Last week we reported that Dell is overhauling its cloud strategy in an effort to avoid a conflict of interest with service providers, which account for a sizable portion of its hardware revenues. The heart of this initiative is a newly launched partner program that will enable the company to offer public cloud services through the channel instead of selling its solutions directly to customers.

“Dell is going through a number of significant shifts in strategy which is dangerous for customer retention,” says Wikibon senior analyst Stu Miniman. “Dell still needs to provide a comprehensive message on how its enterprise strategy meshes with cloud.”

The vendor’s plan is ambitious and not without risk, but the gamble may just be worth it. A successful partner-centric approach will eliminate the friction between Dell and the channel, and it will indirectly make the vendor more competitive by providing customers with a wide variety of different clouds to choose from. SiliconAngle’s Mike Whitley pointed out that the move will also make Dell’s public cloud business redundant, which will give management an opportunity to cut spending by a sizable percentage.

It’s highly likely that Dell will either shrink or shut down the unit, but this prospect begs the question: can the company justify its massive investments in public cloud?

A few weeks ago Dell acquired Enstratius, a SaaS provider that offers ‘cloud-agnostic’ technology for managing hybrid environments. In 2011, Dell committed one billion dollars to building 10 data centers across the globe.

Jason Verge of Data Center Knowledge pointed out that Dell started constructing a relatively small data center in Slough, England in late 2011. In the meantime, the company completed construction of a facility in Quincy, Washington.