#99 - Dell Technologies World 2019 in Review

This week, Chris and Martin discuss the announcements from Dell Technologies World 2019, held in April/May 2019 at the Sands Convention Centre in Las Vegas. Chris attended as a guest of Dell Technologies, who covered flights and accommodation.

Dell Technologies made a range of announcements, including improved capabilities on the Unity XT and Isilon storage platforms. A new data protection platform called PowerProtect was introduced and PowerMax gained dual-ported Optane drives that allow a new tier of persistent media storage.

One of the most interesting areas was the announcement of more SaaS and cloud-based offerings, including Cloud Storage Services and Dell Technologies Cloud. The former is co-located storage that can be used for features like disaster recovery. The latter is the delivery of Project Dimension and the capability to ship and run a Dell cloud based on VxRAIL, right in the customer’s data centre.

The idea of SaaS-based cloud delivery brings up many questions, not least where companies like Dell and HPE are headed, as cloud becomes more dominant. What does the future hold for Dell Technologies and other infrastructure companies?

Elapsed Time: 00:34:13

Timeline

00:00:00 – Intros
00:00:50 – Is the EMC brand vanishing?
00:02:30 – How big was DTW 2019?
00:04:40 – What did Michael say?
00:06:00 – What were the storage announcements?
00:10:30 – New co-located storage as a service
00:11:30 – Dell Technologies Cloud was new offering
00:14:30 – Is on-prem SaaS hardware the right step forward?
00:17:28 – Dell, VMware and Microsoft best of friends
00:18:25 – What’s the benefit of running vSphere on Azure?
00:20:50 – Where is Dell headed? It’s all about VMware.
00:25:25 – Could Dell be the Apple of Enterprise Servers?
00:28:00 – Will IoT and 5G be the saviour of infrastructure companies?
00:29:00 – What’s the future for infrastructure companies like Dell & HPE?
00:33:00 – Wrap Up

Transcript

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Martin Glassborow: Hi everybody, welcome to another Storage Unpacked with me, Martin, hosting. I’m going to be talking to Chris Evans about his trip out to Dell Technology World in Vegas. Hi, Chris, how are you doing?

Chris Evans: Hi Martin, yeah pretty good thanks, not too bad at all.

Martin Glassborow: You’re were on your travels again last week?

Chris Evans: Yes, now you were very careful to say Dell Technologies World, I’ve been really struggling to not call it Dell EMC World and get into calling it Dell Technologies World. Even though it’s a bit of a mouthful.

Martin Glassborow: It is, but I’ve got account teams who are now calling themselves Dell Tech or Dell Technology so I’m getting used to this idea that it’s Dell Technologies, EMC as a brand is vanishing.

Chris Evans: Yeah, so that’s an interesting observation. I would say that having been to, I think I only went to two or three EMC worlds over the years and I don’t think I ever went to a Dell World if there was an independent Dell World. I think there might’ve been.

Martin Glassborow: Oh, no you did, we went to one in London.

Chris Evans: Oh yes, that’s true. Yeah there was one in London. So I haven’t been to a US one, but you’re right they do one in London. And I did sort of feel that it was very difficult, A to see the EMC name of old still there, or at least the feeling of EMC of old, like we used to know very much flying across arrays with motorbikes and guitar playing execs, do you remember that?

Martin Glassborow: Oh yeah, I remember all those. Those wonderful marketing ideas.

Chris Evans: Well, people think they’re going to be great but then you look at them and they just come across a lot cheesier later. There wasn’t a real hyperbole there, but it was very much a different event. So that sort of I guess history of EMC was pretty much not there and I suspect give it six to 12 months, knowing what Chris Miller’s discovered about brand names like Power Store and things like that, I don’t think there’ll be much left of EMC name in the next 12 months.

Martin Glassborow: That’s a bit sad really, does it make you feel a bit sad?

Chris Evans: It does in lots of ways because a lot of what I did in the Ultima Systems side of things, the non-mainframe side of things, was without a doubt all starting on EMC and in the early days I just thought it was such an amazing technology. More from the software side, so things like Solutions Enabler and it’s ability to allow me to automate and do so many different type of things, the software was really well written and it was just it was really, really efficient and I think it was really good. Obviously the portfolio widened and it became a bigger company, but when you look at the roots they really did some really good stuff in those early days.

Martin Glassborow: The event, what kind of size? Because the EMC Worlds of the past were renowned for being pretty large and then now we’ve got the mega event so the AWS events and Google events so how did this compare?

