vmware

Cisco jumps into the hyper-converged game

Steve Kaplan , , , , , , , , ,

Cisco changed the datacenter game with UCS – the only server designed from top to bottom for virtualization. Despite widespread skepticism that the networking giant knew nothing about servers and would fail miserably, in less than five years UCS became the number one blade seller in the Americas.

In our new compressed disruptive-cycle world, Cisco itself has now fallen far behind when it comes to optimally hosting a virtualized datacenter. The company is, however, scurrying to catch up. Within the past few weeks, it’s been revealed that Cisco both invested in hyper-converged startup, Stratoscale, and also blessed Maxta as the first, and so far only, certified hyper-converged solution to run on Cisco UCS.

How UCS Thumped the Server Leaders

I’ve been a vocal fan of UCS from the beginning. In late 2009, when “over 100 companies” were using UCS, I wrote a blog post comparing UCS vs. the HP Matrix. While competitors scoffed at UCS as a “one-size-fits-all product”, I maintained that it would revolutionize datacenter virtualization.

The dominant server manufacturers of the day were perfectly happy with the status quo. But Cisco realized that virtualization would become the datacenter standard and that a new type of server was required. Cisco initially approached IBM and HP to jointly develop a product, but both companies declined. So Cisco instead funded VMware cofounder, Ed Bugnion, and a team of engineers to spend three years building UCS.

UCS helped mitigate virtualization challenges with capabilities such as FCoE (Fibre Channel over Ethernet), hypervisor bypass, extended memory, services profiles and a GUI that can help the server, storage and network teams collaborate more effectively.

But UCS’s Achilles heel is that it really only addresses a small part of the virtualized datacenter issues – the compute. By far the majority of the pain in the modern datacenter has to do with storage. Not surprisingly, four storage manufacturers, EMC/VCE, NetApp, Hitachi and Nimble, all incorporate UCS as an integral component of their so-called “converged infrastructure” solutions.

Channel partners across the globe, such as the one I worked for, understood that as customers increasingly virtualized their datacenters, they would want the enterprise capabilities and features that UCS offered. These partners worked with Cisco to make UCS the number two blade seller in the world.

Descending into Irrelevance

Ah, but all things must change – especially in a software-defined world. While Cisco was promoting the superiority of custom-designed ASICs, Nutanix was bringing the advantages of commodity-driven web-scale architecture to the enterprise. The impressive innovations that Cisco unveiled over five years ago are now not just obsolete, but superfluous.

  • Fibre Channel over Ethernet (FCoE): Unlike the converged infrastructure offerings built around UCS, FCoE is an example of true convergence of the network stack – melding fibre channel and IP Ethernet networks. But today, Web-scale eliminates the requirement for SANs and switching fabrics entirely.
  • UCS Manager GUI: Lets storage and server teams collaborate more effectively together. Not so useful when separate storage administrators are no longer necessary.
  • Custom ASICs: Cisco boasts 12% increased performance from proprietary hardware. Nice but inconsequential when Moore’s Law doubles performance every 18 months anyway. Nutanix utilizes commodity hardware, but increases performance nonetheless with regular software updates that improve hardware effectiveness.
  • Services profiles and templates: These were great in the day for relatively fast provisioning of ESX hosts. Nutanix Foundation is much faster and doesn’t require zone masking or manual hypervisor installs.
  • Integrating the Cisco Nexus switch: Making the network the management center was key to Cisco gaining traction with its network administrator constituency. But Web-scale eliminates the requirement for complex, intelligent and expensive converged network switches.

The leading converged infrastructure manufacturer, VCE, proudly advertises that it only takes 45 days to order and put a Vblock into production – 5 X faster than with conventional servers and storage. In contrast, Nutanix can be ordered, received, installed and in production in around five days.

