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May 6, 2021

Dell goes all in on ‘as a service’ with Apex but is it too late to the hybrid cloud party?

New 'as-a-service' model will transform Dell's business but it faces stiff competition from rivals offering hybrid cloud solutions.

By Matthew Gooding

Dell Technologies has revealed the first products in its Apex ‘as-a-service’ portfolio as it looks to take advantage of the growing popularity of hybrid and multi-cloud deployments. Analysts are divided on whether the move from one of the biggest names in enterprise IT is a timely reinvention of its business model or a delayed response to market trends.

Having made its name as a hardware vendor, Dell announced last year that it was planning to move all its products to an ‘as-a-service’ model under the umbrella title Apex. On Wednesday, the first components of this strategy were unveiled at the company’s DellWorld conference; they include Apex data storage, a storage-as-a-service solution, and Apex cloud services, which promise one consistent experience for clients across public and private cloud deployments.

“The world is innovating faster than ever to meet new demands of customers, students, patients and constituents – driving the need for a more agile and simple technology approach,” said Allison Dew, chief marketing officer and executive vice president of Dell Technologies Apex. “This is what Apex offers.”

Dell Apex: a necessary step as popularity of hybrid cloud grows

Dell’s approach with Apex, which will allow customers to manage workloads deployed on multiple public and private clouds, is similar to that taken by rivals such as HPE, which offers a similar ‘as-a-service’ package through its Greenlake portfolio, and Cisco with its Cisco Plus offering. Dell will be hoping Apex can help tempt customers away from HPE and Cisco, as well as the hyperscale cloud providers, many of which are aiming to lock clients into a single platform.

Businesses are increasingly relying on both public and private clouds to underpin their IT services. The 2021 state of cloud report from Flexera, which polled 750 IT professionals from around the world, shows that 82% of respondents deploy a hybrid strategy.

The poll also shows companies are increasingly making more substantial cloud investments than ever before, with the percentage of large enterprises spending $12m a year on cloud going up from 20% to 36% year-on-year.

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This shift has forced Dell into offerings its enterprise systems as services. “With the advent of cloud, Dell has been under pressure as enterprises move away from a capex-heavy model to an opex model, and it has had to adjust to this reality of as-a-service offerings,” says Sid Nag vice president for cloud services and technologies at research company Gartner. “It has also been under competitive pressure from HPE with its Greenlake as-a-service offering. Apex is Dell’s response to this.”

Will Dell Apex make an impact?

Hybrid cloud is nothing new of course, and with HPE, Cisco and other competitors such as IBM having already established their expertise in this domain, Nag says Dell’s intervention may have come “a bit late”. “Greenlake was introduced over a year ago so Dell is late to the market,” he says.

Charlotte Dunlap, principal analyst for application platforms, enterprise technology and services at GlobalData, disagrees. “Dell is not too late to the as-a-service party and represents a competitive threat simply by sheer size and breadth of its – and VMware’s – customer base, thereby maintaining a strong influence in customers’ digital journeys,” she says.

Indeed, Dell’s relationship with VMware, the cloud software provider of which it has owned the majority since 2016, could prove a trump card. Though Dell recently announced plans to sell its 81% stake in VMware, the companies said they would continue a close collaboration for at least the next five years. And with Dell founder Michael Dell retaining his position as chair of both companies, it seems likely their fortunes will remain closely intertwined.

“The enabling cloud platform services of Apex will come from VMware Tanzu, which is highly competitive in the app modernisation space against rivals such as IBM Red Hat OpenShift, AWS, Microsoft Azure, and Google Cloud,” explains Dunlap. “Tanzu coupled with Dell and VMware’s infrastructure strengths create a strong following among operational teams looking to acquire DevOps models to achieve business transformations.”

How will Dell differentiate?

The long-term success of Apex will depend on the continuing popularity of hybrid cloud, says Nag. “The world remains largely hybrid, but that could change in the future with the bulk of workloads moving to the public cloud,” he says. “In a hybrid world, offerings such as Apex and Greenlake address non-public cloud [IT] estate needs.”

So far there “seems to be very little differentiation between Apex and Greenlake”, Nag says, but he adds that the Apex cloud console may give Dell the edge. This tool aims to provide a single portal for monitoring cloud, on-premise and edge technology, which Dell says will simplify IT management. This puts Dell into competition with Microsoft, which is attempting to own the control environment with its Arc control panel, an Azure tool that can be used to manage various workloads.

Dell has also announced a partnership with infrastructure provider Equinix, which will allow Apex services to be run from any of Equinix’s data centres around the world, as well as Dell’s own cloud servers. Nag believes that this partnership can be a differentiator “as organisations continue to consolidate and evacuate their data centres as part of their ongoing capex reduction push”.

Home page image by KenSoftTH/Shutterstock

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