I attended Dell Technologies World 2019 this week in Las Vegas. I’m not a gambler, but I’ve attended enough conferences in the Nevada desert in my 30+ year career to know that many tech companies and their leadership have a tendency to roll the dice. Michael Dell is no exception, taking his company public in 1988, private in 2013, and public again in 2018 under the Dell TechnologiesDVMT +0% umbrella (which includes Dell, Dell EMC , VMware , and RSA, among other iconic brands). Mr. Dell and his senior executive leadership strive to integrate the capabilities of these organizations to make it easier for customers to procure IT hardware, software, and services. It’s a bold vision and it will be interesting to see how it unfolds over time. From a networking perspective, there were two announcements this week that caught my attention. Let’s take a closer look.
Infrastructure that’s decidedly VMware-flavored
Dell made a few networking-related announcements on the second day of the event. On the hardware side, PowerSwitch is a rebranded open networking switch portfolio that delivers improvements in performance and is optimized for edge, storage, and hyper-converged infrastructure deployments. A SmartFabric services integration was also announced for VxRail, which promises to automate the majority of the required steps in design, validation, and deployment. The remainder of the announcements were decidedly VMware-oriented. The newly packaged Dell EMC SD-WAN Edge powered by VMware bundles a VeloCloud SD-WAN software subscription with Dell EMC hardware. The aim is to streamline support, though from my perspective the branding is a tad confusing.
After two days of keynotes, it became abundantly clear to me that VMware leads Dell’s overall software-defined networking strategy with NSX and drives the lion share of networking innovation. I’m left with the impression that Dell EMC isn’t making an equal investment on the hardware side. In contrast, Cisco Systems announced a new series of Catalyst 9600 switches earlier this week that are backed by its DevNet developer ecosystem (over a half million developers strong). That should drive significant innovation on top of its hardware offering. Across the globe, Huawei invests heavily in R&D and is driving one of the most prolific patent portfolios of any major tech company. Key to its differentiation strategy is integration of custom artificial intelligence silicon into its switches and routers. Given what Dell’s competitors are doing, I would like to see the company invest commensurately.
Orange is the new Dell 5G
Netflix fans, did I get your attention? Day 3 of Dell Technologies World was punctuated with an announcement focused on 5G. Dell and Orangehave entered into a partnership to develop and validate 5G use cases and business models and explore multi-access edge and multi-cloud architecture deployment. Open source edge consortia, validation of accelerators (such as SmartNICs and the ever-popular GPU), and software-defined automation tools that utilize artificial intelligence/machine learning are all part of the overarching scope of the relationship. Regarding open source, there was no direct reference to the Linux Foundation’s recently launched LF Edge working group. That being said, I know that Dell EMC is a founding member and Orange is a part of the Open Network Automation Platform (ONAP) effort. Given Orange’s recently flat earnings report, I believe it will benefit from the identification of new service monetization opportunities. Dell should benefit by expanding its telco grade infrastructure reach with industry standard compute, storage, and fabric—which is attractive to operators given the obvious OpEx and CapEx advantages over traditional, purpose-built LTE and 5G “big” infrastructure.
I also had the opportunity at the event to speak to Kevin Shatzkamer, who heads up the overall 5G and service provider strategy for Dell EMC. His team is roughly 2.5 years into its journey, and it demonstrated at the recent Mobile World Congress event in Barcelona that it has the necessary telco acumen. Orange is just the first carrier partnership announced; Dell has its sights on 15 carriers globally that drive 80%+ of the mobile broadband market, in addition to traditional infrastructure providers Ericsson and Nokia . Mr. Shatzkamer views 5G as an umbrella and is also looking at how his team can enable additional service provider monetization opportunities with VeloCloud SD-WAN services and CBRS/OnGo (which should reach a commercial deployment phase in the U.S. by mid-year). The latter in my mind is ripe for services such as private LTE and eventually 5G which promise to provide flexible and lightly /unlicensed spectrum connectivity options for enterprises, governments, and educational institutions.
I found it interesting that in keynotes and subsequent closed-door analyst sessions, Mr. Dell and Vice Chairman Jeff Clarke were both quick to point to 5G as the key to driving digital transformation. I expected a focus on the latest Wi-Fi 6 platform release and how it might complement Dell’s strategy to drive an open networking ecosystem. I believe both 5G and Wi-Fi will co-exist long term (you can read a prior article I wrote on that debate here). With that said, Mr. Dell’s vision and my discussions with Dell telco executives at the event clearly point to 5G and edge as an integral part of the overall Dell Technologies playbook. The collective companies are obviously doing something right, posting share increases in their respective categories.
What I also find fascinating is that Mr. Dell started his journey in a dorm room at the University of Texas souping up IBM personal computers. Today, the combined revenue of Dell Technologies exceeds that of IBM ! This required an evolution of the Dell direct sales model to embrace the scale of the IT distribution channel and the transformation of a PC-centric business to a one-stop IT services shop. I look forward to seeing what unfolds in the future for Dell Technologies.