Chris Evans: Yeah, funny. About 15K I think were at the event and if you’re in any way familiar with the Sands Convention Center, you come down into that area from the restaurant row between the Venetian and the Palazza in Las Vegas, as you come down there they pretty much had to set the hall on the left, sorry the hall on the right as being the entrance into the Solutions Expo, the sort of the main vendor sort of presentation side. And then you went down the very end to get to A which was there they’ve got the stage set up. So it was a little bit busy getting into one of the sessions but compared to AWS which I went to a couple of years ago which had 42000 in, it was in some respects a walk in the park.

Martin Glassborow: Yeah, 15K doesn’t sound that large. I mean I’m sure the EMC Worlds of the past were bigger and we’ve all been to bigger events than that so that’s interesting. And type of attendees? I mean EMC Worlds and Oracle Worlds and things like that in the past, lots of big enterprise players, lots of people, lots of the FTSE100 say if you’re got a UK view or a lot of the really big companies, certainly big financial companies. It was really focused at high enterprise. Similar feel or different?

Chris Evans: I personally didn’t get that feeling. I would say that when I went to EMC World it was super high focused at the enterprise, very much focused on enterprise challenges and problems. This event didn’t quite feel like that, it felt a bit more … I don’t want to be unfair because obviously there is talk about the enterprise at the event, but it felt more sort of middle, the middle range of companies rather than the really super high end ones. And that might be reflective Dell’s history, it might be reflective of where some of the work loads have gone in terms of the cloud. But it just felt like it was a bit more sort of mid market.

Martin Glassborow: What was talked about? What were the keynotes? What did Michael say?

Chris Evans: Well, do you know he’s pretty good on stage? He obviously likes to get up there and talk. Sadly, the way we were positioned, this is quite funny really. They’d done the stage as one big long stage and obviously nowadays they tend to have repeated screens so you can see what’s going on with the presenters and then now add to the front of the stage in the middle was like a little I guess runway or catwalk where he could, and all the other presenters, could come forward and talk to the audience. Now, where they’d positioned the media and analysts, we were to his left or to the right of the stage as you look at it from the front, looking towards him. And that meant we were basically looking at the side of his head or if he walked back slightly, we would be looking at a pillar because there were pillars all the way along where the stage was.

Chris Evans: And the funny thing is, in the first day they never used any of the width of the stage, so he never moved more than about five or six feet away from where we were standing. Which made it quite a shame really, because if he’d walked up and down a little more that would’ve been good. But, it was the usual talk about data and where businesses are going and the challenges were going and the cloud and IOT and 5G now. IOT and 5G seem to be the two buzzwords that everybody’s picking up on. Yet it still seemed to be very much an infrastructure discussion.

Martin Glassborow: I think we’ll come onto that a bit later, so what announcements? This is Storage Unpacked, we’ve got to talk about storage.

Chris Evans: Absolutely.

Martin Glassborow: And EMC World in the past, there was always a big announcement. It was either a big Clarion/Unity or whatever they’re calling it this month or a VMax announcement, we’re overdue a VMax announcement, so what’s going on? But we need the storage announcements.

Chris Evans: There was a number of different areas they were covering and I looked at it and thought, “Yes.” I thought this might be the time when they were going to talk about what they were calling Unity.Next, come onto that in a second. But no Unity.Next yet. What they did announce was a new version of Unity EXT which keeps the Unity platform going a little bit longer so like Six Million Dollar Man, “Better, Faster, Stronger.” That sort of thing.

Chris Evans: There were some improvements to Isolon again, performance, scalability, that sort of stuff. Incremental. They brought out a new data protection product called Power Protect, hence the Power in front of the whatever it now it is. And that seemed to be a new backup software solution although I haven’t actually spoken to anybody about it in detail, so I’m not sure whether that’s a repackaging or whether it is a brand new product. And then for Power Max they brought out Dual Opt In Drives, the ability basically to start using Opt In as a tier of storage, not as a cache. So you can actually use it as a proper tier within the box. So across the board everything was quite incremental.

Martin Glassborow: One which I am particularly aware of is the improvements to the Isolon, that’s been well trailed, certainly within the user community. I’ve known about a couple of the new nodes for quite a long time. Actually I will EMC or Dell Technology some credit, they actually listened to some of the comments of the customers, from the user base out, and they said, “What we need is we need a node like that, but with that capacity.” So they did actually react to customer demand on some of these things. Which was good to see.

