Dell doubles down on consultancy work as companies reassess cloud moves

IT giant Dell Technologies is looking to gain ground in cloud-focused consultancy projects for major Latin American firms as many of them roll back or rethink their cloud adoptions on cost grounds.

“We have discussed very interesting cases of customers wanting to ‘recalibrate’ their cloud, not ‘repatriate’ it, as has been said. So we’re working not only on products, but increasingly on consultancy services,” Diego Puerta (pictured), the company’s head of Brazilian operations, told a press conference at the Dell Technologies Forum in São Paulo.

Such a dilemma is not new in the market, but it became particularly acute during the pandemic, when several companies rushed to the cloud for efficiency and digitization but many ended up seeing upfront costs increase.

What Dell describes as companies recalibrating their cloud strategy involves a multicloud and hybrid approach.

“We have to understand the customers’ architecture today, what makes more sense. A customer may want to run their Oracle environment on [Microsoft's] Azure cloud, or maybe do it over the Dell platform in their own datacenter," Joel Brawerman, VP of pre-sales at Dell Technologies in Latin America, told BNamericas. 

"It’s important that players understand the importance of interoperability.” 

Dell has large hyperscale colocation providers among its partners, such as Equinix and Ascenty, as well as big cloud firms AWS, Microsoft and Oracle. Other partners in the broader cloud ecosystem include Red Hat, NTT, Unisys and Kyndryl.

The company has been making “recommendations” to customers regarding which workloads should be in the cloud, in the datacenter or in colocation, according to Puerta. Among these consulting clients are large banks, retailers and some industry players, he said.

“Today there is a very serious question about operating costs. 'Are my workloads positioned where they can extract the most value?',” he said.

‘The State of Innovation’ study, carried out by Dell with 6,600 IT leaders and released during the São Paulo event, indicates that 83% of surveyed Brazilian companies consider themselves to be innovative or extremely innovative, but 35% of them reported increasing costs with the cloud as one of their main hurdles.

Beyond consultancy and multicloud, Dell is betting on generative AI, with the Dell Generative AI Solutions suite being developed in partnership with Nvidia, while upping the ante on cybersecurity and on serving the edge ecosystem in the region.

Dell is also investing in private networks, including at its own facilities. It is working, for example, with Claro Brasil to deploy a private 5G network at its Hortolândia factory in São Paulo. 

At this same plant, Dell recently announced the start of production of a new storage line, PowerFlex, focused on orchestrating cloud environments.

MARKETS

The company's main markets in Latin America, in tech infra, are the two largest economies of Brazil and Mexico, said Brawerman. 

But Dell also reports “very strong” growth in Chile and in key projects in some markets in Central America, namely Costa Rica and Panama, both of which are seeing a ramp-up in datacenter projects.

Costa Rica is also Dell's service hub for all of Latin America.

Argentina is also an important market, but according to Brawerman Dell has faced, like others, difficulties in exporting to the country.

According to IDC data made available by Dell to BNamericas, the company is currently leader in Latin America in commercial PCs, with 27.1% of total units sold in Q2.

The company also leads regionally in mainstream servers, with a 37.4% market share by revenue, and in storage, with a 37.7% revenue share, according to the data.

Dell Technologies posted global revenue of US$22.9bn, down 13% year-on-year but up 10% sequentially, for its fiscal 2024 second quarter ended August 4.

The company also reported investments of US$2.7bn globally in research and development in its last fiscal year, from February 2022 to January 2023.