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VCE currently has 1,200 employees and an annualized order run rate approaching $1 billion, although it hasn't disclosed much about its actual revenue.
According to regulatory filings, EMC invested $383.2 million in VCE during its fiscal 2011 and recognized $133.9 million in VCE revenue for the year, with a cumulative loss on the venture of $253.8 million over a three-year period. As of its fiscal second-quarter 2012, Cisco, which has a 35 percent stake in VCE, had made a cumulative investment of $264 million with a $165 million share of VCE's cumulative loss.
Both EMC and Cisco have maintained that looking at VCE's numbers as losses is deceptive. VCE's costs show up as operations expense lines in their balance sheets, but with the company set up as a joint venture, both parents recognize revenue from sold Vblocks on their respective P&Ls.
"The profit and revenue flow back through the parents," EMC CEO Joe Tucci told CRN in May. "So therefore, the more successful VCE is, in theory, the more money they'll lose. But what we do, underneath it all, is keep a management P&L. If we were losing that much money, we wouldn't doing it."
One thing Akkiraju will need to address is VCE's ongoing channel strategy, as well as its competition with other converged stack offerings such as FlexPod, which is a NetApp-centric reference architecture that also uses Cisco and VMware products, and EMC's own VSPEX, also a reference architecture approach.
VCE's channel program, however, is an area major networking and data center solution providers have told CRN is much improved in the past year.
Solution providers salute the efforts of D. Martin, vice president of global channels, and his team for being much-needed channel advocates at VCE and fine-tuning partner programs to include things such as a global price list, and various training and pre- and post-sale support options. VCE also launched a single program for registering Vblock deals last fall, eliminating the hassle of dealing with the various deal-registration processes of the vendors involved.
"Both D. and Andrew [Lickly, senior marketing manager, global channel marketing communications] are very responsive to email and direct calls," Kent MacDonald, vice president of business development for Calgary-based Long View Systems, told CRN in May. "Their team support of the channel is truly appreciated, as is their help managing field engagement with the EMC sales teams."
"We've been a partner with VCE from its Acadia days. All along, I've said that VCE did a good job of listening to the channel," Bob Olwig, vice president of business strategy and marketing at St. Louis-based World Wide Technology, told CRN in May. "It has changed its deal-registration and discount programs for partners in a good way. We have no concerns at all."
PUBLISHED JULY 19, 2012