Note To Dell: Forget Big Data and Go For Cloud Infrastructure

It seems like five seconds after HP purchased Vertica, the entire world focused on Dell and their big data strategy.  This was further compounded by the fact that Dell blew out their earnings with a $15.7 Billion fourth quarter and Michael Dell suggested that they would target smaller acquisitions to help their server and storage divisions.

Speculation is rising that Dell will purchase Aster Data Systems a Stanford University start-up that is backed by Sequoia Capital.  Aster’s nCluster sports a massively parallel processing (MPP) data warehouse with integrated MapReduce that is built on commodity hardware.  Whose commodity hardware?  You guessed it, Aster partners with Dell to provide the Aster Data MapReduce DW Appliance.

However innovative and powerful Aster’s solutions are, their rumored valuations are sky high.  According to Gigaom’s article Cloud Startup Values are Getting Insane published on September 24, 2010, Aster’s valuation is rumored, “somewhere between $85 and $120 million.”  Furthermore, Aster took issue with Gigaom’s assessment saying, “The valuation you/GigaOm stated recently is more reflective of the previous B round that closed Q4 2008, and while we don’t disclose the actual valuation of the latest C round it is in fact materially greater than the Series B.” Really?  Let’s get back on track.

Dell is a remarkable turnaround story that is predicated on their decisions to blaze their own trail in the industry.  Rather than purchase network equipment or security vendors, Dell has been acquiring interesting software companies such as Scalent, Boomi, and Insite One, with a purpose or focus on the Cloud.  Why change this focus?  When you think Dell do you think database warehousing? Software?

Dell’s future growth hinges on their Data Center Solutions (DCS) and Cloud Computing.  They have two choices; make a major market disrupting acquisition or take some risks by purchasing smaller but highly disruptive software companies.  It’s no secret that I am a proponent of Dell purchasing Rackspace, even in the face of a rising market valuation and the prospects of another bidding war.  Rackspace is that good and Dell knows it.

Enough, who else should Dell purchase?  There are the obvious, Joyent, and the obscure, Nimbula.  They could lean forward, OnApp, or take a risk, Appistry.  They could choose infrastructure, GoGrid, or go a bit crazy, Marathon Technologies.  They can go services, Appirio, or go international, ElasticHosts. And on, and on, and on, …

Regardless of what path Dell chooses, Michael Dell has done one incredible job of turning and changing the course of a $60 Billion company. While some have written that Dell is “yesterday’s company”, I’d watch out as they may just surprise you and the entire industry.

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