Friday, February 17, 2012

Dell? a software company? Frankly I'm torn.

ZDNet's Glenn ODonnel tells us "Suddenly, Dell is a Software Company!"

About two weeks ago, Dell announced it formed a new software group. In itself, this is not necessarily big news, but what gets us excited about Dell’s potential to finally become a serious software player lies in the man they hired to lead this new group. The new President of Dell Software Group is none other than John Swainson, the same guy who rescued CA from the brink of collapse and turned it into a truly good software company. When John left CA, it was the best it had been in its entire history. It continues to be a strong company because he built it to endure.

I cannot say I am surprised at Dell's move. Dell wishes to compete with HP who competes with IBM and Oracle all of whom have vast software and service portfolio's. Not to mention the hardware business is become more and more of a commodity market. Only the high end systems offers good margins and that seems to get smaller and smaller.

On the one had this move will be a good move for Dell, John Swainson has a good track record and has Gleen pointed out if Dell's culture is compatible what what John brings then it could be very successful. On the other hand I have to ask is this really a good move for the customers? One thing I have liked about Dell is they have been the most vendor agnostic. IBM is network agnostic as is Oracle but HP has been trying to claim the entire hardware stack for a while which has put pressure on Dell to do likewise. I think IBM and Oracle have been wise to stay out of the network space but both are heavy in the storage market. Cisco has entered the server market but honestly I have not seen anything from them that has been very compelling. Only thing I do see between HP and Cisco is that their building of the stack has just lead to a proprietary stack.

Personally I have not been happy with the hardware stack all in one vendor approach. It seems to be an "all eggs in one basket" approach. I am not saying this doesn't work, but I question how good it is for the industry as a whole and for customers in-particular. HP pushes their stack hard. Yes they will work with you if you bring up another solution but it is generally a HP first mentality. Oracle seems to be moving to the "we are the only one" route. IBM seems to be the most willing to work with people and build good hardware stack, but IBM has a problem with the image (true or not) of being costly. So Dell has played and good role in value and service. Frankly their equipment hardware is as good or better than HP servers. Dell's DCS team is a great boom but I wish they were a little more public with what they do as they have great solutions that might actually fit other people but no-knows that is going on behind their closed doors. (BTW, I really like the concept behind the C6100 and C5000 are great. Just wish acquisition cost would come down more.)

Building out more software solutions for Dell may be seen as a good competitive strategy when comparing Dell to HP but I can see where one time business partners are now software rivals. We saw the same thing happen between HP and Cisco which in turn changed things between Dell and Cisco. HP started making more advanced 10G switch gear and made their "VirtualConnect" which offered something more than Cisco offered for the HP Blade Enclosures. Soon we find out that Cisco is going to make their own server hardware and blade enclosure and the only "Cisco" blade-switch you can have for your C7000 is the Cisco 3120, 3020. None of which have 10G connectivity to the blade. Your only option is to use 10G pass=through to a Cisco switch. You have a similar situation with Dell.

In the end if Dell can show the same customer service with software that it does with it's hardware and do a good job with implementation then I see them doing well in this new initiative. But it still begs the question is this good for customer and the industry or are we starting to hedge towards more proprietary hardware stacks?