EMC, Cisco Move To Clear Up VCE Vendor Conflict With New Channel Program
Kristin Bent and Steven Burke
EMC and Cisco Tuesday launched their first-ever joint channel program in a bid to alleviate intense conflict between the two vendors that is stalling partner deals from its VCE joint venture.
The new joint partner program includes new sales incentives, such as a 3 percent additional back-end rebate on the Cisco portion of EMC VSPEX reference architecture deals, along with an additional 3 percent front-end guaranteed discount on the EMC portion of the deal.
The two companies also are providing an additional 2 percent rebate on Vblock System 300-based systems where the company is facing new pressure from HP Converged Systems.
’From an alignment standpoint, [this program] is the best we have done over the past three or four years, and it will help take out a lot of the confusion for our customers, our partners and our field-selling organization,’ said Tom Tormey, vice president of alliances at EMC. ’It’s been a great market opportunity, but we haven’t done as good a job as we could about being clear about the swim lanes and the direction, and we haven't aligned the incentives for the partners to help make that happen."
The new Cloud Infrastructure Solutions Accelerator program was created, Tormey said, to formally house VCE, Cisco and EMC solution providers selling either EMC’s VSPEX reference architecture, VCE’s Vblock converged infrastructure or "custom design" converged infrastructure offerings that leverage a mix of EMC, VCE and Cisco technologies.
The program is designed to complement, not replace, the existing partner programs from Cisco, EMC and VCE, the Cisco-EMC-VMware joint venture formed in 2009, which has grown into a multibillion dollar business. EMC owns 58 percent of VCE, while Cisco holds a 35 percent stake, and VMware and Intel also hold small stakes.
The partnership was strained by both VMware's $1.2 billion acquisition of software-defined networking startup Nicira in 2012, and later by Cisco’s $415 million acquisition of solid state storage maker Whiptail in 2013.
The program comes with both Cisco and EMC partners complaining about the bitter infighting in the field between sales reps from the two vendors pitching their own vertically integrated stacks with their own software defined-networking and data center architectures.
Kent MacDonald, vice president of Converged Infrastructure at solution provider Long View Systems, said he sees the new program giving partners of both EMC and Cisco more control out in the field. "This [program] validates that the partner has more control here, and creates a discipline for all the stakeholders and parental owners of VCE," he said.
MacDonald said in the past there was "undue complexity and an occasional ruffling of feathers, depending on how the deal would unfold. It was supposed to be a partner-led opportunity when you get into converged infrastructure, but because of the incumbency, if it was a Cisco account or an EMC account, it was a challenge from the partner's lens."
An executive at one major Cisco, EMC and VCE partner, who asked to remain anonymous, said in the past Vblock deals were delayed by vendor conflict in the sales trenches. "For Vblocks in the past, it wasn't unusual for a deal to get unhooked," the partner told CRN. "And one of the big reasons was that Cisco's quarter closes at one point and EMC's closes another, so you always had somebody up against a different month or a different quarter. You had that disconnect."
To qualify for the Cloud Infrastructure Solutions Accelerator program, partners must be either a VCE Gold or Silver partner, or hold a Cisco Advanced Data Center Architecture Specialization. In addition, all must meet the EMC Signature and VSPEX-enabled partner program requirements. The companies said there are roughly 100 partners that meet these requirements today.
The two companies are backing up the new program, aimed initially at its top 100 VCE partners, with tough, new rules of engagement and a new conflict escalation process with vice-president-level executives acting as mediators.
The program also has its own dedicated demand-generation program, with EMC, Cisco and VCE all having allocated marketing dollars, the companies said.
NEXT: Partners Still See 'Tension' In EMC-Cisco Partnership
EMC's Tormey said the company's new joint partner program with Cisco suggests the two tech giants are in for "the long haul" when it comes to the VCE joint venture.
But some partners are skeptical that the new program will resolve deep- rooted Cisco-EMC/VMware vendor conflict in the sales trenches.
Bill Barry, chief architect for Denali Advanced Integration, Redmond, Wash., No. 116 on the SP500, said the conflict between Cisco, EMC and VMware is breaking and delaying deals in the field.
"This is not going to solve the problem," said Barry of the new Cisco EMC VCE channel program. "It might help some small amount of incremental sales, but the problem needs to be fought at the engineering and business level, and moving to standards for all the major vendors to better exist in a cloud environment. We have Cisco and VMware selling two different flavors of software defined networking. It is hindering the adoption of cloud and SDx [software defined networking, software defined fabric, software defined data center].’
A top converged infrastructure sales rep for a national SP500 company, who did not want to be identified, said he also does not expect the new Cisco-EMC-VCE channel program to alleviate conflict in the sales trenches between EMC and Cisco sales reps.
"This is the new cold war," said the sales rep, who complained about Cisco reps pitching the VCE VBlock in one meeting and then the next day pitching a Cisco NetApp Flexpod solution. "They want to say they love each other but the reality is they want to own the deal no matter what happens. It's a coin flip, and it's heads it's me, and tails it's me.
"The channel conflict and the vendor-to-vendor conflict is rampant," added the national solution provider sales rep. "It has gotten worse with NSX [VMware software defined networking] and Cisco Invicta [Cisco solid state storage]. Cisco is over-rotating in the worst way because of NSX. These two companies are at nuclear war. There is definitely an opportunity for the channel to act as a trusted adviser to customers. This is like cheating spouses that can't come to grips with anything other than their own self interest."
Other partners, meanwhile, say Cisco-EMC tension definitely exists, but expect the two tech giants will attempt to smooth things out, given the dollars they've invested in VCE.
"There's definitely some tension there, which made it interesting when this program came out," said another solution provider executive who asked not to be named. "But, at the same time, they both have money invested in VCE, so they are trying to figure that out."
MacDonald said he views the joint partner program as a sure sign that this is the case.
"I think this is a renewing of the partnership vows," MacDonald said. "For me, it validates that this is an ecosystem and a partnership that I want to continue to invest in."
Joe Kovar contributed to this story.