EMC and VCE are gearing up to strike back at hyper-converged vendors such as Nutanix that have been eating up traditional server and storage sales.
Over the next two weeks EMC and VCE, now called the EMC Converged Platform Division, will unwrap a line of hyper-converged appliances called VxRail, to complement its higher-end Vxblock series of converged infrastructure (CI). Not to be outdone, VMware hopes to revive users' flagging interest in its hyper-converged products, debuting its next generation of its software-only converged product VSAN.
Also expected is an expanded role for EMC's Converged Platform Division (CPD), as the primary go-to-market channel and the single point of integration for all components going into converged and hyper-converged offerings across the EMC Federation. The hope is that this group will deliver customized, more profitable integrated products faster, to help users to more easily implement a range of hybrid cloud-based solutions.
"VCE will deliver the platform for everything (the EMC Federation) has," Chad Sakac, president of the Converged Platform Division, told TechTarget. "Increasingly users define the buy versus build boundary at the IaaS layer of the stack, meaning they want the buy boundary to include vSphere, vRealize and anything else that gets them to a self-service portal."
In October, Dell revealed plans to buy EMC in a $67 billion deal anticipated to close later this year. As part of this deal, privately-held VCE will be integrated into EMC as a division focused on converged platforms.
Some analysts view the CPD's elevated role within the Federation as a smart move, especially if they leverage Dell's supply chain and manufacturing capabilities to gain the economies of scale that could make the offerings more cost competitive.
"If VCE becomes a customized manufacturing arm for converged and hyper-converged infrastructure, they can pursue more profitable opportunities," said Geoff Woollacott, principal analyst and practice manager at Technology Business Research Inc., in Hampton, N.H. "But they will need the assembly engine for this to take advantage of Dell's supply chain best practices."
To better compete in the converged infrastructure and hyper-converged infrastructure (HCI) markets, VCE must transition from a single product company to a "portfolio" company, Sakac explained. To accomplish this, the company needs to offer users more choice or flexibility in the servers, which means starting with a low-cost, industry standard rack mount modular server.
"We extended out from Vblock to include VxRack, which are rack-scaled, hyper-converged systems," Sakac said. Further additions later this month, he hinted, will include something in the hyper-converged appliance category.
The basic building block for all hyper-converged infrastructure offerings starts small: an Intel-based two processor system with base disk, memory and networking specs, which can be scaled to handle large rack systems with 500 nodes and beyond.
VCE has done well and Dell would be best served to give VCE more resources, said Zeus Kerravala, founder and principal analyst at ZK Research in Westminster, Mass. Meanwhile, he said, an unnamed major analyst firm is telling enterprises that Vblock will fade away in favor of a pure Dell offering.
"That's absolutely crazy," Kerravala said, adding that this sentiment may have inspired a letter to VCE users last month by Dell chairman and CEO, Michael Dell, in which he stated VCE is a "top strategic priority for EMC" and will be "a centerpiece" of the firm's 2016 plans.
Additionally, with close ties to Dell, VCE will probably release other flavors of Vblock, Kerravala said -- which opens up speculation about where else VCE will expand its portfolio.
"The question is how to keep the momentum going into other markets while still doing what they do well," he said.
Sources have indicated that VCE's anticipated launch of the VxRail hyper-converged product will replace VSPEX BLUE, and VMware's EVO:RAIL hyper-converged appliance, which Kerravala said has not lived up to expectations.
"That product category does not warrant the level of sophistication that VCE brings to that market," he said.
The best role for CPD may be selling a combination of hyper-converged infrastructure and CI with a layer of management software on top to add differentiation, since a "plug-and-play hardware device will be hard to differentiate." It also should include a tie-in to VCE's Vscale architecture and Vision Intelligent Operations software.
VCE has been valuable because of its "VCE magic" that simplified CI deployment, but in some cases hyper-converged appliances are simpler and do not require "tuning and tweaking," Kerravala said.
Cisco partnership 'sacrosanct'
CPD's elevated role within the Federation will not affect its existing relationship with Cisco, which Sakac called "sacrosanct" -- despite EMC taking a bigger stake in VCE last year which reduced Cisco's ownership. Dell addressed this point in his letter to users, reaffirming the continuation of a "close working relationship with Cisco" with Vblock following Cisco's compute and networking roadmaps and EMC's storage roadmaps.
Cisco UCS servers and Nexus networking will remain at the heart of Vblock and industry pundits who wrongly assumed that VCE would do less with Cisco because of the Dell acquisition, Sakac said. "I can see why some would jump to that conclusion, but the reality is, when someone buys an [integrated] system, the components aren't as important as the whole system," he said.
These lower-end, more customized offerings will give CPD -- and, by extension the EMC Federation -- a chance to pursue markets in which they haven't been competitive to date. Sakac hopes the upcoming hyper-converged appliances will be a balanced complement to the Vblock line.
"Vblocks are good if you need 2,000 VMs or more but there are portions of the market we don't serve," Sakac said. "You can't buy a Vblock in a size small -- not that we don't want to make one."
CPD should continue to invest in Vblock and VxBlock, VCE's latest converged offerings, to give users a choice between VMware's NSX or Cisco's Application Centric Infrastructure for software-defined networking functions, Kerravala said.
"With all the challenges that the merger faces, messing around with the Federation companies [is] one thing they shouldn't do," Kerravala said.
Converged infrastructure is high on the radar screen for most enterprise IT buyers, according to a recent survey from International Data Group Inc. for Datalink Corp. A combined 71% of respondents indicated they are either planning, building or implementing the architecture.
VCE has "unbelievable upside potential" for Dell, EMC and VCE if they can bring it all together, streamline and execute, according to Greg Schulz, founder and senior analyst at Server StorageIO in Stillwater, Minn.
Some buyers view and define the CI and HCI market around Nutanix and SimpliVity, but there's a bigger and broader CI market targeting buyers that need other options to scale up, out and down -- and this is where VCE needs to establish a presence, Schulz said.
"Some people will say '[it's] good to see VCE in the converged space,'" he said. "CI is not a tiny little pond."
With VCE, Dell could elevate its profile as an OEM in CI, Schulz said, noting its existing partnership with EVO:RAIL and Nutanix.
"Some are concerned that it will be all VMware -- no, it won't," he said, adding Dell does a lot of business with Microsoft, too. "Dell will now have more in its portfolio to take to partners and customers."
The new VCE will be more than VMware plus EMC, as it signals the company is in the CI game and it is doing more business than most startups, he said.
A focused VCE is what EMC needs to "ratchet up" its knowledge of CI, he said. This will send the message that "we are a player in this space -- many different sectors of this space."
About the authors:
Robert Gates covers data centers, data center strategies, server technologies, converged and hyper-converged infrastructure and open source operating systems for SearchDataCenter. Follow him on Twitter @RBGatesTT or email him at [email protected].
Ed Scannell is a senior executive editor with TechTarget. Contact him at [email protected].
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