Dell EMC Acquisition Would Nix Cisco's Participation With VCE, Partners Say
Partners say a Dell acquisition of EMC would officially end Cisco's six-year relationship with VCE.
"I can't see VCE as an entity anymore with Cisco if Dell follows through" on an EMC deal, said a top executive solution provider and EMC and Cisco Gold partner who declined to be identified. "I don't see how Cisco stays in that partnership, so they'll have to get bought out of whatever the last of their investment is there."
VCE was formed in 2009 as a converged-infrastructure joint venture between Cisco Systems, EMC and VMware. Over the years, Cisco has moved away from the relationship with the networking giant, selling most of its stake in VCE to EMC last October, and now owns about 10 percent of the joint venture.
In March, Richardson, Texas-based VCE expanded its converged infrastructure lineup by delivering new VxBlock converged infrastructure systems offered VMware's NSX software-defined networking technology for the first time, which initially only supported Cisco's Application Centric Infrastructure (ACI) in its Vblocks.
Solution providers said Cisco solutions would eventually be discontinued from all VCE offerings if EMC merged with Dell.
"Many of those [offerings] would just become more Dell switching, which is integrated with [VMware] NSX already and Dell compute, so I don’t see a future for Cisco in that," said the Cisco Gold partner. "It's going to definitely impact UCS sales. [VCE] vBlock is the No. 1 converged infrastructure out there, so whatever revenues ... they're generating -- keep in mind that’s not just UCS, that’s Nexus [switches] too -- that would definitely have an impact. … Cisco would have to get into the storage business."
Robert Keblusek, chief technology officer of Downers Grove, Ill.-based Sentinel Technologies, a Cisco and EMC partner, said Dell would eventually gradually displace Cisco equipment out of VCE offerings, but it will take some time.
"From a VCE perspective, there's some pretty significant testing, develop, tie-ins and things they do around UCS today, so it would be bad for Dell to just say, 'Cisco's gone now, so you're no longer supported,' because if I'm a customer, I'm certainly not going to pick you as a platform going forward," said Keblusek.
Although VCE executives over the past year have continued to say its relationship with Cisco is still strong, some partners aren't buying it.
"A split has been coming for the past, I'd say 12 to 18 months between Cisco and VCE," said a top executive solution provider and Cisco partner ranked on the CRN SP500 list, who declined to be identified. "This would kind of seal the deal on that case."
The executive said VCE is capable of operating successfully in the future without Cisco by focusing solely on software from VMware.
"Two or three years ago, it might have been hard to function without Cisco, but if Dell takes over EMC -- since they have a relationship with VMware, ... things could transition pretty smoothly," said the CRN SP500 executive.
Cisco and EMC partners said Dell put itself in a good position by going private in 2013 in order to be able to make an acquisition such as EMC. Solution providers also believe Dell is seriously considering buying EMC because CEO Michael Dell is determined to win the enterprise computing landscape.
"Michael Dell is all in. There would be no coming back. It's either going to work or he's going to be broke," said the Cisco Gold partner. "If Cisco's going to want to be relevant in the compute space in the data center, they're going to need to have a compute combined storage offering."
PUBLISHED OCT. 8, 2015