Dell Technology Summit – Big on Aspiration, Light on Detail

Last week, Dell Technologies held an online Technology Summit as a half-yearly review of progress since Dell Technologies World in May 2022. Although I wasn’t invited, I have watched the recorded video. My initial thoughts are that the presentation was strong on aspirations and goals but, unfortunately, too light on the details.

Background

In this latest edition of the Dell Tech Summit, panellists presented views and opinions while taking questions from invited analysts. The layout of the panel was itself interesting to note. At the head and centre was Michael Dell, with Jeff Clarke (co-COO), literally his right-hand man. Also onstage was Allison Dew (Chief Marketing Officer) to the left and, to her left, the new co-COO, Chuck Whitten.

As you can imagine, with a small set of senior executives, the discussion was always likely to be high-level, but there was a distinct lack of strategic detail in the conversations. More on that in a moment.

APEX

The future of Dell Technologies is being squarely placed on APEX, the purchasing model that aims to add flexibility and choice to future customer technology deployments. Michael Dell commented twice during the discussion that APEX is late and should have been started earlier. This is, perhaps, a reference to the work HPE has done with GreenLake. HPE now claims that every solution can be purchased under the GreenLake banner, for good or otherwise.

But what does “purchased through APEX” actually mean? Here’s a description taken from this APEX brochure.

Introducing Dell Technologies APEX, our breakthrough portfolio of as-a-Service offerings that simplify digital transformation while increasing IT agility and control. APEX makes it easier than ever to leverage Dell Technologies innovation when and where you want it, while easing or eliminating infrastructure management. APEX helps you react quickly to capture new opportunities and ensures that your technology stays aligned with your business requirements. And with APEX, you’re always in full control, minimizing risk and maximizing performance, all on your terms.
APEX Brochure

From the way this reads, we should be able to buy and use Dell services and infrastructure in any location in the consumption model that suits the end user. In fact, further into the document, we see this description:

either on-premises in your data center, out to your edge environments, in colocation facilities adjacent to your cloud providers, or natively in a public cloud.

So far, so good. APEX enables anywhere deployment of Dell services and infrastructure. But at this point, we need a reality check.

APEX Services

There’s a limit to how far Dell solutions and products can be delivered outside a traditional data centre environment. Dell servers, for example, aren’t going to be available in the public cloud and possibly not with most co-lo bare metal providers like Equinix. So, to gain some clarity, we’ve trawled through the Dell APEX offerings and produced the following table.

Service	Delivery Model	Private Cloud	Public Cloud	Co-location	Edge
APEX Cloud Services with VMware Cloud	Dell-owned and managed, 14-day delivery, 1/3 year term	VMware Cloud on VxRAIL	Not available	VMware Cloud on VxRAIL	VMware Cloud on VxRAIL
APEX Hybrid Cloud	Dell-owned and deployed, customer managed, 28-day delivery, rack-based, 1/3 year term	VMware Cloud Foundation on VxRAIL	Not available	VMware Cloud Foundation on VxRAIL	VMware Cloud Foundation on VxRAIL
APEX Private Cloud	Dell-owned and deployed, customer managed, 28-day delivery, rack-based, 1/3 year term	Dell VxRAIL	Not available	Not available	Dell VxRAIL
APEX Data Storage Services	Dell-owned, customer or Dell-managed, three tier minimum 50TB, block & file services, 1/3 year term	Yes	Not available	Dell-managed co-location facilities (see list)	Not available
APEX Backup Services	Dell SaaS solution built on Druva technology/partnership	Endpoint devices, Virtual workloads (VMware, Nutanix, Hyper-V)	SaaS applications (Google Workspace, Microsoft 365, Salesforce), VMware Cloud on AWS	Virtual workloads (VMware, Nutanix, Hyper-V)	Endpoint devices, Virtual workloads
APEX Cyber Recovery Services	Dell managed solution running in co-location or public cloud	Yes, protect on-premises data in secure vault	UNCLEAR	UNCLEAR	UNCLEAR

Dell APEX offerings

Notes:

VMware Cloud = Tanzu Kubernetes Grid, App Migration (HCX), vSphere, vSAN, NSX-T (Networking)
Hybrid Cloud – VMware Cloud Foundation = vRealize Suite, HCX, SDDC Manager, vSphere, vSAN (optional), NSX-T
Priviate Cloud = vSphere & vSAN (optional)

The first three services are effectively variations of VMware platforms on Dell VxRAIL hardware. These include Tanzu, vSphere, vSAN, NSX-T (networking), vRealize Suite, SDDC Manager and App Integration. The first (APEX Cloud Services with VMware Cloud) is fully managed, using a tightly coupled configuration with no external storage. Both the Private Cloud and Hybrid Cloud offerings are customer-managed and look to be no more than repackaged hyper-converged infrastructure platforms with a one or three-year lease term.

APEX Data Storage Services offers either file or block-based storage on-premises or in a Dell-managed co-location facility. There is currently no public cloud offering, and Edge isn’t discussed.

APEX Backup Services is rebranded Druva, with protection for endpoint devices, SaaS applications, virtual workloads, and VMware Cloud on AWS. There doesn’t appear to be any support for virtual instances running across public clouds.

