Platforms = End Game for IT

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Is that headline over the top? Perhaps 🙂

On the other hand, it’s obvious when you think about it and also nothing new.

It’s the short answer to the question, “Chad, why are you incredibly pumped about being the new leader of VCE?”

Let’s start by really understanding the word platform.

  • In the Military domain: “…solid ground on which artillery pieces are mounted.”
  • In the Political domain: “…a public statement of the principles, objectives, and policy of a political party.”
  • In the Digital technology domain: “…a major piece of software, as an operating system, an operating environment, or a database, under which various smaller application programs can be designed to run.”

The common pattern? A platform is a foundation, something you consume and build on versus something you decompose. In fact, the core value is that it is not decomposable. It must be used whole. When someone tries to decompose a platform, it loses its value, its purpose, its animus.

In the past, the IT platform domains were primarily “server, network, storage, database, client, application, security.” Virtualization started the trend of mashing up server/network/storage by making the technical lines dividing those domains very blurry. Public IaaS clouds finished the job, making the dividing lines invisible. SaaS and PaaS models then moved the bar of platform further.

In IT, the idea of a platform is nothing new. It’s always existed. So, it’s by definition the end game.

What is changing – and disrupting massive ecosystems – is where platforms begin and end.

Three reasons why I’m so pumped

Reason One

Storage, compute and networking domains are commoditizing. Can anyone disagree? It’s not that there won’t be great innovations in sub-component stacks. There will be tons of new things like VMware NSX and Horizon, like EMC DSSD, XtremIO, and Neutrino. There will be things like VSAN and ScaleIO from VMware and EMC together and things like Cisco ACI and UCS Director.

In open source land, the point solution innovation is overwhelmingly fast and furious. There will be innovations in the Apache Hadoop ecosystem and the Openstack ecosystem; there will be Mesos releases, Docker updates, and the VMware Photon Platform, EMC RackHD, REX-Ray and so much more. It can feel never-ending.

Of course there will be tons of innovations by our competitors too! And YES all those ingredients are awesome. 🙂

But, the game is shifting towards “Buy commodity vs. Build where you differentiate.”   I firmly believe that customers are thinking more strategically about where they buy vs. build, redefining where the new commodity line is drawn, which leads to…

Reason Two

The lowest common denominator of that new commodity line is convergence in consumption of infrastructure as virtualized pools of compute/network/storage with an integrated consumption and management model.

This comes in 3 system-level architectures:

  • Blocks – traditional virtualized system architectures; packaged for turnkey consumption
  • Racks – hyper-converged virtualized industry standard servers with software-defined storage and networking stacks; designed as a system to scale big; much simpler operational models than traditional stacks, scaling in simpler linear ways
  • Appliances – hyper-converged virtualized industry standard servers with software-defined storage and networking stacks; designed as a system to start small; much simpler operational models than traditional stacks, scaling in simpler linear ways

In 2016, the people still building and trying to optimize their own stacks are wasting their time (with small exceptions that are very workload-centric). It’s not that they aren’t smart or capable. It’s more that if you ARE smart and capable, focus on something that provides more value, which leads to…

Reason Three

The higher order version of choosing “what you build vs. what you buy” and where you draw the commodity line is the next layer up in the stack: turnkey IaaS /PaaS (on and off premises, and in every form of capex/opex economic model) and SaaS models.

Turnkey IaaS and PaaS are not actually turnkey yet. There is a window to make it that way – and EMC, VMware, Pivotal are in a better position than anyone to do that. It requires a pivot in some strategic thinking and posture – becoming more opinionated (while still always offering choice – that’s a brand promise). You can see the industry running to this point (see the EMC Federation Enterprise Hybrid Cloud, Cisco Metapod, Mantl, IBM’s bluebox efforts, and Azure on-prem work).

None of us have nailed it yet – but we will.

If you agree with point #1 (the commoditization of components)…

Then the center of the infrastructure universe is at the same place as the center of the universe for making storage/networking/compute convergence the new “commodity” domain. That’s at VCE within EMC. This strikes me as the center of that new entity.

If you agree with point #2 (the new base commodity layer is converged/hyper-converged)…

Then you want to be at the place that is the clear leader in converged infrastructure. That’s clearly VCE.    VCE exits FY15 on an even higher run rate than the $2 billion+ we previously disclosed, demonstrating the resonance of the VCE value proposition and the tremendous growth potential of CI.

For perspective, one of the other leaders in this space made their current run-rate public in an S-1 filing.   It highlights a 4x delta. It also makes clear why everyone would target VCE as a leader in this category and that’s OK (competition is good for everyone)!

Today, VCE is synonymous with Vblock, which is in the “Block” category of CI. Blocks are an important category and will continue to grow as the best way to support workloads in certain scales, industries and use cases. Vblock is an unquestionable leader in this part of the market – and in 2016 we will DOUBLE DOWN on Vblock with our partner Cisco.

