Dell to Invest $1 Billion in ‘Internet of Things’

The company sees growth in providing "edge" computing power for devices ranging from thermostats to connected cars.
Matthew HellerOctober 11, 2017

After pivoting from personal computers to data center hardware and software, Dell Technologies is now charting a course toward the next state of its evolution — providing “distributed” computing through the Internet of Things.

The company said Tuesday it will invest $1 billion in new IoT products, research and partnerships over the next three years and named Ray O’Farrell, the chief technology officer of its Vmware subsidiary, to lead a new IoT Solutions Division that will combine internally developed technologies with products from its partner ecosystem and investments.

According to SiliconANGLE, Dell’s strategy is “anchored by what it calls the ‘distributed core,’ in which information is processed at the most appropriate point in the network, regardless of where that may be.” Computing power would be at the “edge” of IoT devices ranging from thermostats to connected cars.

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“We think edge computing could be 100 times bigger than the internet as we know it today,” Chief Executive Michael Dell told The Wall Street Journal.

Several executives at a media event Tuesday stressed the need to put computing power into local devices including smart cars, to enable a fast response to unforeseen events.

“If a deer jumps in front of your self-driving car, if you have to send that info back to a cloud, you might as well plan on venison for dinner,” Dell said.

It is cheaper and more efficient to process information coming from sensors close to where it originates rather than sending that data back to the cloud, said Patrick Moorhead, president of Moor Insights & Strategy.

As Fortune reports, Dell’s move comes as “virtually every tech vendor tries to boost its Internet of things-related businesses.” Hewlett-Packard Enterprise and Cisco also favor a distributed approach to IoT.

“On paper, it looks like Dell is doing the right things in forming a dedicated internet of things division, blending edge data ingestion with analytics and announcing relevant products from across its portfolio,” David Vellante, chief analyst at Wikibon, told SiliconANGLE. “The big question is whether Dell can demonstrate clear differentiated value.”