VCE ad

Upgrading VMware vSphere requires a corresponding upgrade to the entire Vblock – a process that can easily require a team of consultants several days to accomplish. And even then there are risks involved. A former Vblock customer that recently migrated to Nutanix was still running three versions back of vSphere because they didn’t want to have to deal with the associated Vblock upgrade.

Contrast all of this time, expense and risk with doing a vSphere (or Hyper-V or KVM) upgrade on Nutanix. The process is literally just a single click. No cost, no downtime and no risk.

Lesson for Nutanix

UCS and Nutanix both target the same customers – virtualized enterprise environments. I’ve heard from multiple partners that despite our relatively tiny size, Cisco has declared Nutanix to be its number one competitor. Not HP. Not VMware. Nutanix. Cisco’s announcements around Maxta and Stratoscale reflect its determination to, albeit belatedly, get into the game.

Cisco is one of the most successful and well-run companies of all time. While known for its innovations in areas such as routing, switching, VoIP and collaboration – perhaps nothing has been as impressive as Cisco’s accomplishment in the datacenter. Cisco upended all of the existing dominant server players by developing UCS to fulfill the computing requirements of the virtualized datacenter.

The lesson here for Nutanix is that if Cisco can fall into complacency, anyone can. We’ve got to keep our heads down, be humble, stay hungry and keep innovating – even if we have to eventually disrupt our own technologies.

Lesson for Channel Partners

Cisco, VMware, Nutanix, Dell and HP, in addition to the other EVO:Rail partners and lots of startups, validate that hyper-converged infrastructure/web-scale is the future of the virtualized datacenter. There’s a $50 billion + annual server and storage market out there just begging to be disrupted by those channel partners with both the vision and the desire to execute.

Thanks to @vmmike130, @langonej, @evolvingneurons and to @richardarsenian for input.

Happy birthday VMware vMotion

Steve Kaplan , , , , , , , , ,

On this day 11 years ago in 2003, VMware introduced vMotion, and the datacenter was never the same again.

Windfall for Storage Manufacturers and for Solutions Providers

If you were involved in IT, you probably still remember the first time you saw vMotion – moving a live running virtual machine between physical hosts seemed like magic at the time. In my case, a friend’s demonstration of vMotion convinced me to start an integrator business with him focused on enterprise virtualization.

The introduction of vMotion was also the birth of the modern datacenter. It was the feature that made IT organizations really take notice of virtualization and of what it could do to improve their operations. And because vMotion required a SAN, it prompted organizations across the globe to begin purchasing shared storage arrays in massive quantities.

vMotion

VMware vMotion was, of course, a huge bonanza for the young storage manufacturers whose sales had been hit hard by the dot com bubble burst. EMC recognized a good thing when it saw it, and the next month announced its intent to purchase VMware for $625 million (VMware’s market cap today is $36 billion – so quite an astute acquisition).

VMware vMotion also turned out to be quite a boon for solutions providers – many of whom were still struggling themselves from the dot com bubble aftermath. Their services were in strong demand for helping organizations decide what arrays to buy, and how to design and implement the complex products and switching fabrics.

SAN Huggers

In the early days of virtualization, server huggers were common.  We used to joke with IT staffs about putting in a façade of servers and blinking lights so that they could make the application owners feel comfortable. And we really did used to hide the ESX tools from the Windows task bar so that the software manufacturer, when troubleshooting its product, wouldn’t see that it was running as a virtual machine.

Today, the server huggers are nearly an extinct species. Organizations are commonly virtualizing even large SQL Server, Oracle and Exchange applications. But a new group has arisen to take their place: SAN huggers.

As the name implies, SAN huggers don’t want anyone to replace their arrays with the new breed of hyper-converged or web-scale infrastructure products. They’re very comfortable with LUN snapshot management, balancing virtual machines across different physical volumes to get around LUN limitations, maintaining aggregates/meta-volumes, and the many other storage administration tasks.

