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Can VCE Be the Apple of the Converged Enterprise Cloud?

By Rob Enderle
April 4, 2014 09:09 AM ET

CIO - At its core, Apple isn't a product. It's a concept Steve Jobs successfully applied to a certain class of product - consumer electronics - to create an end-to-end solution for folks who wanted to enjoy music and, later, apps, movies and better communication.

At Apple's heart, though, was the concept of an appliance that people wanted. In a saturated PC market, the Mac wasn't that successful, but in a messy consumer electronics market, Apple used the same concept and rolled through that market.

This week, I'm at VCE's first analyst conference. After listening to a series of customers talk about the "massive, unbelievable" benefits (their words, not mine) that justify VCE's incredibly rapid growth, I get the impression that, like Apple, VCE - formed by Cisco Systems and EMC, with investments from VMware and Intel - has a good shot at succeeding in a messy enterprise private cloud market.

VCE's Growth Limited Only by IT's Resistance to Change

You have to start with where VCE fails to sell, though given its well-documented benefits. Just talk IT costs, and the 50 percent reduction that VCE customers report as a core benefit, and Vblock Systems should sell far faster than they are now. Granted, there are limits to how fast a company can grow - and VCE is pushing that limit - but in questions about how VCE loses bids the answer isn't another vendor.

Instead, it's resistance to change. IT shops tend to have groups that focus on networking, storage or servers. VCE comes as an appliance that integrates all of those components. The concept of a specialist in a converged infrastructure product, as a complete product rather than a collection of parts, pretty much starts and ends with VCE.

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The company's most capable competitors lose to VCE by pitching parts rather than complete solutions. This could result from an out-of-date commission system or a structure that has evolved to best address the way IT is, not the way IT should be.

VCE Must Show That Its Customers 'Think Different'

Apple's transformation began with the "Think Different" slogan. Apple realized things didn't have to be the way they were but also recognized it had to appeal to change agents: Those willing to break tradition and try something that, at the time, was vastly different from what they were using but far easier all the same.

VCE's product is so disruptive to the current IT status quo that the company needs someone to champion its product. The customers that spoke this week were under the gun to turn around a firm, to compete at a greater level in order to keep up, or to reduce costs while improving capabilities. They had to change because their IT shops were bleeding them dry with high costs and poor performance.

[ Commentary: BMC and VCE Partnership Shows Consortium Is Gaining Power ]

But resistance was often massive. Once one customer announced that he wanted to use Vblock Systems to fix his cost and execution issues, his staff said it wouldn't work. He fought through that. Then his engineers said it wouldn't work. He fought through that. Finally, a series of well-recognized consultants said it wouldn't work. He fought through that &mdash and got rid of them. Vblocks were in service 45 days later, exceeding expectations - but they never would have been there if that customer hadn't been driven to think different.

That's nearly identical to the problems Apple had over and over again.

Enterprises Will Learn to Love IT as an Appliance

Change is scary. As one CIO on a panel said, it's so much easier to focus on a never-ending problem list often created by the very folks that fix them. But we live in a competitive environment - and in technology, there clearly isn't any moment where we can stand still. To advance, we have to be able to move.

[ Analysis: HP Hits Restart on 'Converged Systems,' Takes Aim at Vblock ]

One subtle point that really hit me: Every VCE customer says its deployments are fully patched and up to date. This is because the Vblock is a known infrastructure against which patches are tested and, therefore, pushed out without incident. One analyst who follows Cisco couldn't believe this, since so many of his clients are afraid to apply Cisco patches. (Cisco technology is a core part of the Vblock to boot.) Given the massive attacks that target router exploits, and given what happened to Target, security alone could justify the change that VCE drives.

There's suddenly a lot of motivation to think different. Aging systems and processes consuming massive resources, increasingly sit unpatched and exposed, and reduce a company's competitiveness and profitability. VCE, according to its customers, can fix that - but it will require people to think different. Given VCE's near-vertical growth, a surprising number of people finally seem ready to do just that.

Rob Enderle is president and principal analyst of the Enderle Group. Previously, he was the Senior Research Fellow for Forrester Research and the Giga Information Group. Prior to that he worked for IBM and held positions in Internal Audit, Competitive Analysis, Marketing, Finance and Security. Currently, Enderle writes on emerging technology, security and Linux for a variety of publications and appears on national news TV shows that include CNBC, FOX, Bloomberg and NPR.

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This story is reprinted from CIO.com, an online resource for information executives. Story Copyright CXO Media Inc., 2012. All rights reserved.
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