Dell Jumps Head First Into Consumption-Based Computing With APEX

Dell Tech World came and went last night. Front and center was APEX, the company’s consumption-based offering that enables companies of all sizes to consume IT infrastructure and solutions in a cloud-like fashion. Pay for what you use, with no capital outlay. 

During the launch of APEX back in October of last year, Michael Dell proclaimed that this consumption-based model was the future for Dell and its customers. Meaning, all products and services would be offered through this consumption-based model – a direction that many of Dell’s competitors appear to be heading. 

Given Dell’s previous statements, it should be no surprise that APEX dominated Dell Tech World. But the question remains – does APEX deliver on the promise of simplicity, agility, and control? And is the market ready for such products?

First, a primer – what is APEX

Before answering what APEX is, let’s start with the problem statement. IT organizations are perpetually in a budget crisis. There is never enough money to purchase, stand up, and manage all IT services that business users require. This rings especially true for newer technologies – where there is no IT expertise to support adequately. 

Further, the infrastructure populating the enterprise datacenter is highly underutilized. So, achieving ROI on infrastructure investments is…well, complicated. And this leads to the somewhat circular issue of IT organizations receiving the required budget to grow its service portfolio in support of the business. 

This dynamic is a significant driver of cloud consumption. For lack of a better word, businesses can “rent” cycles to handle that very specific compute need. Another use of the cloud is utilizing newer technologies (ahem, AI) where IT has neither the expertise nor the time to support. The cloud has in many ways democratized technology – enabling consumers to utilize who would otherwise be excluded. 

To drive that cloud consumption model on-premises, many of the server vendors delivered consumption-based services. Hardware is deployed and provisioned, usage is metered, and every billing cycle, the IT organization squares up based on utilization. No up-front costs. No required minimum usage. No length of contract (hence, not a lease). 

APEX is Dell Technology’s play in this consumption-based market. It competes with HPE’s GreenLake, Lenovo’s TruScale, and Cisco’s Open Pay. The cloud providers offer a similar service. Many are familiar with AWS’s Outposts, Microsoft’s Azure Stack, and Google’s Anthos. 

Second – what are the elements of APEX?

Dell appears to have aligned APEX to account for the variety of ways IT consumes technology. The goal – reduce the amount of time and complexity with standing up IT services. Below are each of those with a little more detail:

APEX Infrastructure Services: Every IT organization craves more infrastructure. It is the nature of the business. APEX Infrastructure Services is precisely what the name implies – Dell infrastructure deployed on scalable and elastic premises. Meaning, capacity is available to scale up and down with the needs of the organization. The first offering under this umbrella, Data Storage Services, was announced at Dell Tech World. 

APEX Cloud Services: APEX Cloud Services are preconfigured solutions that stand up private and hybrid cloud services to organizations. The value proposition is pretty apparent – building a cloud environment is challenging—connectivity to the public cloud and the convergence of containerized and virtualized environments. The goal, again, is quite simple – significantly reduce the time to value for IT. 

APEX Custom Solutions: APEX:  APEX Custom Solutions is further split into two subcategories – APEX Flex on Demand and APEX Data Center Utility. 

APEX Flex on Demand is perhaps the purest form of a consumption-based model. Deploy infrastructure and square up every month for resources consumed. There’s no upfront cost for the infrastructure, simply a cost associated with how much is consumed. Flex on Demand addresses one of the key issues I outline at the beginning of this blog – IT organizations paying for unused capacity. 

APEX Flex on Demand model DELL

As you can see above, a consumption baseline is established, which is used for billing. As average utilization increases, so does the billing. Likewise, reducing consumption would drive costs down toward baseline.

APEX Data Center Utility is moving data center operations (in part or whole) to Dell. In this model, an IT organization sits with Dell and scopes out requirements and forecasts growth. Dell fully manages the environment, allowing IT to focus on the business – and payments are made every month. To put it differently, this is like outsourcing data center operations to a well trusted partner who has a financial stake in providing the most optimized infrastructure and highest service levels. 

While the above was written to give a high-level understanding of APEX from a real-world usage perspective, my colleague Steve McDowell goes deeper into each offering as he covered APEX announcements at Dell Tech World here. For coverage on Dell’s Networking Announcements, read Will Townsend’s content here

Is the world ready to move to a pure consumption-based model?

In short, no. However, the answer is a little more nuanced than a simple “yes” or “no.” IT organizations are conservative in nature and see the often-hidden costs that quickly cause cloud costs to increase considerably in a relatively short amount of time. Further, governance, regulatory, and other considerations drive IT organizations to resist a full embrace of the cloud. These concerns are at odds with the wants of the business unit that want utility-like access to the latest and greatest technology. 

This operational tension detailed above is what makes APEX so appealing to an IT organization. As an IT administrator, I can stand up services quickly without incurring the capital expenses or the management headaches associated with traditional deployments. And my billing is both predictable and manageable. I can add value to my internal customers, and I can have a catalogue of services that rival that of any cloud provider. The business is happy, I look like a hero, and I’m not up at night worrying about budgets, security, or overall operations. 

I like Dell’s approach because it seems to bring with every product or service introduction the level of pragmatism. Every company – every organization is at a different point in its journey toward consuming everything as-a-Service. Dell seems to understand this and can meet those customers where it is.  Want to consume technology in an IaaS model? No problem. Hands-free like cloud deployment? There’s an answer. This approach should lead to rapid adoption of APEX from the Dell customer base – and enables it to engage channel partners and small enterprises in a more meaningful way. 

APEX Console is the ultimate in cloudification

As comprehensive as Dell’s APEX approach is to solving the needs of IT, its APEX Console demonstrates how much APEX embraces the cloud-like consumption model.  APEX Console is where IT consumes, monitors, and manages its APEX environment.  And it’s this kind of simplicity that drives the consumerization of IT. 

APEX Console DELL

Simplifying the IT infrastructure deployment process down to this level enables an IT organization to transform from a bunch of server and storage administrators to business consultants. For all of the goodness of an “as-a-Service” portfolio in a service like APEX, if these services aren’t easily orderable, monitored, and managed – then nothing else matters. And in this regard, it appears Dell got things very right.  

Closing thoughts

Consumption-based IT is all the rage. Every server company is aggressively pursuing this market, and each has its unique value proposition and differentiator. Dell has lagged its competition by a little bit in rolling out APEX, but the offering is both appropriately developed and well-timed for an industry that has begun to embrace this model. The company’s three value prop pillars – simplicity, agility, and control ring accurate across each offering. 

While Dell customers will undoubtedly find APEX an attractive option, I am curious to see how the company can use this to bolster its channel business and increase its share in the small enterprise and mid-market segments. The ingredients are all there, it’s a matter of disciplined execution. 

Note: Moor Insights & Strategy writers and editors may have contributed to this article.