The ironic thing is that storage arrays were built for a physical “scale-up” datacenter. Although they satisfied vMotion’s requirement for shared storage, they’re simply not a good fit for a highly virtualized “scale-out” datacenter . Take RAID which was invented in 1987. This is a really old technology that requires lengthy rebuild times and that can be disastrous if multiple drives fail simultaneously. The same is true if a SAN loses both of its storage controllers. Losing just one controller significantly reduces performance.

SANs take the disk and the flash away from the CPU and stick them in proprietary arrays at the end of networks where they’re subject to latency and network hops. They scale very poorly, are expensive, in many cases require separate switching fabrics, and are complex to manage.

Web-Scale Converged Infrastructure

When Google came on the scene in the late 1990s, co-founder Sergey Brin refused to buy SANs and instead hired a group of scientists to rethink datacenter infrastructure. They invented the Google File System, Map Reduce and NoSQL and put all of the intelligence into software rather than into proprietary hardware. The result was a very inexpensive infrastructure that is also highly resilient, scalable and simple to manage.

The lead Google scientist and two other Nutanix co-founders brought this same type of architecture to the enterprise datacenter by leveraging the hypervisor to virtualize the storage controllers. The result is a low-cost, self-healing, linearly scalable and very simple to manage infrastructure.

Although still very small by datacenter incumbent standards, Nutanix has already made a big impact in the industry. VMware introduced VSAN and now EVO:Rail as the recommended path to a software-defined datacenter. And hardware leaders EMC, Dell, HP and Cisco all have existing solutions, or planned entries, in the web-scale/hyper-converged infrastructure space.

While it may seem highly unlikely today, my guess is that the SAN huggers are going to have a much shorter reign than the server huggers did before them.

Today’s vMotion-like Moment

Nutanix’s management interface, Prism, is simple, elegant and comprehensive. When partners and customers see it for the first time, many report having the same type of “wow!” experience that they had the first time they saw vMotion.

Thanks to @vmmike130 for editing.

When a channel partner looks in the mirror, does a trusted advisor look back?

Steve Kaplan , , , , , , , , , , , , ,

In my former position as VP of Cloud and Virtualization at Presidio, I frequently used financial modeling to assist our reps, but did not drive sales on my own. That changed after I learned about Nutanix.

I loved the no-SAN concept and was curious to see how it would actually play in Peoria. I pitched a savvy CIO who had participated in an EDUCAUSE panel I moderated, and she was immediately intrigued. But the Chicago office of Presidio was reluctant to work with a new manufacturer. I just made the sale myself and convinced another region with which I had stronger ties to process the paperwork.

The experience should have tipped me off as to the type of situation I would face in my dual channel and strategic sales role at Nutanix. While it’s been surprisingly easy to sell web-scale converged infrastructure to former clients who have called me or vice-e-versa (always running the deals through partners of course), it’s often difficult to get buy-in from VARs – especially from large ones.

mfg rep 1

The Channel Partner Perspective

I had dinner a few days ago with the VP of Sales of a sizable regional VAR. He asked me how much business our top partner would do with us this year. I told him that one organization had a plan in place to sell $50M in our new fiscal year, though internally we pared it down to be conservative. The VP told me that his company will do $90M this year with EMC alone.

As enamored as he and his team were with our technology, I could tell he was thinking about how he could realistically present it internally. Even matching the sales of Nutanix’s largest partner wouldn’t come anywhere near the business he’s driving with EMC and Cisco. How could he convince his executive team that they should risk the wrath of their two largest vendors by promoting Nutanix?

And, suppose he did manage to persuade the executive team to go all in with web-scale; they still would have to get their sales reps on-board. The reps have established relationships with legacy manufacturers, are trained and experienced in selling their products and depend upon them for opportunities. These “coin-operated” reps do not readily gravitate toward promoting new technologies.

mfg rep 2

The Customer Perspective

If I were a CIO, I would not want a solutions provider who simply brought me different product configurations from a leading datacenter manufacturer – I could find that information myself on the Web. I’d want to work with a partner who was diligent enough to constantly investigate new promising technologies, and who was astute enough to discern which ones could have a positive impact on my organization. I’d expect the partner to bring those options and his recommendations to me for review.

