I’m attending the first VCE analyst conference and it has been a very enlightening experience so far. The most interesting session has been one where customers were placed on a panel while the room full of analysts from all the top firms pounded them with questions. What I found fascinating about this was that the analyst from the largest and most prestigious firm didn’t seem to believe what the customers were saying. VCE is a mash-up of best-of-breed products from Cisco, VMware and EMC as primary partners, and their latest financial results were impressive. The analyst was an expert on Cisco and he had never heard of a Cisco experience that was as good as the ones the CIOs—all from large, mostly multinational firms—were reporting. Most organizations even cringe at the mention of Cisco patches and updates because they create problems for IT. But, apparently that doesn’t happen with VCE and here’s why.
We were put under a non-disclosure agreement with regard to the customers, but several of their stories were particularly interesting. Without mentioning names, I’ll discuss some of the basic stories. One of VCE’s very first customers reported some problem with what VCE could do. This isn’t what you think, though. It wasn’t that the customer couldn’t find something for the solution to do—he couldn’t seem to find something it wouldn’t do.
VCE’s Vblock is positioned as an internal converged infrastructure solution for the private cloud and the customer’s business is to host services for other companies and supply them on demand. His customers are also huge companies, so he had to find the limits to the platform. Apparently, he wasn’t able to find any. He even had a customer who needed a render farm for highly rendered blockbuster movies and still, his old Vblock system had no issues providing that service. Render farms are typically highly specialized servers designed around graphics engines, and even with this, Vblock worked like a charm.
An even more interesting story was from a customer whose IT expenses were out of control. Like most large shops, his was made up of a mess of different platforms, network gear, storage and stuff that was never optimized. In looking at his massive annual IT labor cost, it was his contention that most of the problems people were being rewarded for fixing were actually problems that his people created in the first place. He felt VCE Vblock would fix the problem, but his staff said that it absolutely wouldn’t work. He wasn’t swayed, though. He had engineer after engineer brought in and each said it absolutely wouldn’t work. His opinion still wasn’t swayed. Consultants were brought in and even they said there was no way Vblock could work. He decided to go ahead and install Vblock, anyway. A mere 45 days later, Vblock was working and his operating expense, outages and aggravation dropped massively. (I imagine a lot of the folks that said it wouldn’t work were also gone.)
When paired against Amazon Web Services, apparently, VCE is far cheaper and better, particularly from a security, compliance and control perspective. I don’t think anyone expected this to be true, but it likely comes from being far more focused as a solution on each buyer’s unique needs.
The Power and Problem with VCE
The reason VCE is so much better is that it is an IT shop in an appliance. Everything is designed to work together so you can keep the system patched without the concern that the patch will cause an unplanned outage elsewhere. Having a known environment means the patch or update can be tested with near certainty that the positive outcome is representative of what will actually happen in the field. Because most IT shops are unique, vendor testing can’t take into account dependencies that are unusual—and they are all mostly unusual—so patches and updates often cause breakage. Vblocks fix that problem up front, which is why VCE customers are reporting a 4x improvement in performance, 4x reductions in downtime, a 50 percent reduction in operating cost, and up to an 80 percent reduction in related IT staffing. All of this together leads to higher customer satisfaction.
The problem is that these kinds of numbers are not only very hard to believe, but to achieve them, an IT shop has to be willing to change. A lot of folks prefer to keep the status quo and consider the inefficiencies in IT as certain job security. They also usually support a large IT organization because a lot of folks measure their importance and success by the number of people that report to them. Oh, and on top of that, we really don’t like massive change even if it looks like things might be better for it.
Wrapping Up: Viral Risk
The kind of savings, efficiency and agility improvements the VCE companies were reporting are being spread to some of the most influential analysts in this space, and also being showcased to large customers during our event. Looking at the sales numbers, much of VCE’s massive growth is coming from customer expansion.
In other words, customers that deploy VCE for part of their shop find the numbers that result are so good that they decide to massively increase their investment in order to accelerate the benefits. The savings are flowing to the bottom line and improving the performance numbers for line managers and CEOs who are measured on profit. These folks tend to talk to their peers and those peers are likely going to begin asking why their IT shops aren’t delivering the same value.
VCE is growing at a rate that makes the other firms in this space look like they are standing still and that creates a risk for anyone who is overly invested in keeping the status quo. That’s something to think about this week.