EMC VSPEX vs. vBlock, or NetApp FlexPod. Can VMware VARs “Refuse” the Offer?

On 4/12/2012, EMC in conjunction with technology partners VMware, Microsoft, Cisco, Brocade, Citrix and Intel announced EMC VSPEX. EMC VSPEX is an specification framework that allows multiple vendors to participate in providing “standard” building blocks for virtualized data centers and private clouds – targeted at accounts who need less than 250 virtualized servers and/or 2000 virtualized users (VDI) and delivered exclusively through EMC/VMware/Cicso/Microsoft/Citrix partners. The goal of this initiative is to provide the mid-market with cost effective, pre-certified, pre-integrated solution sets and leverage standard building blocks from leading vendors. In other words this is VCE/vBlock for smaller companies delivered through the distributor and VAR channels of the respective vendors.

So What is VSPEX all About

EMC VSPEX is touted as a “third way to build a private cloud”. The first two being having your VAR assemble it for you from best of breed components, or a high end converged infrastructure offering like a VCE VBLOCK or a NetApp FlexPod. There are in fact 14 different recipes that can be used to build a VSPEX compliant offering.

The VSPEX Technology Partners

EMC has done a great job of choosing the obvious hardware and virtualization platform partners to complement its contribution of storage to the VSPEX offerings. But take a close look at the image below. Notice that for every layer in the stack except for one, there are at least two choices. Only for the storage layer is there only one choice and that would happen to be EMC. So one is to assume that the entire VAR channel is going to standardize on EMC storage for all of their mid-market customers?

The EMC and VMware Channel Partner Angle

EMC made a big deal of the fact that this offering will be sold only through distributors like Ingram Micro, Tech Data and Arrow and then from these distributors to the VARs that build solutions for their customers. This is probably an essential step for EMC, as many VARs are loath to partner with EMC for fear (borne out of experience) that EMC will take the largest deals direct even if the VAR has done substantial work towards making it happen.

Exactly How Can a VSPEX be Cheaper than a Best of Breed Solution

A VSPEX is constructed out of products that are already commercially available from all of the vendors. Absolutely no new technology is a part of these offerings. For obvious reasons the vendors involved are not going to sell their components into a VSPEX deal for less than they would sell the very same components into a best of breed deal where the VAR is doing the integration for the customer. So where do the cost savings come from?

Answer – the cost savings come from the fact that in each of the 14 recipes for building a VSPEX, the vendors have done the work to implement and certify the integration between the components. So the vendors have borne the cost of figuring out how configuration #1 works together, and then the VAR does not have to do that work again for the customer. This is the exact same recipe that drives the cost savings in a VBLOCK.

This story falls down in several respects. First of all there is only one storage vendor present in VSPEX. Guess who that is. That would be EMC – a vendor not exactly known for competing on the basis of price/performance. In other words at first blush VSPEX is simply a ploy on the part of EMC to commoditize the businesses of everyone else, and to enshrine themselves as the storage vendor of choice. This might fly in the large enterprise market, but it stands no chance of flying in the mid-size and small enterprise markets where solutions that offer compelling price/performance alternatives to EMC storage are plentiful.

Things get more pernicious from here on out. VSPEX is a direct attack upon the services revenue of the VMware VAR channel. VCE VBLOCK was such an attack also, but it was confined to the largest accounts and the largest environments. This attack is directly at the core of the market that the VMware VAR channel serves. It is tantamount to the “gun to the head” played out in the Godfather Part II below:

MICHAEL

Well, when Johnny was first starting out, he was signed to this personal service contract; with a big band leader. And as his career got better and better, he wanted to get out of it. Now, Johnny is my father’s godson. And my father went to see this band leader, and he offered him $10,000 to let Johnny go. But the band leader said no. So the next day, my father went to see him; only this time with Luca Brasi. And within an hour, he signed a release, for a certified check for $1,000.

KAY

How’d he do that?

MICHAEL

My father made him an offer he couldn’t refuse.

KAY

What was that?

MICHAEL

Luca Brasi held a gun to his head, and my father assured him that either his brains — or his signature — would be on the contract.

The EMC Gun to the Head of the VAR Channel

If you have not made the connection yet, here it is. EMC is saying to every VMware, Cisco, and Citrix VAR that if you do not play VSPEX, then your competitor will, and your competitor will erode your services margins and therefore you will suffer so you might as well get on board and hurt your competitors before they hurt you. This is not the kind of sales pitch that VAR’s react well to. While there are certainly loyal EMC VAR’s, the more likely general effect of VSPEX is to help the fortunes of Cisco and NetApp in the VAR channel.

The Missing Management Software

One of the most curious aspects of this announcement is that absolutely no mention was made of any management software above the hypervisor layer. No software to manage the physical provisioning of the environment (something equivalent to Cisco UCS Manager or UIM for VBLOCK’s). No software to manage the creation and self-service ordering of services like what is offered by DynamicOps, Abiquo, Gale Technologies, or Cloupia. These software layers are going to determine whether this really is a useful and streamlined addition to the set of private cloud offerings on the market, or whether rampant confusion will ensure as the vendors of each of the component layers (VMware, Microsoft, etc.) fight to get their management software into each deal.

