Dell Strengthens Its Cloud Management Hand with Enstratius Acquisition

Among the cloud’s great promises are the lure of unmatched agility and scale delivering IT applications and services. Along with these great promises the cloud’s early days have also seen challenges handling governance of applications as they stretch dynamically across their virtualized infrastructures, and actually simplifying management of multitiered applications as they deploy across private and hybrid private/public clouds. A strong ‘felt need’ for simplified management of enterprise application portfolios across multiple supporting cloud service platforms has emerged. In fact, to realize the agility and scaling goals of the cloud across a whole portfolio of applications, providing that kind of consistent management for a heterogeneous mix of infrastructures is an essential tool for IT moving forward.

Recognizing this, as Dell has strengthened its hand for enabling its enterprise customers to meet these challenges of the clouds with its acquisition of Enstratius on May 6. Enstratius’ Cloud Management System brings a ‘cloud neutral’ approach to providing consistent governance and management to enterprise applications across a flexible mix of virtualized cloud environments in private and hybrid private/public deployments. Enterprises are able to leverage the capabilities of virtual data center management platforms from say, VMware and OpenStack and integrate them into a portfolio of applications managed from Enstratius’ CMS. If needs dictate the use of public clouds for overload computing, flexibly expanded development resources, or automated disaster recovery across applications, secure access to public cloud resources from, say, Rackspace, Azure, or Terremark services (to name a few) can be enabled from CMS via integrated functionality and APIs. The net effect is to introduce a layer of consistency in managing applications across the multiple virtual infrastructure platforms.

As enterprise customers, and service providers supporting them, address their need for consistent, scalable controls, and simplified management of applications across multiple participating clouds, a layer of management such as Dell’s newly acquired Enstratius CMS may provide an important building block in enabling the cloud’s potential. Kudos to Dell for perceiving the importance of this need, and bringing the Enstratius CMS into its menu of offerings for cloud IT.

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Paul Parker-Johnson
pparkerjohnson@acgresearch.net
www.acgresearch.net

Dell’s SonicWall Play

Companies are consolidating as players attempt to add or extend their security expertise and technology to address customers’ demands.

Dell announced it has signed a definitive agreement to acquire SonicWall for an undisclosed price, but which financial analysts estimate has a likely price tag north of $1 billion. Citing cyber security as a top customer pain point, this acquisition makes a lot of sense as a way for Dell to quickly deliver more advanced security technologies to its enterprise customer base.

This acquisition will help the company extend the range of security solutions it can offer, leveraging SonicWall’s unified threat management portfolio: NSA Series, SuperMassive Series, and TZ Series, which includes web security, virtual private networks, anti-virus and malware, intrusion detection and protection, content filtering, application control in an appliance, and next-generation firewall technology.

Enterprises are asking for more comprehensive security to help them protect their operations and intellectual property and address regulatory and compliance demands. Some of today’s security challenges are due to the exponential growth of data, the adoption of cloud-based solutions, and the increased presence of mobile consumer devices in the enterprise (BYOD).

Behind the acquisition

Dell hopes enterprises will turn to Dell to solve their security issues. At first glance, there appears to be good alignment between Dell and SonicWall to address the mid-market. Both have had success there; Dell has six million small business customers and SonicWall has been adding 200,000 new small businesses a year.

With only a little overlap within the channel partners, (15,000, SonicWall; 100,000, Dell), there is the potential for significant growth, if Dell can effectively leverage its brand and global distribution to attain greater penetration for the security technologies. (Note that two-thirds of SonicWall’s $260 million revenue is based in the US.) The challenge may be in getting the channel up to speed selling security; we have seen this take other organizations longer than they anticipated, for example, when Juniper acquired NetScreen or IBM acquired ISS.

Breaking into the big league?

Will Dell be able to effectively move up and into the large enterprise and provider markets? This has traditionally been a struggle for SonicWall, which is hoping its SuperMassive Series will enable the company to finally break through. Dell has a foothold in the data center and has had some recent success with providers, such as US Cellular and Telefonica, but we will have to see if, together, they can expand their footprint.

Competitors are Cisco, Juniper, with whom Dell has a relationship, Check Point and Fortinet. This acquisition is consistent with Dell’s strategy of trying to own more of its intellectual property, so it is fair to say the Juniper relationship is probably in jeopardy.

Dell expects the transaction to close in the second quarter of its 2013 fiscal year. Dave Johnson, SVP, Corporate Strategy for Dell said SonicWall represented a good strategic, cultural and operational fit. Time will tell. One thing we can say for certain is that we will see more consolidation in this market, as players attempt to add or extend their security expertise and technology to address customers’ demands.

Sarah Sorensen

ssorensen@acgresearch.net

www.acgresearch.net