CEO Michael Dell said that services companies are starting to realized the public cloud is too expensive.
Dell is launching a pay-as-you-go model for its cloud services business as an alternative to the offerings of rivals Amazon, Microsoft and Google, CEO Michael Dell told CNBC on Monday.
The change in pay model was “a natural evolution, ” he said.
“We’ve been gradually embracing this for some time, but we talk about this as consumption models. So, pay-as-you-grow, pay-as-you-use, pay-per-use – and we’re absolutely embracing that. It’s what our customers are asking us to do, and we’re happy to do it, ” said Dell.
Dell said leading software as services companies are starting to realize the public cloud is too expensive, which has led companies like Dropbox to pull out. “Because the operating costs of the infrastructure itself is too large of a cost relative to their overall P&L, ” he said.
“We’ve seen a bit of a boomerang effect where, you know, customers have run to the public cloud and say, ‘Hey wait a second, this is more expensive, ‘” said Dell.
In an interview with CNBC, Dell also said this new offering would be good for Snap — which is a large user of cloud services, and reports earnings for the first time this week.
“I guarantee you we can save them some money, ” he said.