The recent EMCWorld event in Las Vegas was arguably less newsworthy for its product announcements than for the way that the underlying theme and message continues to move EMC away from the company that it was just a couple of years ago.
The new EMC II (as in "eye, eye", standing for "Information Infrastructure", although it might as well be as in Roman numerals to designate the changes on the EMC side of things) is part of what Joe Tucci, Chairman and CEO of the overall EMC Corporation calls "The Federation" of EMC II, VMware, and Pivotal. The idea is that each company can still play to its strengths while symbiotically feeding off each other to provide more complete business systems as required. More on this, later.
At last year's event, Tucci started to make the point that the world was becoming more software oriented, and that he saw the end result of this being the software defined data centre (SDDC) based on the overlap between the three main software defined areas of storage, networks and compute. The launch of ViPR as a pretty far-reaching software defined suite was used to show the direction that EMC was taking—although, as was pointed out at the time, it was more vapour than ViPR. Being slow to the flash storage market, EMC showed off its acquisition of XtremIO—but didn't really seem to know what to do with it.
On to this year. Although hardware was still being talked about, it is now apparent that the focus from EMC II is to create storage hardware that is pretty agnostic as to the workloads thrown at it, whether this be file, object or block. XtremIO has morphed from an idea of "we can throw some flash in the mix somewhere to show that we have flash" to being central to all areas. The acquisition of super-stealth server-side flash outfit DSSD only shows that EMC II does not believe that it has all the answers yet—but is willing to invest in getting them and integrating them rapidly.
However, the software side of things is now the obvious focus for EMC Corp. ViPR 2 was launched and now moves from being a good idea to a really valuable product that is increasingly showing its capabilities to operate not only with EMC equipment, but across a range of competitors' kit and software environments as well. The focus is moving from the SDDC to the software defined enterprise (SDE), enabling EMC Corp to position itself across the hybrid world of mixed platforms and clouds.
ScaleIO, EMC II's software layer for creating scalable storage based on commodity hardware underpinnings, was also front and centre in many aspects. Although hardware is still a big area for EMC Corp, it is not seen as being the biggest part of the long term future.
EMC Corp seems to be well aware of what it needs to do. It knows that it cannot leap directly from its existing business of storage hardware with software on top to a completely next generation model of software which is less hardware dependent without stretching to breaking point its existing relationships with customers and the channel—as well as Wall Street. Therefore, it is using an analogy of 2nd and 3rd platforms, along with a term of 'digital born' to identify where it needs to apply its focus. The 2nd platform is where most organisations are today: client/server and basic web-enabled applications. The 3rd Platform is where companies are slowly moving towards—one where there is high mobility, a mix of different cloud and physical compute models and an end game of on-the-fly composite applications being built from functions available from a mix of private and public cloud systems. (For anyone interested, the 1st Platform was the mainframe).
The 'digital born' companies are those that have little to no legacy IT: they have been created during the emergence of cloud systems, and will already be using a mix of on-demand systems such as Microsoft Office 365, Amazon Web Services, Google and so on.
By identifying this basic mix of usage types, Tucci believes that not only EMC II, but the whole of The Federation, will be able to better focus its efforts in maintaining current customers while bringing on board new ones.
I have to say that, on the whole, I agree. EMC Corp is showing itself to be remarkably astute in its acquisitions, in how it is integrating these to create new offerings and in how it is changing from a "buy Symmetrix and we have you" company to a "what is the best system for your organisation?" one.
However, I believe that there are two major stumbling blocks. The first is that perennial problem for vendors—the channel. Using a pretty basic rule of thumb, I would guess that around 5% of EMC Corp's channel gets the new EMC and can extend it to push the new offerings through to the customer base. A further 20% can be trained in a high-touch model to be capable enough to be valuable partners. The next 40% will struggle—many will not be worth putting any high-touch effort into, as the returns will not be high enough, yet they constitute a large part of EMC Corp's volume into the market. At the bottom, we have the 35% who are essentially box-shifters, and EMC Corp has to decide whether to put any effort into these. To my mind, the best thing would be to work on ditching them: the capacity for such channel to spread confusion and problems in the market outweighs the margin on the revenues they are likely to bring in.
This gets me back to The Federation. When Tucci talked about this last year, I struggled with the concept. His thrust was that EMC Corp research had shown that any enterprise technical shopping list has no more than 5 vendors on it. By using a Federation-style approach, he believed that any mix of the EMC, VMware and Pivotal companies could be seen as being one single entity. I didn't, and still do not, buy this.
However, Paul Maritz, CEO of Pivotal put it across in a way that made more sense. Individuals with the technical skills that EMC Corp require could go to a large monolith such as IBM. They would be compensated well; would have a lot of resources at their disposal; they would be working in an innovative environment. However, they would still be working for a 'general purpose' IT vendor. By going to one of the companies in EMC Corp's Federation, in EMC II they are working for a company that specialises in storage technologies; if they go to VMware, they are working for a virtualisation specialist; for Pivotal, a big data specialist—and each has its own special culture. For many individuals, this difference is a major one.
Sure, the devil remains in the detail, and EMC Corp is seeing a lot of new competition coming through into the market. However, to my mind it is showing a good grasp of the problems it is facing and a flexibility and agility that belies the overall size and complexity of its corporate structure and mixed portfolio.
I await next year's event with strong interest.