GE’s software will run on Dell Technologies hardware from now on – but most enterprises don’t care much about big-name endorsements.
A Dell-GE deal last week made Dell the primary IT infrastructure supplier to GE for hardware and services, spanning servers, storage, backup, client products, peripherals and professional services. The multi-year deal is one of the largest non-government contracts in the history of Dell Technologies, Dell or EMC, according to Dell, which did not disclose financial terms of the deal or specific products involved.
The eye-popping scope of the Dell-GE deal is good news for investors and the company’s bottom line, but it likely won’t sway many IT buyers. When CIOs, IT directors and other IT buyers look around to see what other companies buy, they tend to focus on their own industry, said Stuart Miniman, an analyst Wikibon, Inc.
That’s especially true here, because a selling point for GE’s Predix its Internet of Things platform is that users don’t need to think about the hardware underneath.
“If I look at those commercials that GE puts out about hiring software developers, the last thing I should be worrying about is what servers or storage is sitting under that,” Miniman said.
Dell gets credit that a cutting-edge platform such as Predix is supported by its hardware. Several years ago, experts predicted many service providers and some companies building new platforms, such as GE with Predix would run on original design manufacturer or whitebox hardware.
“The reality is that there has not been a wholesale move to that,” he said.
GE’s search for a single infrastructure provider that broadly support the internal operations of GE and GE Digital meant few vendor options, said John Spooner, an analyst at Technology Business Research in Hampton, N.H. who tracks both companies.
“If they only want one vendor, there aren’t many companies that offer everything from a laptop PC to a high end storage array and complex server,” he said. “It is really only Dell that does that at this time.”
Hewlett Packard Enterprise (HPE) and HP Inc., Lenovo, and Cisco could have been in the mix as multi-line vendors for everything from high-end servers to laptops, Spooner said.
“That is what any CIO or IT department would do,” he said.
The Dell-GE deal also creates synergy between the two suppliers. For example, when GE talks to a potential Predix customer who asks for a complete package, GE might recommend Dell and Dell Technologies, although ultimately the customer decides on the hardware provider. However, GE isn’t limited to Dell and its sister companies, including VMware, Pivotal, RSA and Virtustream – it also counts Microsoft as a partner and also uses Amazon Web Services.
With the breadth of technologies and services illustrated in the Dell-GE deal, Dell looks more like the IBM of old, and also Hewlett-Packard after it bought Electronic Data Systems in 2008, said Charlie Rice, vice president of engineering at Gametime United, Inc., a ticket broker in San Francisco.
And that’s not necessarily a good thing.
“How did that work out for HP?” he said.
Meanwhile, GE’s decision to outsource so much of its IT functions is ironic because GE now promotes itself as a high-tech company in TV ads, but handing over its IT keys suggests they have nothing innovative to add, he said.
“Didn’t Kodak do this same thing?” he asked. “So sure, outsource your future — what could possibly go wrong?”
Robert Gates covers data centers, data center strategies, server technologies, converged and hyper-converged infrastructure and open source operating systems for SearchDataCenter. Follow him on Twitter @RBGatesTT or email him at email@example.com.