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Dell JUNKS public cloud in favor of partner tech

'Freedom from lock-in' through product cancellation

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Dell is discontinuing its infrastructure-as-a-service cloud and instead dealing tech to partners as it looks to make some money in the cut-throat world of cloud computing.

The Round Rock, Texas, company announced on Monday that it was discontinuing sales of its multi-tenant public cloud IaaS "in favor of best-in-class partner offerings."

Dell had announced plans last year to offer an OpenStack-based cloud service, and we understand it had been trialed with some customers and was being prodded by other tech companies – database provider TransLattice had said in February its new tech would be available on both AWS and Dell's IaaS service.

The decision means punters who want to get a cloud from Dell will now go through a trio of partner mid-tier cloud operators including Joyent, ScaleMatrix, and ZeroLag. No mention was made of any European partners.

By cancelling its own product in favor of supplying partners, Dell is giving its customers "freedom from lock-in," the company said in a statement.

This is aided by the company's recent acquisition of Enstratius, a company that specializes in the management of multiple cloud environments.

Enstratius, paired with Dell's troop of Global Service Delivery Partners, will give the company's customers the ability to consume cloud services from multiple Dell-verified providers, and to easily migrate workloads between them, the company said.

Though Dell is spinning the announcement as part of its multi-cloud vision, we think there are other forces at play. We observe that Dell is in a tricky position when it comes to cloud computing, as it sells a ton of servers to service providers through its Dell Data Center Solutions unit. Running its own public cloud service could potentially take cloud punters away from its hardware customers.

Furthermore, though Dell made rather grand claims about its Dell data centers, it's difficult for this vulture to see the value of consuming cloud services from an OEM versus those of an actual massive service provider in its own right (Amazon, Google, and to a lesser extent Microsoft and Rackspace).

Finally, neither of the main public clouds based on OpenStack appear to be doing very well. HP's is still in a beta and few features have been announced in the past months nor have we heard of many [Any?—Ed.] customers using it that are not put forth by HP in their marketing materials, and Rackspace's cloud revenues have seen slow growth compared with the big cloud providers such as Amazon Web Services and Microsoft Azure.

For a company like Dell, which has built its entire enterprise business on selling hardware with big fat support and software contracts on top, the cloud world must seem a little scary and a little weird – and Dell admitted as much in a chat with us discussing the news.

"Our number one strategic effort here is in selling and delivering private clouds whether they be customer managed or Dell-managed, that's our number one," Dell Cloud veep Nnamdi Orakwue, told us.

Dell just doesn't have much of an appetite for public clouds, it seems, and what little enthusiasm it can muster for the market is going to be expressed via its Enstratius tech. "We think that by building traction and owning the multi-cloud management layer much like systems management, we'll be in a position where customers will start to have a greater affinity with Dell or Enstratius as we help them choose," Orakwue said.

Dell is still firmly committed to offering OpenStack-based private clouds to enterprises, and though many of Dell's public cloud team will work on the company's private offerings, some "are making different choices," Orakwue said. ®

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