The Issue for VMware and Hyper-V Customers

So as a customer of virtualization and private cloud solutions is this good or bad for you? The answer to that question starts with do you want price/performance competition on the part of your storage vendors. The next question is do you want one storage vendor (EMC) choosing the vendors that participate in the building blocks out of which you construct your virtualization and private cloud environment? Most mid-market customers do not buy high end storage from EMC today. Most mid-market customers focus heavily upon price/performance with the price part of that equation being the more important of the two. Cutting out some services costs in order to lock customers into an inflexible storage architecture and higher costs for storage does not seem like a winning proposition to most mid-market customers.

Another Issue for EMC and VMware?

In “Will Microsoft Drive a Wedge Between VMware and EMC with Windows Server 8 and Hyper-V 3?” we asked the question as to whether new storage features in Hyper-V 3 will drive storage commoditization, and force VMware to fully embrace commodity storage. EMC’s embrace of Microsoft as a part of VSPEX acknowledges the obvious – that Microsoft has made substantial headway in the mid-market, especially with shops that are essentially 100% Windows and for whom Hyper-V is essentially free.

For most of these shops, a VSPEX with Hyper-V is going to be considerably less expensive than a VSPEX with VMware vSphere. This will again highlight the perils to VMware of having its fortunes tied to closely to expensive storage from EMC.  Just as EMC would rather keep its storage in the deal, and turn the hypervisor business over to Microsoft, VMware would rather keep its hypervisor in the deal and turn the storage over to someone cheaper than EMC.  Price/performance competition in the free market is simply going to force both companies to act in their own self-interest – interests which continue to diverge.

Conclusion

EMC VSPEX is a converged infrastructure offering targeting private clouds offered through EMC and VMware VAR’s. This focus upon the channel makes this the first “private cloud in a box” that is explicitly designed for VAR’s and SI’s to take to their mid-market customers. As such the potential for such an offering is huge. However it is highly likely that the success of VSPEX will be clouded by EMC’s less than stellar track record with the channel, and the complete absence of management software from the offering.

Bernd Harzog (318 Posts)

Bernd Harzog is the Analyst at The Virtualization Practice for Performance and Capacity Management and IT as a Service (Private Cloud). Bernd is also the CEO and founder of APM Experts a company that provides strategic marketing services to vendors in the virtualization performance management, and application performance management markets. Prior to these two companies, Bernd was the CEO of RTO Software, the VP Products at Netuitive, a General Manager at Xcellenet, and Research Director for Systems Software at Gartner Group. Bernd has an MBA in Marketing from the University of Chicago.

Connect with Bernd Harzog:

Tags: , , , , , ,

2 Responses to EMC VSPEX vs. vBlock, or NetApp FlexPod. Can VMware VARs “Refuse” the Offer?

  1. April 16, 2012 at 9:56 AM

    [disclaimer, I work for VCE and we sell the Vblock infrastructure platform]

    Overall, I understand and agree with your point that VARs have a different landscape today than they did a few years ago, and adapting to that is important and sometimes challenging.

    That said, your attacks on EMC seem a little overwrought. Reference architectures like VSPEX, FlexPod, HP CloudSystem Martix, Dell vStart and IBM Puresystems have always offered a way for VARs to offset some portion of a services engagement with pre-produced intellectual property, and EMC certainly wasn’t first to introduce one. This doesn’t have to cut into revenue, necessarily, as some VARs are able to use it as a way to work further up-stream with their customers, providing value further up the chain than simply putting the lego pieces together. Give the VARs some credit, they understand their business model! If they didn’t want the reference architectures in play, they wouldn’t be selling them, and the vendors would be offering them. If they like the NetApp or HP programs better, they will sell them. But I won’t count EMC out when it comes to working hard to give customers what they want.

    Also, I’ll make the point that none of the above reference architectures are comparable to a Vblock. I’ve argued for a long time (internally and externally) that the reference architecture has a viable place in the market, and as happy as I am to see EMC provide a unique offering with the channel alignment they introduced, I’m no more worried about it competing with VCE than I am any of the others. Apples and Oranges, and the market gets that.

  2. February 7, 2013 at 7:40 PM

    I think the key is that there are different market segments for the different converged infrastructure offerings and we’ll see that play out. But since this article is still coming up in searches, I wanted to set the record straight about the management software. Most VSPEX configurations can be managed by the Unified Infrastructure Manager (UIM) from EMC. Although they may not be marketing it strongly yet, there are partners out there who have implemented UIM with VSPEX, it works perfectly fine. We have also implemented some of the reference architectures with UIM and all is well. If you or anybody has any questions, I can certainly help answer them.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please Share

Featured Solutions