VARs that close-mindedly mimic their vendor perspectives risk becoming, in the eyes of customers, glorified manufacturer reps. An EMC partner, for example, might feel confident today in leveraging a trusted relationship with a CIO to advocate Vblock as the best option for a VDI deployment. But the probability is increasing that the CIO will learn on her own that she could have implemented a similar project at a fraction of the cost and with none of the risk by utilizing web-scale. She will consequently feel her partner is either uninformed or, worse, acting in EMC’s rather than in her best interest.

mfg rep 3

Preserving the Customer Relationship

Channel partners tell me that large enterprises move very slowly – the implication being that they have plenty of time to continue making lots of money by promoting legacy 3-tier infrastructure. Perhaps they’re correct, but it’s a dangerous way to conduct business.

Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses.”  Just because a customer asks for more storage doesn’t mean a solutions provider should limit the conversation to arrays. They can take the opportunity to educate their client about how Google and the leading cloud providers have moved away from using SANs and ancient (1987) RAID technology. They can discuss the advantages of web-scale converged infrastructure and about whether or not the architecture might be appropriate for the customer’s environment.

Even if the customer decides, for whatever reason, to go with traditional 3-tier infrastructure, at least the channel partner looked out for the customer’s best interest. Over time, as web-scale/hyper-converged infrastructure becomes the virtualized datacenter standard, the customer will appreciate the effort and integrity of the partner for introducing it.

The Playing Field has Already Changed

I don’t agree with the premise that big enterprises will continue to move slowly. External pressures from public cloud and internal pressures from much more rapidly changing technologies will force enterprises to change more quickly as well.

Just look at web-scale. Almost overnight it has jumped solidly into the mainstream. VMware’s endorsement of hyper-converged infrastructure as the platform of choice for hosting virtual machines leaves no doubt as to the future direction of virtualized datacenter architecture.

Then there’s Dell – one of the “big seven” who collectively drive 76% ($56B) of the annual server and storage business. Dell also blessed hyper-converged architecture last week with its launch of the Dell XC Series: Web-scale Converged Appliances. Yet another of the “big seven”, EMC, has said it will develop its own EVO:Rail offering. Even HP is weighing in both with an EVO:Rail solution and with its own StoreVirtual product. Cisco is showing signs of making the leap as well.This massive validation during the past few months by the leading datacenter players enables solution providers to bring up web-scale without concern of appearing “bleeding edge”. It also means that they should, with at least some degree of impunity, be able to focus on hyper-converged solutions by creating a separate division explicitly for this purpose.

However they do it, I strongly encourage channel partners to figure out a way to get engaged with web-scale. Nutanix continues, and is even accelerating, our trajectory as the fastest-growing infrastructure company of the past decade. This provides an extraordinary opportunity for forward-thinking partners to grow along with us.

Dell XC Series Launches – and Nutanix partners benefit

Steve Kaplan , , , , , , , , , , , , , ,

Nutanix partners will benefit from the rising tide of web-scale mindshare as Dell launches its XC Series: Web-scale Converged Appliances across the world. But solutions providers currently selling Nutanix-branded appliances through Dell are already discovering other advantages. Choice Solutions, for example, beat out an entrenched Vblock incumbent with the assistance of Dell’s existing server business and its financing capabilities.

Disruption with Dell

Nutanix’s Sr. VP of Sales, Sudheesh Nair, likes to talk about the compressing disruption cycle in our industry. Disruption used to take place over a roughly ten year period, but now it occurs on a to a two to four year cycle.

Large companies tend to be very, very good at running marathons.  They spot emerging patterns and then maintain their leadership through acquisition or internal development. Only rarely have exceptional companies such as NetApp and VMware been able to emerge through the disruptive cycles as large leaders themselves.

