4 ms·

Dell Unveils Subscription Model to Counter Amazon, Microsoft

68 points by jmsflknr 7y ago

mfer 7y ago
This reminds me of HPE greenlake [1]. I wonder how the TCO compares to public clouds [1] https://www.hpe.com/us/en/services/it-consumption.html https://www.hpe.com/us/en/services/it-consumption.html
lonelappde 7y ago
2017 version: https://www.techradar.com/news/dell-to-bring-pay-monthly-subscriptions-to-pcs https://www.techradar.com/news/dell-to-bring-pay-monthly-sub... It would be a total Amazon power move for Dell to displace one of its customers' businesses by removing the middle-man in computer rental (aka "cloud computing") businesss.
- wrkronmiller 7y ago
  The hardware is only a small component. Hosting and maintenance are others.
alberth 7y ago
It’s interesting how hardware manufacturers have offered the ability to lease equipment for literally decades. Now, they start calling it a “subscription” and Wallstreet thinks it’s innovation.
- thisisnico 7y ago
  I work in infrastructure... Nothing has changed here. This is leasing. Dell also has a division named Dell Financial Services that will lease or loan you the hardware.
  - djsumdog 7y ago
    Maybe they'll do small volumes with subscriptions though? Now a smaller business may be able to rent/lease <$5k worth of hardware where in the past discounts were given for big data center orders?
  - jrochkind1 7y ago
    I don't totally understand what they mean, the press-release-style article isn't very specific. But: > Customers will now be able to use Dell’s hardware based on their consumption, as a service… For the consumption programs, customers pay for the amount of storage or computing power they use. That part sounds different than an ordinary lease, yes? I'm not totally sure I understand what it is though... the hardware on-premise at the customer for their exclusive use? But somehow it's usage is metered?
  - wyldfire 7y ago
    Doesn't a lease mean that you take custody of the goods and return them at the end? IIUC this is much more like a service akin to cloud offerings. Who pays the power bill for the server(s) subscribed to? Is the subscription one-for-one with serial numbers? Or if you deactivate the server and activate it again later could you get a different one?
- windexh8er 7y ago
  Yep. But I don't think the Street is blind to this. They want it for their own good. Not that they think it's innovative. But it protects their investment as a recurring model vs having to deal with lumpy quarters and churn. It's easier to keep leasing, I mean subscribe to, and get locked in vs just switch vendors.
- agumonkey 7y ago
  We're in the era of disruptionish. Give something a new, i-friendly, name and off you go.
hamandcheese 7y ago
Installment plans, not software, are eating the world.
- ImprovedSilence 7y ago
  How depressingly true. Run out of technical innovation? Let's switch to subscription services!
windexh8er 7y ago
Considering equipment leases have been around forever I feel like this is just a way to say "why yes, we do subscriptions as well!". The real takeaway here is it's not that subscribers (customers) want this. It's that Wall Street wants this because: investors. This is because deferred futures are great for smoothing and forecasting of revenue. Subscriptions are ultimately bad for the buyer because you pay more and get less in most situations. And then you have vendors offering subscriptions that literally have taken formerly perpetually sold product and wrapped it up in a subscription model with little to no value add. It's also given vendors a way to lock customers out of support and upgrades. I'm waiting for the pushback... People complain about it, but not as vocally as they should.
- Spooky23 7y ago
  Microsoft’s upgrade cycles for Windows 10 are a big problem for many companies. Many places deferred PC upgrade cycles for 6-10 years because they didn’t need them. Now they are stuck with an accelerated upgrade cycle and big capex. With respect to other subscriptions, I think that you’ll see pushback. Adobe and Microsoft play hardball, which gets old quick.
  - jklehm 7y ago
    I don't follow, Win10 runs on a 9 year old pc for me without issue?
    - hermitdev 7y ago
      I think it's more of a will this update cripple our 20yr old in house developed app that is crucial for the business that either we don't know how to maintain or lost the source no longer working on the latest windows. Previous employer, we were on WinXP and compiling a/ VS2003. Upgrade to Win7 mostly effectively crippled VS2003 for reasons I don't know. This necessitated porting our very large (100s of Millions of LOC in C++ to at least VS2008) set of in-house libraries. It should on paper be trivial, but it was a firm wide effort that spanned 18 months. Why? Because someone sent the CEO an xlsx that he couldn't open. This was circa 2007-2008. We were forced to upgrade OS and compiler for the new Office version, but it trickled into a firm wide rebuild of all C++ code. Wasnt pretty or fun.
sysbin 7y ago
I wish Apple would do this for their laptops. I'm not really sure how it could be done. Will be interesting to see how Dell handles the cost.
- ac29 7y ago
  They do, they just call it leasing: https://www.apple.com/financing/ https://www.apple.com/financing/
big_chungus 7y ago
How does this make sense when you're dealing with a rapidly-depreciating asset? Many businesses seem to be using "subscription" as a veil for "payment plan", as they are not delivering a service or recurring good.
- hinkley 7y ago
  Labor and transportation also cost. And turnaround time introduces friction. If you’re staring at slow servers and someone says they can fix that in 20 minutes for another few bucks a month then that is the easy way out. Also redundant hardware can be used to deal with hardware failures. No rush to swap out the machine. There are three spares.
amanzi 7y ago
This article is light on details but this doesn't seem to be the same thing as leasing as others here have said. This is more akin to offerings from HPE and IBM where you get a whole bunch of infrastructure, but then only pay for what you consume. It's Infrastructure as a Service, but in your own data centre. Not sure how this translates to personal computing though - typically you're either using the whole computer or none of it. I guess you could get a whole bunch of desktops and then only pay for the 8 hours a day that you're using them? Doesn't quite have the same scalability benefits as you can get from the compute infrastructure.
- jacques_chester 7y ago
  It's the difference between paying for capacity and paying for consumption. Which is useful, it opens a variety of potential economies and options for both Dell and their customers. Many customers are fine doing their own planning and dislike being billed after the fact. Charging for capacity is what they want. That is the common case now. Many other customers resent bearing the risk of over-provisioning or under-provisioning. Charging for consumption solves that for them. That's what Dell is adding. It's not totally new to them, EMC have done something like this for some time now. Disclosure: I work for Pivotal, which is part of the Dell EMC keiritsu.
daxfohl 7y ago
Seems like a tough sell, with Amazon offering their new Outposts product, which is also an onsite datacenter subscription model but also integrates seamlessly with AWS.
- jacques_chester 7y ago
  Dell is closely connected with VMware, which also integrates seamlessly with AWS. And Azure and GCP. Everyone has dived into the all-places, all-clouds pool to try and outmaneuver each other. Disclosure: I work for Pivotal, we're being acquired by VMware.