Finally, APEX Cyber Recovery Services is a SaaS offering to protect data and isolate it in a secure vault. Customers then get managed recovery assistance in the event of a disaster, such as a ransomware attack. We could only find references to the protection of on-premises data. Of all the services, Cyber Recovery Services is the least well-documented and most difficult to conceptualise in the framework of a hybrid environment.

Patchwork

In this breakdown, APEX seems (so far) to be a patchwork of multiple infrastructure solutions with a heavy dependency on VMware technology. The storage platforms are probably PowerStore and PowerScale. Backup services are delivered by Druva, while the Cyber offering looks to be existing backup software. In that respect, this is the only software offering that uses the majority of Dell intellectual property.

Missing in Action

The “elephant in the room” here is the support for the public cloud. The only service that directly references any of the leading public cloud platforms is APEX Backup Services. However, this is limited to VMware Cloud on AWS. So, despite claiming a focus on hybrid clouds, the Dell APEX offerings seem to miss out a massive proportion of public cloud workloads, such as those running in virtual instances.

Work in Progress

I’m prepared to accept that APEX is a work in progress. We know that Project Alpine will deliver Dell storage solutions in the public cloud in some form. Exactly how that will work is, as yet (to us at least), unknown. More importantly will be the next layer up from infrastructure (mobility), which we will refer to in a moment. We also heard at the Tech Summit about Project Frontier, an initiative aimed at delivering better management, security and orchestration of edge-based applications and data. The adaptation of technology to manage some of the edge computing challenges could be a significant area for Dell (and one we’ll discuss in another post).

Strategy

We see Dell Technologies’ ongoing strategy as being divided into two parts.

What is the company going to deliver to customers?
How does the company intend to deliver those services?

The answer to the first question appears to be infrastructure and associated services. Today this still includes servers, storage, networking, and endpoint devices (laptops and desktops). However you choose to slice and dice this by industry, the results are still the same.

In the public cloud, the only products Dell Technologies can offer are software-based. To date, this has been restricted to data protection and resiliency solutions. Storage products are expected “soon”.

How will these solutions be delivered? As we can see from the table above, most of these services are provided as customer-managed hardware or partner-managed software. Dell isn’t becoming a service provider in the same way NetApp has transformed its business.

However, there’s decreasing margin in hardware, whereas infrastructure sold as a service can be packaged with add-on services (like management). To achieve this effectively, every vendor must evolve its hardware solutions to be more efficient. This means high granularity (being able to deploy in small increments), light-touch or no-touch performance management and rebalancing, hot-swap “everything”, and in-place upgrades (without downtime). This topic is probably a series of blogs in its own right, so we’ll leave it there for now.

The ultimate conclusion of this position is that the remaining on-premises vendors, such as Dell and HPE, will need to evolve the design of hardware to be service focused, with increased levels of standardisation and efficiency. A good example of this is the way Pure Storage has aligned FlashBlade and FlashArray to use the same DirectFlash components and introduced commercial models to make the hardware interchangeable between platforms.

Moving up the Stack

Early deployments of the public cloud were essentially on-demand consumption of virtual instances, except perhaps for Amazon’s S3, which was the first practical public storage-as-a-service offering. As the cloud has evolved, virtual instances, storage, networking, and infrastructure tools have become the building blocks of bigger and better services. For the cloud providers, this offers a greater margin and a desirable level of lock-in. For the customer, there’s the ability to build complex ecosystems of applications that store and process data while avoiding significant capital expenditure.

How does a company like Dell Technologies replicate this success? Over time, on-premises hardware can become more “cloud-like”. Although this can’t mean full scale-up/down flexibility, Dell can offer managed hardware for long-term and predictable applications.

What we don’t see is how Dell Technologies will bring next-level services like data mobility or application ecosystems to complement the infrastructure. This is where we see the gap between aspiration and reality, but one that comes with a degree of risk.

Build or Partner?

So, what should Dell (and others like HPE) do? In data storage, we’ve already seen some evolution with Portworx Data Services from Pure Storage. This kind of service could be replicated by Dell Technologies, especially with the availability of Tanzu in the portfolio.

Going further than this could be a challenge. The most obvious route is to partner to build services, like the relationship with Druva. Alternatively, Dell could build these solutions independently.

However, there’s a considerable risk in becoming a developer. AWS (for example) overcame this issue by taking in-house developed solutions that were already deployed in the Amazon retail business. We don’t think Dell Technologies has this kind of capability and would therefore need to create the solutions from scratch – or partner.

The partner route has one problem. Dell doesn’t own the technology and so can’t direct the development of (for example) vSphere or Tanzu over time. If VMware made a commercial decision to drop Tanzu, customers could perhaps migrate to Red Hat, but that’s a disruption and introduces additional costs. Add in the factor that Dell only makes a portion of the revenue from integrated sales with VMware, Red Hat, Druva, or any partner. (Side note, this reason is one that had us scratching our collective heads when Dell sold off VMware).

The Architect’s View®

Dell Technologies’ hybrid strategy is heavily biased towards on-premises edge/co-lo solutions. This isn’t a surprise from a hardware vendor. We would like to see what the next stage in development will be as infrastructure transforms into solutions. Will Dell continue to leave this part of the work to integrators, partners, and customers? Will the company build out a set of generic services onto which partners can build? This is the next level of detail we would like to see, one that helps crystallise a strategy to bring a hardware portfolio into the hybrid world.