The datacenter infrastructure landscape is long overdue for disruption. According to IDC, just four manufacturers – EMC, NetApp, IBM and HP, command a 65% market share of storage today. EMC, with a 30% share alone, has been particularly adept at acquiring innovative companies such as Data Domain* and Isilon. IBM and HP acquired XIV and 3Par respectively.

Dell’s acquisitions of Compellent and EqualLogic have enabled it to attain a 7% share of the storage market. In contrast, Dell has a 17% share of the server business which is also dominated by a handful of manufacturers:  HP, IBM, Dell, Oracle and Cisco own a 77% market share between them.

This discrepancy between server and storage market share creates a huge incentive for Dell to leverage its server base to more deeply penetrate the enterprise storage market. While Dell knew that EVO:Rail was coming, it also recognized that EVO would be a 1.0 product lacking the necessary enterprise attributes for wide scale adoption. Enter Nutanix.

Nutanix Web-Scale

Nutanix pioneered the hyper-converged infrastructure era just three years ago, but legacy datacenter players have already been scrambling to claim a stake. After EMC’s mid-2013 acquisition of ScaleIO went nowhere, the company now is counting on subsidiary VMware’s EVO:Rail. HP has resurrected its Left Hand Networks product as StoreVirtual with EVO:Rail positioned as a back-up in situations where it can’t sell its own product. Even the leading all-flash array start-up, Pure Storage, has announced it will be coming out with a hyper-converged offering.

Dell, however, took a different tact. It took a look at all the potential hyper-converged products, including one that already utilized its hardware, and quickly realized that Nutanix’s innovative vision, enterprise capabilities and exceptional support could enable it to make the same type of inroads into enterprise storage that it already holds with servers.

Dell’s recognition of the huge opportunity Nutanix presented led to an OEM agreement signing that is reportedly the fastest that the company has ever done. The OEM agreement includes unique terms that ensure Dell will not have a price advantage over other partners selling Nutanix-branded appliances. And Dell is subject to the same stringent rules as all of Nutanix partners in terms of forecasting and registering opportunities.

Synergies with Nutanix Channel Partners

Dell partners cannot sell Nutanix without first meeting the requirements of, and enrolling in, the Nutanix Partner Network. And Nutanix-only partners cannot sell the Dell XC Series. But partners of both companies can sell either product depending upon customer technical, environmental and purchasing requirements.

Dell brings a great deal to the table. Customers have a lot of trust in the Dell brand, and Dell already has a pervasive footprint in datacenters across the globe. Its extensive purchasing agreements and contracts with both governmental and commercial entities make procurement much easier. And Dell Financial Services can significantly shorten sales cycles.

It’s already been established that once Nutanix gets a foot in the door for a particular use case, customers quickly come to love the simplicity and elegance of the solution. As a result, Nutanix becomes an almost annuity-like business for partners as customers, now unencumbered by the cost and difficulty of scaling arrays, expand their environments.

But beyond increased revenues and shortened sales cycles, partners of both Nutanix and Dell also benefit from the tendency of web-scale to expand to more specialized use cases such as VDI, private and hybrid cloud, big data, disaster recovery and remote branch infrastructure. Partners consequently have an opportunity to increase their services business, and to provide more specialized services at higher rates.

Datacenter Infrastructure Under Seige

Between web-scale and public cloud, the $73 billion annual server and storage business is under siege for the first time. As Choice Solutions and other Nutanix partners are already learning, working together with Dell enables them to grow their businesses by grabbing a piece of the massive low-hanging status quo fruit.

“Choice Solutions has already had a great experience with the Dell team even before the XC Series has shipped. We have seen first-hand that the partnership will amplify Nutanix’s footprint in the Data Center. Being Part of the Nutanix Channel Advisory Council, I have seen the commitment from Nutanix to protect the interest of the channel, and know that Nutanix has been diligent about the joint opportunity registration program. We already had our first Nutanix/Dell marketing event in Dallas, and the Dell team was both enthusiastic and successful in helping drive attendance to the event. Similar events in other cities are already planned.”    