68 points by jmsflknr 7y ago

mfer 7y ago

This reminds me of HPE greenlake [1]. I wonder how the TCO compares to public clouds [1] https://www.hpe.com/us/en/services/it-consumption.html https://www.hpe.com/us/en/services/it-consumption.html

lonelappde 7y ago

2017 version: https://www.techradar.com/news/dell-to-bring-pay-monthly-subscriptions-to-pcs https://www.techradar.com/news/dell-to-bring-pay-monthly-sub... It would be a total Amazon power move for Dell to displace one of its customers' businesses by removing the middle-man in computer rental (aka "cloud computing") businesss.

wrkronmiller 7y ago
The hardware is only a small component. Hosting and maintenance are others.

alberth 7y ago

It’s interesting how hardware manufacturers have offered the ability to lease equipment for literally decades. Now, they start calling it a “subscription” and Wallstreet thinks it’s innovation.

thisisnico 7y ago
I work in infrastructure... Nothing has changed here. This is leasing. Dell also has a division named Dell Financial Services that will lease or loan you the hardware.
- djsumdog 7y ago
  Maybe they'll do small volumes with subscriptions though? Now a smaller business may be able to rent/lease <$5k worth of hardware where in the past discounts were given for big data center orders?
- jrochkind1 7y ago
  I don't totally understand what they mean, the press-release-style article isn't very specific. But: > Customers will now be able to use Dell’s hardware based on their consumption, as a service… For the consumption programs, customers pay for the amount of storage or computing power they use. That part sounds different than an ordinary lease, yes? I'm not totally sure I understand what it is though... the hardware on-premise at the customer for their exclusive use? But somehow it's usage is metered?
- wyldfire 7y ago
  Doesn't a lease mean that you take custody of the goods and return them at the end? IIUC this is much more like a service akin to cloud offerings. Who pays the power bill for the server(s) subscribed to? Is the subscription one-for-one with serial numbers? Or if you deactivate the server and activate it again later could you get a different one?
windexh8er 7y ago
Yep. But I don't think the Street is blind to this. They want it for their own good. Not that they think it's innovative. But it protects their investment as a recurring model vs having to deal with lumpy quarters and churn. It's easier to keep leasing, I mean subscribe to, and get locked in vs just switch vendors.
agumonkey 7y ago
We're in the era of disruptionish. Give something a new, i-friendly, name and off you go.

hamandcheese 7y ago

Installment plans, not software, are eating the world.

