Original URL: http://www.theregister.co.uk/2012/12/12/dell_servers_cloud_president_clinton/

Dell shoots for number one in servers, adds OpenStack to public cloud

Ex-Prez Clinton preaches optimism, and R&D spending, to the multitudes

By Timothy Prickett Morgan

Posted in Servers, 12th December 2012 23:30 GMT

Dell World 2012 It is Dell World day two, and company founder, chairman, and CEO Michael Dell took the stage a half-hour late to talk, once again, about the repositioning of the company that bears his name to be a bigger player in the IT racket.

He also invited former President Bill Clinton, who spoke for what seemed like about three hours about the things that were wrong with the world and how we all need to work together, internet-style, to make it better.

As an IT sports writer who happens to like systems, the System of All Systems is, of course, the world economy and how people, technology, money, and raw materials mash up to give us all livings and products.

And if you are a policy wonk with a systems bent, listening to Clinton go on for an hour and a half about how he sees this system breaking down and how to fix it is surely more interesting than whatever server and cloud announcements Michael Dell was going to talk about. But this is an IT pub, and we take care of business first.

In his keynote, Dell, the man, said that as of the third quarter of this year, Dell was the number one server supplier in North America and had taken the number one position in Asia, too. Dell meant in terms of shipments, not revenues, of course, with IBM selling $3.5bn and HP selling $3.3bn of machines compared to Dell's $2.1bn. But, Dell counts share by shipments, and said it was only 64,000 machines behind market leader HP.

"So if everybody here buys ten servers, I think we've pretty much got it," quipped Dell, saying that Dell, the company, had been gaining share for quite a long time with competitors moving in the opposite direction.

That's true enough. But Dell doesn't have expensive and sticky mainframe and Unix systems from which to extract disproportionate profits, either.

"If you look at the trajectory, we are on a path to become number one worldwide in servers within the next few quarters."

That's not news so much as throwing down the gauntlet at HP CEO Meg Whitman's feet. The real question is not when Dell will ship more boxes, but when it will rival HP and IBM in terms of revenues.

Dell is about half the size of HP in EMEA, but is growing revenue at around 10 per cent while HP is off 17 per cent. If HP just managed to level off and hold steady, Dell will catch up with it between 2016 and 2017 in terms of worldwide revenues, and if HP keeps losing revenue share as it currently doing, Dell will catch up with HP in 2015.

If you really want to think linearly (which is foolish even if it is fun) then by mid-2016 or so HP and Dell will switch revenue streams on servers. These are not predictions, mind you, but rather more like the limits of possibilities.

It is hard to imagine all conditions remaining the same to sustain these trends in a linear fashion. The world just doesn't work that way. And if it did, we'd be spending $150bn a year on servers by now, which we most certainly do not.

President Bill Clinton showing off his boots and his brains at Dell World

President Bill Clinton showing off his boots – and his brains – at Dell World

The other big news coming out of Dell World today, which Dell, the man, didn't even bring up, was that the company was getting behind the OpenStack cloud control freak developed by NASA and Rackspace Hosting as the basis for its own Dell Cloud public infrastructure cloud as well as private clouds, which it calls Dell Cloud Dedicated.

The Dell Cloud launched back in August 2011 and comes out of its Services group. The initial cloud was based on VMware's ESXi hypervisor and vCloud Director control freak. And back then, Mark Bilger, VP and CTO at Dell Services, told El Reg to expect an "open source cloud" in 2012 and another one based on Microsoft Azure before the end of the year.

Everyone was pretty much guessing that Dell would lean more towards OpenStack and less towards CloudStack and other alternatives available in the market, especially since it has been peddling custom OpenStack clouds to data center customers on top of its hyperscale PowerEdge-C servers for nearly two years now.

Now that the "Folsom" release of OpenStack is out, which is arguably the first usable implementation of the cloud control freak, Dell is now ready to build a portion of its own Dell Cloud public cloud on top of OpenStack. But you go first. Dell is at first rolling out a tech preview of the Dell Cloud Dedicated, a mix of boxes and software all configured with Ubuntu Server, the KVM hypervisor, the OpenStack control freak, and Dell's own Crowbar configuration tool.

Interestingly, in the kitchen sink announcement Dell made, it said that for the third quarter of fiscal 2013 (its most recent quarter) were up 30 per cent, and it also added that OpenStack would be "Dell's primary platform."

It is not hard to figure out why. Dell will get the cash for supporting OpenStack, which is free and open source, while VMware will get most of the money from any cloud based on ESXi and vCloud Director, which is not.

It is also interesting that the announcement did not mention the VMware-based chunk of the Dell Cloud public cloud that has been running in Plano, Texas since October 2011 and the other chunk running in Dell's Quincy, Washington, data center and yet another chunk that was fluffed up in Ireland to serve Europe.

But Stephen Spector, cloud evangelist at the IT supplier, did remind everyone in a blog post today that these three VMware-powered regions of the Dell Cloud are up and running.

