Dell Technologies, Microsoft Reveal 'Intimate' Hybrid Cloud Relationship
Microsoft Azure: "Not everything needs to be in the cloud."
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Dell’s Dayne Turbitt, SVP & GM, said the two vendors growing closer was “a question of timing.”
“Before there was like an obsession with, ‘it’s either private or public,’” he said. “What’s actually become reality and we’re seeing driven by clients, is that it’s both. It’s not public, or private cloud.”
The exec noted drivers such as regulatory compliance and latency, especially in customers within financial services, public sector, national security and healthcare.
“There are some corporations that will move 100% in the public cloud. There are others that will never be able to move their workloads out of their data centers. But those organizations want to still be able to run those applications for next five, 10, 15 years and take advantage of all the cool things of cloud.”
Azure business lead Michael Wignall agreed that “timing is definitely a big part of it.”
“Ninety-three percent of enterprise customers are committed to a multicloud-hybrid strategy. Seventy-five percent of data will be created at the edge by 2025. We’re seeing the shift,” he said.
Wignall said there has been tremendous growth in public cloud, and that will continue. But increasingly, he said, there is a desire for a hybrid cloud approach.
One reason is flexibility of choice for customers. “Being able to innovate wherever you want. That is absolutely a key trend. And then there are other scenarios like latency or data residency requirements or things which are very valid good use cases for data and applications in the customers data center or the edge.
“So it doesn’t have to be everything in the cloud – that might sound like a strange thing for cloud providers to say. We’ve developed cloud technology, but at the same time, we’ve always continued to invest in what we deliver on premises. And we see customers going the same way.”
When questioned about why Dell is teaming with Microsoft Azure over any of its rivals, Turbitt pointed to its scale.
“We estimate Microsoft has about $75 billion in public cloud; we do about $65 billion in private cloud. Together we do about $135 billion of business in the hybrid cloud,” he said.
“We’re the No. 1 hardware provider in service, storage, client. So while there are other players out there, we’re by far the biggest on prem private cloud company in the UK.
“Microsoft, in my world, is the biggest provider in public cloud. I think AWS is slightly bigger but when you get into the hard and serious work that we need to do with the banks, etc., [Azure has] the biggest share of the market.
Turbitt said he doesn’t “have that relationship with AWS [and] I don’t have that relationship Google.”
Turbitt pointed to Dell’s shift to becoming a catch-all or providing “unified plumbing” in the data center. He referred to Azure Arc, the basis of Microsoft’s multicloud and hybrid cloud approach. Azure Arc provides a centralized way for customers to manage, govern and secure their digital landscape across datacenters, edge and multiple clouds.
“We can run VMware, we can run bare metal, we can certainly run Azure Arc on the same set of infrastructure,” he said.
He also noted that there is more of Dell’s storage, backup and security software being ported to the cloud.
“We’re starting to see more high-end performance storage-based workloads running both on prem and in the cloud. That’s the evolution that we will have as a company. So our partnership will continue to grow,” he said.
The execs were also asked as to whether the surge in the cost of living is affecting IT spend. Wignall claimed not.
“Are we seeing a retrenchment in spend based upon cost of living or energy prices? Generally, no. Satya [Nadella, Microsoft CEO] said on our latest earnings call that in an inflationary world, software’s deflationary.
“Technology does drive cost savings. From an Azure perspective especially, there are absolutely no plans to change our prices due to energy changes. Azure is a great place to come and put your technology in a world where there are fluctuations in energy prices.”
However, Turbitt said rising costs were becoming more of a factor in the total cost of ownership.
“Before, whenever you put energy savings on the table, [customers said] ‘let’s not talk about that, let’s talk about the cost of the infrastructure.’ Now, having a far more efficient infrastructure has a significant savings for businesses,” he said.
“‘If I buy this new piece of kit, I can reduce my energy consumption.’ That’s becoming a discussion, whereas before it was just a ‘nice to have,'” he added.
The execs were also asked as to whether the surge in the cost of living is affecting IT spend. Wignall claimed not.
“Are we seeing a retrenchment in spend based upon cost of living or energy prices? Generally, no. Satya [Nadella, Microsoft CEO] said on our latest earnings call that in an inflationary world, software’s deflationary.
“Technology does drive cost savings. From an Azure perspective especially, there are absolutely no plans to change our prices due to energy changes. Azure is a great place to come and put your technology in a world where there are fluctuations in energy prices.”
However, Turbitt said rising costs were becoming more of a factor in the total cost of ownership.
“Before, whenever you put energy savings on the table, [customers said] ‘let’s not talk about that, let’s talk about the cost of the infrastructure.’ Now, having a far more efficient infrastructure has a significant savings for businesses,” he said.
“‘If I buy this new piece of kit, I can reduce my energy consumption.’ That’s becoming a discussion, whereas before it was just a ‘nice to have,'” he added.
Customer demand for hybrid cloud is driving a new, closer relationship between Dell Technologies and Microsoft.
The pairing is a result of demand from clients for benefits of the public cloud in the data center, said Dell’s UK leader.
Dell’s Dayne Turbitt
“We’ve been intimate with Microsoft for many years,” said Dayne Turbitt, SVP and general manager at Dell. “That intimacy is now just extending into the data center. It’s the natural evolution.”
Turbitt said the relationship has extended from client to bringing Azure services into the data center. More specifically, he added, “to the edge because that’s the emerging boundary.”
“We’re seeing a seismic shift in clients wanting to leverage the cloud-based services that they know and love in the public cloud for the hard and difficult workloads in the data center.”
Microsoft said that despite developing cloud technology, it has continued to invest in deliver on premises.
Microsoft’s Michael Wignall
“In the last couple of years, we’ve seen a massive acceleration of digital transformation,” added Michael Wignall, Azure business lead, Microsoft. “More recently I’m seeing the shift to multicloud and to hybrid cloud, and to wanting choice and flexibility about how they access it.”
The two vendors were talking at their “formal go to market” launch Thursday. They said by working together, it would be easier for partners to source joint solutions.
See the slideshow above to find out how and why the vendors want to align.
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