Chris Evans: I’ve got the impression with the Isolon stuff and I’m not the expert, you’re the expert on this, and funnily enough when I had the briefing I did say that to peeps that were briefing me. But it did seem to me that with Isolon they are quite focused on that as a platform and that does seem to be an area they’re trying to work hard on. So that sounds like you’re seeing the same in the field as they were trying to brief us as media and analysts.

Martin Glassborow: Yeah, I think they are, they really are pushing. But there are some new incumbents, or no sorry, newcomers, not incumbents. You can’t be a new incumbent. Newcomers into the field and I think they’re beginning to get a bit twitchy about some of that. So the Cumulus, there’s been some improvements to Spectrum Scale XGPFS, so they’re beginning to see that Isolon for a long time was the only player in the game if you wanted a scale out NAS. Certainly the only serious player. But now they’re starting to see some people coming and having a poke, they’re thinking, “We’ve got to listen.” And I think they themselves might be quite open about the fact in the past couple of years there have been some code quality issues, they’ve really focused in on that, because these sort of issues allow some of the newer players to come in and start asking questions.

Chris Evans: You got high end stuff as well, haven’t you? You’ve got WEKA, you’ve got people putting GPFS on E8.

Martin Glassborow: Yeah.

Chris Evans: There are other solutions that are coming into the market. Elastofile is coming in as a scale out solution as well. So there are definitely other companies coming in and competing and I guess, as you said, they’ve got to up their game at this point.

Martin Glassborow: Yeah, so that’s the storage on premises infrastructure. Obviously that’s where we know and love, we know the EMC heritage.

Chris Evans: Absolutely. Let me just finish that comment I made about the Unity side of things.

Martin Glassborow: Yeah.

Chris Evans: Because I think that’s quite important and it might be something we want to come back to. There is no Unity.Next available yet, and it was sort of intimated it might be later in the year. But it was also intimated that the other platforms will live on for some time to come. And by that I mean the SC, the PS and the Unity ranges as they are today. So there’s still going to be mid range products sitting there for quite a while, even if they do bring in a new product later. We’ll come back to .Next in a little while.

Martin Glassborow: That’s interesting, but if you for instance if we look at HP historically when they started to acquire things, things like the MSA’s for instance lived on for a long time. So I wonder if we’re going to see this sort of very similar thing happen with this where some of these things just keep going. Because the customers who’ve got them love them. We don’t actually need massive innovation to keep them alive.

Chris Evans: No, you don’t. We’ll come back and talk about it later I guess as part of sort of an observational side of things. I think the challenge is going to be how do you bring a customer who’s comfortable with that platform onto whatever you want to build as your new platform, and still keep them happy. That’s going to be the challenge.

Martin Glassborow: Yeah, the interesting thing is what they’ve done with Unity, as we all know, all they’ve ever done with Unity is put … As far as I can see, it’s gone back, the heritage is very strong. All the way going back to DG, there’s very, very little challenges for a customer. They’ll say, “It’s completely different.” But when you get down into it it still feels like the old general date Clarion back in the day.

Chris Evans: Well, you just have to look at the configuration or something, you can still see code references to DG.

Martin Glassborow: Yeah. Dell, very much an on premises infrastructure company, so what did they have to talk about with cloud and cloud based services? Anything?

Chris Evans: Yeah, no this ones quite interesting, because you’re right, on premises infrastructure based company, however they did talk quite a lot about clouds. So there was discussion of cloud storage services which, from what I can tell, looks a bit like what other vendors have done. You put a piece of equipment in a Colo and then you basically can consume that from the Colo and that allows you things like replication and other features that you would expect if you have got sort of ownership of the majority of the storage itself. You get all the performance benefits and all that side of things.

Chris Evans: But you can connect it to your cloud infrastructure. So that seems to be … I would say that’s more like, “Yeah, other vendors have done that, we need to do something similar type step.” If you know what I mean? Because HPE did it, Infinidat have got one, NetAPP have got one. So lots of people have done that already so it’s not exactly a new one, but it’s I guess ticking the box.

Martin Glassborow: Yeah, yeah.

Chris Evans: What was probably more interesting was the idea of what they were calling Dell Technologies Cloud. So this is where things get a bit confusing. You would think that when you talk about cloud you think about on … Sorry, you talk about public cloud. But of course that isn’t the case. It could be on premises cloud, it just depends on your management model of how you look after that infrastructure as we know. So the Dell Technologies Cloud is effectively the ability to order equipment which would be shipped to you, installed on premises and managed by Dell in a SaaS model.

Martin Glassborow: Okay.

