Summary Bullets:
• The market for hyper-converged infrastructure (HCI) will be a major battleground for solutions jointly engineered by Dell Technologies group businesses.
• Dell EMC will maintain partnerships with competitors in relation to specific converged and hyper-converged solutions as long as customer demand for these solutions continues.
The launch in December of a new VxRack solution based on Dell EMC’s PowerEdge servers and VMware’s software-defined data center platform, gives us only a partial indication of how Dell EMC’s HCI will evolve in 2017. For a fuller understanding, it is necessary to look at the broader range of decisions and announcements the company has made both prior to and since its September merger. It can be argued that the launch of a new HCI solution based entirely on infrastructure provided by Dell Technologies group businesses – together with a move to drop the VCE brand for all of Dell EMC’s converged and hyper-converged solutions – points to a change of strategy for the vendor. They also note the way in which Dell’s PowerEdge servers have been steadily incorporated into several EMC solutions since the completion of the merger – including the company’s VxRail hyper-converged appliance.
However, it can be shown that recent moves by Dell EMC are very much in keeping with the approach that was announced by the vendor at its first Dell EMC World event in October. At Dell EMC World, the company said that it remained committed to selling Cisco server and networking technology as one of the main components of its Vblock converged infrastructure solutions, despite the fact that Cisco’s UCS server is a major competitor of PowerEdge, and despite that fact that Cisco competes against Dell EMC for both converged and HCI customers. Also at Dell EMC World, the vendor said it would continue offering its XC Series hyper-converged solution, which was launched by Dell in November 2014 and which combines Dell PowerEdge servers with hyper-converged software from Nutanix. Like Cisco, Nutanix competes against Dell EMC for hyper-converged infrastructure customers.
Going into 2017, a key component of Dell EMC’s strategy will be to maximize choice for its customers, even when that means offering solutions that involve collaborating with key competitors. The company believes that this approach will maximize its own opportunity to capture market share. Although Dell EMC recently extended its partnership agreement with Nutanix to 2021, it has nevertheless set its sights on overtaking Nutanix in the HCI market and is prepared to sell Nutanix technology if this helps them achieve this.
Dell EMC’s strategy is mainly twofold. Firstly, the company will continue to develop jointly engineered solutions that draw on the technological expertise of both the Dell and EMC parts of the business, as well as other Dell Technologies businesses (including VMware). The new VxRack SDDC solution demonstrates this approach. Secondly, Dell EMC will maintain existing partnerships in relation to specific products (e.g. Cisco for Vblock converged solutions and Nutanix for the XC Series hyper-converged solutions) as long as customer demand for these solutions continues. One assumption here is that as long as customers remain happy with the way a particular solution is engineered, it makes no sense to mess around with that engineering. At the same time, Dell EMC acknowledges that not all hyper-converged customers want to use VMware hypervisors and its XC Series solution is therefore designed to address that market.
Meanwhile, the decision to drop the VCE brand (based on the initials of the three founder of VCE – VMware, Cisco and EMC) can be seen as a move to remove a brand that no longer makes any sense when applied to an increasingly diverse range of solutions. Indeed, it can be argued that the popularity of Dell EMC’s converged and HCI solutions depends more on the reputation of the technology rather than the VCE brand.
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