Cisco VCE Investment Nears $500 Million
Cisco Systems (CSCO) has invested $464 million into VCE since the joint initiative with EMC, VMware (VMW) and Intel (INTC) launched in 2010, according to a recent SEC filing. Since Cisco has a 35 percent stake in VCE, it's safe to estimate that total investments in VCE from all financial backers now top $1.3 billion. Critics keep wondering if VCE's investors can remain aligned amid potential competitive conflicts. But here's the thing: It sounds like VCE is starting to hit its stride.
VCE develops VBlock systems — converged infrastructure that combines hardware and software from Cisco, VMware and EMC for data centers and IaaS clouds.
The challenges:
- Cisco also works closely with NetApp.
- EMC and VMware have close relationships with other networking companies.
- Plus, VCE's investors could wind up competing with each other if software-defined networking (SDN), software-defined-storage (SDS) and software-defined data centers (SDDC) gain momentum.
But instead of going to pieces, VCE has presented a far more unified front in recent months. The turning point seemed to be February 2013, when VCE hit a $1 billion annual run rate; introduced new mid-market solutions; and also unveiled deeper support for SAP's HANA.
At the time, VCE claimed, more than 1,000 Vblock systems had been sold, and 200 channel partners were backing VCE.
So where has VCE gone from there? Multiple sources tell The VAR Guy that Q2 2013 is performing well for VCE. And the company's financial backers plan to pump more money into the company.
According to a recent Cisco SEC filing: "Over the next 12 months, as VCE scales its operations, we expect that we will make additional investments in VCE and may incur additional losses proportionate with our share ownership."
Partnerships like this ain't easy. But Cisco seems committed for the long haul.
These CEO’s are utterly
These CEO’s are utterly clueless are will wreck their companies over this silly verbiage hype. They’re just trying to “sell” the stupid “cloud” for cryin out loud – it’s like these bozos are still selling used cars,,,
If one looks closely at this
If one looks closely at this venture, it basically means that VCE is just a manufacturing arm for the 3 investors. Every dollar invested and claimed as a loss is ploughed back into each of the parent companies.
At the end of the day, VCE is just an empty shell and a cost center and yet to turn profitable.
Worst still, why buy “seamless support” when one is already entitled to warranty support from the investors? Sounds more like “seemingly-useless support” to me. 3 investor’s support teams each saying not my fault but the other 2 guy’s fault………is all too familiar.
In my not so good English, it sounds like money rolling in the deep and of course, tax evasion at it’s best and jobs for VCE staff. 🙂
Completely agree that VCE is
Completely agree that VCE is just a manufacturing arm and is an empty shell, but I think you may be confused with that seamless support means. What VCE is trying to do is take the numerous phone calls that the customer would have to deal with out of their hands and make the VCE team deal with it.
The benefit for the customer is that they will not have to deal with the investor company finger pointing. The only phone number they would be calling is VCE, who would be taking care of all of the problems on the backend. Then, when everything is resolved, VCE, not the investor companies, would reach out to the customer.
The customer would no longer need a virtualization guy, a storage guy, and a networking guy on their end to collaborate and determine what the issue is. Instead, if one person notices the issue, they can reach out to VCE who will in turn resolve the problem.
Great idea in theory, but to get back to your other points – I completely agree. I am not optimistic about the future of VCE… a so-called “services company.” The way I see it, EMC will probably absorb them some time in the near future and start branding the EMC Vblock. Heck, they already have VSPEX which is essentially the same thing (except smaller).