Partners: Architecture, Sales Differences Will Lead To Dell, Cisco Strain Over VCE

(NOTE: This article was originally posted to CRN.com Oct. 4.)

Cisco and Dell are pledging their support for their VCE partnership, but partners will apparently not be surprised if that changes within a few months.

In fact, partners contacted by CRN expect new sales incentives and architectural changes to impact the wildly successful VCE alliance.

Several top CRN SP500 solution providers, who have built successful practices with Cisco, EMC and VMware said they are already bracing for new sales incentives that reward the channel to sell Dell's own servers and networking portfolio more aggressively than Cisco's solutions like Unified Compute System (UCS). That change could come as soon as Feb. 1, they said, when Dell unveils its new Dell EMC unified channel program.

"Make no mistake, Dell has to compensate for nearly $50 billion worth of debt and they're not going to do that by selling competitors' products when they can sell their own," said one top executive from a solution provider who is a Cisco Gold and EMC partner and asked not to be identified.

[Related: Michel Dell And Chuck Robbins Are VCE BFFs]

"I see Dell coming out sometime within the next 12 months with its own converged platform and, while they'll still sell Cisco servers, this isn't about what they can do, this is about how they're going to behave in the field and Cisco is the archenemy," said another top executive from a solution provider on CRN's 2016 SP500 list who is a longtime partner of Cisco and EMC that did not wish to be identified. "You got to have blinders on if you can't see that ... Lots of people feel that this change is coming."

With Dell's $65 billion acquisition of EMC now closed, the seven-year relationship between VCE and Cisco is bound to hit an architectural crossroad, according to partners. For example, as software-defined storage gains greater adoption and compute nodes become more storage-based, Cisco-configured architectures will show up less often inside VCE.

"You'll see some reference architectures that will be [VMware] NSX integrated and things like that where I don't know how much R&D they'll do around Cisco ACI and CliQr and that type of stuff," said one top executive from a solution provider who is a top Cisco, VCE and EMC Platinum partner, who did not wish to be identified.

Partners predict that Dell will also create a specific VCE go-to-market strategy focusing on replacing Cisco UCS with Dell servers.

"If I'm Dell, I'm having a program to which I'm training my partners where I can go to market with a, ‘replace Cisco UCS servers in a VBlock with Dell servers and we will come in and certify it and this will be produced and supported by Dell organically' -- it isn't a bad pitch," said the CRN SP500 partner.  "But this is a slow roll out because nobody wants to lose this $3 billion of business and I'm not disagreeing with that, but you're going to see this chipped away as soon as February."

VCE sales reps will also have better leverage and incentives to sell Dell solutions over Cisco, said partners.

 "Reps get more margin selling Dell. So I can make sure the Dell solution looks more interesting from a financial perspective because there's more margin for me to work with than there is on the Cisco VCE side," said the EMC Platinum partner. "I can sell you my version of a rack running on Dell compute at this price or I can sell you the Cisco version on Cisco compute at a higher price ... That's not going to happen tomorrow, but it's an inevitability."