EMC, Cisco Move To Clear Up VCE Vendor Conflict With New Channel Program

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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.

[Related: CRN Exclusive Q&A: Former VCE VP On Why He Jumped To Red Hat]

“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

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