Spector said that Dell would be opening up Dell Cloud regions in Asia, South America, and in other parts of Europe next year. And the question, of course, is this: How many of those 10 million SMBs who buy servers from Dell today and barely use them are going to just say to hell with it and buy a slice on the Dell Cloud instead?

And just what does that to do Dell's server market share. Does the market share count if you build your own servers and sell them to yourself?

The announcement today also introduces naming conventions: Dell Cloud is the public cloud, and Dell Cloud Dedicated is the private cloud chunk based on the same technology that you deploy in your data center. It seems reasonable to expect Dell Cloud Managed to be a private cloud you install in your data center and allow Dell Services to manage, and Dell Cloud Hybrid will be any mix of the methods outlined above.

It's the internet of things, stupid

You can accuse President Clinton of a lot of things, but cloudy thinking is not one of them. And thank heavens Clinton didn't go on and on about clouds and solutions during his keynote and then his question-answer session with Michael Dell.

Clinton talked about so many things, as he does when he gets going, that it is hard to summarize. But mostly the message seemed to be simple: be forward thinking and look to the future, don't live in the past.

One poignant example that he brought up, which was relevant to techies and nerds the world over who have been watching the hunt for the Higgs boson at CERN.

"The world I see has lots of interesting things," Clinton explained during his keynote. "If you are interested in particle physics, earlier this year, finally at the CERN superconducting supercollider – which I tried to build in Texas, by the way and you may remember your former senior Senator, Lloyd Bentsen, who became my first Treasury Secretary, came to me and said we were trying to make a budget deal back in 1993. And he said, 'We can't get the votes unless we give up the supercollider.'"

"I said, 'That's the dumbest thing I ever heard. Particle physics is going to determine a lot of our future, and it is not that much money.' And he said, 'Congressman who don't live in Texas think it is.'" I say that because you will have to hold your nose during this budget process. It is going to get ugly."

But the important thing that has come out of the hunt for the Higgs boson, said Clinton was that the project ended up a CERN with a global team working on the project and that researchers are working under "creative collaboration and creative competition" to try to figure out if we have indeed found one – or two – God particles.

Clinton has taken a shining to the internet and open source – which is quite a leap for a president who sent two emails during the eight years of his two terms and which is laughable considering that he was in the White House during the dot-com boom.

Some would say Clinton got his second term and budget surplus because of the dot-com boom, so maybe he should be Bubba Dot-Com. It has been almost 20 years since Clinton was first inaugurated, and Clinton said it was hard to believe it has been that long.

President Bill Clinton addressing Dell World attendees

President Bill Clinton addressing Dell World attendees,
tongue in cheek but dead serious

"The way the Internet works could be a model for the way we deal with the challenges we face in the 21st century that appear to have no much to do with technology," Clinton said.

"When I was president, the average cell phone weighed five pounds. There were a grand total of fifty web sites on the entire Internet – that was it. More than that have been added since I started talking. (It had only been about nine minutes at that point – ed.)"

"I sent a grand total of two emails when I was president: One to our troops serving in the Balkans when we were trying to stop the ethnic cleansing in Bosnia and Kosovo, and one to John Glenn who was up in space at the age of 77. It didn't hurt him any, he's 92 and he still walks 3 or 4 miles every day." Not the email, the spaceflight

Clinton was not big on email back then, he explained, because most of the emails he saw were going around the White House staff and a lot of people "typed before they thought." Which is a pretty good description of the Internet, if you get right down to it. But that doesn't mean Clinton is a disbeliever in technology even if he has been an awful, or at least reluctant, user.

"In a world that is still dominated in the daily headlines by conflict – what's going on in Egypt, what's going on in Syria, what's going to happen in China, are we going to fight over natural resources – in a world that seems to be full of zero-sum games and conflict models that are based on trying to hold onto a yesterday that can't be recovered, I believe that the future belongs to networks of creative cooperation," Clinton said.

"I love the way the Internet allows people to make unusual partnerships, and to try, and to not be afraid to fail and go on and do something else."

Clinton said that we are now living in the most interdependent period in human history, even though there was more tight coupling between the global economies ahead of World War I (which was one of the causes of the war, of course).

"But there has never been a time when so many people, so much information, so many cultural ideas, so many political debates, and so many security threats are crossing national borders. They all seem to look more like nets than walls," said.

The problem, said the former president, is that the world is too unequal, there's too much instability, and the world is unsustainable because of the way we produce and consume energy. And we have to learn tolerance, that everything is not a zero-sum-game, and remember to be optimistic and hopeful.

"We have to learn to live with difference and still feel good about ourselves," Clinton said as he wound down his speech. "If we can get back into the tomorrow business, and do it together, we are going to be just fine."

To that end, Clinton said that the "hardest thing to do was keep an old country in the future business" because the future "never has a lobby as strong as the present."

The future always gets cut first. And so Clinton admonished Dell, the man, and his industry titan peers to keep spending money on research and development. "You need to preserve our R&D budget. We are down below 3 per cent of GDP, and we should never be below 3 per cent." ®