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Top national solution providers acknowledge that VCE has made significant progress with the channel in the past year. But they still question the long-term viability of the joint Cisco and EMC venture and are concerned that VCE hasn't much changed its sales strategy in a rapidly crowding, rapidly evolving converged infrastructure market.
"The converged infrastructure bus has left already," said a top executive at a national solution provider who requested anonymity. "They have to stop trying to define it and start marketing the software-defined, flexible data center. What we just heard from them is to redirect customers back to the same converged conversation they were asking us to have two years ago. It's a stale message for a company that needs 'fresh' really badly."
"The conversation is shifting from a tactical product sale around converged infrastructure to solution sets that are specialized for applications. If that's the message, I think that's going to be a hit," said Thatcher Alexander, corporate president of Alexander Open Systems, an Overland Park, Kan.-based solution provider. "That's the message VCE is starting to get out there to the direct customers. But they need to sales-enable the partners and get that message into the partners' mouths, though, or they won't scale."
CRN interviewed about half of the dozen or so partners who attended VCE's second partner conference -- an intimate gathering of top converged infrastructure solution providers held in Dallas last week.
While the first VCE conference -- held in Boston in November 2011 -- was all about addressing complaints from the channel, partners said this gathering was less about smoothing out the channel strategy and more about how to grow VCE's sales and what it plans to do next. Most of VCE's executive team was on hand, although CEO Praveen Akkiraju was not in attendance, according to partners.
VCE as of this past summer had about 150 global channel partners. According to internal sources not authorized to speak publicly, it now has between 600 and 650 customers for Vblock -- the converged stack that combines Cisco servers and networking with EMC storage and VMware software and orchestration -- in various levels of implementation.
VCE executives told partners at the Dallas conference that the company added 130 "new logos" in the last quarter and that it is holding at about a $200 million to $250 million quarterly run rate -- roughly the $1 billion annual run rate that EMC and Cisco executives have talked about on their respective earnings calls.
Partners said that they wanted to hear more at the conference about how VCE plans to compete with the likes of Hewlett-Packard, Oracle, Dell and other top vendors all pushing a converged infrastructure strategy. The challenge for VCE remains how to convince customers to invest lock, stock and barrel in the fully created Vblock stack and pay a premium for that instead of buying the various products piecemeal -- the so-called V plus C plus E approach -- or buying some products to work with data center products from other vendors such as Dell.
"All my guys say VCE is really pushing EMC and Cisco hard for better pricing," said the first solution provider. "The Vblock is still more expensive than doing it piecemeal, and the value of that is a tough sell. We've had calls all over the place on Vblock and a lot of customers are interested because of the converged infrastructure and that it seems to be easier to manage, but it's just not the same price as building your own, especially if you can't really customize it. I don't think VCE can hide that anymore. They know they can't hide the objections they're getting."
Several partners said they raised the issue with VCE executives, who urged them to sell the value of the complete stack and the one-throat-to-choke service and support on that stack.
"I said, 'Guys, it's not that simple,' " said a senior vice president at another solution provider who also requested anonymity. "In many cases, the problems with the system are at such a granular level you have to ask the original manufacturer anyway, so the support really isn't all that smooth. With VCE, you have a fit in some cases, and in most cases you don't. That's why EMC launched VSPEX -- to cover all the fits it doesn't have. There's just not that many customers who want it exactly the way Vblock is. And now, people are pushing back."
VCE did not respond to CRN requests for comment.
NEXT: Assessing VCE's Strengths