What's Dell's networking differentiator?
Dell: If you look at the server market 20 years ago, it was a tightly wound appliance of OSS, BSS, and was a very expensive thing, proprietary. X86 blew that open, lowered the cost dramatically, opened it up. I would argue that Dell was among the major catalysts that caused that to happen. Now if you jump over into the networking space it actually looks a lot like the server market did, with a tight coupling of OSS and BSS, it's expensive and a high margin business for a lot of folks in the industry. We're all about making technology more affordable, more acceptable to hundreds of millions of customers out there in the world.
We have a big opportunity here to change the way the data center is installed, and it's absolutely in our DNA. It's why we were the first to embrace Linux, it's why we were the first to embrace OpenStack, it's why we're jumping into the open networking space very rapidly. Any time something comes along that's good for customers, ultimately standing in the way of it is never a good idea. I was talking with a large customer in the financial sector, they're pretty enamored by the idea of open networking. We work extensively with those customers, we certainly work with the big med tech companies, we're seeing it jump a bit into pharmaceuticals. Of course the real opportunity is, beyond that, how do you take this into the (mass) market, all the enormous numbers of small and medium sized companies huge opportunity for Dell obviously to use the strong base that we have in end user computing and servers. That's a great position of strength to work from as the market goes to more converged, more software-defined [infrastructures].
Doesn't hardware/software disaggregation marginalize or commoditize or devalue your hardware?
Dell: I certainly don't enter a battle if you can't win the war. This is the kind of war we know how to win. In commercial PCs and x86 servers, we lived that and we know how to run our supply chain and drive quite a profitable business. The market's consolidating, we've been gaining share. If and when that happens we're certainly quite prepared to be the provider of choice. Dell has unparalleled scale in our supply chain and cost structure to be able to win in that kind of world.
What is your view of the OpenDaylight SDN project spearheaded by Cisco and IBM?
Dell: We stay actively involved in all of the standards groups, while I'll tell you that not all of them have the customer in mind. We always take the side of the customer and the approach of, how do we make this a win for customers? We're not seeing that behavior from all of the participants.
When you jump into Microsoft, Google, Facebook, Salesforce.com, Alibaba, all of whom are our customers, there's no Cisco. This is where we live. We see the world changing here, we're definitely embracing it, and we have the cost structure, the DNA. Dell's a company that invests a billion and a half dollars in R&D, has incredible partners behind it. This year we'll file more patents than any year in our history. We've got 6,000 patents issued and applied for so, we're serious about this and committing significant resources.
Wouldn't all of these open initiatives undercut your hardware business? Wouldn't the Open Compute Project, for example, devalue Dell hardware? Wouldn't adding Cumulus to your switches devalue your FTOS operating system software?
Dell: The same question could have been asked about Unix or any other large open initiative. Windows on servers, that was a huge change back in the mid-1990s. It was disruptive, it caused all kinds of challenges for the incumbents, yet the net effect was a sea change in the affordability of these kinds of systems. I look at the underlying ingredients here and there's a big opportunity here to change this market and bring the technology to many, many more customers all over the world.
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