Before reading further, read this post from Chad Sakac. Now allow me to talk out my ass and inject wild speculation prefaced by the fact that I’m speaking on my own behalf.
First: I think when most people read that post they will walk away with a good understanding of why Cisco reduced their share in VCE, and why EMC has essentially taken ownership of the group. For me, I see this as the realization of a strategy that was put into place several years ago with the movement of specific key leaders (Pat Gelsinger goes from EMC to VMware and Paul Maritz left VMWare to go to Pivotal, etc.) and with the absorption of VCE the Federation is now complete.
Second: the obvious conclusion the EMC Federation strategic vision has been to move towards being the complete provider of IT for its customer base, and the for the Federation to be complete, EMC II needs to move beyond being a storage vendor. The push will be primarily focused on Converged Infrastructure / IaaS / Hybrid Cloud offerings as I believe they see the future of those spaces being the direction that IT will be moving. Furthermore, 2B run rate is significant, and EMC was taking in 70% of the revenue from that, why not capture more as the ecosystem shift moves into the hyper converged and rack converged spaces? Why not be the end to end solution provider? You have all the pieces of the puzzle to build nearly any environment for any customer, so capitalize on that ability.
Third: EMC now has a Converged Infrastructure sales force that is battle tested and will be leveraged across the entire EMC Federation to focus on this new strategic shift. I always viewed VCE as the official VAR (Value Added Reseller) for VMware, EMC, and Cisco that in turn chose strategic private VAR partners to leverage for deliverables. It’s far easier (and cheaper) to use a certified partner to do the grunt work and let your highly specialized sales force focus on the largest and most challenging deployments. It also allows you to grow much faster than you could have on your own. This is why so many startups work the channel model in the begging since it allows you to reach a much larger commercial space. With the addition of the VCE Team, the EMC Federation has a 2000 member strong, highly specialized converged infrastructure sales force that can move seamlessly between standard vBlock Converged Infrastructure, and their future EVO:Rail/Rack based solutions as well. Converged Infrastructure sales can be highly nuanced and there tends to be a longer sales cycle and a deeper level of customer integration, customization, and education that needs to be imparted during that process. I think the EMC Federation realized this and has capitalized by bring the VCE team on board.
Fourth: Much of this strategic focus is born out of the general acceptance of Cloud services (public/private/hybrid) and with the market reaching a level of maturity that reduces the risk to making a significant shift of this size and scope. VMware embracing OpenStack starts to look a lot more reasonable if you buy into the larger EMC Federation strategic viewpoint that Hybrid Cloud is the future of IT. The relatively quick adoption of the DevOps mindset within IT organizations is the driving factor here, and the Hybrid model makes the most sense in my viewpoint. I think this is why Chad bolded the following: “the API and abstraction focus along with management, orchestration, automation. It is NOT about the hypervisor, server, network, or storage themselves. “ That is the foundational step that needs to be taken if you are going to move towards the agility and acceptance of what Hybrid Cloud can offer to larger organizations. In essence it lays the foundation for what I see as the holy grail for a lot of companies (and this is where Pivotal comes into the equation) the ability to make business critical strategic decisions based on the information you currently have at your disposal in a point that approaches a near instantaneous time frame. This is why you see companies like GE investing in Pivotal, and declaring that they are going to move all of their IT operations to the Cloud space. It’s also why I think many people misunderstand the role of Pivotal in the larger EMC Federation strategy. The “big data” and analytics side of the equation is something that other vendors do not have in house and need to leverage outside resources. Once again, we go back to the EMC Federation looking to become a panacea for IT.
So where does it all go from here? I just laid out some highly speculative thoughts above, and will be curious to see how competitors in the space react. Obviously I see Cisco as having adopted a similar mindset, but a different strategic approach and one that is more geared towards the public cloud in many respects.