Since Dell Technologies Inc. and EMC Corp. stacked their bulky portfolios together to officially become Dell EMC last year, the newly merged company has sold the notion that bigger is better. In its end-to-end marketing message, however, a strategy for rapidly growing “internet of things” edge devices was MIA — until recent announcements at the Best of Breed Conference in Atlanta, including a new internet of things division and partner program. Better late than never — but can Dell EMC catch up to the internet of things edge runaway train?

“If you look at Dell pre-merger, their transformation was largely failing. The company was making a lot of acquisitions, but it wasn’t able to reshape itself fast enough,” said Dave Vellante (@dvellante), co-host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, and Wikibon Inc. analyst.

Vellante joined several others for a Wikibon Analysts Meeting on Dell EMC’s progress in the cloud and internet of things devices post-merger.

The merger with EMC was wise in that EMC is a highly lucrative asset. “For $4 billion, they’re getting an asset that’s worth somewhere north of $50 billion,” Vellante said. This cash flow is happily paying down the debt that Dell incurred to acquire the company, he added.

But does EMC have the mojo to redefine Dell for the cloud era? Dell EMC is rooted in hardware like servers and hyperconverged infrastructure appliances. “That kind of center of strength is on-premises, and therefore, they’re not really living heavily in the public and multicloud world,” said Wikibon analyst Stu Miniman (@stu).

Dell EMC’s ace card may be VMware Inc., which it owns and which does have a discernible place in multicloud. “Without VMware — in my view, anyway — the combination of these companies would not be nearly as interesting; in fact, it would be quite boring,” Vellante said.

“There’s no question that virtual machines will remain important, if not only from an install base standpoint, but in the future, how the cloud is organized and arranged and managed,” added Peter Burris (@plburris, pictured, left) head of Wikibon research.

IoT moves target from cloud to edge

Even a viable cloud strategy, however, does not answer the looming internet of things edge device question. Here, Dell EMC may buy itself time in the internet of things market with technology geared toward the “edge gateway,” which bridges information technology and operational technology, Wikibon analyst George Gilbert (@ggilbert41, pictured, center) explained. “Mapping the IT gateway server to all the OT edge devices may turn out to be horribly complex for a few years,” he said.

Even public cloud giants like Amazon Web Services Inc. acknowledge that much future data will live at the edge. Wikibon analyst and Chief Technology Officer David Floyer (@dfloyer, pictured, right) has extensively researched edge computing trends. In a recent Wikibon report, he predicted that “95 percent of internet of things data will live and die at the edge, and this will grow to 99 percent over the next decade.”

This growth is pressing technology companies to dive into edge computing if they haven’t already. A recent IDC Research Inc. report suggested that internet of things edge spending with grow 16.7 percent year over year in 2017. IDC forecasts global spending on edge hardware, software, services and connectivity will reach $1.4 trillion by 2021.

“The discussion about IoT has shifted away from the number of devices connected,” according to Carrie MacGillivray, vice president of internet of things and mobility at IDC. “The true value of IoT is being realized when the software and services come together to enable the capture, interpretation and action on data produced by IoT endpoints.”

Dell EMC IoT boat belatedly departs

Dell EMC has lagged behind Hewlett Packard Enterprise Co., a major competitor, in the internet of things device market, according to the Wikibon analysts. At the 2017 Best of Breed Conference in Atlanta, it finally broke its silence with a slew of edge announcements. VMware Chief Technology Officer Ray O’Farrell will captain the new Dell Technologies IoT Division. The company plans to invest $1 billion in internet of things technology over the next three years.

While the substantive offerings are still not fully baked, Dell EMC previewed them at the conference.  Dell EMC’s new Project Nautilus software ingests and queries data from internet of things gateways in real time. VMware will introduce Project Fire, a hyperconverged product that speeds up deployment of internet of things applications. Dell EMC will also develop processor accelerators for edge analytics with partners such as Intel Corp. and Nvidia Corp.

Dell’s relationship with Intel may come up for review as Advanced RISC Machines, or ARM, processors gain market share at the edge. Some ARM microprocessors cost as little as a dollar. While Intel has begun incorporating ARM technology into some products, it has typically positioned it own chips as competitors to ARM.

More compute moving to the primary edge of the devices themselves may cut into Intel’s market share, according to Floyer. “Dell has, in my view, a strategic decision to make of whether they get into being part of that ARM ecosystem for the edge,” he said.

Does hardware sink cloud and edge analytics ships?

Is Dell EMC in over its head at the edge, despite its new efforts? Wikibon analyst Neil Raden (@NeilRaden) contends that Dell EMC might simply be “too big to fail,” despite its weaknesses. However, data analytics, artificial intelligence and deep learning algorithms at the intelligent edge are largely software-powered.

This conflicts with the “hardware race to the bottom,” as Wikibon analyst Ralph Finos terms it. “I think that’s the challenge when you’re looking at going head [to] head with HPE, especially,” he said.

“Dell’s a hardware company,” Miniman concluded. “This is a software play. Dell’s been cutting their software assets. And I’m really worried that I’m going to see an edge box that doesn’t have the intelligence that they need […].”

Watch the complete Wikibon analyst meeting below:

Photo: SiliconANGLE