VCE is an agglutination of VMware/Cisco/EMC products that sell to the premium end of the market. The VCE business model is basically the same as any other reseller—hardware leads professional services revenue. VCE sells a strictly limited number of products that it calls "best-in-class production ready technologies," where "best" means just one product in each category.
VCE builds a profitable services business by rigidly restricting its product and vendor partnerships. This limited product selection means that internal technology, business and service skills run deep on the few products that are offered in the Vblock systems.
In keeping with this model, VCE will choose just one SDN networking technology—and that’s Cisco’s. Cisco is the networking partner in the VCE relationship and can make strong claim to setting the network strategy. It’s likely that Cisco holds a larger share in VCE than VMware, and may own the board seats to push ACI onto VCE.
[VMware NSX may upend networking. Greg Ferro offers details in “VMware NSX: Game Changer for Data Center Networks.”]
Selecting Cisco ACI for the networking component is a decisive move at an early stage. While Cisco has announced some elements of its SDN portfolio, the market is waiting to see what emerges from its Insieme effort, which will be officially announced in November.
This decision has ramifications for Vblock customers. Part of the VCE pitch is that its infrastructure is the best platform for VMware, so many customers will likely want to use VMware NSX for networking. Being forced into Cisco ACI may alienate customers.
VCE says customers can deploy VMware NSX onto a Vblock if they choose, but VCE won’t provide support for NSX. That defeats the whole purpose of a Vblock: The primary value of VCE is the "pig-to-bacon" professional services package.
While VCE’s SDN choice may sting some customers, it may not mean all that much to VMware because VMware would get limited revenue from VCE. A "billion-dollar annual run rate" suggests that sales were $250 million in the last quarter, and I’d guess the majority of that revenue would have been hardware, not VMware licenses. It’s doubtful that VCE is a significant-enough VMware partner to make the decision too painful.
Cisco has hinted that its SDN strategy will be hardware-centric by claiming that a software-only network doesn't scale. Hardware suits the VCE business because, as the company says, infrastructure matters. Specifically, hardware infrastructure is key to its business and this leads to the conclusion that Cisco's SDN solution suits the VCE revenue opportunity better.
So be it. VCE has an internal motto of "Game On." Well, it has placed its bets and customers have to go with Cisco or fall out of the supported configuration. VCE sets the rules of the game on its “approved” technology. If you want VMware NSX, then Vblocks should not be part of your game plan because it’s not a supported product.