were the best specs you could buy, back in the 1980's. As soon as they started competing on price, I imagine they switched to bargain basement suppliers. Now everyone knows that to own a Dell is to have to buy a new machine the very second the warranty expires if not sooner, AND having to deal with perhaps the worst support and service in the industry. But Michael Dell mad

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[Anonymous Coward]

You're describing a past which never happened; e.g. the entire point of DELL's initial business model was to compete on PRICE by marketing computers directly. By not having the overhead of a physical store, they managed to undercut other vendors, with more "traditional" sales approaches, in the fledgling PC clone market of the mid 80s. Then in the 90s they went one step ahead, and they tried to do as much "just in time" distribution as they could, in order to have as little inventory as possible (shipping d

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[Dunbal]

A past that never happened? I remember DELL on the back cover of PC and Byte Magazines. And I remember the day of the $5000 Dell computer. Dell never competed on price - at least not at the beginning. The "cheap computers" were to be had from CompUSA, "Fast Data", and other dealers, for a good $2000 or more less than a Dell machine.

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[Dunbal]

Not CompUSA... some other direct marketer with Comp in their name. I had a 33MHz 386 from them but I can't remember the brand name anymore. Too damned old.

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[Dunbal]

Nope. CompuAdd [wikipedia.org]. I remember now. Far cheaper than Dell, and much nicer machines. Hell even Gateway was cheaper than Dell.

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[GigaplexNZ]

Using Dell and quality in the same sentence, hell - post at all, invalidates your entire argument. Go back to answer Dell Help Desk calls...your numbers are dropping. Tell them to rebuild their pc again to solve their printer problem...

You just invalidated your own argument by including the offending words in the same sentence.

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[whoever57]

I think you are confusing Compaq and Dell. Compaq used to sell insanely expensive and over-engineered PCs. I seem to remember my company paying $30k for a desktop PC from Compaq in the early '90s.

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[evilviper]

Compaq used to sell insanely expensive and over-engineered PCs. I seem to remember my company paying $30k for a desktop PC from Compaq in the early '90s.

Compaq had very good WORKSTATIONS and SERVERS, but their PCs have always been cheap. I distinctly recall their later 90's PCs, which were non-standard over-sized motherboards, with all (cheap junk) components integrated onto them. They were right along side companies like Packard Bell in the race to the bottom.

Their workstations and servers, however, were

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[HornWumpus]

Intel has been giving away reference designs for 20 years.

Most Dell hardware is just generic PC hardware, bought in bulk, with 'Dell' silk screened on it.

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[scottbomb]

Actually they're still the #3 maker of PCs so I wouldn't be so quick to write their obit. Source: http://en.wikipedia.org/wiki/Market_share_of_personal_computer_vendors [wikipedia.org]

At the board meeting

[Dunbal]

Someone overheard part of the conversation which went something like "it turns out that people aren't as dumb as we though they were".

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[Dunbal]

Yeah, typo. Well spotted. I never used to make them but now I'm getting older :(

ugh!

[Anonymous Coward]

Anybody else misread that as "Pubic Cloud"?

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[Anonymous Coward]

Anybody else misread that as "Pubic Cloud"?

Um... no?

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[hawkinspeter]

Nope: I misread it as "Pubic Clown"

How will this affect Rackspace?

[Baby Duck]

Hmmm, Dell provides a lot of hardware to Rackspace. Rackspace has an OpenStack implementation offering.

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[Desler]

Why would it affect Rackspace?

Re:How will this affect Rackspace?

[mu51c10rd]

Rackspace can go to hell.

Hell is already hosted on Amazon EWS...

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[IVI4573R]

But if you want a T-Shirt it's back to Rackspace as they host tshirthell.

It isn't cheap, nor is it easy.

[applematt84]

Building and maintaining a public cloud offering is not cheap, nor is it easy. I was laid off from my last job due to the shortsightedness of the management staff. When I started asking for licensing and support from the vendors due to unforeseen issues, as well as additional equipment due to the growth rate, the management staff realized they couldn't do it as cheaply as they wanted. I have experience building an IaaS product, and that experience tells me to just let someone else deal with it that already has the issues figured out. Linode and Rackspace are great examples. In addition, if one wants to offer a custom portal for their clients, then I suggest you write an interface that uses your vendor's API and call it a day. 'nuff said.

