EMC Combines VCE, VSPEX Into New $1B-plus Converged Infrastructure Business

VCE CEO Praveen Akkiraju

In a surprise move, EMC has combined its VCE and VSPEX businesses into a single $1-billion-plus converged infrastructure organization within the storage vendor, CRN has learned.

The creation of the new business unit, which also includes EMC Enterprise Hybrid Cloud, effectively cements EMC's control over VCE, the former joint venture builder of vBlock converged architecture solutions that counted EMC, Cisco, and VMware as investors.

Cisco in October sold the majority of its equity stake in VCE, which EMC said previously is a $1-billion run rate business, to EMC, reducing its share to 10 percent from the previous 35 percent.

The move also separates EMC's converged infrastructure business, which depends heavily on third-party relationships including Cisco and Lenovo, from EMC's core storage business which includes such product lines as VMAX, VNXe, and storage software.

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[Related: EMC Reorgs, Forms New Cloud Business Unit]

Solution providers expected VCE to be pulled into Hopkinton, Mass.-based EMC after the transfer of Cisco's stake in the venture, but EMC had not signaled its intention to combine it with other businesses.

EMC confirmed the new converged infrastructure organization.

"[The] EMC Global Solutions organization now reports into VCE CEO Praveen Akkiraju. The combined team under Praveen will drive the creation and delivery of a full range of converged infrastructure platforms (including Vblock and VSPEX), as well as enabling the development, go-to-market and delivery of both EMC Enterprise Hybrid Cloud and EMC Federation solutions resulting in the industry’s most powerful and differentiated suite of Converged Solutions for the Data Center and Hybrid Cloud," EMC said in a statement emailed to CRN.

The move should allow EMC core storage sales reps to focus on EMC storage solutions while converged infrastructure sales reps focus on multi-vendor solution sales, said one EMC solution provider speaking on condition of anonymity.

"Before, it was hard to track how much VSPEX we sold," the solution provider said. "It should be easier under VCE. NetApp's FlexPod had extra discounts on NetApp and Cisco deals that qualified as FlexPod solutions, but there were no qualifying discounts under VSPEX."

Jamie Shepard, regional and health systems senior vice president at Lumenate, a Dallas-based solution provider and long-time EMC channel partner, told CRN that running EMC's converged infrastructure business as a single entity could work.

"If they make one sales team then yes. Having a rep that handles all EMC converged makes sense. Too many overlays," Shepard said via email.

Unveiled in October, the EMC Enterprise Hybrid Cloud is focused on helping business users quickly deploy IT-as-a-Service infrastructures based on EMC-engineered systems featuring pre-integrated VCE Vblock solutions or VSPEX reference architectures.

It was developed in part by combining three acquisitions made in the fall of 2014, including OpenStack IaaS solution developer Cloudscaling, global namespace provider Maginatics and cloud-based application data backup and recovery provider Spanning.

News of the new converged infrastructure organization follows EMC's October, 2014 move to reorganize its core businesses into two new divisions: the Emerging Technology Division and the Core Technology Division.