Michael Dell & Satya Nadella announce Dell Hybrid Cloud System for Microsoft at Dell World 2015 (Photo credit: Patrick Moorhead) Today at Dell World in Austin, TX, Dell Inc. and Microsoft Corporation announced a new innovative product called Dell Hybrid Cloud System (DHCS) for Microsoft. Both Michael Dell and Satya Nadella were on stage, which translates to a “this is important” moment for both companies and their customers by de-risking the journey to a hybrid cloud environment. Hybrid cloud is a computing environment which uses a mix of on-premises applications or equipment, private cloud, and public cloud services while coordinating or orchestrating resources between the two platforms. There is no doubt that hybrid cloud is a key component in IT transformation, especially in the areas of business continuity and corporate governance. As Moor Insights & Strategy’s cloud services practice lead, I predict that over 80% of businesses will migrate over 60% of their internal enterprise applications to cloud-based solutions in the next five years. There is pent-up demand in the industry to take advantage of cloud, and hybrid cloud is a logical first step. I also believe this program will be used to help give a boost to flat private and hybrid cloud growth factors within the respective companies. There are several reasons for companies to be reluctant to move to the cloud. Dell cites three main factors: complexity, risk, and cost. The DHCS team has done a good job of eliminating many of these objections. While it is part of the message, I think Dell and Microsoft should put more emphasis on security, customization, and application interoperability / migration as well. Complexity In most cases, cloud migration can be a very daunting and difficult task. Amongst other things, companies must plan for downtime, application integration, and patch management when migrating to the cloud. Dell and Microsoft address this by delivering a co-engineered hybrid solution that is deployed in less than 3 hours, thereby reducing some of the complexities of cloud migration. This system could allow their joint customers to unlock capabilities on demand, scale compute, and storage independently onto Microsoft Azure. This system offers the ability to account for system level non-disruptive patch and update management enabling continuous operations. Finally, Dell is offering a single point of contact with one Service Level Agreement (SLA) to help streamline problem resolution and accountability. While DHCS is a compelling solution for reducing complexity, cloud migration is not a trivial challenge. Each company recognizes there will be some level of IT advisory services required, especially as applications and data are moved into the environment. I believe this announcement will resonate with midmarket customers that are looking for a relatively turn-key solution for moving to the cloud. Companies will benefit greatly through a hybrid solution that favors configuration over customization. Risk Companies considering moving to a hybrid cloud environment are concerned about de-risking the process. Factors such as security, data sovereignty, user access to workloads / services, and cost are the main concerns. From a risk perspective, control is the largest hindrance for enterprises moving to the cloud. Control can be intrusion, data loss, service governance, and cost control / predictability. As an example, Dell stated 9 out of 10 cloud applications in an organization are not approved by IT. While Dell’s statistics are high, it does follow a trend I’ve seen where lines of business continue to end-around IT bureaucracy to obtain the solutions they need to do their job. Dell’s Cloud Manager (DCM) manages a company’s security, governance, and costs from a single console across multiple clouds. The combination of Azure and DCM should help IT organizations to have a consistent platform to manage both security and compliance. Further, Microsoft has integrated Azure backup directly into the cloud platform, enabling customers to create a cloud data vault for offsite data and Virtual Machine (VM) back-up. From a disaster recovery standpoint, Microsoft is also providing Azure Site Recovery designed to ensure mission critical applications are protected from unexpected downtime. Disaster recovery creates a primary or production system in one location and a secondary system at another site. All of the data is encrypted both at-rest or in-flight. Cost Like anything else, cost and risk are double-edged swords. From a cost perspective, Dell has established a first-to-market advantage with the announcement of Dell Cloud FlexPay. Flexible financial solutions givescustomers the ability to right-size their environments, customers can reduce their overall costs with three basic consumption models provision and pay, pay as you grow, and scale on demand. Dell says FlexPay will reduce the risk of over expending of capital by building too big of an environment or supporting too many workloads. In effect, FlexPay is an attractive package that may sway midsize companies that have yet to make the journey to cloud step-up. Conclusion Dell is the Über arms dealer in the cloud business. This approach allows them to be creative and strategic about the partners with whom they go to market. Customers will have the ability to choose from a series of best-of-breed technologies without being locked-into a particular solution or vendor. The Dell Hybrid Cloud System for Microsoft helps both companies in unique ways. As a reseller for Microsoft Azure, Dell has the opportunity to extend its hybrid cloud reach across all levels of the industry. From a single console, DCM is designed to be the “hook” that makes it simple for Dell’s customers to move to the cloud. Dell’s challenge will be establishing IT service and integration partnerships that have expertise across multiple cloud providers, technologies, and applications. Microsoft has been aggressively working to move its midmarket customers from on-premises solutions to cloud-based, preferably Azure. One of the key criticisms I’ve heard from end users deploying Microsoft Azure is it is very cumbersome and difficult to set-up and manage. Microsoft’s focus on partnering with providers that have the technical expertise, support infrastructure, and ability to scale should pay off in the long run, especially in terms of reducing overall complexity. I especially like the fact that Dell is not locking vendors into the Windows operating system or any particular VM. Hybrid cloud is a reality and while there will be challenges and roadblocks, by reducing the complexities and risk associated with cloud migration, Dell and Microsoft have established a strong first-to-market advantage that should pay future dividends for Dell and Microsoft.
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