They Laughed When We Said Hybrid

Central Texas is a long way from Wall Street and from Silicon Valley – about 1700 miles from both. And being headquartered here, sitting smack in the middle, has helped Dell Technologies to defy the conventional wisdom of those markets. Why is that a good thing? Because conventional “wisdom” is rarely wise, and convention actually stifles innovation. Challenging it is part of Dell’s culture.

When conventional wisdom isn’t wise

I have had the good fortune of a front row seat to the historical intersection of cloud, conventional wisdom and Dell Technologies. It has given me a unique view of where convention faltered and blew some common predictions.

In 2008, Nicolas Carr wrote the influential book, “The Big Switch; The Definitive Guide to the Cloud Computing Revolution.” He famously offered an analogy for IT, likening it to the history of electricity and electricity generation. Discussing the significance of the shift to cloud computing, he explained that in the beginning, companies and communities generated their own electricity – by leveraging dynamos, steam power, water wheels, etc. As these technologies improved, centralized generation and broadened distribution led to the creation of electrical utilities.

Most companies used electricity; generating it was another thing. Carr likened that to IT, claiming that IT wasn’t central to a company’s mission and would be cast aside when somebody could consolidate it and do it better. He envisioned maybe six giant companies that would operate IT while everyone else simply consumed it.

Ownership has its privileges

Humor me while I introduce another book that I read from the aforementioned front row. Five years before Carr published his book, Chris Anderson penned NYT bestseller “The Long Tail: Why the Future of Business is Selling Less of More.” The editor of Wired Magazine didn’t explicitly address cloud computing – it was in its infancy then – but he did essentially clap back at Carr’s argument, noting that owning your critical capabilities (e.g., IT) would be imperative as wants and needs diverged. As I predicted, we’ve got some very large players, but we have thousands of clouds, and not all of them are public.

The thinking in 2008 (including mini HD camcorders and hippie headbands everywhere) centered on “The Big Switch” being inevitable because public cloud was cheaper than owning and operating your own – by a lot. And, unfortunately, that assumption held for a long time – until it was finally acknowledged that public cloud plainly delivers on its cost promise early in a company’s cloud journey but the pressure on margins grows as the company scales and it starts to outweigh the benefits (see my blog “The Transformation Knothole”).

While many industry and financial analysts bought the notion of the big switch, happily, Dell was already betting against conventional wisdom and was planning for a very hybrid and multi-cloud world.

Our logic was simple. We agreed that non-differentiating IT functions would be subsumed by public cloud Software as a Service (SaaS). So, we worked with SaaS companies to build their own infrastructure to deliver their services at scale. We agreed that public cloud infrastructure as a service (IaaS)/platform as a service (PaaS) was popular with developers because it was convenient and fast, and removed internal IT from the critical path. We agreed that technology investments would be focused on business differentiating capabilities. That meant that digitally intensive businesses would continue to own and operate technology for multiple reasons, including cost, control and innovation.

Cloud is an operating model, not a destination

So, we set out to enable an ecosystem of cloud operating systems that could be deployed everywhere and operated by anyone. To that end, we signed on as a founding member of OpenStack (the free, open-standard cloud computing platform) and integrated deeply with VMware to simplify operations.

We predicted correctly that public cloud IaaS/PaaS/SaaS was a rising tide that would float all boats. We fought the false notion that public cloud was cheaper, and followed our conviction that cloud was more opportunity than threat. Forecasting we’d need to integrate public cloud services with private cloud, and that the ability to integrate data from across the clouds would be critical, we invested to facilitate that.

In our view, everything pointed to a multi-cloud world solved with hybrid cloud solutions.

Conventional wisdom mocked our conclusion, suggesting that we invented the concept to beat back public cloud and change customer sentiment about it.

Flood alert in Texas: the digital kind

A decade later, conventional wisdom is finally catching up. Even the public cloud players are enabling customers to run their cloud operating systems where they need them; think Microsoft AzureStack HCI, Google Anthos, AWS EKS Anywhere – all of which allow end-users to deploy on owned and operated hardware of their choice.

Cloud truly has been a tide to float all boats. In fact, it is more like a digital flood, spreading everywhere and the challenge is on to enable businesses to extend their cloud operating models.

They laughed when we said it would be a hybrid and multi-cloud world, but we kept a straight face while challenging conventional wisdom to forge our path forward. Maybe it’s our Texas roots that keep us pragmatic, open minded and flexible (and too hot for headbands). With true southern hospitality, we always put the needs of our customers first and check dogma at the door. It has served us and our millions of customers well.

P.S. Back to Nicolas Carr’s Big Switch theory of IT. The major flaw in his theory was not understanding that it was the Internet that was more like electricity, a shared utility that enables innovation. He did not recognize that IT would morph from a cost center, necessary but not central to the business of business, into THE business. He locked into considering IT against a backdrop of a highly analog world – something at odds with the core mission of the business – and didn’t see the digital revolution coming. The revolution that would make IT technology central to nearly every sector of the global economy.

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