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One year ago, Cisco's investment in its converged infrastructure play with storage giant EMC and virtualization kingpin VMware was frayed with partners complaining about numerous channel challenges. But, as Cisco kicks off its partner summit Tuesday in Boston, Mass., partners say that is no longer the case.
Cisco partners say VCE sales momentum is on the rise thanks to the stronger channel engagement under CEO Praveen Akkiraju, a 19-year Cisco veteran who will be talking up the VCE block opportunity at Cisco Partner Summit. Akkiraju will celebrate his one-year anniversary at the VCE helm next month.
D. Martin, VCE's vice president, Global Channels, told CRN in an exclusive interview on the eve of the Cisco summit that VCE channel partner sales growth was up more than 40 percent in 2012 and momentum is increasing in 2013 under Akkiraju's leadership. "We are in a breakout period," exclaimed Martin. "It feels fantastic." VCE announced earlier this year that the organization is on a $1 billion run rate.
Akkiraju, speaking Monday in Boston before the conference officially starts, insisted from day one that he have a "hands-on" role in developing the VCE organization's channel engagement and sales strategy, said Martin, a 12-year Cisco veteran who has headed up the VCE strategy for the last three and a half years. Partners say Akkiraju's channel focus has made all the difference.
"The focus on us executing and being successful with partners has gone up 100 percent [under Akkiraju]," said Martin. "He is a good champion for partners within the organization. We didn't necessarily change compensation. It was more of a refinement and some additional investment in the partners whether it be headcount or marketing dollars. He brought more of a focus on partners within the organization than there may have been before."
In a May 10-Q SEC filing, Cisco said its cumulative gross investment in VCE as of April 27, 2013, was approximately $464 million with approximately a 35 percent stake in the company. Cisco said in the filing that it has recorded cumulative losses in VCE of $374 million with a loss of $49 million for the three months ended April 27, 2013.
VCE currently has about 110 partners in the U.S. and about 200 partners globally with those partners now seeing more repeat business, said Martin. One example of that repeat business: a large manufacturing customer that bought a Vblock 300 and a Vblock 100 and then, only four months later, bought 18 additional Vblock 100s for remote manufacturing locations.
"The initial deal for the partner was about $3 million, the next deal for the partner was about $3 million, and then after that they added on the EMC Data Protection Suite," said Martin. "It is the stickiness that the Vblock provides partners. The customers love the technology. They love the experience. And that translates into accelerated time to next revenue for the partner."