Chris Evans: Yeah? Now, I guess this is an extension of what was Project Dimension, if I’m right, that was announced last year and I think was shown at VM World where basically you go online, you go onto a portal, you type in what you want, it gets shipped to you, you rack it and then they’ll manage it from that point onwards. Almost like a bit of a converged infrastructure managed solution, except I believe it’s built on VX Rail so it’s not actually just traditional converged infrastructure.

Martin Glassborow: Okay. So all the problems of your on premises infrastructure, managed by Dell Technologies so they’ll manage it remotely as such, so they’re doing all the management for it.

Chris Evans: Yes.

Martin Glassborow: So why would I want to do that?

Chris Evans: Well, from my perspective I think it opens a massive can of works because first of all I would say, if I was using that model, I would never put that next to equipment that I already owned. Because I wouldn’t want to mix and match, I wouldn’t want to have a real nightmare of who supports what and how and when and all that sort of stuff. But I guess if you think about the converged infrastructure model where they would tell you what patches you needed to apply, but you then still have to go and do them potentially, this is like that next step forward and that they’re going to manage the infrastructure, fix failures, upgrade, patch, all those sort of operational tasks you would od normally.

Chris Evans: And I guess, theoretically, that should also mean capacity planning, performance management and everything else. But the devils going to be in the detail there to work out exactly what they are and what they aren’t going to do.

Martin Glassborow: Okay, so in some ways it feels quite similar to ESRS which is the EMC remote management of your storage arrays, where they can apply patches remotely, they monitor, they can send engineers out to fix it and they can even tell you if there are performance problems. But you still own it and your infrastructure team still look after it to a certain extent, so it’s like … Is it a shared model. Certainly they can’t upgrade it without asking to do it, they still would have to go through your whole change management procedures, which I can’t imagine is going to be a lot of fun if you’re trying to do it across a cloud which … a much larger cloud than just say a storage array. I imagine going through an enterprise change management procedure when you’re not actually part of the company is going to be painful.

Chris Evans: Here’s the devil in the detail thing again here, what’s not really clear is whether … And I believe you don’t own the infrastructure, I believe it’s done on a consumption model, so even though they’re shipping you hardware, Dell would still own it, it’s just happens to be sitting in your data center.

Martin Glassborow: Oh, okay.

Chris Evans: And as a result, if that is the case, theoretically of course, they could say, “Yeah, we manage the upgrades, we keep it all up to date or whatever we want to do. This is our policy based on us having to support our equipment.” I need to go back and dig into that one, because I think there’s a very difficult line between what is on premises and what’s not on premises and how do you manage the two. And we talked about this, remember quite a few podcasts back we talked about the fact that Amazon was shipping Amazon Services On Prem and how would that work and we talked about things like RDS and various other features that they were potentially going to push on prem. And I think this is this whole question again coming back up.

Martin Glassborow: Yeah, I think so. But I think certainly both actually Amazon and the traditional infrastructure vendors like Dell Technologies are beginning to struggle what to do with on premises. They don’t quite know how this is going to work going forward. And they both seem to be coming down this model.

Martin Glassborow: Which I think it just feels like you get worst of both worlds as a customer. You have a load of kit on premises which you have to … you’re still going to have to physically manage, you’re still going to have them in a data center, you’re still going to have a data center to manage. But you don’t have any control over it.

Chris Evans: I agree, and it becomes really confusing but I think as you’ve highlighted, this is possibly because the vendors are trying to look at how they can stay relevant and fight against the idea of everything becoming cloud, where everybody buys a service and pays on the consumption model. So on the one hand they’re trying to find better operational models to take away some of those headaches from you, they’re trying to find better consumption models so you can buy on an OpEx basis rather than CapEx. But is this the right approach for that sort of application workload anyway? And I guess the third angle to that, third leg of the stool is, most of these vendors probably don’t want to go off and build their own clouds because all they’ll be doing is trying to compete on price with Amazon.

Martin Glassborow: Yeah.

Chris Evans: Having said that, we should bear in mind though that Dell owns Virtu Stream and Virtu Stream is effectively a public cloud provider.

Martin Glassborow: Yeah, but Virtu Stream’s basically dead, isn’t it?

Chris Evans: I don’t know, I didn’t think it was. There was a nice big stand there.

Martin Glassborow: Oh, okay.

Chris Evans: I was invited to an event in London, not sure what it is, but I think I can’t make it because I have a clash. So I think it’s still alive. But it’s a tricky one, isn’t it? Because do you, as a vendor, go after a market simply because you need to look like somebody else looks and therefore convert your business to look like that in order to be what you might think of as relevant. Or do you stick with your principles and say, “Actually, this business will come back at some point.”

