1 post • joined 21 May 2013
Dell has been messing about with public cloud for over three years. I say messing because that's essentially what's been going on at the management level with a real lack of understanding and commitment.
The organization within services has gone through three VPs in less than two years and until recently the services cloud team numbered almost five hundred people. It is now being shrunk to less than 150 and contrary to current assertions most of those aren’t by choice.
Dell hasn't invested in the right places or embraced the change that cloud brings. Management either doesn't understand the cloud business or refuses to acknowledge the realities of its disruption to both technology and service consumption models as shown by the poor state of offerings on the vCloud platform. As a company used to selling large numbers of servers to cloud providers it’s reticence to invest the required capital is also odd as it was hardly a surprise.
Dell initially presented too few resources for cloud, then went the other way and built an organization that was far too bloated with too much resource on admin and process, not enough investment on actual innovation and all the bad stuff that comes from the legacy Dell organization. This included a high cost structure reminiscent of traditional custom ITO or managed services deals. Ask yourself, does it really take 300 people to run VMWare services with a few dozen customers?
This was followed up with an organization that was long on promise and short on investment in anything that actually moved the ball forward. Lots of smoke and a few mirrors. Over 300 team members are now subject reorganization and work force reduction, unfortunately many of whom with valuable cloud era talents.
Dell has never accepted the large and long duration investments required for success in the cloud business, and this is in keeping with historic principles within the company where R&D investment has been far below that of its competitors. Also, as is typical, internal and external politics kept degrading the effort. With the massive fumble on smartphones and tablets and now adding cloud to this effort
Is this decision right for Dell? It’s certainly easier for Dell to digest as it fits into the typical operating model, but given the disruptive nature of cloud and the existing state of Dell’s business I suspect that history will look back on this and wonder whether opportunity was lost.
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