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:
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.
How’d he do that?
My father made him an offer he couldn’t refuse.
What was that?
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.
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.