Martin Glassborow: Yeah, I think that’s probably where we are with some of the vendors, certainly some of the infrastructure vendors where they’re kind of hanging tight, hoping it’s all going to come back. They’ll still play and try to be cool and funky, you’ll get things like PKE, the Pivotal Kubinato’s Enterprise or whatever they’re calling it at the moment.

Chris Evans: Yeah.

Martin Glassborow: So they’ll play in a funky space to keep themselves relevant, but deep down they’re really hoping everybody decides cloud was just a passing fad and everybody moves things back. That’s why whenever you talk to an enterprise infrastructure vendor, they’ll tell you horror stories and that everybody is bringing or pulling all their stuff out of the cloud.

Chris Evans: Yeah, and are we meant to believe that’s true? Is it just a case that there’s churn? Just like people use mobile phone companies and move between them for different reasons?

Martin Glassborow: I think there’s churn, I think there’s people who’re realizing that you can’t just lift your legacy applications and put them into the cloud. So they pull those, they think, “Actually that was a really bad idea.” So they pull those back. But all their new application deployment ends up running in the cloud.

Chris Evans: Yeah. Absolutely.

Martin Glassborow: Yeah. So obviously VMWare, anybody turn up from, say, Microsoft?

Chris Evans: You must’ve been watching, Martin. Funnily enough the discussion got up, well we had Michael on stage, we had Pat on stage. I’ve got a lovely picture with Pat, I went up and had a word with him and got a selfie at one point. I was an inch away from asking Michael for a selfie but I just thought, “Don’t know if I can.” So I didn’t do that one, but I have got one with Pat. Anyway, not on stage by the way, just on one of the briefings that we were in. But Pat was on stage, Michael was on stage and then he introduced or talked about Microsoft and there’s Satya Nadella coming on stage, doing the obligatory handshake with everybody.

Chris Evans: Now, there was talk about desktop and the ability to do application deployment of your marketplace applications like you would, or applications and so on as part of their end user computing piece. I sort of switched off when that came on because I’m not really bothered about end user computing. But what I did the impression was that we were going to see an equivalent model for VSphere, I.e. VMWare on AWS also being deployed on Azure.

Martin Glassborow: But why?

Chris Evans: Well, it’s a good question isn’t it? So if we go back to when VMWare was deployed on AWS, first of all to me it looked really expensive, that’s the first thing. Because obviously you’re paying an operational cost for the hardware that they’re going to have to put in place. It seemed to be fairly limited in the sense that it just looked like VMWare running on a different set of hardware. In that respect, the only possible scenario could be that you could link to AWS somehow and you could share services, but I don’t see how you can do that anyway. Because if most of your services or your applications are running as VM’s they’re probably traditional apps and there probably not going to very easily consume cloud based services. That’s my initial assumptions.

Martin Glassborow: Chris, I agree with that. I can think of a use case of VMWare on cloud and that’s for those companies who don’t want to build a full DR environment.

Chris Evans: DR environment, absolutely.

Martin Glassborow: So you never actually really want to run it.

Chris Evans: I agree. So we talked to Daytrim before, Daytrim for example have got a solution that allows you to do that and that’s supposed to be quite slick, which is great. That’s a fantastic application for VMWare running on a public cloud provider where you can spin it up on demand. The issue there of course is how’s that differentiate when you go to Azure? What was the need to have more than one? And I don’t really sort of understand that, so I think I need to sort of try and think a bit more about what that really means. Because I don’t really get what the benefit is to the end user.

Martin Glassborow: Yeah, nor do I. I don’t see what the benefit is for Microsoft. I’m not really sure I see the benefit for VMWare either. It just seems to be a tick box. I don’t think there’s going to be huge deployments of it, there may be a third party ecosystem so maybe a few third party vendors who’re already doing … dealing with VMWare on AWS who will be rubbing their hands in glee, it’s another thing to try. But I don’t see the value.

Chris Evans: No. I’m struggling at the moment. So maybe we should park that one and try and find somebody who can explain it to us.

Martin Glassborow: Yeah, I’m sure there’s somebody out here. Maybe somebody from VMWare or somebody from Microsoft. Maybe Satya wants to come on and tell us all about it, or we’ll get them both on, we’ll get Satya and Michael on.

Chris Evans: And explain the strategy, yeah that’d be good.

Martin Glassborow: Yeah. Yeah, that would be the killer podcast I think.

Chris Evans: If we managed to do that I think I’d retire. I wouldn’t do another podcast again. It’d be all over.

