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Dell Launches $1 Billion Division To Mold a World of Smarter Devices

October 10, 2017, 5:47 PM UTC

Dell Technologies just announced a new Internet of Things division that is intended to foster smarter Internet-connected devices for homes, factories, cars, and appliances—all using Dell hardware and software, of course.

The company plans to spend $1 billion in research and development over the next three years on this effort, CEO Michael Dell said at a press event in New York City on Tuesday. The new group will be run by Ray O’Farrell, who is also chief technology officer of VMware (VMW). Given the size of the market opportunity, a skeptic might say $1 billion over three years is really not all that much.

Dell says its various businesses already contribute key building blocks, including security software, that can bolster the Internet of things. But they must be unified in ways that make sense to customers, and the new division is supposed to make sure that happens.

Dell’s Virtustream, for example, offers businesses a way to run their own private cloud data centers which can act as processing points and repositories for data.

RSA, another Dell company that focuses on cybersecurity, will offer more security monitoring and data analytics for devices wherever and whatever they are. Such devices include sensors embedded in home appliances or on factory-floor robots, part of what is called the industrial Internet.

Security analysts worry that the proliferation of such billions of devices gives hackers more targets of attack. Last year, for example, when hackers infected connected home devices that were improperly secured and were able to bring down many popular Internet sites.

At the event, several executives 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,” said Dell.

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That worldview in which local data processing and storage mixes with central cloud computing data centers also plays to Dell’s strengths. The company has experience making PCs and laptops which constitute important local computing nodes connected to cloud data centers. But it does not offer a massive Amazon Web Services-like public cloud. Thus the need to highlight local processing power in addition to the massive processing power concentrated in public clouds like AWS.

“Some applications cannot wait multiple seconds to talk to a public cloud, but need computing to be done locally,” O’Farrell said.

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Jeremy Burton, Dell’s chief marketing officer, outlined a few Dell projects that are supposed to bolster this business. Project Nautilus for example, is software that enables the processing of fast-moving data streams from various devices.

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Dell’s announcement comes as virtually every tech vendor tries to boost its Internet of things-related businesses. Microsoft, Amazon, and Google all push their public cloud data centers for processing and storing data generated by devices in the field. Networking giant Cisco (CSCO) has also pushed its view of a highly distributed network of devices, again as the foundation for its Internet of things strategy.

Hewlett-Packard Enterprise (HPE), Cisco, and now Dell Technologies all espouse a distributed approach to IoT, Patrick Moorhead, president of Moor Insights and Technology told Fortune. “The biggest difference is that Dell Technologies can actually deliver a complete bundle at the infrastructure and management, and development layers.”