                Jim Steinlage, President and CEO, Choice Solutions

____

*The Data Domain acquisition did not go uncontested. NetApp still has a press release on its Web site proclaiming its acquisition of the same company.

Today’s disruption news: Web-scale vs. 3-Tier infrastructure

Steve Kaplan , , , , ,

Two good articles were published today. The first, from ZD Net, is titled, Enterprise tech vendors: Sizing up the next gen field.  The article talks about the upcoming reshuffling of the enterprise stack. While tech buyers named VMware, Cisco and Microsoft as the three most important vendors over the next three years, EMC was ranked second to last.

EMC Struggle 1 0

Nutanix got a mention, along with “Pure Storage and/or Tintri” as one of the “key vendors that are likely to get some play as the next-gen tech pecking order forms in the next two to three years.”

The second article worth reading is Top technological trends hitting the datacenter soon in SearchDataCenter.  Slide #3 is titled, “Web-scale IT evolves data centers”.  While the slide disappointingly doesn’t discuss web-scale converged infrastructure, it does highlight the importance of adopting cloud-like technologies to the datacenter.

Get in on the Nutanix Technical Champion (NTC) ground floor

Steve Kaplan , , , , , , , , , ,

Microsoft has MVP, Citrix – CTP, Cisco – Cisco Champions, VMware – vExpert, EMC – Elect, and so on. Nutanix has just launched its Nutanix Technical Champion (NTC) program and applications are being accepted until November 15.

I was a Microsoft MVP for four years and have been a VMware vExpert since the beginning – for the past six years. I find these types of programs to be incredibly valuable. Benefits typically include things such as access to pre-release product information, special events, direct access to manufacturer top executives, speaking engagements and other publicity, etc.

Most importantly, these programs offer an opportunity to get to meet and interact with like-minded peers. The exchange of information that tends to take place can be very beneficial both for one’s company and for her/his own career path.

Nutanix is the fastest-growing infrastructure company of the past decade, and its web-scale technology is disrupting the datacenter status-quo in a manner comparable to what VMware did with virtualization ten years ago. Channel partner technical folks have a great opportunity to get in on the ground floor of the NTC, and to help revolutionize the way that datcenters are built and operate.

 

 

Channel Disrupt – an Introduction

Steve Kaplan , , , , , , , , , ,

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
-Charles Darwin

I’ve headed up channel sales for the Americas at Nutanix for 19 months now, but previously worked on the partner side of the IT infrastructure channel for 25 years. During that time, I saw a lot of disruptive technologies such as Ethernet, VoIP, the Internet, etc. But from a datacenter standpoint, nothing came close to the impact of virtualization.

VMware’s introduction of vMotion 11 years ago turned out to be an incredible boon to the IT channel. Solutions providers grew in both number and size as they helped organizations across the globe to virtualize their data centers through the acquisition of high-end hosting servers, SANs and switch fabrics.

Many VARs, especially the larger ones, were reluctant to fully embrace VMware’s revolutionary technology. But they were fortunate in that virtualization spread surprisingly slowly; they generally had time to adapt. The VMware consultancy I ran, for example, was purchased after only three years in business by a much larger publicly-traded Cisco partner desperate to quickly acquire virtualization expertise.

Today’s disruptive climate is dramatically different. Rather than enjoying an exploding increase in purchases of traditional datacenter hardware, solutions providers are going to see the opposite take place. And the timeframe is going to be very fast.

