Dell distances itself from utility computing

The current hype surrounding the evolution of utility computing and its steady march to the enterprise has left a bitter taste on the tongues of Dell Computer Corp. executives.

Officials for the Round Rock, Texas-based computer maker have little good to say about recent utility computing wins such as IBM Corp.'s US$4 billion deal with American Express Co. to provide all of the financial service company's technology infrastructure as a utility, managed and maintenanced by Big Blue.

Dell is tempering its enthusiasm for grid computing because the build-to-order computer maker believes that as utility computing technology currently stands, the model is merely a way to lock a company into a single vendor's technology platform.

"It's unclear to us how much of the promotion over utility computing is a self-serving way of changing the rules of the game to benefit [competing vendors] instead of ultimately being a good thing for customers," says Gary Cotshott, the vice president and general manager of Dell Services.

Experts agree that Dell is not entirely wrong in its assumption that current utility computing is in some sense vendor lock-in.

The motives of early utility computing providers such as IBM and Hewlett-Packard Co. "are very transparent," said Robert Batchelder, a research director at Gartner, in Stamford, Conn. "They want to sell more iron -- computer hardware. And they see this [utility computing] software sale as facilitating iron sales."

Why Dell should be concerned about the forward momentum of utility computing is another thing on the minds of industry observersJoseph Zhou, a senior analyst at D.H. Brown, in Port Chester, N.Y., thinks Dell's negative reaction to recent utility computing wins is due in part to the fact that Dell, a commodity-level computer and computer service company, does not yet see utility computing as a commoditized market. In turn, Dell has taken on something of a "sour grapes" stance to utility computing, Zhou said.

"When you look at Dell and their direct model, that is pretty much a product-oriented model," Zhou explained. "And as far as services, Dell has seen a portion of the service business become a commodity play, such as hardware, warranty, and OS-level support services, and Dell offers that. But as far as the service for solution providing, such as what IBM and HP are doing, Dell does not yet see that as a commodity right now.

"And even though Dell doesn't want to admit it, and they keep saying they don't care, they are actually trying to catch up" in the enterprise IT services and utility computing space, Zhou said.

Getting its organization up to speed with enterprise IT services and utility computing models may be essential for Dell going forward, Batchelder said.

"Dell is saying they don't [care] about utility computing, and in some ways that leaves them vulnerable," Batchelder said. "Because when somebody like an IBM is going to be specifying out all the iron to make a company's computational backbone work in conjunction with IBM's manageability layer, Dell is worried that they will get cut out of the picture."

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