VCE partner program modifications tackle channel conflict, deal reg problems

The Virtual Computing Environment Company introduces streamlined deal-registration and purchase-order systems to boost Vblock sales in the channel.

The Virtual Computing Environment Company wants to make it easier and more profitable for partners to sell and implement Vblocks.

Over the next six weeks, the Virtual Computing Environment (VCE) Company plans to roll out a new deal-registration system so VARs will only have to register a Vblock deal once. Currently, they have to register with all three VCE parent companies -- Cisco Systems Inc., EMC Corp. and VMware Inc. -- which is hardly the most efficient way to do business. As part of its evolving VCE partner program, the company will also unify its purchase-order system, said Pete Koliopoulos, vice president of global partner marketing for VCE.

Customer interest in Vblocks runs high, but order-entry hurdles have stymied sales, VCE partners said. These VARs, which must attain high status with all three VCE parent companies, said these channel program changes may seem obvious, but they could get some large kinks out of the Vblock sales process.

VCE will also expect partners to perform their own high-value implementation and deployment services although VCE staff will be available for them to subcontract if needed, Koliopoulos said. The dissolution of Acadia, VCE’s services arm, reassured partners who viewed it as a competitor to their own service offerings.

Vblock sales challenges
Vblocks, announced in the fall of 2009, are built-to-order packages that comprise Cisco Unified Computing Systems (UCS) and network switches, EMC storage, VMware virtualization and Unified Infrastructure Manager, which is based on VMware’s Ionix technology.

Selling Vblocks and other converged infrastructure products tends to be a long, difficult process, given the complexity and prices involved. The lowest-end Vblock lists for about $100,000; and the higher-end SKUs start at $1 million and go as high as $6 million for up to 6,000 VMs.

In addition, many customers still prefer to spec out and buy data center components separately and retain their relationships with legacy vendors such Hewlett-Packard, IBM, EMC, Cisco and Dell. An executive with a large VCE VAR out of New England said these buying habits pose a challenge for VCE, but not necessarily for partners that can sell the components separately or together in a Vblock.

For example, this VAR is in one large account, pitching Vblocks. The customer wants to price out two Vblock configurations, as well as two best-of-breed configurations that include Cisco UCS, VMware and another vendor’s storage.

“That kind of analysis takes a lot of time, although it’s a completely reasonable request from the customer,” the executive said.

And to register this deal, the VAR had to input data into all three parent companies’ systems and the VCE Company’s own system -- and had to do it for two different VCE configurations. The VAR will make money on the deal either way, but as of now, selling the components separately could be more profitable. That needs to change if the VCE company wants to sell more Vblocks, the executive said.

A VCE partner in the Mid-Atlantic region said he was excited to hear about the single deal-registration and sales-entry systems. Having to use multiple registration processes is a huge issue, this partner said.

Reducing Vblock channel conflict
Perhaps more important than the evolving VCE partner program are the changes occurring at the VCE parent companies.

Several VCE partners last year complained about Vblock channel conflict, charging that EMC salespeople broke up Vblock sales because they wanted to get credit for the storage component faster, instead of waiting for the slower Vblock sale to close.

The parent companies changed that incentive structure starting this year, Koliopoulos said. “The direct rep will see no advantage [from] taking [a Vblock component] sale direct,” he said.

The New England VAR said he has noticed a significant reduction in this channel conflict over the past few months. But the VCE partner in the Mid-Atlantic said he has seen no change whatsoever in the behavior of EMC salespeople.

Koliopoulos said it takes time for headquarters-mandated changes to ripple throughout all geographies, but the direction is clear. “We’re going through a big transition,” he said. “There’s a learning curve and rules of engagement we’re putting together, and that takes time.”

As a bonus, VCE will also offer incentives based on the number of Vblock units sold per six-month period -- on top of what partners already get from Cisco, EMC and VMware.

These changes come as more Vblock competitors hit the market. Last week, Dell announced what some are calling the “mini-Vblock” -- a bundle of Dell servers, EqualLogic storage and VMware virtualization called Dell vStart. And Cisco is playing many sides of this battle, also backing the FlexPod, which features VMware virtualization and NetApp storage. (Some VARs see that as a more flexible option than Vblock.)

The VCE partner program changes will roll out first in the United States, then Europe and the Middle East, then Asia Pacific.

Let us know what you think about the story; email Barbara Darrow, Senior News Director at bdarrow@techtarget.com, or follow us on twitter.

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