The behemoth merger of Dell and EMC is nearing conclusion. The first week of August is the target date for the final wrap up of all the financial and legal parts of the acquisition. After that is done, the long task of analyzing product lines and finding a way to reduce complexity and product sprawl begins. We’ve already seen the spin out of Quest and Sonicwall into a separate entity to raise cash for the final stretch of the acquisition. No doubt other storage and compute products are going to face a go/no go decision in the future. But one product line which is in real danger of disappearing is networking.
The first indicator of the problems with Dell and networking comes from whitebox switching. Dell released OS 10 earlier this year as a way to capitalize on the growing market of free operating systems running on commodity hardware. Right now, OS 10 can run on Dell equipment. In the future, they are hoping to spread it out to whitebox devices. That assumes that soon you’ll see Dell branded OSes running on switches purchased from non-Dell sources booting with ONIE.
Once OS 10 pushes forward, what does that mean for Dell’s hardware business? Dell would naturally want to keep selling devices to customers. Whitebox switches would undercut their ability to offer cheap ports to customers in data center deployments. Rather than give up that opportunity, Dell is positioning themselves to run some form of Dell software on top of that hardware for management purposes, which has always been a strong point for Dell. Losing the hardware means little to Dell if they have to lose profit margin to keep it there in the first place.
The second indicator of networking issues comes from comments from Michael Dell at EMCworld this year. Check out this short video featuring him with outgoing EMC CEO Joe Tucci:
Some of the telling comments in here involve Michael Dell’s praise for the NSX business model and how it is being adopted by a large number of other vendors in the industry. Also telling is their reaffirmation that Cisco is an important partnership in VCE and won’t be going away any time soon. While these two things don’t seem to be related on the surface, they both point to a truth Dell is trying hard to accept.
In the future, with overlay network virtualization models gaining traction in the data center, the underlying hardware will matter little. In almost every case, the hardware choice will come down to one of two options:
- Which switch is the cheapest?
- Which switch is on the Approved List?
That’s it. That’s the whole decision tree. No one will care what sticker is on the box. They will only care that it didn’t cost a fortune and that they won’t get fired for buying it. That’s bad for companies that aren’t making white boxes or named Cisco. Other network vendors are going to try and add value in some way, but the overlay sitting on top of those bells and whistles will make it next to impossible to differentiate in anything but software. Whether that’s superior management capabilities, open plug-in model, or some other thing we haven’t thought of will make no difference in the end. Software will still be king and the hardware will be an inexpensive pawn or a costly piece that has been pre-approved.
The other big inflection point that makes me worry about the Dell networking story is the lack of movement in the wireless space. Dell has historically been a company to partner first and acquire second. But with HPE’s acquisition of Aruba Networks last year, the dominos in the wireless space are still waiting to fall. Brocade raced out to buy Ruckus. Meru offered itself on a platter to anyone that would buy them. Now Aerohive stands as the last independent wireless vendor without a dance partner. Yes, they’ve announced that they are partnering with Dell, but have you been to the Dell Wireless Networking page? Can you guess what the Dell W-series is? Here’s a hint: it rhymes with “Peruba”.
Every time Dell leads with a W-series deployment, they are effectively paying their biggest competitor. They are opening the door to allowing HPE/Aruba to come in and not only start talking about wireless but servers, storage, and other networking as well. Dell would do well at this point to start deemphasizing the W-series and start highlighting the “new generation” of Aerohive APs and how they are going to the be the focus moving forward.
The real solution would be for Dell to buy a wireless company and take all the wireless expertise they are selling in-house. That would show they are serious about both the campus network of the future and the data center network needed to support their other server and storage infrastructure. Sadly, with Dell being leveraged due to the privatization of his company just two years ago and mounting debt for this mega merger, Dell is looking to make cash with spin offs instead of spending it on yet another company to ingest and subsume. Which means a real non-partner wireless solution is still many years away.
Dell’s networking strategy is in maintenance mode. Make switches to support faster speeds for now, probably with Tomahawk support soon, and hope that this whole networking thing goes software sooner rather than later. Otherwise, the need to shore up the campus wireless areas along with the coming decision about showing support fully behind NSX and partnerships is going to be a bitter pill to swallow. Perhaps Dell Networking will exist as an option for companies wanting a 100% Dell solution? Or maybe they are waiting for a new offering from Dell/EMC in the data center to drive profits to research and development to keep pace with Cisco and Arista? One can only hope that their networking flower doesn’t wither on the vine.
To be honest. I cant see Dell as a company lasting too much longer. Certainly all companies that I know are using Apple devices. I really cant see any other brand making the cut whilst Apple are bring out the new thing they are bringing out at the moment. I have worked on every computer going and I have moved to a mac about 3 years ago. I must say, yes it took me a while to get used to the mac, but once you get used to it you start to realise how much better they are to any other company.
Hey Tom, #IWorkForDell Lets get that out there. UK based Network Specialist
Michael and Joe are right. The networking world is moving towards Software Defined, just like the server world did with virtualisation 15 years ago. Hasn’t stopped Dell selling Servers. NSX still needs an underlay. Dell can provide that. Further, if the customer doesn’t want to use DNOSv9 or OS10 firmware, then use Cumulus.. or Big Switch.. or one of the other software vendors we partner with.
Is that any different to a customer who needs to run a new workload has to decide on which OS, and which server they want to deploy that with? Those same customers actually want something that just works. With the support behind them, if something was to go wrong.
Remember, what is Dell good at?? We are all about driving value. Why did Michael Dell get into this business 32 years ago? He wanted to make technology accessible and affordable to more people everywhere.
That is exactly why we do what we’re doing in Networking.
Driving up our capabilities. Moving technology forward quicker than our competitors. We’re two years ahead of everyone else with our Open Networking strategy. Partnering with a multitude of software vendors who create Network OS’es. Those solutions are available to ALL of our customers.
Driving down costs. Dell wins customers by offering Enterprise grade technology for up to 1/2 the price in campus, and up to 60% off for Datacenter. Customers love this.
Driving down complexity. We dont use proprietary ASICs. We dont use proprietary protocols. We don’t lock customers in.
Further, the Networking industry is not just moving towards the Software Defined Datacenter.. As you know, its also moving towards a Software Defined WAN.. and a Software Defined Campus. Look at our partnership with Aerohive. Plug in a switch. Plug in an AP. Phones home.. then it Pushes out the Network Policy. Still 100% manageable from the CLI if you want, and it still works if you don’t pay your license renewals.
Dell want me out there helping our customers. At my disposal I have a whole range of solutions to help customers create business value. Can i sell NSX? yes. Brocade Fibre Channel? Yes. Aerohive Access Points? yes. Nuage? F5? SilverPeak? Others? yes. yes. yes
My opinion for what it matters; Dell aren’t disappearing from the Networking industry, and we’re definitely not in maintenance mode. I’ve seen our roadmap, and I’m super excited about it. Happy to put you in touch with someone from Product Group, who’d be happy to share our future with you.