back to article Michael Dell? More like Michael in-Dell-nial: No public cloud, no future

You look at Michael Dell, as he gazes out on an audience of 13,000 attendees at this week's Dell EMC World event in Las Vegas, and you think it's like looking at a Sun King and his worshippers. The audience stretches from side to side in front of him in a 180-degree arc. The multiple video screens on either side relay every …

  1. Steve Davies 3 Silver badge

    That can't be the real M. Dell

    He's not wearing a shirt with a button down collar. Aren't they mandatory in the USA?

    1. Stevie

      Re: That can't be the real M. Dell

      Eddie Monsoon? Is that you?

    2. BillG
      Paris Hilton

      Grab them by the what?

      I saw M. Dell speak at an entrepreneur's conference in Boston about ten years ago. It was in an auditorium at MIT. I'll never forget it - it was an education into hot girls and the rich & powerful.

      I got there 30 minutes before the talk and the first few rows were already filled with hot, supermodel-type girls, some who tossed their hair at him the entire time. Some appeared to pull their blouses up to show their "assets". When the talk was over the girls rushed the stage and security had to restrain them. A few threw what looked like panties at him.

      "Power is the ultimate aphrodisiac" - Henry Kissenger

  2. AMBxx Silver badge


    Is the audience really sitting on beanbags? It isn't 1999 any more Mr Dell. I suppose it does mean the hall looks fuller than it really is.

    1. Anonymous Coward
      Anonymous Coward

      Re: Beanbags?

      That's in the breakout hall, not the main hall which is normally packed.

  3. deadlockvictim

    Public Cloud

    Do we really want (let alone need) public Clouds?

    It seems to me that they are devices which allow the corporations to extract money from from on a monthly basis rather than whenever you choose (as would be the case if you owned and maintained your own hardware).

    They also tether you to an Internet connection, which isn't always to your advantage.

    And finally, they give the corporations much more power. And these corporations have been known to become very greedy. Rates can be raised at any time. Outages are your problem, insofar that you have to wait until we fix the problem, but we have you by the short-and-curlies, so there is little that you will do about it. And if you are not happy, you can go through the pain of taking all of your stuff off our Cloud and put it somewhere else. It will cost you though...

    1. big_D Silver badge

      Re: Public Cloud

      Not to mention data protection and legislation problems. If it is on-site, it is your problem. If it is hosted, you have no control over the hoster and if they splurge your data over the internet (or let someone steal it), it is still your problem, even though it is not your fault and you face prosecution for their failure...

      Add in things like not being able to store personal information outside the EU (for EU based citizens and businesses) and, usually, financial/tax relevant data can't be stored outside of the country of origin withoug getting a special dispensation from the tax office / treasury, and you have real problems trying to even recommend cloud as a suitable alternative.

      I like the convinience of cloud in some ways, but for a business based on a single site, doing manufacturing and where most of its employees are on site and sitting at the thin end of a 10mbps line, cloud makes little to no sense.

    2. ParasiteParty

      Re: Public Cloud

      Agree entirely.

  4. Anonymous Coward
    Anonymous Coward

    The Cloud...

    Other peoples Computers you have no control over.

    Dell Servers - not as good as HP servers, but you do have control over them.

    1. Korev Silver badge

      Re: The Cloud...

      Not to mention low latency and not panicking because you've gone through your budget and it's only August...

      We probably need another cloud icon ->

    2. Anonymous Coward
      Paris Hilton

      Re: The Cloud... The Reg said it...

      How the cloud really works for you:

      Paris, because she knows about the commercial opportunities when you open yourself up for the general public.

  5. Fabrizio

    Dell has a hybrid public-private Cloud

    Dell *does* have a Cloud offering through its Virtustream subsidiary: a public-private Cloud offering including EU data centers (and even super-private Germany is included there)

    And contrarily to AWS, Azure and Google, they offer an SLA so they attract the SAP, SAP HANA and other business-critical applications into their Cloud...

  6. Mage Silver badge

    What doesn't Dell have? A public cloud

    Why should they?

    It's like asking why doesn't Tesco own McDonalds.

    Or why don't Unilever, Nestle, Heinz-Kraft only run restaurants. Eating out will never replace eating at home.

    1) Inevitably there will be a small number of Cloud sellers = Hosted Services. They need massive private international fibre networks, that's why there will only be a small number of vendors of hosted services.

    2) It's a completely different market to selling mostly hardware.

    3) HW sales will not go away. Clouds need client equipment.

    4) HW sales will not go away. Much IT should NEVER be on the so called Cloud.

