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V-Block getting stickier with customers


BOSTON – When the V-block initiative was presented by VCE (The Virtual Computing Environment Company) CEO Michael Capellas at the 2011 Cisco Partner Summit in New Orleans, the channel was surprised to see the ex-Compaq CEO and they were skeptical about the go-to-market strategy. VCE is the joint venture from EMC and Cisco with additional investment from Intel and VMware.

The feedback from the channel was that V-block was too new and the total cost of ownership model wasn’t matching customer objectives.

VCE vice president of worldwide channels, D. Robert Martin, told CDN at the Cisco Partner Summit conference that at the time the company was still organizing itself to focus on converged infrastructure and create a base of channel.

Today, V-block 300 and 700 products targeted at the data centre are moving through the partner channel with the help of a high touch sales force, Martin said.

What is occurring in the market with some consistency is one V-block sale is leading to more repeat buys, Martin added.

“We had a large insurance company who was competing with those over the phone and get a quote companies like Geico and Progressive. They wanted to leverage their agents to better compete and provide an improved customer experience. The channel partner was able to get the V-block on the data centre floor in 30 days optimized for their applications. The great news is once the customer bought the V-block they bought another one,” he said.

Repeat buys are attributing to 60 per cent of a partners’ V-block business. Some of the top applications on V-block are: VDI, SharePoint, Exchange and SAP.

Another example of a repeat buy with V-block is when a channel partner engages a customer with branch offices. Martin said a Tennessee-based chemical company purchased a mid-range V-block with another lower-end model for a branch office. Four months later the chemical company decided it worked so well they bought another 18 for the rest of their branch offices. For the channel partner involved the deal size increased to include EMC back up suites.

“The stickiness is so good that the time to revenue gets accelerated,” Martin added.

Since VCE validates V-block solutions before it gets to the partner, the speed to market is normally reduced by 45 days, according to Martin.

Currently VCE focuses on a core group of channel partners; approximately 200 worldwide. About 15 of those are in Canada include Calgary-based Long View Systems and Ottawa-based Northern Micro.

Martin said that these partners are focused on the data centre and are already EMC, Cisco, and VMware solution providers. One benefit from VCE’s channel program is that those solution providers with EMC, Cisco and VMware certifications don’t have to attain VCE certifications.

Martin said the company’s deal registration program VIOR mirrors that of Cisco’s OIP program.

“From our perspective, it’s a process they know and I don’t want to re-invent a process especially one that the partners are comfortable with,” Martin said.

Margin expectations are in line with those of EMC, Cisco and VMware. The key is repurposing solutions and having a strong managed services practice. “When they crack that code it could be 40 plus points of margins that leads to an ongoing revenue stream. This just drives profitability for the channel partner,” Martin said.