Dell Launches a Subscription Model to Rival Amazon and Microsoft

Updated on Dec 12, 2019 at 1:42 pm UTC by Wanguba Muriuki · 3 min read
Photo: Wikimedia Commons
Photo: Wikimedia Commons

Reports reveal that Dell Technologies Inc plans to offer its business clients more flexible and on-demand buying options for various products.

The latest reports reveal that Dell Technologies Inc plans to offer its business clients more flexible and on-demand buying options for various products. Some of the products featured in the new plan include personal computers and servers. This move is believed to aim at countering the lure of cloud services offered by Microsoft Corporation and Inc.

Customers can now use Dell’s hardware on their consumption. They can use it as a service or via a subscription called the Round Rock, a Texas-based company. The company made this announcement on November 12.

Dell together with its hardware peers has come under pressure to provide corporate clients extensive flexibility and simplicity of infrastructure cloud services. Some of the public cloud behemoths like Microsoft Azure and Amazon Web Services have reduced the demand for data-center hardware.

The emergence of cloud services has made more businesses to look at renting computing power as a viable solution instead of investing in their local server farms. Rivals like Hewlett Packard Enterprise Co. Announced in June that it would shift to a subscription model by 2022.

According to the Gartner Inc research firm, around 15% of data-center hardware deals will feature pay-per-use pricing in 2022. That will represent a significant increase from 1% in 2019 as stated by Dell. The company’s senior vice president of product marketing, Sam Grocott, added:

“We really think it’s an important time for Dell to simplify the way we offer our portfolio and meet customers’ needs. This type of a model — as a service — was born in the cloud. As organizations have leveraged this model in the past, they have come to like it.”

Dell is striving to make it easier for its clients and users to upgrade their hardware because they do not need to spend a lot of money in the form of capital expenditures upfront. Instead, they can pay smaller amounts monthly to cater to the company’s operating expenditures. Thus, customers pay for the cumulative storage or computing power that they use for this consumption program.

Companies may also choose to hire Dell to manage their hardware infrastructure entirely on their behalf. Although Dell’s total sales jumped 2% in the quarter ending August 2, demand for its networking gear and servers plunged 12% in a reversal from 2018. Last year, there was unprecedented customer interest in the products. 

The company, according to Grocott, still hopes that most of the users and customers will pay upfront for the products in the coming three to five years.

Business, Markets, News, Technology
Wanguba Muriuki
Author: Wanguba Muriuki

Wanguba Muriuki is a content crafter passionate about putting everything into writing. He is passionate about Blockchain and Traveling. He is also an experienced creative and technical writer. Everything and everyone has a story to tell. What better way to capture the real story than in words.

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