Feeds

Storage world punch-up over whether VCE is a start-up

EMC: $40m-a-quarter losses are 'expenses'

HP ProLiant Gen8: Integrated lifecycle automation

EMC's view

An EMC view is that, SEC filings apart, VCE losses are not losses but expenses. Here's EMC's Chuck Hollis commenting on the VAR guy's blog: "I understand what you're trying to say here, but I think you've missed a fundamental point — the revenues associated with VCE flow back to the parent companies, and aren't broken out separately. Put differently, the 'losses' you're writing about are actually 'expenses'. They're offset by revenue that show up elsewhere. And none of the parent companies break out revenue to that level of detail."

There has been a sequence of comments about VCE and Vblock sales by EMC's CFO, David Goulden, and by Joe Tucci in recent EMC earnings reports. Here they are:

David Goulden in April this year:

With our expanding pipeline, VCE opened its headquarters in Dallas last month and will soon open offices in San Jose, Raleigh/Durham and London.

Given the market momentum, we are accelerating our investment in VCE ... We're increasing our projection for other expense in 2011 by approximately $70m. The accelerated VCE investment is reflected here, as are changes in the operating effects associated with VCE. However, we expect improvements to our operating margin from Vblock-related sales to effectively offset most of this increase in other expense during 2011.

David Goulden in July:

Momentum continues to build at VCE. We have seen substantial demand from small and large customers, as well as partners, who appreciate Vblock's converged, best-of-breed, virtualised infrastructure and VCE's revenue for the first half of 2011 already exceeds the revenue it achieved all of 2010.

As VCE grows, we are seeing increasing sales to repeat customers who are standardising their next-gen data centers on the Vblock and moving their enterprise workflows into full production on Vblock platforms.

Joe Tucci in July:

Our joint venture with Cisco, VCE, continues to grow in both revenue and relevance. Customer interest in the Vblock converged technology is extremely high and the installed base of Vblocks is performing very well. For sure, Vblocks are proving their value proposition and we expect Vblock sales to hit the billion-dollar run rate mark in the next several quarters."

We are left with the knowledge that EMC is asserting Vblock sales are rising steadily and there is strong customer interest. VCE is costing EMC money right now but EMC hopes and expects Vblock sales to reach billion dollar annual run rates in the "next several quarters" when it would then, obviously, be profitable.

Four quarters would take us to this time next year and we might expect profitability to be reached by then, and, possibly, unit ship numbers to be revealed or indicated.

If VCE were a Silicon Valley start-up its backers would probably never have countenanced such an ambitious infrastructure build-out and, assuming they had, would be scaling it back to stop it running out of cash.

Ironically there are rumours of VCE layoffs but these are, emphatically, rumours. Commenting on this point and saying he didn't know about that, Hollis said: "Just about every IT vendor in the industry is continually refining their labour model these days — adding and subtracting to get the right mix. To do otherwise would be foolhardy." ®

Reducing security risks from open source software

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
US judge: YES, cops or feds so can slurp an ENTIRE Gmail account
Crooks don't have folders labelled 'drug records', opines NY beak
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
The triumph of VVOL: Everyone's jumping into bed with VMware
'Bandwagon'? Yes, we're on it and so what, say big dogs
Carbon tax repeal won't see data centre operators cut prices
Rackspace says electricity isn't a major cost, Equinix promises 'no levy'
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.