Martin Glassborow: Oh, that might be an incentive for a few people thinking, “Oh, we can shut these two up.”

Chris Evans: Yeah, probably.

Martin Glassborow: So your real impressions of the show, what did it feel like? I mean we’ve done a lot of these enterprise shows in the past, do you think we’re at inflection points in the industry? Do you think this is a company which is hunkering down really letting itself trying to ride out the cloud wave? Or really has a vision of where it’s going?

Chris Evans: Let me give you a few pointers, or things that I thought were quite interesting. First of all I’ve gone back many, many times and I still go back to it and talk about the VMWare acquisition, because first of all the VMWare acquisition by EMC was obviously very astute because they bought it a very, very opportune time and made a fortune out of it. Bought it cheap and didn’t even sell it so that was a great move. I do think a lot of what Dell did was buying EMC for VMWare because time and time again VMWare comes back to being the center of everything they’re doing.

Chris Evans: So as an example, when we talk about infrastructure and application migration, it’s all about VM’s. When we talk about management and operations it’s all about VM’s. Everything is VMWare and VM’s and of course we’ve just talked about Microsoft and VMWare on Microsoft, we’ve talked about VMWare on AWS and obviously as part of this Dell Technologies Cloud thing that they’re doing which they’re calling something bizarre like VMWare On Dell EMC or something, VMWare Cloud On Dell EMC. They’re shipping new hardware on which they’re putting VX Rail which is still VMWare so VMWare is the core of everything they’re doing and I think that’s really, really fascinating.

Martin Glassborow: It’s also worrying.

Chris Evans: There was like a little bit of I guess lip service to things like containers and PKS and things like that. But I didn’t see anything demonstrated by it, I didn’t see anything talking about it or advancing it now. I would say that might turn out to be the thing that they show at VM World rather than being at this show. This show could be about the infrastructure and VM World could be about the applications so that might be perfectly logical. But I didn’t get the feeling there was anything else there apart from VMWare.

Martin Glassborow: Because VMWare is just an infrastructure, so it’s still just infrastructure.

Chris Evans: Yes. Entirely.

Martin Glassborow: So we have these companies like Dell, companies like HPE who’s position in the value stack isn’t very high. So to HPE potentially I would argue is probably potentially worse than from Dell, because they don’t even have the platform. But this is still all about platform. We’re beginning to the stage where we’re moving above that to where the value add is, applications, databases, where business value is really created.

Chris Evans: Yeah, I would say so. I’m not seeing as much conversation about that as I would’ve thought there would be. Now, maybe it’s that tricky situation about maybe some of that stuff’s talked about VM World rather than at this event. But then again VMWare is a separate organization theoretically. Still a separate legal entity, even though it’s very tightly combined with Dell, so theoretically Dell should still have it’s own strategy about where it’s headed, even if it’s using the VMWare technology and I still don’t get that feeling yet. Still doesn’t come through.

Martin Glassborow: And if Dell and VMWare are so joined at the hip, surely that’s going to worry some of their competitors?

Chris Evans: Yeah, that was interesting. There’s a couple of comments were made in a couple of events, I think it might even have been made on stage and I think Pat might’ve said it on the Cube or one of the other interviews that, “VMWare is Dell’s first partner. I can’t remember how he said it exactly, it’s something like, “Preferred partner and first partner.” So basically what that was meaning was for example we know Dell has a partnership with Nutanix to sell that platform, clearly the comment was if there’s going to be anything put in first it’s going to be a VMWare solution before anything else. Unless a customer says, “I’m definitely not taking that.”

Martin Glassborow: Yeah, one of the things about the old EMC, EMC’s stewardship of VMWare, certainly for most of the lifetime was very good. At times, I mean I remember talking to EMC sales people who were quite annoyed with the fact that they had less influence or less support from VMWare than say NetAPP did. So it was very good, because EMC didn’t have a server platform, they weren’t too worried about which server vendor you went to, they didn’t really care. With this absolutely they potentially do care.

Chris Evans: I would not be surprised that like we’ve seen the EMC name sort of slowly drift away and all the products become Dell products, I would not be surprised to see VMWare being wholly integrated within the Dell platform at some point. Now, I don’t think they’ll drop the name VMWare at all, because I think that’s got such a massive value they’ll not do that at all. But I wouldn’t be surprised to see it become a wholly owned subsidiary and bit by bit they try and replace the business they get from other vendors with Dell business. It’ll take time but I would expect that’s the strategy.

Martin Glassborow: Ooh, they’ll have to be careful. That’s an anti-trust waiting to happen.

