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Michael Dell: We're Seeing Public Cloud 'Boomerang Effect'Michael Dell: We're Seeing Public Cloud 'Boomerang Effect'

Companies that go all in on public cloud are missing out on optimization and efficiency, says Dell Technologies honcho. Of course he has to say that.

Mitch Wagner

May 8, 2017

3 Min Read
Michael Dell: We're Seeing Public Cloud 'Boomerang Effect'

LAS VEGAS -- Dell EMC World 2017 -- Public cloud isn't everything, says the man who runs a company that's doomed if the public cloud becomes everything.

Enterprises that adopt a "public cloud first and only" strategy are missing out on competitive advantages available from hybrid and private cloud, said Michael Dell, Dell Technologies chairman and CTO, on Monday.

Amazon Web Services Inc. (AWS) predicts that all workloads will move to the public cloud, which would be a headshot to Dell and its competitors. Dell and its competitors depend on selling equipment to enterprise data centers. (See AWS CEO: Enterprise Data Center Is Doomed.)

These companies can survive and even thrive in a world of private and hybrid clouds. But if everybody moves to public cloud, then Dell and its competitors would be fighting for business from a few, big hypercloud providers like AWS, Microsoft Azure, and so on.

And the hypercloud guys need Dell and its competitors a lot less than enterprises do. Hypercloud providers build a lot of their own equipment.

But Dell says companies that go public-cloud only will find it difficult to compete.

Figure 1: Michael Dell delivers a keynote at Dell EMC World. Michael Dell delivers a keynote at Dell EMC World.

"Cloud is not a place, but rather a way of doing information technology," Dell said. We are already in a multicloud world -- public cloud, private, hybrid, software-as-a-service (SaS) and managed services, Dell said. Enterprises need to optimize workloads, move them securely and manage them efficiently. Public-cloud-only doesn't deliver the full value of that kind of optimization and efficiency -- optimizing private infrastructure is necessary to achieve that kind of agility.

Dell said customers tell him public cloud is twice as expensive as on-premises, particularly for predictable workloads, which comprise 90% of workloads.

"We've seen a boomerang effect, or repatriation, of customers saying, 'We thought it was going to save us money and all of a sudden we're seeing it's costing twice as much,'" Dell said at a press conference Monday afternoon. "We think it's going to be a multi-cloud world, and we're going to make the on-premises systems very competitive," Dell said.

Companies have built up decades of legacy infrastructure, which needs to be optimized. The savings from transformation can fund the transition to cloud-native apps and "digital transformation," Dell said.

Add "digital transformation" to your buzzword bingo cards. "Digital transformation" is the latest marketing catchphrase for using the cloud, mobile, and other advanced technologies to transform business. David Goulden, president of the Dell infrastructure solutions group, defined "digital transformation" as using IT to drive business. That's something the tech industry has been evangelizing for more than 20 years, but now it's the new hotness again.

What are the hottest jobs in the cloud. Get our special report to find out: 
Cloud Skills: What’s Hot? Dell is not alone in advocating hybrid cloud and multi-cloud as the future of IT. Cisco uses a similar pitch. Hewlett Packard Enterprise talks about "hybrid IT," which it defines as public cloud, hybrid cloud, and legacy IT combined together. (See Cisco Faces Up to Public Cloud Threat and Cloud Rains on HPE Earnings.)Dell, HPE, and Cisco are the leading providers of cloud infrastructure, according to recent analyst research. (See Dell, HPE, Cisco Top Cloud Infrastructure Market – Analysts .)Also, Google Cloud Platform sees itself as a multi-cloud platform. (See Google's Big Enterprise Cloud Bet-- registration required.)Related: How About a Las Vegas Photowalk Before Dell EMC World? Dell EMC Places Big Bets on Hyperconverged in Vegas— Mitch Wagner Follow me on Twitter Visit my LinkedIn profile Visit my blog Friend me on Facebook Editor, Enterprise Cloud News

About the Author(s)

Mitch Wagner

Executive Editor, Light Reading

San Diego-based Mitch Wagner is many things. As well as being "our guy" on the West Coast (of the US, not Scotland, or anywhere else with indifferent meteorological conditions), he's a husband (to his wife), dissatisfied Democrat, American (so he could be President some day), nonobservant Jew, and science fiction fan. Not necessarily in that order.

He's also one half of a special duo, along with Minnie, who is the co-habitor of the West Coast Bureau and Light Reading's primary chewer of sticks, though she is not the only one on the team who regularly munches on bark.

Wagner, whose previous positions include Editor-in-Chief at Internet Evolution and Executive Editor at InformationWeek, will be responsible for tracking and reporting on developments in Silicon Valley and other US West Coast hotspots of communications technology innovation.

Beats: Software-defined networking (SDN), network functions virtualization (NFV), IP networking, and colored foods (such as 'green rice').

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