VCE’s Industry Analyst Day: A Year of Evolution and Growth

By Charles King, Pund-IT, Inc.  June 10, 2015

Tech industry analyst events come in all sizes and shapes, from massive get-togethers aligned with general partner and customer conferences, such as EMC World and IBM Innovate, to sizable dedicated summits, like Dell’s Annual Analyst Conference. Just as it did in its first analyst event last year in San Diego, VCE’s Analyst Day last week in Chicago took a different approach; keeping it small (just 15 analysts), and emphasizing deep dive presentations by senior executives and in-depth discussions with company customers.

The result was one of the best events I’ve attended in 2015, and while I can’t discuss material VCE shared under NDA, there are still many points and details worth close consideration.

VCE’s year in review

The past year or so has been remarkable for VCE by any measure, so let’s consider some of the high points:

  • In October 2014, the company announced that it had surpassed a $2Bn annual run rate, just five years after its commercial launch. In comparison, VMware took nearly a decade to reach this milestone.
  • The company has added numerous new solutions, including three next gen Vblock systems, a new family of VxBlock systems designed to offer greater flexibility and choice, hybrid cloud offerings of its own and in partnership with VMware, and support for EMC’s Isilon and XtremIO.
  • In November, it was announced that VCE would become a full member of the EMC Federation, ending the partial ownership by Cisco and VMware while retaining strategic ties to both companies.
  • In March, the company launched its new scale-up/scale-out Vscale architecture, a new family of VxBlock systems designed to offer greater flexibility and choice (the first offering allows customers to choose either Cisco or VMware’s software-defined networking solution) and a major update to VCE’s Vision converged infrastructure management software.
  • Finally, at EMC World, VCE launched VxRack; hyper-converged RackScale systems that enable enterprises and service providers to simplify the deployment of next generation scale-out mobile, cloud and distributed Tier 2 applications.

All in all, not a bad year for a company that’s been around for just over half a decade.

The more things change…

These announcements and events aside, the Chicago event made one thing abundantly clear – that providing an exceptional and innovative experience to customers remains VCE’s central, undiluted focal point. This begins with the company’s deeply integrated development and manufacturing process, which CEO Praveen Akkiraju called, “Engineered as one.”

In essence, VCE engineers, manufactures, manages, supports and sustains each Vblock, VxBlock and VxRack as a single system. Before delivery, it works with each customer on their specific workloads, applications and environments so that each individual system is tuned to address that customer’s specific business and computing requirements,

But that’s just the beginning of the “VCE Experience.” The company operates on a far faster pace than most vendors, delivering fully integrated systems within 45 days of being ordered, and installing systems so that they are ready to deploy workloads within 48 hours of their arrival at the customer’s data center.

The VCE experience is an ongoing process, where customers can interact with deeply knowledgeable converged system specialists and regularly receive software and firmware updates that arrive tested, certified and guaranteed for interoperability for all Vblock System infrastructure components (network, compute, storage and virtualization).

The quality of the VCE experience and the company’s solutions are reasons for its financial success, but also consider that repeat customers account for about 60% of the company’s sales. In other words, after initially buying and deploying VCE’s converged solutions, a strong majority of company clients come back for more.

The word from customers

The first day’s analyst sessions were capped by a panel discussion with representatives from four VCE customers; a metropolitan healthcare company, a regional university, a service provider and a large hospitality player. They considered VCE (and competing vendors) for a variety of reasons.

These included the decision to deploy a new records system; a major disaster recovery upgrade that morphed into an end-to-end systems overhaul; searching a significantly more cost-effective platform that could also support next generation workloads; and a badly needed upgrade of in-house applications and their supporting systems.

Not surprisingly, all four enjoyed successful deployments of VCE solutions, but the company also delivered benefits beyond those anticipated. These included notable reductions in total cost of ownership (TCO), faster time-to-value (due to the speed of system delivery/deployment practices) and ongoing savings from VCE’s support and maintenance policies.

Interestingly, two of the panel members mentioned an issue I heard about from VCE customers at EMC World – initial resistance to VCE by experienced IT staff members who preferred building and deploying systems in-house, but changed their minds when they saw, as one panel member put it, “How Vblocks helped them have a life beyond work.”

But getting to that point isn’t automatic, let alone easy. As another panel member noted, “You have to bring your people with you. You can’t just announce that you’re buying an all-new platform, then tell them to get to work. That’s a ticket to certain failure.”

The pitfalls of success

That “cultural” resistance in IT to deep factory-based integration and ongoing vendor-managed maintenance and updates is more common than many might like to admit. But it’s important to remember as vendors continue to develop converged systems and related solutions. That’s especially the case for VCE, since its well-defined “experience” is central to the company’s core practices and value proposition.

But it’s also something to keep in mind as VCE continues to evolve. As noted above, the changes the company has gone through during the past year are extraordinary but I don’t expect VCE to stop there. Partly, this is due to simple economic reality; market opportunities are limited for makers of specialized solutions, even those of exceptional quality.

The considerable expansion of VCE’s portfolio indicates a recognition of that point. However, there are likely to be problems as the company finds its way in these new markets, and pitfalls as it works to maintain the quality and value of the VCE experience among growing numbers of new customers and partners.

It’s also entirely possible that VCE could face challenges as it grows into its position as a full member of the EMC Federation. This may not be a serious problem – after all, many of its executives came over from EMC in the first place. But over its first half decade, the company has developed a culture and approach to business that are essentially unique and worth preserving.

Final analysis

Strategically speaking, vendor-sponsored IT analyst events typically follow a “Here’s where we are and here’s where we’re going” framework that provides snapshots of a company’s progress. That’s sensible from a narrative standpoint, but the insights and value it provides varies widely from vendor to vendor and event to event. That said, value and insights were thick on the ground at VCE’s Analyst Day in Chicago. Not only did the company have a lot to talk about but it also took full advantage of the dialogues with and among customers, analysts and executives.

The result was far more than a simple snapshot – call it a detailed portrait of one of the IT industry’s most accomplished and intriguing vendors. Along with delivering highly innovative computing solutions, VCE recognizes the value of customer-centric engagements and has developed its unique “experience” to maximize its relationships with clients.

This is not to say that the company will not face challenges and barriers on the road ahead, but the Chicago analyst event clearly demonstrated that VCE’s past progress has set it on a course for future success.

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