EMC, Cisco, vBlock and trust - how long will it last?

"I trust Joe with my life" 

 John Chambers spoke about trust at some length during the vBlock cloud computing announcement today. He is obviously trying to communicate something to his people.  FWIW, Joe Tucci didn't have as much to say about it, but he did echo those sentiments. 

The difficult part of what EMC and Cisco are trying to accomplish does not involve virtual technologies nearly as much as it involves the very real world of compensation.  EMC is a company that is driven by goals tied to compensation.  Their culture does not let anything get in the way of their goals. Whether you like it or not, it's what's made that company what it is today and it's a culture that was started by founder Dick Egan, long before Joe Tucci took the reigns, and it is ingrained at EMC.

Cisco is a different animal. Obviously they are aggressive too, but they do it differently. As Chambers said, 80% of what Cisco does is through partners - something very different from EMC.  When Chambers mentioned that partners will get most of the revenue from vBlock, Tucci was silent. I don't believe Tucci believes this for a minute. The sales engagement process for this will be very interesting to watch.  When the question was asked later about who will sell vBlock, Tucci's response was to say it will be figured out.  That's probably why they are forming a joint venture - Acadia - to deal with the sales problems.  But that doesn't mean the problems are resolved - they will simply be transferred elsewhere.  The accounting on this should be interesting to say the least, but unlike EMC and Cisco, Acadia will be a private company. 

Chambers also made the somewhat ironic comment, "Companies like to control their customers, that's wrong."  While many would agree with that, I'm wondering if he is familiar with the measures taken in the storage industry to maintain account control.  How far will EMC bend in maintaining account control to help their partner Cisco make sales of UCS servers?   Probably not very far.

There is a lot of risk with vBlock for both EMC and Cisco. Certainly, its an opportunity for Cisco and EMC to expand their markets, but sharing is hard for companies with voracious appetites and flattening revenue streams.  

 

Comments

[nate]

saw another blog that pointed out something interesting - potentially big damage to vmware's reputation as an "independent" organization. Not only will Cisco/EMC alienate folks like IBM/HP but there is a good potential for those same companies to be alienated from vmware as well depending on how they(CEV alliance) handle the situation.

He said that cisco has nothing to lose, EMC has nothing to lose, VMware has everything to lose.

http://blog.scottlowe.org/2009/11/03/a-few-quick-thoughts-on-the-vce-coalition-announcement/

[marc farley]

Scott's blog is usually pretty good. I hadn't really been thinking that much about VMware in all of this. But you are right - these are the sorts of things that create opportunities for competitors. The other thing is that big architectures are very difficult to pull off - as opposed to developing industry standards. I didn't hear those words mentioned very much today.

[nate]

I wonder what the vmware consultant shops will push. For what seems like at least the past year NetApp has had them in their pocket. When UCS launched a bunch of them cuddled up to UCS as well, and there was even several events around my neck of the woods that was specifically pitching VMware + UCS + NetApp with FCoE and stuff(not that I ever understood that since it seems NetApp pushes NFS harder than block storage in which case what's the point of the added FCoE cost.. but I suppose it's nice to have the option).

I wonder if those same shops who had such a woody for NetApp will jump ship so easily, I suspect not..will be interesting to see though..I wonder how receptive this new company would be if they went into a customer and said hey look at this new combination! And the customer said yeah that looks great but take out the EMC storage and give us NetApp(dedupe) or 3PAR(high i/o) or X/Y/Z instead, awkward?

Myself I'm looking forward to getting some c Class blades still. Like that built in 10GbE virtualconnect and even better the 16-18 memory slots on a single half height blade, 64GB of ram is a good sweet spot for a VM system. I wonder if AMD's upcoming 12-core chips will be available in dual socket configurations, that'd be killer.