SAN JOSE, Calif. – Dell will open ten data centers over the next two years to deliver cloud computing services, spending as much as $1 billion in its current fiscal year alone. The company also announced it will sell collections of servers, storage arrays and networking gear as part of a so-called vStart package.
The news underscores an emerging trend of computer and communications systems companies adding IT services as a main component of their businesses. Dell's announcement comes weeks after rival Hewlett-Packard said it will launch cloud services using an undisclosed number of new and existing data centers.
The trend is driven by vendors and end users racing to find ways either to offer time on underused systems or use such resources to avoid buying new hardware. The rise of big data centers also has spawned the move to bundling racks of servers, switches and storage arrays into mega-products.
Sun Microsystems, now part of Oracle, pioneered the trend by offering collections of systems in shipping containers for data centers that needed to scale quickly. The trend also fueled Cisco Systems' move into servers in 2009 as well as a number of acquisitions by Dell, HP and others trying to fill out their data center product lines.
Dell's vStart includes Intel Xeon-based Dell PowerEdge servers, Dell's PowerConnect switches and storage systems Dell acquired with EqualLogic in 2007. The systems will be delivered "racked and cabled" as a single unit in versions geared to run 100 or 200 virtual machines (VMs) simultaneously.
"Customers are more interested in buying VMs than assembling new hardware," said Praveen Asthana, vice president of enterprise solutions and strategy at Dell. "It's still really hard to deploy virtualization extensively, so it's not deployed in many small and medium businesses," he said.
Market watchers predict half of all business computing workloads will run on VMs as opposed to physical processors by the end of 2012, he added.
Dell's vStart will initially support only the VMWare hypervisor software for controlling VMs. However, Dell also announced a partnership with Microsoft that will lead to support for its Hyper-V hypervisor.
Long term, Dell plans to offer cloud services based on VMWare, Microsoft and Open Stack hypervisors. The IEEE recently announced efforts to help standardize interoperability of clouds services.
"There's still plenty of work to do here," said Steve Schuckenbrock, president of services at Dell.
Dell's new data centers will be globally distributed with at least three in the U.S., proving a range of services including email and file storage. "We've provided various kinds of cloud infrastructure before, but this is a large commitment to do this in a broad based way," said Schuckenbrock.