Consider:

  • Web-scale technology, as introduced to the enterprise by Nutanix three years ago, has gained exceptionally fast mind share across the globe including an OEM offering by Dell.
  • VMware has introduced its own hyper-scale technology, EVO:Rail, that competes with both its long-term storage partners and with parent company, EMC.
  • HP is jumping on the hyper-converged bandwagon both with EVO:Rail and with an updated version of its Left-Hand Networks. And it’s splitting off half of its business in order to focus on the enterprise space.
  • EMC, the leading storage manufacturer, has been seeking to be acquired.
  • VCE, the leading player in the so-called “converged infrastructure” space has increasing animosity among two of its primary partners, and Cisco is rumored to have turned off the financial spigot.
  • AWS is making big strides as they work to take away everyone’s hardware business.

According to IDC, the total server and storage market is now over $70B annually. An incredible $56B of this business is done by only seven vendors (eight once Lenovo’s purchase of IBM’s server business is reflected): EMC, HP, IBM, Dell, NetApp, Oracle and Cisco. Most of this revenue flows through channel partners.  As the status quo business decreases, resellers are going to have to react very quickly to compensate.

Manufacturer 2014 Server Revenue
(in millions – annualized)		 2014 Storage Revenue
(in millions – annualized)		 Total
(in millions)
HP $12,776 $2,384 $15,160
IBM $11,888 $2,848 $14,736
Dell $8,332 $1,700 $10,032
EMC –
$7,056
 $7,056
NetApp –
$3,060
 $3,060
Oracle
$2,948
 – $2,948
Cisco
$2,908
 – $2,908
Subtotal $38,852 $17,048 $55,900
Hitachi
–
 $1,492 $1,492
ODM Direct $3,340
–
 $3,340
Others $8,084 $4,940 $13,024
Total $50,276 $23,480 $73,756

Putting the Customer Second

All solutions providers say that they have their customers’ best interests at heart. But infrastructure VARs are typically dependent upon a few, or less, of the handful of leading datacenter manufacturers for most of their business.

The VARs make significant investments in trainings for both salespeople and technical folks. They work to obtain both individual and organizational certifications. They attend manufacturer conferences, engage in manufacturer led demand-generation events, and develop close relationships with their manufacturer partners. In return, the resellers receive Marketing Development Funds, access to sales and engineering resources and, most importantly, opportunities.

This channel structure has worked quite well since the early days of IBM-initiated solutions integrators, and many reseller organizations are now doing hundreds of millions or even billions of dollars in annual revenues. But the channel structure can often make it challenging to put customer advocacy ahead of manufacturer loyalty.

When a manufacturer, for example, introduces a partner into a new account, that partner has to push the manufacturer’s products regardless of whether or not the technology is the best fit. Introducing a competitive product would spell the death knell for receiving future opportunities.

Partners of the leading datacenter incumbents need to be careful even in their existing accounts of mentioning one of the newer disruptive technologies as an option. The partner will typically position it, if at all, only in situations where the incumbent either lacks a competitive product or is not likely to notice. The alternative is to risk the potential wrath of the datacenter giant.

So while a channel partner will privately often concede that, say, web-scale infrastructure makes a lot more sense for a virtualized datacenter than a Vblock, it can’t even bring up this option to the customer for fear of jeopardizing its large Cisco and EMC revenue streams. The manufacturer  relationships supersede the customer’s best interest.

In Boldness There’s Opportunity

Ray Noorda of Novell used to tell his partners, “In mystery, there’s margin”.  Today’s corollary might be, “In boldness, there’s opportunity”. The handful of infrastructure giants are selling virtualized organizations tens of billions of dollars worth of equipment that was designed and optimized for a physical datacenter.

Enterprising channel partners have an extraordinary opportunity to educate clients and prospects about the advantages of web-scale converged infrastructure. Not only is the revenue and profit potential vast, but they can also differentiate themselves from the pack as innovative, forward-thinking, and as leaders in integrating cloud technologies.

Sources
Weak Demand for Storage Systems…as Worldwide External Disk Storage Systems Revenue Falls for Second Consecutive Quarter.  09/05/2014. IDC Press Release.
Server Refresh Cycle Propels Industry Forward in Q2. 08/27/2014. Charlie Osborne. ZDNET.