Chris Evans: It potentially could be, couldn’t it? The difficulty is how far do they go? Is it seen as being a position of absolute dominance in the market and controlling, maybe it is, maybe it’s back to that Microsoft scenario and maybe they don’t do that. And maybe that’s the reason why they’ve kept it at the level they’ve kept it of that core partition type thing, simply to avoid anti-trust. Maybe that is part of the reason it’s left where it is.

Martin Glassborow: Yeah, it could be. So, if VMWare, just say for example we started to see this tighter integration, at which point do Dell become the Apple of enterprise servers? And does Michael become the Steve Jobs of the enterprise IT?

Chris Evans: There’s an interesting question, because if you look … I guess if you look at the wider market, there seem to be two types of personality. Maybe there’s more than two, but the most obvious ones that stand out are the people who want to keep getting higher and higher up in the company and owning more and more of the world, your sort of Larry Ellison type, maybe Michael Dell type character, even Steve Jobs you could say that obviously sadly him getting ill and dying didn’t really sort of allow him to play out his strategy there. But you get the other people like I guess you could say Scott MacNeillie, you could say Bill Gates all born in a similar sort of timeframe who made it and then have sort of backed out and sold off and gone off and done other things. So it seems to me that I would say that Dell is the company and Dell the person are that former character, rather than that latter character.

Martin Glassborow: Yeah, we’d probably argue that for instance Bill, who’s probably the most famous of them now, who we’ve seen such a change. I mean Bill for a long time was hated by very many people in the enterprise, certainly enterprise IT, certainly Microsoft were. Bill’s now basically decided to become the savior of the world but Bill is 10 years older than Michael, there’s still time for Michael to say, “You know what? I’m going to go and cure diseases in South America. We’ll let Bill have Africa, I’ll have South America.”

Chris Evans: Yeah, that’s possible. But in the mean time I guess maybe he is building that Apple of the enterprise. Maybe that is part of his plan in the short term and certainly you can sort of see a scenario of that. If you’re not buying cheap commodity servers, maybe you’re buying something more expensive or slightly more value. And maybe you are joining everything up end to end to give you that complete Apple experience rather than like the Microsoft experience of taking your own hardware and putting software applications on top yourself.

Martin Glassborow: Yeah. Which is interesting because that works for a certain period of time, and obviously it’s worked very well for Apply but Apple’s driver has been really the mobile phone. So Dell need to come up with some cracking new invention for the enterprise which means that you buy this wonderful device which is slightly over priced and you refresh it every two years. There is some indications that Dell really do want you to refresh your technology every two years if at all possible, so maybe we will see something like this.

Chris Evans: I think everybody’s talking about IOT, Edge, 5G as being the next savior of technology and the enterprise, that is the next thing where we’re all headed. I’m not sure whether that’s the sort of thing that you’d want to replace every two years though.

Martin Glassborow: No. And I’m not sure that 5G is the savior for the enterprise.

Chris Evans: No, I think it’s hyped up. At the end of the day unless it’s got other features that I’m not aware about, 5G just seems to be a faster network that could potentially be placed more in a metro situation, within buildings and things like that than it does outside of buildings like 4G or 3G was. So I don’t honestly see what that gives you in terms of an ability to write software and applications that can somehow manage devices and allow them to talk to each other.

Martin Glassborow: 5G let’s you to get your data back to the core that much quicker, which means that you’re going to need that much more storage. So maybe that’s Michael’s strategy. You just keep buying more and more storage.

Chris Evans: That could be it, that could be it. And at the end of the day he seems to want to partner with people, if you can get Microsoft on stage with VMWare when they’ve both got competing hypervisors, shall we say, maybe that wasn’t even their discussion. Maybe they didn’t even think about that, maybe Microsoft’s vision is heading off in a different direction but if you can get more and more partnerships with people, maybe he can bring more and more of these companies together. I mean certainly you’re talking about getting stuff on AWS and on Azure and he’s managing to do both of those at the same time which is pretty good.

Martin Glassborow: So, Chris, big question time. Where do traditional infrastructure companies like Dell, HPE, where are they going? I mean Dell are fairly unusual in the marketplace, in fact that actually they do have consumer grade all the way through to the enterprise. There a very few other examples of that, certainly since HPE and HP Inc became separate entities. The only other one I can really think of at the moment would be the Chinese Huawei, whether we’re allowed to use their kit and whether we should be mentioning them on a podcast or not, that’s a different matter all together. Probably now we’ve probably hit every potential hot word going.

