Dell Riding on a Cloud

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The big news out of Dell this week was the creation of the new Cloud Computing Division, a business unit dedicated to delivering high-end systems to mega-sized data centers. The idea is to offer customized infrastructure solutions that leverage virtualization to ultimately provide a new type of computing environment in which applications can utilize resources more dynamically. The benefits of cloud computing are said to be greater flexibility and the elimination of the "feature tax" that comes from using dedicated servers, storage devices and other networking gear.


Dell isn't the first company to try and make a go of cloud computing. In fact, the company seems to be targeting a firm called Rackable Systems, which has already lined up the likes of Microsoft, Yahoo and Amazon as customers.


But there are those who wonder whether Dell is the right company to be taking on such an ambitious venture. Nicholas Carr, over at Rough Type, points out that Dell is looking to extend its build-to-order approach to the PC market into a design-to-order model for hyperscale data centers, as if there is even the slightest similarity between loading a PC and specing out a server farm.


And other analysts are saying that success will depend more on commoditization than customization. As Gartner's Martin Reynolds pointed out, if they can't compete against HP and others on price, they'll be dead in the water.


In the end, it will be interesting to see what Dell can provide. Now that Michael Dell is back in charge, this just might be the new direction that can refocus the company's energy.