Vblocks bleed out EMC money
VCE = virtual cash erosion
VCE – the Cisco-EMC-VMware Vblock company – appears to be experiencing virtual cash erosion, with EMC reporting $132m of accumulated losses.
Vblocks are converged IT stacks composed of EMC storage, Cisco UCS servers and networking, and VMware server virtualisation software. The VCE concern was set up by Cisco, EMC and VMware to build the Vblocks, and EMC owns 58 per cent of VCE, giving it the controlling interest.
Thanks to Aaron Rakers of Stifel Nicolaus, we know that EMC's 10-Q SEC filing says total EMC-contributed funding to VCE is $173.5m, plus $7.8m in stock-based compensation for VCE executives such as CEO Michael Capellas.
EMC losses in VCE for the June quarter of this year were $46.6m, with $41.9m in the preceding March quarter.
Viewing VCE as a startup it has not been very successful thus far. If it doesn't make a profit by the end of this year then perhaps EMC, Cisco and VMware might reconsider things. Perhaps they should change from stock-based compensation to stick-based incentivisation? ®
Principal Architect - VCE
I think people are forgetting the structure of VCE. We have no income by design. The parent companies (VMware, EMC, and Cisco) recognize the income individually and not through VCE. So EMC could sell as many storage systems as they want through VCE and we'll still appear as a loss for them because they are funding VCE. This number has no bearing on the success of VCE for any of the parent companies.
As to the poster who complains about rigidity and inflexibility, you are either a NetApp shill or do not understand the product line. You should schedule a session with a partner and look into the upgrade options. With any product in the line it's possible to start with a minimum blade and spindle count and expand over time, typically with a huge range of options.
Thank-you for that! I am laughing my ass off. Holy shit that was unexpected at the end. :)
hold on holmes...you have 3 posts and claim to be EMC
jellers, I am with you. The whole thing is very complex. Trust me...I for one get it. I see on a regular basis how dysfunctional OEM, VAR, Strategic Alliances and other "partnership channels" can be. Not to mention the crazy ass way that Quarterly bonuses get paid and targets assigned. If you cannot articulate the value other than saying "we don't get it," then we get to mock...