Dell brings VCE into its hyperconverged tent

dell vce hyperconvergedDell just announced several new additions to their hyperconverged infrastructure portfolio and, not surprisingly, the bulk of these announcements were centered around their new partnership with VCE.

Prior to this announcement, Dell’s lone hyperconverged offering was its Nutanix OEM “XC” line of hyperconverged infrastructure (HCI). Dell says that they have seen great success with selling the XC — to the tune of 10x year over year sales growth since they began offering it in 2014. So they were eager to dispel any notion that their Nutanix partnership was going away anytime soon.

Dell is taking the position that VCE’s VxRail (based on VMware VSAN) and VxRack (based on ScaleIO) offerings are additive to an integrated systems portfolio which now consists of DIY reference architectures, engineered systems (Dell Hybrid Cloud System for Microsoft - Azure Stack), and appliances (XC - Nutanix and VxRail/VxRack - VCE). The party line is that Dell will do what’s best for the customer, and by providing more choice, they will be best positioned in the market to do exactly that. 

Aside from the fact that it will likely take time for Dell’s direct sales force and partners to master the shiny objects in their expanded HCI portfolio, one of the big questions is whether the XC will be able to peacefully coexist long-term alongside VCE’s Racks and Rails.

While I don’t doubt Dell’s intentions to always do what’s right for the customer, they also have to factor in doing what’s right for VCE as well. And these aren't necessarily conflicting interests. The point is that with the huge debt burden of acquiring EMC dangling over their heads, Dell will need to drive higher margin deals, and it’s harder to drive fat margins via an OEM. 

Don’t expect Dell to make any sudden changes with its Nutanix relationship. The HCI Nutanix-fueled gravy train continues to chug along quite nicely so they’ll gladly stay along for the ride — for now.

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