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[atom1c]

And for Dell's part, they also realized that cooking the books wouldn't help their overall financial position without pulling a CA-style fraud.

After all, their OpenStack unit would have to buy equipment (presumably Dell servers), but that's just shuttling dollars from one P&L to another. They would surely need more customers footing that bill before rolling their own -- which, mark my words, is what they'll do once their P&L statements allow them.

Until that time, they'll just let the partners

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[mysidia]

And if Linode/Rackspace's nearest datacenters are so far from your geography, that the latency is too high for internal business apps?

Re: It isn't cheap, nor is it easy.

[applematt84]

You have private clouds confused with public cloud offerings. You are thinking about a private cloud, not an IaaS public cloud. If you have the funds and resources, then by all means, build yourself a private cloud using VMware, XenServer or KVM. A public cloud offering IaaS product involves offering a web portal for your clients to build their own VMs ... like what Linode, Rackspace, etc. offer. If you are really concerned about latency then a private cloud would be the best solution. If you are using an a

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[mysidia]

If you are really concerned about latency then a private cloud would be the best solution.,

Ah, but you see... It's not about private clouds... it's not me alone that is concerned about latency... it would be my customers that would be considering using a cloud service for their internal servers, because there are no big datacenters nearby, but my datacenter is nearby...

The big cloud providers' datacenters are far-away net-wise, so I ought to be able to service some latency-sensitive workloads

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[applematt84]

I still think you have private and public clouds confused. A private cloud would be a single physical server on-premises, or uplinked to the clients office from a datacenter via MPLS circuit, that is managed by a single client like XenCenter (XenServer), vSphere (VMware) or System Center (HyperV). This allows one to spin up multiple VMs that would logically sit on their internal network and be perfect for low-latency, internal applications.

A public cloud offering is where you have a scaleable cluster of

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[mysidia]

A private cloud would be a single physical server on-premises, or uplinked to the clients office from a datacenter via MPLS circuit

The private/public distinction seems totally artificial then.

Does it really matter whether their internet service is residing in a VRF, with IP space routed to a VLAN on the virtualization cluster, or whether the end user has a site-to-site VPN solution, as if a VPN suddenly makes it public?

Is the distinction private/public not totally artificial?

Of course there sh

They couldn't get a good price on servers...

[evilviper]

Could it be that Dell discovered the hard way that their servers are, in-fact, too expensive? Companies like Dell and HP are seeing declining server sales due to projects like OpenCompute that are bypassing 1st tier vendors and going straight to ODMs for simpler, cheaper servers. Some of the companies buying these cheap servers include cloud service providers like Amazon.

Obviously Dell can't do that with their own in-house offerings, so perhaps they just couldn't compete with vendors running on cheaper servers.

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[eap]

...Obviously Dell can't do that with their own in-house offerings, so perhaps they just couldn't compete with vendors running on cheaper servers.

Dell's public cloud problem wasn't hardware. Cloud providers buy hardware before building the service. Dell failed to stand up a live OpenStack public cloud. HP and Rackspace already have theirs running with real customers.

Building a public cloud is hard. It takes either a big company with lots of resources, or a smaller dedicated company with good funding. Both require long term commitments.

Openstack isn't particularly good...

[Anonymous Coward]

While I recognize that Dell's failure in the industry doesn't indict Openstack, it's really not that good.

Every well known provider either doesn't use it, or at best uses it in a token fashion to appear 'open'. The reason is pretty straightforward, it's functional scope is sufficiently limited that each vendor is just as well off writing their own private solution. It actually takes less work to charge forward with your own implementation than go through the hoops of coordinating with a wider community c

Took them long enough...

[Cyberax]

So they've finally realized that OpenStack is just a death-knell for the IaaS industry. It commoditizes it and enables a race to the bottom, like it earlier happened with web hosting and later with individual VPS hosting. A couple of years from now and we're going to be swamped by small companies offering OpenStack-based clouds.

And so instead of trying to capitalize on their own server production unit and compete on price, Dell's going to try and differentiate themselves using some half-assed proprietary

Not enough control of private data

[who_stole_my_kidneys]

I was working with a company who signed a contract with dell to have people start implementing "private clouds" on the Microsoft platform. I think they realized that most organization need more control over their data due to regulations and solutions like this may not meet those needs.