Virtual Compute Environment – Is VMware still independent?

This is one of a 5 post series on the VCE coalition announcement, what’s in it, and what it means.  You can see all the posts together here.

Ok – as we sat on telepresence after telepresence, and f2f meeting after meeting approaching the VCE launch, one thing we’re very cognizant of was the fact that some would (and this is a natural fear) that this would signal less independence on VMware’s part.

In uncharacteristic fashion for me – let’s make this short and sweet.   VMware is, and will continue to be, an independent company, that makes it’s own independent decisions, and openly partners with those that partner with them.

if you want more details (and some of the behind the scenes of the VCE announcement with this topic in mind), read on…

Look, it is true that VMware and EMC share board members, and that our financial results are linked.   It’s also worth noting that Virtual Infrastructure and Information Infrastructure are the two linked core strategies for EMC in a larger sense.

BUT…

EMC understands that we cannot hug VMware too closely.  They must be able to partner openly.

I’ve seen this in exec staff and board meetings time and time again: “this would be good for EMC, but bad for VMware – let’s not do it”.   If you doubt it – remember how everyone assumed VMware would be rolled into EMC day one – but Joe and the exec team decided to go the better route – let VMware be independent, and thrive.  And thrive they did, and things were good.  That has to lend some credence (since people doubted it then as they doubt us when we say it now) to us saying “that is NOT going to change”.

It’s also true that while VMware will always be open with it’s API models and opportunities for partner integration – period.

But, what’s interesting – is that when we don’t apply our full resources (as was the case in 2007) we’re considering “missing the opportunity”, and when we do apply full resource and focus (2008 and 2009), people assume collusion.

Let me spell it out…    Starting in Jan 2008 and going forward (until it’s over my dead body), EMC will always do a “full commit” to leverage/integrate with any program/API/initiative (engineering, marketing, go-to-market – whatever).   In those engineering meetings (some of them with EMC competitors present) – on our side we’ll make a massive commit.   This isn’t cheating, and it isn’t collusion, it’s focus and application of resources.   Each competitor has the choice to do the same.

We have an R&D budget of about $1.7B per year, and we’re betting hard on the virtualization of the datacenter and this transition to private cloud computing models.  This is significantly more than many of our storage pure-play peers.   On the other hand, they have narrower (or stated in a more positive sense, more “focused”) product portfolios, which perhaps allows them to have higher R&D efficiency.   Conversely, in other areas, our R&D/revenue model (like our Ionix stuff) is investment along the lines of our much larger competitors in this area (HP/CA/BMC) – where what we need to do is be focused (and we are – on the virtualized datacenter using VMware and the private cloud scenario).

Where there is an opportunity to align in the field with our customers – we will do it, with massive commit, and focus of resources in a similar way.

Where use of EMC intellectual property can help VMware and vice versa, one difference between other partner models is that we are always open to the discussion (sometimes with other technology partners, the door isn’t even open).   But people should understand - the legal and business structure that govern those are just like all partner models.

And yes, EMC and Cisco, like VMware – will continue to partner with others, including VMware competitors (like Microsoft) and VMware with EMC competitors (like NetApp), and Cisco competitors (like Brocade and HP).   They may not have the inherent focus that VMware, Cisco and EMC have on our joint vision/strategy/engineering, but the opportunities will always be open.   The things that govern EMC’s thinking at least are first and foremost customer demand (overwhelmingly VMware in the server virtualization space) and then alignment with our strategic goals and vision.

Ok – but that said, back to the discussion at hand…

There were a couple parts of the announcement that were us trying (perhaps failing) to signal that VMware’s role in the VCE coalition is different than Cisco and EMC’s.

1. Note that Acadia is a Cisco/EMC joint venture – not a VMware/Cisco/EMC joint venture?   That’s because that would have been crossing a line that we don’t want to cross, and would adversely affect VMware’s other partnership models.
2. Note how consistently Joe/John used the words “Cisco and EMC, with VMware”?   Cisco and EMC aligning as tightly as we are is possible because we have joint vision, joint strategy, joint engineering, but also (and very importantly) joint enemies.   VMware, Cisco and EMC share joint vision (private clouds), joint strategy, and joint engineering – but some of Cisco/EMC’s enemies are VMware’s partners (and vice versa).   We’re very conscious of that.    It’s very important to everyone (including in EMC) that VMware remain able to operate independently.

Just like people’s doubts about whether we can do this without hurting the channel – I don’t immediately disregard people (like Scott’s here) concerns on the impact of the VCE Coalition to impact VMware’s partnering.   It’s a legitimate concern, one that we share and are trying to be careful about.

Is there anything we can do to “solve” this concerns about VMware’s independence in one fell swoop? 

Well, short of selling them, or not leveraging our resources to integrate and go to market aligned with VMware and letting our competitors run with the ball - both of which would be colossally stupid moves - NO.

Simpletons look for simple answers (in business, not technology), but the world is a bit more complex.    The answer (just like demonstrating ongoing channel senstivity and alignment – as discussed here) – isn’t pretty, or “sound bite simple”, but it’s the truth.  It’s about aligning, integrating, and focusing Cisco and EMC resources around the VMware-powered private cloud use case (which is the defining element of most x86 datacenter and service provider projects), but at the same time giving VMware the room to operate and partner independently.

Are we perfect, no – but it’s a work in process, and we try to prove it every day.

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