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."
NEXT: VCE Set To Add More Midmarket Focused PartnersVCE is currently working with key partners to provide more "consistency" with regard to sales planning and "more repeat business with those partners as we go forward," said VCE's Martin.
One top solution provider executive, who did not want to be identified for fear of antagonizing his other converged infrastructure vendor partners, said his VCE sales are up 100 percent this year as a result of strong VCE channel engagement. He said the channel engagement has become a lot stronger under Cisco's Akkiraju.
Bob Olwig, vice president of business development and innovation for World Wide Technology, for his part, has also singled out Akkiraju for driving significant improvements in VCE's channel sales effort. "Praveen has helped make VCE overall a more channel-oriented provider," Olwig said. "We appreciate that. We knew him when he was a business unit vice president at Cisco. He is a strong leader and has carried that over to VCE."
Martin said that the VCE converged infrastructure story is resonating more with customers and partners. "Everyone seems to be buying into the concept," he said. "We are at this tipping point. I believe it is going to be the standard way to buy infrastructure for the data center. There is more customer and partner acceptance."
The VCE sales momentum comes with the company's new Vblock System 100, a remote branch office converged solution, and Vblock System 200, which is being released "shortly" into the market for general availability, said Martin. What's more, he said, VCE plans to recruit more partners to address more of the midmarket opportunity.
As the company expands its partner network, Martin said he wants to make sure that the organization continues to provide a "great partner experience."
"I think we will do it very judiciously," he said of adding partners to beef up the organization's midmarket charge. "What we find is partners that have strong applications skills as well as the networking, server and virtualization skills are really strong for us." He said SAP application environments are one of the most popular for Vblocks along with Microsoft VDI solutions.
Martin says that from the outset VCE knew it had the right converged infrastructure offering. "It has been a tremendous investment," he said. "I think the best times are still ahead of us. I couldn't be more excited about being here at the Cisco Partner Summit and what is in the future for VCE."
PUBLISHED JUNE 3, 2013