Hybrid-AI-cloud innovation: Dell and Microsoft advance AI – News

There was once a time when Dell Technologies Inc. was known primarily as a box provider, a hardware-centric company. Yet, as recent announcements during Microsoft Ignite in November have shown, Dell is transitioning to a broader vision, one that encompasses an expanding portfolio of products and services in support of the hybrid-AI-cloud.

Working with partners such as Microsoft Corp., Dell is leading an evolution of the hybrid cloud that is geared to provide new software and data management solutions for the emerging AI ecosystem. TheCUBE Research “Future of Data Platforms” study found that 92% of organizations are demanding cross-cloud and on-premises pipeline interoperability. Announcements from this year’s Microsoft Ignite event demonstrated how Dell’s partnership with Microsoft was designed to meet enterprise demands for scaling AI workloads and deploying them flexibly in hybrid environments.

“One of the biggest takeaways this year is that Microsoft isn’t trying to do everything alone,” said Rob Strechay, principal analyst at theCUBE Research. “The Dell + Microsoft ecosystem, from Azure Local to PowerScale running natively as an Azure service, is becoming essential to delivering AI where customers actually are. These partnerships aren’t peripheral; they’re becoming the delivery mechanism for real-world AI outcomes in hybrid and multicloud environments.”

This feature is part of News Media’s ongoing exploration into the evolution of AI innovation and hybrid cloud. (* Disclosure below.)

Azure and PowerStore support hybrid-AI-cloud

Azure Local is Microsoft’s rebranded hybrid cloud solution, formerly named Azure Stack HCI, that provides Azure cloud services on hardware for on-premises or edge environments. It is one of a suite of offerings that comprise Azure Arc, a bridge that extends Azure management and services to any infrastructure.

Dell customers are attracted to Azure Local because of the low barrier to entry. Plugging Dell PowerStore into Azure Local enables them to adopt a hybrid cloud solution without the need to purchase new hardware.

“With PowerStore, it’s enabling organizations to scale the compute and the storage independently, so that gives them that flexibility in case business needs change,” said Matt McSpirit, senior principal engineering technologist at Dell, during an interview with theCUBE. “Organizations that have either been investigating new external storage or already have it now have a great solution going forward for that option. PowerStore brings a number of advantages, the advanced data efficiency, which keeps the data reduction always on. That lowers the storage costs without impacting performance.”

For Microsoft customers, the linkage with Dell provides security, compliance and consistent tooling, benefits of the public cloud experience. Yet, in this new era of AI, they also want guaranteed control over data residency and operations in a private cloud. Azure Arc offers a solution that enables this preferred framework.

“As a foundation of our strategy, we are extending Azure’s fundamental principles, which are based on security, sovereignty and a consistent operating model, into private cloud,” said Meena Gowdar, senior director of product management at Microsoft, in conversation with theCUBE. “What customers love about Azure is extended through Azure Arc.”

Cloud-native PowerScale deployment

In addition to bringing Dell PowerStore to Azure Local, Dell is integrating its PowerScale storage solution into Microsoft’s cloud. Last month, Dell announced that it would offer a fully managed cloud-native deployment of PowerScale software on Azure’s infrastructure.

By provisioning Dell’s file storage directly from Azure’s portal, users can take advantage of a single, unified experience across the Azure data platform and in on-premises environments.

“This isn’t really about running the software just in the cloud,” said Rachna Lalwani, senior consultant, director and product manager at Dell, during her appearance on theCUBE. “It’s about creating a truly integrated experience that empowers businesses to do more with their data. What’s also new and unique with this offering is their custom compute instances that are purpose-built for Dell.”

The movement of massive amounts of data across cloud and on-prem infrastructure, however, carries its own set of risks. Building cyber resilience in the event of a data breach has become a necessity, and organizations often develop blind spots when it comes to preparedness, according to Colm Keegan, senior consultant of product marketing at Dell.

“The big risk is that you think your capabilities are what they aren’t,” Keegan said during an interview with theCUBE. “The worst time to find that out is during a breach. The vast majority of IT professionals stated that their leadership overestimates their cyber readiness. We’re calling this the confidence versus capability gap.”

To help bridge that gap, Dell announced advancements for its PowerProtect Backup Services offering that is built on Azure infrastructure. The enhancements are designed for customers to protect hybrid workloads while providing data protection and cyber resiliency.