    5) Setting up datacentres, global networking, managing services etc is quite different to making storage arrays, servers and PCs.

    6) No doubt the laptop, PC, Server and storage markets are challenging. They won't go away and doing something unrelated you know nothing about is no solution.

    Apple has had iTunes since before iPhone. It made the iPod successful (which was very late to market MP3 player). Phones and tablets are a consumer commodity product. I expect Apple to try and sell their cloud services to non-Apple users. Dell abandoned their phone and tablet lines and Apple has maxed out. Apple's not Dell's future is in Cloud services. Apple has been doing this for 16 years.

    IBM disposed of their PC, Laptop and then x86 server business, but really before the x86 was unexpectedly a success for them, their mainframe business was about selling on site managed hosting / services. The Cloud is just that at a datacentre (warehouse of pizza box style computers instead of a single mainframe shared) via the Internet. Nothing new.

    SoundJam MP, developed by Bill Kincaid and released by Casady & Greene in 1998,[6] was renamed iTunes when Apple purchased it in 2000. Jeff Robbin, Kincaid, and Dave Heller moved to Apple as part of the acquisition, where they continue to work today as the software's original developers. They simplified SoundJam's user interface, added the ability to burn CDs, and removed its recording feature and skin support. On January 9, 2001, iTunes 1.0 was released at Macworld San Francisco

    1. Mage Silver badge

      Public cloud is a threat to civilisation!

      As more stuff that SHOULDN'T be outsourced, gets outsourced by bean counters we will reach a tipping point.

      Yes, a Cloud service might be more reliable. But if in house fails you only lose ONE bank, or wholesaler, or retailer, or Mobile operator (billing). The Cloud has too much monoculture and will be too few providers.

      I just read a pre-release review copy of No Silver Lining. It's set slightly in the future of fewer cloud providers and most Point of Sale, Banking, Mobile Billing, supplier ordering etc all outsourced to the cloud.

      The scenario is patches rushed out (by separate organisations) for servers and routers. A perfect storm of stupidity. We have ALREADY seen these sorts of failures, but not enough is outsourced yet to make it serious.

      How many Cloud failures so far have been:

      a) DDOS

      b) Other Cyberwarfare attacks

      c) Misconfiguration by human

      d) Automatic update patches that were not tested properly.

      Most that I find searching here are in c and d categories. I think only a couple of significant DDOS and they by nature are limited.

    2. Anonymous Coward
      Anonymous Coward

      Re: What doesn't Dell have? A public cloud

      Clouds do need client equipment and there will still be a market for that, but for owners of larger infrastructures the need to "control" through in-house hardware is continually being eroded. For higher security environments auditing by the customer can be arranged etc.,

      1. Roland6 Silver badge

        Re: What doesn't Dell have? A public cloud

        >Clouds do need client equipment and there will still be a market for that,

        Clouds also need server equipment and there will be a market for that...

        So the real question is whether Dell see's itself as being a major player in the cloud infrastructure market. Which basically says to what extent does and will Dells involvement in cloud datacentre projects such as OCP contribute to future revenues and profits.

    3. Roj Blake Silver badge

      Re: What doesn't Dell have? A public cloud

      Also, while Dell may not have a public cloud, a lot of its partners do, running on Dell hardware.

  7. Tim Roberts 1

    Michael who??

    Who is Michael Dell? ...... for that matter who/what is Dell?

    1. Stevie

      Re: Michael who??

      Clive Sinclair? It that you?

  8. piwi3910

    Dell does have a public cloud

    but it's more of a specialty cloud, it's called virtuastream.

  9. naive

    Simplifications in server hardware might beat cloud offerings

    On premises hardware still has significant cost cutting potential. Suppliers of cloud based services mainly realize lower prices by using simpler server hardware, instead of an over engineered 1U servers costing at least $ 2000,- in a basic config, they use non standard and simple blade like setups. Same goes with networking, instead of premium brand firewalls costing in the 5 digits range, they also use simpler designs. Maybe they also get reduced prices for Windows CAL's.

    Once the main stream 1U Xeon box manufacturers like DELL come up with a concept for replacing the typical mid scale data center filled with 50-100 1U boxes requiring an initial investment of around $ 500,000.- with some blade like systems like the big cloud boys use, requiring half of this investment, they could perhaps compete better on price with cloud providers.

    1. Anonymous Coward
      Anonymous Coward

      Re: Simplifications in server hardware might beat cloud offerings

      Will companies not end up with highlly specialised staff only to optimize backends for the sake of keeping them on-premise?

