Breaking News: Dell Acquires Enstratius to Further Complete Its Cloud Story

Today, on May 6, 2013, Dell acquired Enstratius, a company aimed at deploying, automating and managing applications in complex hybrid cloud environments. Enstratius enforces governance and security in the cloud, offering automated scaling, disaster recovery and cloud bursting. The Enstratius solution supports all popular public and private cloud offerings such as VMware vCloud, Amazon EC2, Windows Azure, IBM SmartCloud Enterprise, HP Cloud Services, Google Compute Engine, OpenStack and CloudStack.

Enstratius enables developers and operations staff to keep using their monitoring, configuration management – e.g. Opscode Chef and Puppet- and other operations management tools via a RESTful API. The software provides a governance layer that ensures access control, logging, security and financial accountability for resources used.

Enstratius, in combination with the infrastructure orchestration and automation capabilities obtained through the 2012 acquisition of Gale Technologies, enables Dell to offer end-to-end cloud solutions to its customers.

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Last week, John Swainson, President of Dell Software, invited a number of analysts to an update of Dell’s progress in transforming into an end-to-end IT solutions provider. This progress indeed is impressive. When John Swainson joined Dell in March of 2012, the company’s software revenue was approximately $100 million per year. Today, only one year later, it is $1.5 billion. This rapid development was fueled by Dell’s determined investment approach, boosted by $5 billion that was spent on developing and acquiring big data, cloud, security and mobile management technologies.

Starting from a Clean Slate

Dell has recognized that IT today greatly impacts the business, offering business units the tools they need to pursue new opportunities. Dell is in a unique position, as the company has had the opportunity to start from a clean slate. This means that Dell can offer its customers exactly the solutions they need, without being bogged down by legacy considerations.

Embracing Shadow IT

“Dell’s focus is on narrowing the gap between business demands and what IT can deliver”. This statement by Joanne Moretti (VP & Global Head of Software Marketing) describes Dell’s unique opportunity very well. Dell has set out to provide the software framework for IT to flexibly govern, optimize, secure and manage software services that are selected by business units. “Shadow IT is the result of business units seeing revenue” (John Swainson). Dell strives to provide customers with the tools required to harness “shadow IT” for the benefit of the entire enterprise.

Dell’s Solution Portfolio

The solutions portfolio shown on the below chart demonstrates that Dell’s acquisition strategy provided the company with capabilities in the three vital data center disciplines: security, systems management and information management. At the same time, this means that Dell can now start competing with the likes of IBM, HP, BMC and CA Technologies. The above-described “clean slate approach” constitutes Dell’s key differentiator in this type of competitive situation, making the company more nimble than the Big 4 can be.

It Works

Dell’s success stories reached from how mobile management solutions were used for better patient care to how a major University took advantage of Dell’s Big Data capabilities to offer a more individualized and effective learning experience to its students. The common theme throughout these success stories was the lightweight pragmatic approach employed by Dell. The company was offering customers only what they needed, instead of pushing an entire solutions portfolio on them.

EMA Perspective

Dell’s transformation is an impressive one! The company has successfully developed from a vendor of more and more commoditized hardware components into a true IT solutions vendor, with strong customer examples to demonstrate the successful completion of this process.

The interesting part about Dell is what I want to call “pragmatic approach” to enterprise IT. Instead of tying up customers in a difficult to understand web of part legacy and part new software solutions, Dell simply sells customers what they need at a certain point in time, without locking them into a specific paradigm.

The next frontier for Dell is to integrate the above-displayed security, systems management and information management software into solutions that can be deployed in an off-the-shelf manner and managed through a central dashboard. EMA will closely follow the company during this next part of the journey.

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