Dell Technologies is taking direct aim at the cloud computing industry.
The company is investing $1 billion into research and development over three years to build a new division focused on ramping up the application of Internet-connected devices to homes, cars, factories, appliances and other things.
CEO Michael Dell made the announcement this week at a press event in New York, where he also was clear that his company’s new investment is geared toward attracting new customers, in particular those spending money on cloud computing services with Amazon and Microsoft.
With the help of IoT, Dell is planning to develop products that can be placed alongside a connected device to manage all of its information, according to Bloomberg. That would allow the devices and systems to operate and deliver data much faster than waiting for information to be bounced back and forth between distant cloud data centers.
“The pendulum has swung back to centralized,” Dell told the audience at the New York press event. “Some claim that cloud is the final model but a new breed of apps like delivery drones or connected lightbulbs, which require real time response will drive this back to the distributed model. This is distributed core technology and forms the basis of Dell’s IoT strategy.”
Dell traditionally operates a personal computing hardware computing, and the new IoT division is expected to provide the company with a fresh way to challenge cloud-based computing giants such as Amazon and Microsoft that are reaping big profits by having customers manage their data.
Cloud computing has put a huge dent in the legacy IT market since it reduces the need for servers and other on-premise hardware, which are major drivers of Dell’s business. At the same time, IoT is growing rapidly and being touted by technology experts and governments as the next big computing platform. By 2020, there will be 20.8 billion connected things, up almost three times from the 6.4 billion connected things in use in 2016, according to research firm Gartner.
Dell is anticipating a huge new market based on IoT, where the cloud will have a very limited role to play, in part because of speed.
At the press event in New York, Dell, the company’s chief executive, hammered home this point. He said while cloud computing has been on the rise for more than a decade, devices nowadays, ranging from phones to cars to heart monitors, are more intelligent than ever and require real-time processing of data.
“These devices,” Dell said, “simply cannot wait for a response from a centralized cloud infrastructure that may be seconds away.”