Dell's acquisition of a networking company was not terribly surprising, and Force10 is a good fit. There were only a few other standalone vendors such as Arista and Extreme that might have been acquisition targets. Juniper was too big and Brocade was too heavily into Fibre Channel. It's surprising that it took Dell so long to acquire a networking company. Force10 has a good product line that is better known in high-performance computing where high port counts and microsecond latency matter. Force10 did have a campus line, but its market penetration was, and is, extremely low. Dell didn't buy Force10 for the customer list and didn't buy Force10 just to have a networking company--not when it had OEM relationships for Ethernet networking with Brocade and Juniper. To compete with Cisco, IBM, and Hewlett-Packard in the data center, Dell needed networking gear it owned and could integrate into a single offering.
Force10 back in 2010 launched its Open Automation Framework, which includes product features like bare metal provisioning of switch hardware, integration with system management and hypervisor products, and on-switch Perl and Python scripting, all of which are meant to support automation and orchestration--the underpinning of a dynamic data center. Dell, for its part, needed not just a switching company, but one with products that could jump-start an integration process that would bring most of the features needed for a dynamic data center revolving around Dell's own server, storage, networking, and management product lines. Bear in mind that Dell is also focused on the midmarket, not large enterprises that are usually the targets of public and private cloud ventures. It isn't looking to scale to tens of thousands of switch ports and servers, initially.
Given Dell's track recent track record to invest in acquisitions, we can expect to see it invest heavily in Force10, perhaps growing the staff two to three times over 12 to 18 months, developing a road map laying out its plan, and executing. Here is what I think Dell will, or should, do with Force10.
First, Dell has already said that it's going to end-of-life the current crop of campus LAN switches it resells from Juniper. They'll still be supported, but Dell won't sell more of the J line, and Dell still resells Juniper's WAN routers and security products--it's not a break. It will start selling its Force10 LAN and data center switches instead. Getting customers to switch to Dell's networking gear will be difficult. In the recent IT Pro Ranking: LAN Equipment Vendors report [free, registration or account login required], 60% of respondents indicated they weren't interesting in replacing their current networking vendors, while the remaining 40% were considering replacing either their primary or secondary vendors. That's either a market opportunity for the likes of Dell or a fairly high hurdle to leap. The upside is that the top two reasons that would get the 60 percent to switch are considerable cost savings and new features. Dell has a habit of selling good equipment for less than competitors, and, since Force10 already relies on merchant silicon, it can probably drop the sales price and still retain good margins. Force10 was, and under Dell is, innovating its product lines. It seems to be hitting both requirements.
We can then expect to see Dell start to tie in its networking with automated management and orchestration to its Advanced Infrastructure Management, acquired with Scalent in 2010. The automation features in the Force10 gear seem nicely aligned with Dell's plans and provide a way that Dell can meet the demands that a dynamic data center places on the network infrastructure.
Along with its server and storage offerings, Dell has a good base to deliver a complete unified computing package based on Dell's equipment. It just has to put it all together. In that sense, it's in a similar position as Cisco was with its Unified Computing system. It doesn't have a legacy of management applications to support and integrate; it's starting with a fairly clean slate, which might make it more nimble than either HP or IBM.