VCE coalition: A one-year retrospective

When the Virtual Computing Environment (VCE) coalition launched in November 2009, the reaction from IT users wasn't exactly warm. A year later, interest in the VCE coalition's preconfigured Vblocks is growing, but sales remain slow and reports of channel conflict have surfaced.

EMC, VMware and Cisco Systems formed the VCE coalition, and its Vblocks bundle virtualization, storage and servers for enterprises that want to quickly build private clouds. From the beginning, some users said it wouldn't be worth buying preconfigured stacks from a single company unless the discount was significant. Those concerns still plague customers (and the channel) today, although there are indications that the VCE coalition will address those issues in the new year.

The VCE coalition has also gone on a hiring spree to boost sales, but many of the hires are coming from VCE parent companies and partners, which has caused other problems in the channel. The following stories in this special report examine the issues facing the VCE coalition as it enters its second year.

VCE reorgs channel, sales operations
Vblock channel sales should get a boost from move to streamline coverage, VCE execs said.

VCE partner program modifications tackle channel conflict, deal reg problems
VCE introduced streamlined deal-registration and purchase-order systems to boost Vblock sales in the channel.

VARs eye VCE coalition incentives to boost Vblock sales
Customers are interested in Vblocks, but most of them still end up buying the individual components separately from their preferred vendors. Organizations don't want to cut ties with their usual brands unless the VCE coalition can offer price breaks. In light of slow Vblock sales, VARs said VCE might offer sales incentives to make the stacks more attractive -- and possibly cheaper. A source close to the coalition said one priority is to compensate VARs so they make as much money selling Vblocks as they would from selling the individual components.

VCE coalition goes on hiring spree to push Vblocks
With its goal to reach a $1 billion run rate on Vblock sales next year, the VCE coalition is hiring new engineers, technical folk and salespeople. VCE has hired about 400 people in the last four months and wants to add 100 more by year's end, according to sources. Many of those hires are from VCE parent companies and partners. The VCE hiring push comes as Acadia, a services company that was set up by VCE to guide implementations, is now being merged back into VCE's operational unit.

VCE hiring, as Acadia fades, spurs channel conflict
Not only is the VCE coalition hiring, but it's hiring from the ranks of its channel partners. VCE is not supposed to recruit from its allied VARs and systems integrators, but some partners say the coalition doesn't always follow those rules. Others say the coalition seems too focused on direct sales, even though sources close to VCE say their orders are to move at least 80% of deals through the channel.

VCE redo aims to boost Vblock sales
More changes are coming for the VCE coalition, as it changes its name to the VCE Company and  Vblock sales continue to hit a wall. While the channel conflict rises, VARs hope the "redo" effort will boost partner Vblock sales. Now, the newly titled company says its goals are to focus on building standardized Vblocks at the factory, distributing them through the channel, and maintaining tighter alignment among the three companies.