EMC Lenovo deal raises questions for VCE

By Joseph F. Kovar, on Aug 3, 2012 11:52 AM
Filed under Cloud

Landmark pact brings concerns.

EMC’s landmark joint server/storage pact with Lenovo raises questions for the EMC-Cisco VCE partnership, according to solution providers and industry watchers.

Under the terms of the new EMC-Lenovo relationship, Lenovo servers will be the preferred server platform in EMC's VSPEX reference architecture for building converged infrastructures.

Some partners and analysts say the deal raises the specter that EMC is trying to distance itself from VCE partner Cisco.

Jamie Shepard, executive vice president of technology solutions at ICI, a solution provider and long-term EMC partner, said the deal opens the door for EMC to take control in the server space, without having to rely solely on Cisco.

“What EMC has been trying to do is separate themselves from the VCE correlation,” he said.

"EMC is not VCE,” added Shepard. “It's its own company. That's why it came out with VSPEX. So, now it's better for EMC to move with Lenovo on VSPEX than it is with other servers."

Aaron Rakers, an analyst with Stifel Nicolaus, wrote in a research brief on Wednesday that he expects the move to "again raise questions over the VMware/Cisco/EMC (VCE) partnership; following VMware’s announced acquisition of Nicira for Software-Defined Networking (SDN), which looks to compete with Cisco spin-in Insieme."

Brian Alexander, an analyst with Raymond James Financial Centre, on Wednesday wrote that the EMC-Lenovo partnership might "suggest that the relationship between EMC and Cisco has become more tenuous as Cisco offers servers that are sold in conjunction with EMC storage as part of Vblock."

But, Rod Mathews, senior director of new business development for EMC, said Cisco and Lenovo servers offer different types of use cases.

"Cisco focuses on data centre infrastructures," Mathews said. "Lenovo is more focused on the volume side. They are complementary partnerships. There are great use cases for both. Customers at the end of the day will choose what server platforms to use. But in our view, Cisco and Lenovo have two different focuses."

Cisco agrees, according to a Cisco spokesperson who stated: "Lenovo and Cisco play in completely different segments of the server market. The announcement will not impact our close partnership with EMC.”

VSPEX

EMC will specify Lenovo servers in EMC's VSPEX reference converged infrastructure solutions. With VSPEX, EMC is starting to offer a series of blueprints that specify how channel partners can configure server, storage and networking combinations to meet customer requirements for specific applications.

"Our plan is to build in Lenovo servers as part of the blueprint," Mathews said. "We will be very focused on Lenovo servers. Customers at their own discretion can select other servers. But, it will be natural for many of our partners to use Lenovo servers. A large number of our VSPEX channel partners already work with Lenovo in North America."

Mathews said he could not be specific about how many of EMC's solution providers also partner with Lenovo.

EMC will not jointly market or sell the Lenovo servers, Mathews said.

"But, VSPEX and how we roll it out will be a kind of joint marketing," he said. "As Lenovo brings these servers to market, we'll turn on our marketing materials."

For Lenovo, this becomes a potentially huge opportunity to grow its North American server business, a business that has not done well in the wake of Lenovo's late 2004 acquisition of IBM's PC Division.

"We've been clear on the need to expand our server business beyond China," said Peter Hortensius, senior vice president of Lenovo and president of the company's product group.

"We needed to expand our product offering and our marketing capabilities. Over time, we'll see more efforts as we build this out. This is a statement about growing our server business."

Dismissing fears

The data centre has traditionally been a series of storage, server and networking silos and virtualisation is breaking those silos down and making multiple strategic relationships between different vendors possible, Presidio’s Kaplan said.

"Today, servers, storage and networking are getting more intertwined," he said. "And, the demand for new technology is expanding as the technology itself expands. There's a lot more opportunities for partnerships. So, I don't see a change in Cisco's and EMC's relationship, at least in the short term. Same for VCE. These relationships are growing."

AJ Ragosta, vice president of sales and marketing at Varrow, solution provider and partner to EMC, Cisco and VCE, said his company remains committed to selling Cisco's UCS servers.

"I've never heard of us running into Lenovo," Ragosta said. "I see little to no overlap between Lenovo and Cisco."

Kristin Bent, Chad Berndtson and Scott Campbell contributed to this article.

This article originally appeared at crn.com

 
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