News Stay informed about the latest enterprise technology news and product updates.

VARs eye VCE coalition incentives to boost Vblock sales

Data center customers like the idea of the VCE coalition's Vblocks, but pricing, a lack of channel incentives and other concerns are putting the brakes on Vblock sales.

A year after Vblock integrated data center bundles hit the market, customer interest has ramped up, but actual sales remain sparse, according to several VARs.

Customers definitely like the idea of Vblocks, which are certified, preconfigured stacks of VMware virtualization, EMC storage and Cisco Systems servers. But the vast majority of them still end up buying the individual components separately from their preferred vendors.

Things may change early next year when VARs anticipate that the Virtual Computing Environment (VCE) coalition will break out new sales incentives to make it more attractive -- and perhaps cheaper -- to buy the whole shmeer.

"VCE in concept is very well received, but sales of true Vblocks have been very slow," said an executive with a large VAR in the northeast. "People are still buying components rather than a bundle, and part of the reason is that customers still substitute another manufacturer for one of the three -- for example, adding [Hewlett-Packard] servers rather than [Cisco's Unified Computing System]. Apparently no one learned from the Chinese menu that there are 'no substitutions.'"

Vblocks: Great idea, slow sales

Cisco, VMware and EMC launched the VCE coalition in November 2009 to push Vblocks. Since then, VCE has rolled out a series of Vblocks for specific use cases, most recently for SAP and desktop virtualization. As of early November, 62 companies had started Vblock rollouts, Cisco CEO John Chambers said on the Cisco quarterly earnings call.

Most IT pros typically have their own preferred brands of storage, servers and virtualization. Those old habits (and vendor relationships) die hard. These IT pros will not forsake the Hewlett-Packard, IBM or Dell servers they've run for years unless it is worth their while.

"Most realize [that data center hardware] is something they could buy piecemeal, and since there is no special pricing … they keep on doing what they've been doing already," said an IT consultant in the Mid-Atlantic region.

This consultancy, which has strong relationships with Cisco, VMware and EMC -- as well as HP, which has its own data center stack -- has talked about Vblocks with customers many times but only deployed one so far.

VCE coalition channel plans in the works?

VCE will have to offer better pricing and possibly other incentives to close actual deals, VARs said. Several channel sources said they have heard indications from VCE that those plans are in the works for early 2011, but they did not receive any details.

No one at VCE would comment on those plans, but a source close to the coalition said one priority is to make sure VARs get compensated so they'll make as much money selling Vblocks as they would selling the individual components separately.

VCE has said the actual rollout of Vblocks is relatively easy because they're certified and preconfigured, and that frees up VARs to do more valuable -- and possibly more lucrative -- services and consulting work. But data center customers still expect price breaks for committing to a single, preconfigured solution, and that is the major issue, several VARs said.

Vblock pros and cons

Despite claims of integration, Vblocks are no easy sale. For one thing, the customer's existing data center and application set needs to be assessed up front.

Varrow Inc., a North Carolina-based VAR, has done a lot of preliminary Vblock work.

"People come to us asking, 'What do we need to get a Vblock?'" said Jason Nash, data center solutions principal with Varrow.

Those Vblock assessments require the VAR to inventory the company's infrastructure to find gaps between what they already have and what they need, Nash said.

Varrow is a high-level EMC and VMware partner, so most of its customers already have some key Vblock pieces deployed and the actual Vblock implementations can be a lot less monolithic than one might think.

One thing VCE brings to the table is the prospect of a single unified support organization to back up VARs on Vblock implementations.

"The support staff really likes it for obvious reasons, and the C-level management likes it because they feel they can get problems resolved much faster," Nash said.

But mixed messages can be a problem. Cisco is allegedly all-in with VCE, but it also launched a similar alliance with NetApp and VMware a few months later. And many business watchers aren't sure how EMC's acquisition of Green Plum for its database appliance will fit in.

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

Dig Deeper on Value-added resellers

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.