Chris Evans: Yeah, but they’re listening anyway I’m sure, aren’t they? They can listen to everything we’re doing.

Martin Glassborow: Well, can they let us know so we can add them to our listener count?

Chris Evans: Yeah, that would be good wouldn’t it.

Martin Glassborow: Yeah, so where do you think Dell and HPE and the other traditional infrastructure companies are going? Let’s throw Cisco in there as well.

Chris Evans: Yeah, it’s a tricky question isn’t it? Because if you look back in history and you look back at say the mainframe era, and then you look at the client server era. The mainframe era when we were mainframe people looked like a great solution, but anybody coming into the market as new entrants either as companies or as employees, when they saw what client server offered, looked at client server and said, “Oh, that’s much better than the mainframe.” And of course mainframe then shrinks to become niche, although it doesn’t die out.

Chris Evans: The client server scenario of things like dedicated hardware and operating system platforms, so thinking of things like Sun with Solaris, HP with UX, IBM with AIX, they again went through the same scenario where they were hugely popular and then Linux came and took over and x86 standardized it all and they shrunk and I’m sure there’s still some of that out there in the enterprise and it’s still used considerably for certain niche requirements. But the bulk of everything has become x86 and Linux and Windows.

Chris Evans: I wonder whether we’re going to go through a similar transformation here where as cloud becomes the thing that everybody feels that they should adopt that the current technology around x86 and on premises infrastructure will shrink to the same degree that it becomes a niche that we hold onto and everybody will have the cloud. And if that is the case then that doesn’t bode well for companies like Dell and HPE because unless they can come up with a genuine cloud strategy that sort of makes sense, their market’s going to continue to shrink.

Martin Glassborow: Yeah, I would tend to agree and neither of those companies have anything, as I say, they can’t go up the stack, they can’t even go up to the database tier. Because you still need databases and you’ll still be able to sell those on cloud. It’s that software which beyond the infrastructure which both companies seem to lack. And so it’s going to be diminishing returns I think for them, the margins on hardware are now so minimal, certainly for x86 hardware.

Chris Evans: Yeah and the trouble is that you end up in a situation where in order to keep your market share size big you end up merging. And you merge a number of companies together, you become a bigger entity, you’ve got more market share and then hopefully that keeps you in a position for a bit longer. But of course then if you shrink again, then what do you do? Do you acquire again and merge again? Is that a repeated process you can do a number of times where basically you’re like a big lump of plasticine, you plug bits on until you make a bigger piece. That doesn’t seem to be a great long terms strategy. But, having said that, Dell seems to be as a company increasing their revenues from what I can tell and still making money. So maybe in the short term they’re still okay.

Martin Glassborow: Yeah, I think so. We’re probably not going to see Dell go before we retire, Chris.

Chris Evans: I don’t think that’s going to happen, we didn’t see IBM go with the death of the mainframe, businesses reinvent themselves.

Martin Glassborow: Yeah, so it’s whether Michael has the vision to reinvent Dell so they survive going forward. I think this is going to be the case for a lot of these companies, it’s how they reinvent. They can, as you say, continue to grow by acquisition, Dell and HPE merge, who knows? Or they can acquire somebody smaller like Nutanix, I would’ve thought that might happen for a variety of reasons. Or do Nutanix grow so big that they actually acquire one of these two.

Chris Evans: They’ve got a long way to go to get that sort of size, but you can sort of see partnerships coming together where the infrastructure providers start saying, “We need to work together, because it’s either us or it’s the Chinese.” At the moment, isn’t it? You’ve got Lenovo, you’ve got Huawei, and if they can produce technology that people are prepared to buy outside of the US then they’ve got a real risk that those companies are going to take market.

Martin Glassborow: Oh well. So it’s another interesting couple of years I think.

Chris Evans: Oh, absolutely. There’s no doubt, there’s no doubt that this market is infinitely interesting and as you look at it and go forward it’s almost impossible to predict because almost every day something comes that sort of pushes it a different direction that gets you thinking, “Well, where are we going to head?”

Martin Glassborow: Yeah, I mean I think we’ve got some more discussions to come up over the next few weeks about acquisitions which has happened, trying to get some ideas about why they’ve happened, what the driver is for them. There’s a few which have been announced recently which I think we’ll probably want to have a dig in and have a look at.

Chris Evans: Yeah.

Martin Glassborow: But for the time being, I think that’s us done.

Chris Evans: Okay, cheers Martin. Good to talk, as usual. And look forward to catching up soon.

Martin Glassborow: Yeah, see you soon.

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