    2. Gerhard Mack

      Re: Simplifications in server hardware might beat cloud offerings

      Cloud providers save money by chopping each server into many little pieces. I've done the math, doing on premises VM cluster is cheaper when looking at lease monthly payments than cloud even if I use expensive servers and brand name networking gear.

  10. Anonymous Coward
    Anonymous Coward

    Dell knows what he's doing, that's why Chris is a journalist on meagre wages and MD is a multi-billionaire.

    Has Chris considered this, because everyone is rushing to cloud that leaves on premises as a clear field, there's a lot to be said for the profitability of a niche business.

  11. Fenton

    Well they already have an enterprise class cloud with virtustream.

    Also why build a cloud when you can hook into existing clouds, without the need to build them.

    AWS can now take on VMware workloads.

    DellEMC storage can use existing cloud storage providers as an additional storage tier within

    and array. You can even backup to existing cloud storage providers out of the box.

    My personal opinion. Why go out to the cloud, why not invite the cloud into your own data center.

    I.e. offer you spare capacity out to the cloud providers who can then distribute/create HA nodes

    on a smaller granular level, thus taking the risk away from large sites.

  12. Tom 7

    Theres no money in the cloud for Dell.

    It's not like they can make any money from it - so long as your PC or Laptop can see the cloud there is no need to upgrade. Its not like MS who can update their cloud so you need a new OS to access it.

  13. piwi3910

    Dell does have a public cloud

    , but it's more of a specialty cloud, it's called virtuastream.

  14. boatsman

    3000-3500 bln is a bit more than 20-30 bln

    the first number is the average number mentioned as the IT spent of the world.

    the 20-30 bln is what is spent on amazon and similar.

    1% of the IT spend = cloud, sort off.

    so, what does the cloud not have what the not-cloud does have ?

    the spending.

    the cloud idea has seen huge adoption. the cloud as a off the shelf product not so much when it comes to the big spenders: facebook, google, amazon itself. they run their own......

    1. Anonymous Coward
      Anonymous Coward

      Re: 3000-3500 bln is a bit more than 20-30 bln

      > 1% of the IT spend = cloud, sort off.

      Except: cloud isn't all *that* cheap for traditional server applications which run 24x7.

      In Amazon, an m4.large virtual machine (2 cpu / 8GB) will cost you $55.19 per month on a 1-year contract, which is over £500 per year, plus EBS storage charge, plus Internet traffic charge.

      Buying a basic Dell R230 or similar is around £700 when an E-value code is available. Furthermore, you can cheaply upgrade it to 16GB or 32GB, whilst similarly enlarging the VM will cost you 2x or 4x as much.

      The management is pretty much the same: in both cases you're responsible for managing both the OS and the applications on top.

      Of course, the Dell needs to be powered, and it needs rack space.

      But what you are really paying for with EC2 is the flexibility to turn service on and off on-demand - plus the fact that if a box dies, your workload will be immediately restarted on another box. And in the case of Windows workloads you're paying your Windows licence per hour, rather than having to buy it all up front.

      Those advantages evaporate when you have a sufficiently large pool of servers yourself.

  15. Jonjonz

    Vanity IT

    A huge selling point for cloud IT, at least to vain CEO's with secret Trump wannabee tendencies, is that it's one check to write, (which they personally get wined and dined for )and they can make that decision and be done with it, fobbing off the responsibility to make it work on some equally lazy IT director who really hated haivng to manage all those independent bids, contracts, personnel and maintenance issues of in house tech.

  16. tedleaf

    Perhaps he doesn't care what happens to Dell later on ?

    It's his company,he has built it up,perhaps he doesn't want to pass it on to family or others once he stops running it..

    Why leave all that hard work etc for anyone else to profit from.

    Most of those mentioned in article are probably psychopaths,how many studies have shown that 'successful" leaders tend to be,one of the traits is not giving a shot about others,so why leave easy profits for others,dead man switch the whole corporation,when you die so does the organisation..

  17. disgruntled yank

    Putting all your metaphors in one basket

    "She's cutting HPE back to find the spring wood hindered by the dead timber, but can she relight HPE's spark, the fire lit by HPE's garage band founders? It's a work in progress and, so far, a strong and sustained spurt of growth hasn't been seen after the severe pruning."

    Is the author trying to remind us that Finnegans Wake first saw print in sections published under the name "Work in Progress". Hewlett and Packard worked out of a garage, but probably half a century before there were garage bands. And if you want, aren't you better off using dead wood than green growth?

  18. CrustyDanBear

    Sitting here at OpenStack Summit, talking to a lot of banks and telco's investing big $$$ into the private cloud. Sure, Google and AWS are infrastructure models to emulate, not migrate. Cloud automation is rocket science, techies working in SDDC are more secure and better paid than ever.

