Dell On Its Networking Play: It's All About Converged Infrastructure

When it comes to the networking market, Dell is counting on its partners and a growing demand for converged infrastructure to give it a foothold in a space long dominated by industry giant Cisco Systems.

"We've got a really good product offering, but more and more the discussion isn't just a networking discussion, it's a converged infrastructure conversation," Frank Vitagliano, Dell vice president of North American channels, told CRN.

Dell, Round Rock, Texas, entered the enterprise networking business with the acquisition of Force10 Networks in 2011, and it's up against not only old-school hardware powerhouse Cisco, but newer companies such as Juniper and Arista Networks.

Vitagliano acknowledged the difficulty in taking on Cisco when it holds such a commanding market-share lead. With $3.4 billion in switching revenue, Cisco held a 62.4 percent share of the $5.4 billion Ethernet switching market in the first quarter, according to research firm IDC, followed by Hewlett Packard Enterprise and Juniper Networks.

But despite the competition, Vitagliano said partners are driving demand for Dell networking gear as part of a converged infrastructure play.

"It's happening on the strength of our server line," Vitagliano said. "I'm getting a ton of partners, many of whom have relationships with other networking vendors, saying, 'I need compute and storage,' so we do more with them and it drags along our networking offering. When you've got an installed base that has been installed for years and years and years, it's hard to rip and replace it, so we're looking at it from a converged infrastructure perspective."

Partners hungry to establish networking practices say they're optimistic about Dell's prospects in the networking market, as well as its strategy for gaining share.

"We're putting a significant push on building our networking practice," Sonia St. Charles, CEO of the Davenport Group, an all-Dell solution provider, told CRN. "We've primarily been storage and infrastructure, but we've decided to make an equally big push in networking."

Partners CRN spoke with said they see Dell making a more aggressive push in the networking space. Part of Davenport Group's rationale for taking up the networking charge is that it sees significant opportunity to take share, according to St. Charles. Dell networking is just as good as Cisco, she said, and Davenport Group can sell it for less.

"We think there's a very significant play here with regard to Cisco," St. Charles said. "Cisco has such a large portion of the market, and so many partners are Cisco partners. We think Dell is as good if not better than anything available in the market. Some large data centers are already running on it, and we're thinking this is an opportunity to really push it."

Tom Burns, Dell networking and enterprise infrastructure vice president and general manager, told CRN Dell intends to "ignite the channel" to push Dell networking in vertical markets such as education, hospitality and retail.

"We absolutely think we need channels for success," Burns said, noting that Dell is providing partners with "a lot of pre-release training," as well as pricing advantages.

Still, as a relative upstart in the switching market, Dell hasn't convinced some partners that it's ready to take a significant piece of that pie.

"If I was going to make an investment to get into networking … it would be with Cisco," one East Coast Dell partner, who asked not to be named, told CRN. "If you're going to have a network practice, you have to start with Cisco."

"Dell probably has a really good story, but it's a matter of bandwidth," the partner said. "If [a partner doesn't] have any mind share in the market for networking, the only thing that's going to get you that is Cisco. If we can convert and make more dollars, that's a great thing to take a look at."

A large Northeast solution provider that partners with Dell and Cisco and who asked not to be identified told CRN that Dell is lacking scale in the market. "They certainly are pushing networking. But they don't have a wireless solution to compete with Aruba. [Dell's] Force10 is limited, and they don't have the scale or market attraction of Cisco, or Juniper or Arista."

"We like Dell, we've done great stuff with Dell," the solution provider said. "But I think their acquisitions have been at the low end of the tech market, and they're not moving the needle for them. We are not aggressively, and we have not seen Dell aggressively, kicking out Cisco."

PUBLISHED NOV. 5, 2015