Microsoft, VMware, and Dell are teaming up to offer a joint IoT solution optimized for Dell Edge Gateways that is set to be available in the second half of 2018
Chris Duckett / ZDNet :
Context & Ripple Effects
This announcement is another move in Microsoft's long campaign to put Azure at the edge by borrowing other companies' hardware. The playbook started with Project A2, where Microsoft partnered with VMware on desktop virtualization, then extended to Azure Stack rolling out through HPE, Dell, and Lenovo. Now VMware joins the edge side of that same alliance structure, with Dell supplying the gateways.
What makes this iteration notable is that all three partners had already worked with each other separately — Microsoft and Dell on Azure Stack, Microsoft and VMware on virtualization — so the joint IoT solution fuses existing relationships into a single product aimed at industrial deployments.
First-order effects
- Enterprises standardized on Dell Edge Gateways get a pre-integrated Azure-plus-VMware stack in the second half of 2018, removing integration work they would otherwise do themselves across three vendors.
- VMware extends its virtualization franchise beyond the desktop work of Project A2 into IoT, while Dell gains a differentiated software bundle for its gateway hardware.
Second-order effects
- Competing edge-hardware vendors face pressure to strike similar Azure alignments rather than build rival clouds — a dynamic that played out when Cisco later integrated its edge gear directly with Azure IoT Hub.
- HPE and Lenovo, already Azure Stack partners, see their server-side alliance supplemented by Dell's claim on the gateway layer, sharpening competition over which OEM owns the edge endpoint.
Third-order effects
- If the pattern holds, edge computing consolidates around hyperscaler software stacks delivered through OEM hardware — a structure Microsoft reinforced again with the later Verizon private-edge deal built on Azure Stack Edge.
- For VMware, repeated dependence on Microsoft alliances points toward a structural question about whether virtualization remains an independent layer or becomes a feature inside someone else's cloud.
The trend: Microsoft is assembling its edge-computing position through successive OEM and network-operator partnerships — Dell, HPE, Lenovo, Cisco, Verizon — rather than owning edge hardware itself.