If you look at the incredible success VCE had in 2015 – a huge portion of that $2B bookings run rate is directly attributable to the success of Vblock.  That formula is a winning formula we have developed and nurtured in partnership with Cisco over 6 years.  It is a strong partnership – and one we will be doubling down and investing to grow.  Vscale, the Vblock (in particular the VB500), as well as expansion/upgrades/refreshes into the enormous Vblock installed base – these are all areas that benefit EMC, Cisco, and most importantly – the customer.

While Racks and Appliances represent critical new growth engines to the Converged Infrastructure business – let there be no doubt – our partnership with Cisco is central to our Converged Infrastructure plan.

BUT hyper-converged models are an area of massive growth. VCE will not rest on the laurels of success in the Block category, rather we will disrupt ourselves to become a leader in hyper-converged Rack scale and Appliance forms of CI. These are different in a ton of ways than the well-established Block CI model (operationally, economically, technologically, and as a business model).

Can we do it? Only results speak. Self-disruption is something that needs to be a core competency. VCE has it. We absolutely can be the leader in all three forms of CI (Blocks, Racks, and Appliances). Customers want partners who are more than a one-trick pony and offer a CI portfolio. We plan on doing it and will do it. Period.

If you agree with point #3 (turnkey IaaS/PaaS/Data Fabrics are the “emerging commodity layer”)…

Then you would want to be in the place where “turnkey buy vs. build” moves to the next level, where you could take the value of an engineered system and make it include engineered solutions.

Converged and hyper-converged infrastructure are simply a means to an end for customers. They dream of a turnkey IaaS/PaaS/Data stack.

The team that builds solutions like the Federation Enterprise Hybrid Cloud stack, the Federation Business Data Lake, and what we will soon reveal as our solution for new Cloud Native app development – they are part of the same team building converged infrastructure.

We can move commoditization further up the stack. We can aggregate, industrialize, and curate the technologies of EMC, VMware and Pivotal. 2015 had a lot of great solutions work – but it still hasn’t been turnkey enough, curated enough. We can do that. It will take a little longer – but that’s the big opportunity.

I can even dream of a day where all IT is consumed as a Platform.  

VCE is now the Converged Platforms  Division of EMC

Our mission is simple:

  1. Shift customers upward towards “buy vs. build.” Focus on delivering the business outcome – the cake, not the ingredients.
  2. Broaden the domain of Converged Infrastructure with a portfolio of Blocks, Racks, and Appliances.
  3. Raise the bar on defining new commodity into the IaaS/PaaS/Data Fabric domain. Bring the simplicity of public cloud IaaS/PaaS models to cases where the right answer is on-premises.
  4. Help power Virtustream and other parts of the Federation that deliver those elements as managed services and public cloud offers.

Now, in addition to leading VCE, I continue to lead the EMC Global Systems Engineering community.   All of my almost brothers and sisters in the EMC SE team will now be able to tap into the resources of VCE and vice versa. We can get the same 1+1=3 with the sales teams, the engineering teams, the customer service and professional services teams. That is powerful!

VCE as the Converged Platform Division is at the center of EMC’s business strategy. Converged Platforms – both Infrastructure (Blocks, Racks, Appliances) and Solutions (IaaS, PaaS, Data Fabrics) are at the center of what customers want – and represent a path towards a simplified and accelerated IT world.

It’s an incredible team, an incredible opportunity – and 2016 will be an AWESOME year! I’m PUMPED!

 

Forward-Looking Statement Legend

This release contains “forward-looking statements” as defined under the Federal Securities Laws.  Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) risks associated with the proposed acquisition of EMC by Denali Holdings, Inc., the parent company of Dell, Inc., including, among others, assumptions related to the ability to close the acquisition, the expected closing date and its anticipated costs and benefits; (ii) adverse changes in general economic or market conditions; (iii) delays or reductions in information technology spending; (iv) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (v) competitive factors, including but not limited to pricing pressures and new product introductions; (vi) component and product quality and availability; (vii) fluctuations in VMware, Inc.’s operating results and risks associated with trading of VMware stock; (viii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (ix) risks associated with managing the growth of our business, including risks associated with acquisitions and investments and the challenges and costs of integration, restructuring and achieving anticipated synergies; (x) the ability to attract and retain highly qualified employees; (xi) insufficient, excess or obsolete inventory; (xii) fluctuating currency exchange rates; (xiii) threats and other disruptions to our secure data centers or networks; (xiv) our ability to protect our proprietary technology; (xv) war or acts of terrorism; and (xvi) other one-time events and other important factors disclosed previously and from time to time in EMC’s filings with the U.S. Securities and Exchange Commission.  EMC disclaims any obligation to update any such forward-looking statements after the date of this release.

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