ImprovedSilence 7y ago
How depressingly true. Run out of technical innovation? Let's switch to subscription services!

windexh8er 7y ago

Considering equipment leases have been around forever I feel like this is just a way to say "why yes, we do subscriptions as well!". The real takeaway here is it's not that subscribers (customers) want this. It's that Wall Street wants this because: investors. This is because deferred futures are great for smoothing and forecasting of revenue. Subscriptions are ultimately bad for the buyer because you pay more and get less in most situations. And then you have vendors offering subscriptions that literally have taken formerly perpetually sold product and wrapped it up in a subscription model with little to no value add. It's also given vendors a way to lock customers out of support and upgrades. I'm waiting for the pushback... People complain about it, but not as vocally as they should.

Spooky23 7y ago
Microsoft’s upgrade cycles for Windows 10 are a big problem for many companies. Many places deferred PC upgrade cycles for 6-10 years because they didn’t need them. Now they are stuck with an accelerated upgrade cycle and big capex. With respect to other subscriptions, I think that you’ll see pushback. Adobe and Microsoft play hardball, which gets old quick.
- jklehm 7y ago
  I don't follow, Win10 runs on a 9 year old pc for me without issue?
  - hermitdev 7y ago
    I think it's more of a will this update cripple our 20yr old in house developed app that is crucial for the business that either we don't know how to maintain or lost the source no longer working on the latest windows. Previous employer, we were on WinXP and compiling a/ VS2003. Upgrade to Win7 mostly effectively crippled VS2003 for reasons I don't know. This necessitated porting our very large (100s of Millions of LOC in C++ to at least VS2008) set of in-house libraries. It should on paper be trivial, but it was a firm wide effort that spanned 18 months. Why? Because someone sent the CEO an xlsx that he couldn't open. This was circa 2007-2008. We were forced to upgrade OS and compiler for the new Office version, but it trickled into a firm wide rebuild of all C++ code. Wasnt pretty or fun.

sysbin 7y ago

I wish Apple would do this for their laptops. I'm not really sure how it could be done. Will be interesting to see how Dell handles the cost.

ac29 7y ago
They do, they just call it leasing: https://www.apple.com/financing/ https://www.apple.com/financing/

big_chungus 7y ago

How does this make sense when you're dealing with a rapidly-depreciating asset? Many businesses seem to be using "subscription" as a veil for "payment plan", as they are not delivering a service or recurring good.

hinkley 7y ago
Labor and transportation also cost. And turnaround time introduces friction. If you’re staring at slow servers and someone says they can fix that in 20 minutes for another few bucks a month then that is the easy way out. Also redundant hardware can be used to deal with hardware failures. No rush to swap out the machine. There are three spares.

amanzi 7y ago

This article is light on details but this doesn't seem to be the same thing as leasing as others here have said. This is more akin to offerings from HPE and IBM where you get a whole bunch of infrastructure, but then only pay for what you consume. It's Infrastructure as a Service, but in your own data centre. Not sure how this translates to personal computing though - typically you're either using the whole computer or none of it. I guess you could get a whole bunch of desktops and then only pay for the 8 hours a day that you're using them? Doesn't quite have the same scalability benefits as you can get from the compute infrastructure.

jacques_chester 7y ago
It's the difference between paying for capacity and paying for consumption. Which is useful, it opens a variety of potential economies and options for both Dell and their customers. Many customers are fine doing their own planning and dislike being billed after the fact. Charging for capacity is what they want. That is the common case now. Many other customers resent bearing the risk of over-provisioning or under-provisioning. Charging for consumption solves that for them. That's what Dell is adding. It's not totally new to them, EMC have done something like this for some time now. Disclosure: I work for Pivotal, which is part of the Dell EMC keiritsu.

daxfohl 7y ago

Seems like a tough sell, with Amazon offering their new Outposts product, which is also an onsite datacenter subscription model but also integrates seamlessly with AWS.

jacques_chester 7y ago
Dell is closely connected with VMware, which also integrates seamlessly with AWS. And Azure and GCP. Everyone has dived into the all-places, all-clouds pool to try and outmaneuver each other. Disclosure: I work for Pivotal, we're being acquired by VMware.