Four Reasons Why Dell Dropped its IaaS Cloud Service

ZeroLag Dell will offer public IaaS through partner companies rather than its own public cloud, according to an IT World article of May 20, 2013. It’s one of the first prominent providers which has decided to free itself of public cloud service offerings. It’s dropping both Openware and VM investments. Best in class partner offerings will replace IaaS multi-tenant services. Partners ZeroLag, Joyent and ScaleMatrix will take over this cloud function on behalf of Dell. Here are four reasons why Dell has taken this surprising step:

  1. Dell has had difficulty implementing public cloud services, delaying Openstack availability. The company advised that it was looking for more maturity in Openstack as a product.
  2. Dell has been experiencing some financial difficulty and may have found that competing in the public cloud service market was more difficult than they had initially anticipated. Dell saw PC profits decline a precipitous 79 percent during q1 of 2013 at the same time as IBM has entered the public cloud service market according to OneStopClick.com. ElcapitalMangement.com reports on Dells sluggish market performance.
  3. Dell has replaced their IaaS program with a partner program. These new providers can offer Dell customers the opportunity to maximize their productivity with the benefits of interoperability and economies of scale. Also on offer are outstanding workload and performance management tools.
  4. With Dell’s astounding loss of revenue in PC sales, the company is trying to recoup their profitability in enterprise areas. Moving IaaS to partners will enable Dell to concentrate on core functions which show more promise of profitability. With a partner approach, Dell customers can gain even more value by employing a comprehensive strategy.

Dell will continue providing customers with the flexible options they need to fulfill their enterprise requirements and ensure a seamless transition to Dell Cloud Partners. Trimming operations to include more profitable core functions makes good business sense, and with transition of public cloud services to partners, Dell can maintain its high standards while continuing to maintain and expand customer base.

There are only a handful to true IaaS providers currently offering cloud services in the UK and US, and Virtual Internet is one of them. While Dell has dropped out the race to be a stable IaaS provider, VI continues to be a leader in this arena. Recent Virtual Datacentre offerings along with enterprise cloud infrastructure powered by VMware and OnApp Xen are proving popular with tech savvy IT leaders.

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