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>> Hello and welcome to this Analyst Brief,
where we're discussing Dell's Apex Cloud platform
for Red Hat OpenShift and their announcement around that.
I'm Dave Volante and Rob Stretchy and I,
will unpack the market for cloud computing
and what the Dell Red Hat announcement means to customers.
First, let's take a reminder look again at cloud usage.
The movement between public and private clouds,
it continues.
But looking at the data from ETR, we're seeing
that the market is becoming much more balanced.
It's not really reached an equilibrium yet,
but it's definitely the balance is tipping back
toward on-prem.
And this chart from ETR shows the percent of usage
of public clouds relative to private clouds,
specifically within the S and P 500.
Which represents a very large portion of spending,
while over half of IT spend
and is generally considered a bellwether.
Now the data shows about 43% usage of public cloud today,
growing to 55% by January, 2026.
Now note that the expected 2026 figure is down
from 10 months ago, implying that the market is reaching a
more balanced state as we said.
IE many workloads are where they belong
and the steep momentum to migrate off-Prem has stabilized.
Rob, what do you make of this data?
>> I think it's super interesting in the fact that
cloud has become not a place,
but it's really an operating model.
And I think a lot of what they're looking at
is the fact that this equilibrium is
because there's better tooling coming to the on-premise
and things like the Apex Cloud platform,
are one way that people are looking at
how they simplify their life.
>> And AI of course is going to be the next battleground here
for tooling.
>> Oh absolutely.
>> Okay let's look at another set of data
and this time we're going to look at the overlap of Dell
inside 144 Red Hat accounts within the ETR dataset.
So the chart shows net score or spending momentum
on a platform that's on the y-axis
and presence in the dataset or overlap in these accounts
is on the horizontal axis.
We see that 46% of those 144 Red Hat customers
also have Dell infrastructure installed.
So you can see on that x-axis, Dell is the dominant player
with a greater share inside of these Red Hat accounts,
more so than any other competitor.
Rob, I recently talked to Sadir, Serena Vasan of Dell
and discussed the Apex Cloud platform family.
Then you spoke with Caitlin Gordon of Dell
and Chris Morgan, who's senior director of hybrid platforms
at Red Hat.
Dell recently announced expansion of the Apex Cloud platform
with the addition of Apex Cloud platform
for Red Hat OpenShift.
So Rob, what are the relevant customer requirements
that people really need to know about?
>> I think what they're really looking for is
how do they deal with demand for agility and flexibility?
I think that's at the top of the list
and they're trying to understand, hey,
it is a cloud operating model, we're going to expand,
we're going to keep expanding.
How do we really, deal with that in an easy way?
And it's also a shift towards containerized workloads.
I think you and I have been talking for quite a while
as people go to microservices
and build those next gen applications,
a lot of it is in these containerized workloads
where there may be 10 to 20 containers
that actually make up an application.
And I think there's also,
its simplified combination of cloud experiences
because they're not just going on premise with their cloud,
they're going to other places.
They're going to co-location,
they're going to other hyperscalers
and they need a operating model
that goes across all of those.
And also I think they're looking at it and saying,
Hey, we're a Red Hat shop
and we really like Red Hat's experience and their expertise.
So we we're trying to leverage that
and we have their tooling already.
And I think also, part of the big thing that they're
looking for is a true partnership between the organizations
and how do they jointly engineer these things together.
Because as they move towards a hybrid experience,
it's really important to know that you have
that supportability going forward.
>> No one company can do it alone these days.
How do you think in your expert opinion,
this announcement addresses customer requirements
and or changes them?
>> I think it really is about the unified application
and plane that the Apex Cloud platform is bringing to bear
for customers is a really a big piece of it.
It's an operating model that is very unique
to what they're bringing out.
It is very cohesive.
I think it's also they're looking for that,
all in one solution, which compute storage
and container orchestration is built in,
so that when they're getting up and running,
it's really quick to get up and running
and they know where they're going to go
and it's the same tooling across everything.
I think the simplified management,
modernized infrastructure,
to your point, hey, how do I get, GPUs and other pieces
of infrastructure into the compute layer
where I'm building these microservices applications?
And I think again, it's the adoption of those microservices
and containers that's really pushing it
to be more than just, Hey, we go out to the cloud
and this is where we're always going to build.
I think bare metal has an appeal from a cost factor
perspective as well.
And the benefits of bare metal are really coming true
and starting to ring true, but it has to be turnkey.
It can't be the old rack and stack pipe power and ping
and connecting everything up.
>> So double click on the announcement, what exactly did Dell
and Red Hat announce and why should customers care?
>> Well, I think they really are going after the simplicity
and that cloud operating model.
It's not just a rehashed hyper-converged infrastructure.
HCI as we've talked about before.
It's not just Gen two of that,
it's really a cloud operating model on top of the hardware
and software that's integrated in there.
So I think really that makes it cloud native
and cloud native applications really easy to deploy and run.
The Apex Cloud platform for
Red Hat OpenShift,
really takes advantage of the leadership role
that OpenShift has in Kubernetes.
And I think Red Hat really has a developer ecosystem,
a DevOps ecosystem that is super strong
and allows people to use the
kit in the stack
for DevOps that they're using today
and apply it to this platform.
It's a powerful, I would say, relationship,
not only for Red Hat, but for Dell.
Especially in their channel partners
where they're leaning into the channel
where organizations are going, Hey,
how do I have a better hybrid experience
and looking to that channel partner.
And really ultimately customers are spending
with their money because they want an operating model
that not only works on premise or in colo,
but also can scale up to those hyperscalers
for when they're using that for production.
>> And it gives optionality to the customers
and to the channel.
I think both of those constituents have been looking forward
to this day for quite some time.
So Rob, thank you. I appreciate your time.
>> Yeah, thank you.
>> Okay and thank you for watching this analyst brief.
We'll see you next time on The Queue.
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