The Most Successful Joint Venture in I.T. History

by Gary Moore, President and COO, Cisco & Howard Elias, President and COO, EMC Global Enterprise Services

The Most Successful Joint Venture in I.T. History. That’s how we, as co-Chairs of the VCE Board, think about VCE. We may be a bit biased, but we’re confident many others agree based on the tremendous success of VCE’s Vblock converged infrastructure (CI). In fact, we created the notion of CI with Vblock, and VCE has held the #1 position for as long as the analyst firms have been tracking it.

Given today’s news about EMC and Cisco jointly agreeing to change the structure of VCE going forward, we’d like to reflect back on its success and what is driving this change now.

Rewind to 2007 when Cisco was first entering the server business.  We began discussions around the best ways to deliver to customers the best-of-breed technologies from Cisco, EMC and VMware into a single engineered solution that would pretty much be plug-and-play for customers.

Over the course of the following two years, we challenged our teams and ourselves to come up with the best way to commercialize our vision and serve customers.  There were the usual traditional resale and meet-in-the-channel programs, but we felt this could be a much bigger idea.  In the end, we concluded that this was the time to be bold, which led to the initial formation of the JV on October 30, 2009 now known as VCE.  We say now known because the original JV was called Acadia, based on Build Operate Transfer (BOT) services and then a Reference Architecture (RA).  But as any nimble startup does, you pivot your great idea to what customers truly want and value – and in this case it was a product, not BOT services or RA’s.  So VCE and the Vblock were born and the rest is truly history!  Consider these facts about VCE’s Vblock:

• More than 2,000 deployed to date
• Six consecutive quarters of greater than 50% year-over-year growth
• #1 position for integrated infrastructure systems for two years running  
• IDC study:  VCE customers are able to deploy new services five times faster, reduce downtime by 96%, and lower their annual datacenter costs by 50% with Vblock systems.

So what made this JV so successful? We’d like to think it was our combined market understanding concerning what customers truly wanted, our sincere partnership and enduring friendship.   All of those things are true, but it all starts and ends with the best technologies, combined with a maniacal focus on the customer experience and tremendous execution by talented teams.  We would like to take this opportunity to thank everyone who has been involved since it’s inception – with a special thanks and congratulations to the current team led by CEO Praveen Akkiraju.

So why the change now?  Because the best time to change and transform is when you’re at the top of your game.  The industry continues to move fast and evolve, and we want VCE to continue to grow and succeed in this environment.  It’s time for VCE to broaden its horizon and help customers in their journey to the Hybrid Cloud.  This has been our focus and we will accelerate our support to our customers.   We also want to signal to our customers that VCE is going to be around for the long haul.  And Cisco’s commitment to VCE continues in the form of a multi-year resale, support and engineering agreement. The partnership remains strong and VCE will be a vibrant channel for Cisco technologies going forward.  In essence, we started with a JV structure that has been wildly successful, so now it’s time to show commitment for the long term in a way that fits the business models of EMC and Cisco well.

It’s been a fun, thrilling and rewarding ride for both of us, but most importantly for our customers, partners and the VCE team. We would like to thank all of them for the confidence they have shown and allowing us to play a meaningful role in changing the industry!

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