Enterprise Architecture: Dell and Microsoft support AI at scale

How can the software and cloud giant Microsoft Corp. translate its platform vision into a fully implemented enterprise architecture in the age of AI?

This central question has defined the next chapter in a decades-long partnership between Microsoft and Dell Technologies Inc. Dell provided some answers at this year’s Dell Technologies World by expanding its private cloud offerings to deliver the latest Microsoft software implementations.

Since this event, Microsoft has been working to enable a disaggregated architecture that simplifies the operation of Dell PowerEdge Computing, Dell PowerStore Storage, and Azure Local. According to Paul Nashawaty, principal analyst at theCUBE Research, flexibility is the key appeal for enterprise customers evaluating Dell and Microsoft’s joint solutions.

“Microsoft and Dell are moving beyond infrastructure partnerships to deliver a more integrated go-to-market strategy for enterprise AI, hybrid cloud and application modernization,” he said. “Since Dell Technologies World in May, the focus has been on connecting Microsoft Azure Local, SQL Server and hybrid cloud capabilities with Dell’s automation platform and enterprise infrastructure to help customers deploy, control and operate AI workloads wherever their data resides.”

This feature is part of SiliconANGLE Media’s investigation into the architectural changes that enable continuous production-quality AI. Be sure to check out theCUBE’s “Dell AI Data Platform Event: From Ambition to AI at Scale” and past coverage of this year’s Dell Technologies World. (*Disclosure below.)

Integrate enterprise architecture from hardware to workload

The market opportunity for Dell and Microsoft centers on the need to operationalize AI applications. Achieving this goal requires integration across the entire AI deployment lifecycle.

The Dell Automation Platform and Dell Private Cloud provide an operational backbone for deploying Azure Local on-premises and managing the hardware lifecycle, including firmware and updates. Azure Arc provides consistent management across all environments. SQL Server can run in virtual machines or Kubernetes containers without having to learn separate skills for cloud and on-premises environments.

“The key architecture for AI capabilities is integration with things like embedding models for vector search or chat completion models for AI agents, but we do everything within… the SQL Server Engine,” Bob Ward, principal architect at Microsoft, told theCUBE. “We [formed a] Partnering with Dell so we can connect to everything locally. I can connect to Azure Local, Dell [and] Nvidia factory. We have just built in a framework. It doesn’t matter where you run these AI models; We can easily integrate into it.”

A key element of the partnership between Dell and Microsoft is the integration of database, automation and hybrid cloud capabilities into a stack that can provide AI with the data it needs. Data fragmentation is often cited as a key barrier to scaling AI beyond pilot projects, and integrating the two companies’ services removes a pressure point identified in surveys across enterprise information technology.

Data fragmentation remains a barrier to scaling AI beyond pilot projects. The partnership between Dell and Microsoft brings together database, automation and hybrid cloud capabilities in a common stack.

“From an AppDev perspective, this integration is important because the challenge is no longer just building AI applications, but running them securely, consistently and at scale,” Nashawaty said. “TheCUBE AppDev Research highlights the execution gap: Approximately 88% of AI pilots fail to reach production, while 64% of enterprise AI teams identify integration complexity as a key barrier to adoption.”

Delivering AI for real-world results

Dell’s partnership with Microsoft also extends to unstructured data storage. The two companies bring familiar storage capabilities to hybrid and multicloud environments.

Dell PowerScale for Microsoft Azure brings Dell’s OneFS file system software to Azure as a managed storage service. Customers can provision file storage directly from the Azure portal while maintaining familiar PowerScale management capabilities.

The solution supports a wide range of production workloads across all industries. These industries are increasingly relying on high-throughput, low-latency file access to power the next generation of agent AI and advanced analytics. It allows media and entertainment companies to handle massive video files, real-time editing and tight production schedules. Semiconductor and electronics design houses can accelerate simulation and modeling using large data sets.

“This isn’t really about just running the software in the cloud,” said Rachna Lalwani, senior consultant, director and product manager at Dell, in an interview with theCUBE. “It’s about creating a truly integrated experience that enables companies to get more from their data. What they really gain is operational consistency across their storage landscape.”

Integration of agents into PCs

A recent IDC analysis found that 95% of companies already have at least one AI agent workflow in production and predicted 2.5 billion agents by 2030. With the advent of agent AI, Dell and Microsoft are collaborating on solutions to help companies deploy autonomous agents while controlling costs.

Managing the cost of tokens, the basic units of data processed by large language models, is one of the financial challenges of AI. To address this issue, Dell partnered with Microsoft and Nvidia Corp. in May. Deskside Agentic AI and provided a local environment for building and testing AI agents.

“What is resonating with customers right now is that the cost of tokens is skyrocketing,” explained Jon Siegal, senior vice president of Dell portfolio marketing at Dell. “Although the cost of a token has dropped quite dramatically, we know that the amount of tokens being consumed right now is nothing short of astronomical. Cloud costs are just pretty high right now. How can customers balance that and run the right workload in the right place? We’re trying to give customers a starting point. The PC is a great place to start.”

In early October, Dell announced an expansion of its Windows PCs and workstations to include agentic AI. In collaboration with Microsoft, Dell has expanded its AI development portfolio to give developers, developers and enterprises more choice when building, testing and scaling agent AI on Windows.

This was an important step in the evolution of Windows, evolving the platform into a more comprehensive resource for agentic AI. Tools like Windows AI Foundry provide developers with a structured way to build, package, and scale agents in a controlled environment.

“With Windows, we’re going beyond just being an operating system – we’re looking at it as a real canvas for AI,” said Mary Ann Anderson, global marketing director for Dell partnerships at Microsoft. “Soon there will be a point where individual employees are managing their own agents, perhaps a small army of agents. This needs to be done in an orderly and very secure manner.”

Dell and Microsoft see a significant market opportunity in bridging the gap between AI development and production deployment.

“Microsoft and Dell have an opportunity to close this gap by simplifying deployment, automating infrastructure operations and providing partners with repeatable solutions to bring to market,” said Nashawaty of theCUBE Research. “The true measure of success will be whether their combined ecosystem helps companies move from AI experiments to production-ready applications with stronger governance, predictable costs and measurable business outcomes.”

(*Disclosure: TheCUBE is a paid media partner for the Dell AI Data Platform Event. Neither Dell, the sponsor of theCUBE’s event coverage, nor other sponsors have done so editorial control over content on theCUBE or SiliconANGLE.)

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