Does EMC’s announcement of VSPEX BLUE pose a roadblock to Nutanix’s record-setting momentum?  It’s actually the opposite. Nutanix is not going to revolutionize the $73B server and storage market without a lot of good competitors. And there is no hardware manufacturer more important than EMC to validating hyper-converged infrastructure (HCI) as the future of the virtualized datacenter.

The Clout of EMC

EMC started the whole storage array industry in 1990 with its introduction of Symmetrix. The company continues to dominate with a 30% share of the $23.5B storage market. And it has augmented its storage business with many other very successful acquisitions over the years including VMware, Data Domain, Avamar, RSA and Isilon.

The Hopkinton giant has also done an admirable job in developing channel partner loyalty despite selling directly to certain customers. Partners appreciate both the leads EMC brings them and the help it extends in closing deals. They also like the distinction they earn by acquiring EMC certifications. These certs translate into back-end services revenues for integrating EMC’s complex stable of storage products.

But all is not roses. “The Federation” has stumbled a bit the past few years as its revenue growth rate has declined. EMC recently had to absorb the highly unprofitable VCE partnership, and the company was known to have shopped itself out to HP, and possibly others, late last year.

Despite these setbacks, EMC continues to be one of the most influential companies in the datacenter. Customers and partners across the globe take note of its vision and purchase its products. As a recent example, even all of the pain of the disruptive XtremeIO upgrade didn’t squelch its title as the fastest-growing EMC product ever (albeit a lot of this growth is likely coming at the expense of declining VMAX sales).

Positioning of VSPEX BLUE

EMC is going to market with an EVO:Rail solution as part of its VSPEX group which now also includes VCE. VSPEX, of course, is a converged infrastructure reference architecture including servers, storage and network while Vblock is a manufacturer-integrated solution. In neither case is there any actual convergence of infrastructure. Customers still face the same extensive rack space requirements, management challenges and scalability issues as when purchasing the products individually.

VMware’s EVO:Rail, on the other hand, is genuinely hyper-converged infrastructure. It includes consolidation of redundant hardware and elimination of multiple management tiers. (As an aside, “hyper” in hyper-convergence stands for “hypervisor”, not for “excessive”. Hyper-converged products only work, at least today, with virtualized workloads).

VSPEX BLUE’s product name and category grouping indicates that EMC considers hyper-convergence to be just another offering in its vast array of storage oriented products. EMC Chairman, Joe Tucci, reinforced this perspective in his 01/30/2014 earnings call: “Let me add a little color. When our sales force goes in they don’t think about [deciding] what’s declining, what’s growing, what they think about is, what are the customers’ needs and then we have a whole portfolio of products and as you can see, that’s our strength and as we are doing that, you can also note that our gross margins are doing well.”

Nutanix: One Mission

While Nutanix describes its offering as “Web-scale” in reference the Google-like infrastructure it introduced to the enterprise, the overall industry increasingly recognizes the broad category as “hyper-converged infrastructure”.  Nutanix, with a 52% market share, is the clear leader in the hyper-converged space.

Unlike EMC, Nutanix does not consider hyper-converged infrastructure to be a storage line-item. We live, eat and breathe Web-scale as not only a vastly superior platform for hosting a virtualized datacenter, but as the inevitable future.

If you go to Nutanix’s engineering department, you don’t find a lot of ex-storage folks. Instead, engineers from companies such as Google, Facebook and Twitter work to enable massively scalable, very simple and low-cost infrastructures for government and enterprise customers. It’s a completely different mindset.

This same scale-out mindset is pervasive in marketing, finance, channels, operations, HR, professional services, alliances and sales. Sr. VP of Sales, Sudheesh Nair, recently commented in a blog post, “EMC is a $60B company with one of the fiercest and meanest enterprise sales engines ever assembled on the face of the earth (I say this as a compliment with full admiration).”

But as good as EMC’s sales force may be, messaging hyper-convergence as just another approach to a virtualized data center is going to be difficult to convey with the same conviction as Nutanix’s sales folks. Nutanix is focused on revolutionizing the data center – or as our federal team likes to say, #OneMission.

So Who Will Win, Nutanix or EMC?

A big answer to this question, of course, is dependent upon the channel. Channel partners hold a lot of sway over their customers and are instrumental in helping them select the best technology for their requirements.

Fortunately, we’re seeing a rapidly increasing number of channel partners adopt the same type of Web-scale passion as our own sales teams. Partners are realizing that while they may not be able to charge their customers for the same back-end integration services that EMC products enable, they develop a deeper trust and many more higher margin services opportunities in areas such as hybrid and private cloud enablement, big data, Splunk, metro cluster, VDI and so on.

The VSPEX BLUE launch, paradoxically, is going to help Nutanix partners make a huge leap forward. Marketing gurus Al Ries and Jack Trout describe “Law #1: The Law of Leadership” in their book, The 22 Immutable Laws of Marketing. This law states, “The leading brand in any category is almost always the first brand into the prospect’s mind.”

In other words, by promoting VSPEX BLUE, EMC sets the stage to win against the real competition – the $73B of servers and storage sold every year. Both Nutanix partners and their customers will win as a result.

See Also

EMC’s VSPEX BLUE Joins the VMware EVO:RAIL Family of Systems. 02/03/2015. Mornay Van Der Walt. VMware Blogs.

EMC’s Joe Tucci on Q4 2014 Results – Earnings Call Transcript. 01/30/2014. Seeking Alpha.

EMC Combines VCE, VSPEX into New $1B-plus Converged Infrastructure Business. 01/28/2014. Joe Kovar. CRN.

IDC MarketScape: Worldwide Hyperconverged Systems. 01/26/2015. Storage Newsletter.

On Classless Winners and Classy Losers. 01/26/2015. Sudheesh Nair. LinkedIn.

EMC said to Explore Options Ahead of CEO’s Retirement. 09/22/2014. Beth Jinks. Bloomberg.

XtremIO Craps on EMC Badge. 09/18/2014. Nigel Poulton. Nigelpoulton.com