    Dell|EMC are capitalising on this private/hybrid cloud need, not chasing the SME's but the giant beasts which keep our world running. There will always be a need for public, private and hybrid clouds, to think otherwise misunderstands what cloud computing offers large enterprises.

  19. Kevin McMurtrie Silver badge
    Thumb Down

    But, why?

    Why would a computer maker want to compete with huge cloud companies like Amazon and Google that are willing to sometimes operate at a loss? That sounds like suicide. A better strategy would be helping them build their clouds while helping customers build private data centers. No matter which way the tech goes, you're selling computers.

  20. Matt Bryant Silver badge

    Dell "needs" a public cloud?

    Maybe MD is just smart enough to realize trying to force his way into the already over-crowded and cut-throat cloud market would just be a massive drain on resource and money? There's still plenty of money to be made out of on-prem, and probably will be for a long time yet.

  21. Dinsdale247

    Too Big, Too Powerful

    The basic issue for companies that provide IT and hardware is that new servers are so big and powerful that you can run most of a SMB needs on a handful of servers. The big boys have seen the writing: Open source software + powerful servers = no more money for them.

    But Big Business *can* create a "cloud environment" and tell you that it's the best thing since sliced bread. Big companies can now extract the income they need on a subscription basis for a nice reliable cash flow and they don't have to worry about licensing or anything. Just provision a new instance and off they go. Those services are great for those who can't do IT themselves or don't want to do it themselves.

    But Michael Dell sees that too. And he also sees that the next generation of IT infrastructure will come in a single box and provide the same cloud like services without the subscription. Hundreds of unique applications and sever instances on a single machine. Once the "converged infrastructure" becomes mature, expect to see a similar move OFF the cloud as the cost benefit suddenly tips the other way.

    Michael Dell is one of the reasons the PC is a commodity now. I completely expect him to do the same thing for private clouds that he did for the PC. I think it's funny that El Reg would go so far to praise his vision and then think that he has suddenly run out of ideas. Dell now has all the pieces - including the hypervisor, networking hardware, deployment software and storage systems - to create something really powerful. Perhaps it is the author who is lacking vision?

  22. W. Anderson

    Dell benefitting signifintly from Microsoft Public Cloud

    As long as Microsoft is closely supporting and using Dell infrastructure - with exception of VMWare.against which they use Hyper-V - for their Public Cloud Computing offering, it behooves Michael Dell to not spend exorbitant hundreds of millions $$dollars themselves, when the benefits of Public Cloud Computing accrue to the company via Microsoft investment, and in concert for Hybrid Cloud from which they gain directly.

    One possible downside is IBM, Oracle, Gooble and other Microsoft Competitors not procuring Dell server hardware.

  23. Steve Chalmers

    Pendulums swing

    C'mon Chris, you've been around the industry long enough to know that technologies and business models come and go, in a pattern where the new and exciting (well, the ones which don't fizzle, which is most of them) become darling growth businesses, reach maturity, and then gracefully decline over a period of decades.

    Comparing public cloud (the current darling) with traditional server, storage, and network (all of which are clearly at maturity if not beyond) makes for good journalism if not click bait headlines (you're better than that), but it's just illustrating what we all knew 5 years ago playing out as expected.

    Public cloud, if you look inside, is just the endgame for x86 processors, in server storage, and cheap networking, delivered not just with an extraordinarily sharp pencil on equipment cost, but also with extraordinary automation and economies of scale on the management side, beyond what Enterprise was ever able to achieve. But doing this has required investing an enormous level of capital in a narrow way of doing business, which will have to stay in place for a long time to earn the shareholders a proper return on that investment.

    So what's next? What will leapfrog the thing that today's public cloud has fine tuned, causing the public cloud vendors to need to extract marginal revenue from their now captive customers, just as (say) IBM needs to in mainframes, or even Oracle needs to as on-prem Enterprise matures? Will the pendulum swing back from public cloud to on-premises, due to outages, or security risks, or attacks on the Internet backbone? Will byte addressable storage class memory chips enable new architectures which break the 50 year old boundaries between server, storage, and network as I have predicted? Will Intel make a series of pricing mistakes, ushering ARM into the data center? These are all hard to predict.

    So I see three possible outcomes:

    1. Dell is running the consolidation play, buying companies in mature segments for peanuts and then firing people and wringing profits out of them on the slow path to oblivion (I think you called this the Unisys play, but that takes a very backward looking view of what the Unisys folks have achieved over the last 30 years).

