Dell to invest $1B in data centers offering cloud services

April 7, 2011 | Dean Takahashi

Computer maker Dell said today it will invest more than $1 billion in new data centers that offer cloud services and other technology for its customers.

The move seems like an effort to counter the growing services and software focuses of rivals such as IBM and HP.

Dell hopes to transform its business from simply selling hardware to providing more value-added services that will help customers offer consumers all sorts of web services in an era of an ever-expanding internet. The move combines hardware, software and service offerings to customers that will make Dell into a more well-rounded enterprise vendor.

HP voiced a similar vision — which included running data centers for its customers — as new chief executive Leo Apotheker laid out his strategy a couple of weeks ago. Both HP and Dell sell a lot of equipment to web service vendors such as Amazon, but now they’re effectively going to compete with Amazon in hosting businesses in their data centers.

The $1 billion figure is impressive, but given that the company already spends $50 billion a year to support revenues of $61 billion, it’s unclear how much that $1 billion is over and above what it would have spent anyway.

Over 15 months, Dell has made nine acquisitions related to everything from new services platforms to storage. All of them are helping to build up Dell’s capability to serve customers at “every layer of the architecture,â€