August 29, 2008

Dell’s Failed Trademark: A Blessing in Disguise?

Derrick Harris

The whole ado around its failed trademark attempt aside (or perhaps because of it), you have to hand it to Dell. The company is making sure the world knows it’s a player in the cloud market.

I spoke with Dell about its “arms dealer” strategy some time ago, but, honestly, the hardware side of things just isn’t too sexy. Cloud software and applications are where it’s at. When I spoke with Dell, the only customer references I got were “three of the top five search engines” and “some social networking sites” [paraphrased], but now it appears Dell is showing its hand.

In a recent event in San Francisco, covered here by CNET, the server leader told its cloud- optimized server message with the world, but also came forward with Facebook as a key partner and customer. According to the article, Facebook has more than 10,000 servers, “and it’s safe to assume any of them come from Dell.” Well, that makes Dell’s cloud play a little more interesting, doesn’t it? If Dell’s biggest competitors in this space are IBM and HP, having Facebook on board seems to be a big notch in Dell’s belt. See if you can follow the complexity of this logic:

Facebook = hugely successful.

Dell = Facebook’s hyper-scale server of choice.

Dell = a damn fine choice to power my cloud.

And aside from its preexisting relationship with Egenera, which is discussed in detail in my earlier commentary (see above), Dell apparently seized the attention of its recent event to discuss how its acquisitions of Message One, Silverback Technologies and EverDream address the software side of its cloud vision. If it can tie all of these things together, maybe it makes a legitimate software play that lets Dell rival IBM and, to a certain extent, HP in the bigger cloud space.

About that whole trademark thing … whether or not they really thought it would be successful, it was a great PR move. Before that news broke, Dell was hardly in the discussion around cloud computing. Once its trademark claim became widely known, Dell at least had to be mentioned. Now, especially after a public coming-out party with Facebook, Dell could become a force to be reckoned with.

But let’s be honest, it never was going to fly. Dell may own the URL and might have latched onto the term early on, but the term is now so widely used it can’t possibly become Dell’s intellectual property. In addition, companies like IBM have done much more to popularize the term (with it’s Blue Cloud software, hardware and cloud computing centers), and, as a result, IBM’s cloud computing mindshare likely dwarfs Dell’s. Even if some might have been rooting for the trademark attempt to succeed — if only because it meant they wouldn’t have to see the term everywhere they turn — I believe the USPTO made the correct decision. Notice how SOA, grid computing and business process management don’t belong to anyone.

Plus, the buzz around the term “cloud computing” is what’s feeding interest in it. The paradigm is here to stay, but the images evoked from the term itself keeps people talking about it. If the Amazons and IBMs and Enomalys can’t talk about “cloud computing,” Dell will be selling a term with no luster. Best to play in the same pool as everyone else, but make waves with news like the Facebook partnership.

Finally, note that Dell’s cloud servers (and IBM’s and HP’s, for that matter) are not just for “cloud computing.” These lines of products are ideal for anyone running huge server farms and who just want the exact product they need and at a fair price. Oil and gas or financial services firms running their own applications in non-service-oriented manner, for example, still could reap significant cost and efficiency benefits by purchasing high-density, relatively bare-bones, cooling-optimized boxes that just provide needed computing power — and are priced as such.

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