    2. Dell is using the legacy businesses as a source of cash (as a private company cash flow is way more important than P&L), and will use some of that cash to fund carefully selected breakthrough technologies in fields its sales force can sell. Glances at the changes in storage which could come from byte addressable storage class memory chips, used wisely.

    3. Michael Dell won the first time around not on product (they were OK, but nothing special) but by building the best, most efficient supply and distribution chains in the world. It may be that he intends to build a supply and distribution chain for private cloud, to make private cloud competitive with AWS...or for some new approach that hasn't occurred to me yet.

    But don't listen to me, I'm just another prematurely retired ex-HPer.

  24. Just a geek

    "What doesn't Dell have? A public cloud"

    Except that they now own a chunk of VMWare who is partnering with AWS so maybe as part of the partnership agreement, Dell won't create a cloud rival to AWS?

  25. Iknowsomethingaboutstorage

    New thinking

    Regarding the cloud, no doubt it will be very present in the IT arena from now. And I am a believer of the cloud role for future architectures. But I do not believe one-size-fits-all but in the use cases.

    This last weekend, Netatmo servers were down several hours (may be for for maintenance). Although not all the users around the world were affected, I was.

    Was pretty funny for me to have a bunch of hardware deployed on premises in my home and being not able to access to them even they were all up'n'running. Thinking about the same regarding business-critical apps makes me thinking a lot if the cloud fever is what IT really needs... for every case.

  26. ParasiteParty

    Cloud based CAD workstation anyone?

    Not much RAM in your cloud based graphics card is there?

  27. Anonymous Coward
    Anonymous Coward

    People continue to underestimate Michael Dell. He has overcome all these and then some. I recommend not underestimating him again. His secret power is that he listen's very closely to the customers and market, and builds businesses to meet those needs better than anyone. Why would this be any different? He is playing the long game. That is why he went private.

  28. Shameless Oracle Flack

    Growth and Business Value Add

    @ Steve Chalmers said:

    "is just the endgame for x86 processors, in server storage, and cheap networking, delivered not just with an extraordinarily sharp pencil on equipment cost, but also with extraordinary automation and economies of scale on the management side, beyond what Enterprise was ever able to achieve. But doing this has required investing an enormous level of capital in a narrow way of doing business, which will have to stay in place for a long time to earn the shareholders a proper return on that investment."

    Steve is effectively backing into Chris's arguments from the article. So although it is true, as some comments on this thread have suggested, that public cloud is not always the right model (e.g., consider HPC environments with large numbers of servers running 99.999% utilized for 5 years), public cloud scale and automation go far beyond what can be achieved by any enterprise IT department on its own. The field is littered with the carcasses of internal-IT-owned OpenStack "cloud" projects that were never truly completed and cost a fortune in time, lost opportunity, and manpower. Only very large, profitable companies with either an in-place cloud for their own business (i.e., Amazon, Google) or a platform franchise (i.e., Microsoft in OS/middleware, Oracle in database/applications) that can be used to subsidize long-term cloud development *at scale* will be able to build real, competitive public clouds.

    And a question for all the infrastructure folks who responded with some "math" on how they can roll--their-own so much cheaper than some public cloud vendor. If that's true, then why is the public cloud growing at 30-50% while the on-prem IT market is slowly shrinking? And that's just IaaS. If you add SaaS, vendors like Oracle are seeing >80% growth rates year-over-year. Perhaps your CIO and VP of IT has finally figured out that roll-your-own infrastructure IT is a recipe for overstaffing, complexity, downtime, and poor ROI.

    1. Steve Chalmers

      Re: Growth and Business Value Add

      @ "Shameless Oracle Flack"

      I hold Oracle in the highest regard, as a software company which has both served customers well and monetized that service well over a period of not just decades but generations.

      That said, the pricing of Oracle's database on virtualized servers, much less converged infrastructure or cloud, has become difficult enough to police that perhaps offering Oracle's database as an SaaS product in its own cloud (which then provides IaaS for all the services built around and over Oracle's database) is a brilliant solution. Allows some of those hardware contributions the Sun engineering team has up its sleeve to come to market in a much more controlled (cheaper to release and support) way than a general release to Enterprise.

      But let's not pretend that Oracle as a company has a business model which allows a large capital investment in a commodity IaaS business in direct competition with AWS, much less the culture or expertise to match the cost structure of that IaaS business. This is an SaaS business, at a much higher cost and pricing structure than IaaS, to the point where the hardware the SaaS runs on could be oursourced to a provider like AWS. Not generic VMs, of course, but rather an isolated subnet of suitably custom servers+storage.

      I think Oracle's message would resonate better presented that way...

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