“We also now offer software-as-a-service and PowerProtect Backup Services,” Keegan said. “That’s now available as a solution you deploy directly from the Azure Marketplace, using Microsoft Azure consumption credits. If you’ve got a contract with Azure and you want to draw down on that, and you’re looking for a solution that basically can protect any workload anywhere it resides, as well as SaaS apps for example, then you can use that.”

New services for AI PC

Protecting workloads wherever they may reside is becoming increasingly more important for one basic reason: AI is moving on-device. The migration of intelligence to edge applications, such as phones, cars, PCs, and wearables, is becoming more noticeable. The global AI PC market alone is predicted to grow from $61 billion this year to $992 billion over the next decade.

Dell and Microsoft are positioning themselves to benefit from growth in the AI PC market. Following Microsoft’s introduction of Copilot+ PCs in May of last year, Dell added services for Microsoft Copilot Studio and Azure AI Studio to help companies develop and deploy Copilot agents. This included support for Azure AI services in the Dell hybrid cloud for Azure.

The AI PC has been enhanced with additional new services from Microsoft, according to Isaac Piñon, director of product marketing, B2B solutions and software, at Dell.

“Microsoft recently announced a couple of new features,” Piñon told theCUBE. “You’ve got Copilot Voice, which makes interacting with your AI PC as easy as speaking to it, and then there’s also Copilot Vision, which offers guidance based on what you see on your screen. You’ve got these Copilot+ experiences that help you work on productivity — so, features like Recall and Click to Do, which streamline your workflow.”

The addition of these new services underscored how closely integrated Dell’s technology has become with Microsoft’s. Dell’s AI PC portfolio is optimized for Windows 11 and Microsoft 365, and Dell’s backup and recovery features have been built on Azure infrastructure as well.

Dell’s PC strategy is part of its vision for the agentic era, where AI agents will perform key tasks using edge devices. That will take an infrastructure well-suited to agentic workloads, which has been a key focus for both companies. This past fall, Dell extended its AI Factory program to encompass reference architectures for retrieval-augmented generation, agentic automation pipelines and multimodal enterprise search — tying the PC, workstation and data center layers into a cohesive operational fabric.

“Agentic AI can’t scale without an enterprise-hardened operational backbone, and that’s where Azure and Dell intersect,” Strechay explained. “Azure’s standardized infrastructure for agentic workloads paired with Dell’s hybrid and on-prem innovations gives customers the consistency, observability and trust layers they need to move beyond pilots and into production at scale.”

Hybrid-first drives data solutions

Dell’s announcement of new collaborations with Microsoft during the Ignite conference placed a spotlight on the company’s hybrid-first strategy. Dell is focused on combining on-premises infrastructure with public cloud flexibility through disaggregated data centers, automation and partnerships such as the one with Microsoft. It is an approach designed to meet the needs of IT customers who have, so far, indicated a preference for the hybrid model.

“The hybrid-first strategy was a strategic focus,” said Paul Nashawaty, principal analyst at theCUBE Research. “What really struck me at Ignite is how Dell and Microsoft made hybrid feel practical, not theoretical. By aligning Dell Private Cloud and PowerStore directly with Azure Local, they’re essentially giving enterprises a way to run Azure operationally, but with on-prem performance, security boundaries, and data locality still intact. That matters because, according to my AppDev research, more than 60% of enterprise teams still keep their highest-value workloads on-prem due to data gravity and regulatory constraints, even though they prefer the Azure-style operational model.”

Dell and Microsoft are also responding to market preferences surrounding AI itself. It has taken a while for enterprise IT infrastructure to catch up with the pace of AI development, and the latest collaborations were specifically designed to enable scale and speed for data processing and autonomous integrations.

“AI readiness now hinges on the data layer,” Nashawaty pointed out. “During Ignite, the message from Dell and Microsoft is that data infrastructure can be the real gating factor for enterprise AI. Integrations around PowerScale, Private Cloud and Azure Local reinforce a simple reality we’re seeing in our research: roughly 70% of AppDev and platform leaders say data fragmentation is the #1 blocker to scaling AI beyond pilots. Compute gets the spotlight, but production AI comes down to where the data lives and how fast you can move, secure and govern it.”

(* Disclosure: TheCUBE is a paid media partner for Microsoft Ignite. Sponsors of theCUBE’s event coverage do not have editorial control over content on theCUBE or News.)

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