Dell Technologies claims its core business and architectural shifts in mobile network infrastructure puts it in a prime position to grab a larger share of the $114 billion telecom market.
“Our core business is growing and thriving. And from there we are building multiple, multi-billion dollar businesses in areas, like edge and telco, where our market position, unique capabilities, and go-to-market reach let us do what others can’t,” Dell Technologies CEO Michael Dell said this week at the company’s analyst event.
As Dell Technologies strives to consolidate and modernize infrastructure in its legacy business segments and expands its cloud-delivered IT services under the recently unleashed Apex offering, it’s reorienting for new growth in edge, telecom, multi-cloud services, and security, executives said.
The vendor is particularly interested in the telco space due to a confluence of trends that are pulling Dell Technologies further into the arena, Vice Chairman and Co-COO Jeff Clarke explained.
It isn’t so much the mere 2% annual growth in the telecom infrastructure space the company is after as much as a meaningful piece of the total addressable market of $114 billion, he added.
“What’s happening is the fundamental change in the architecture. Roughly 70% of the spend is on the radio, and the radio side is being disaggregated and opened up.
That’s the opportunity for us,” Clarke said, adding telco infrastructure is opening up, embracing modular hardware, virtualization, containerization, and is on a path to be largely housed in the cloud.
“As it becomes more cloud-like, we now talk about software and it begins now to be very ripe for the opportunity here,” he said.
RAN Disaggregation Fuels Dell’s Telco Ambition
Disaggregation in radio access networks (RAN), a longtime bastion of proprietary equipment, is “becoming more API based, built on standardized hardware.
That’s what we do,” Clarke said. This highly-proprietary market hasn’t been open to Dell for decades, but as it becomes more open, virtualized, and standardized, “that’s a recipe we know quite well,” he said.
The executive claims Dell Technologies is working with or is in discussions with all major telecom companies transitioning to 5G and open infrastructure, but warned that this shift won’t happen quickly.
“The rollout of that will be a bit longer because there’s a re-architecture that has to be done in this disaggregation of the telco networks,” he said.
The $114 billion total addressable market that “was previously so highly guarded is now an opportunity for Dell and we’re ready to spearhead the disruption,” Co-COO Chuck Whitten said.
“We are the largest provider of open software, defined industry standard infrastructure, and are now building systems for this market,” he said.
“We have the engineering, supply chain, and importantly the services to anchor the emerging modern telecom ecosystem.”
Dell Technologies’ pursuits in the telco space will also undoubtedly include acquisitions, but don’t expect large, surprising deals. Deals in this sector will, however, be targeted, according to company leaders.
“I wouldn’t be looking for any large-scale transactions,” Dell said. “There are going to be opportunities for us with some relatively small transactions.”
