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Key Strategic Challenges for Virtustream Key Strategic Challenges for Virtustream Key Strategic Challenges for Virtustream by, David Floyer October 21st, 2015 Dell/EMC has created a Virtustream brand and business unit from the EMC Virtustream acquisition. Success is a key indicator to CIOs of the relevance of Dell/EMC as a strategic IT partner for the enterprise. © 2015 Wikibon Research | Page 1 Key Strategic Challenges for Virtustream Virtustream will be the new hybrid cloud services business and brand, and will incorporate and align the cloud capabilities of EMC Information Infrastructure, Virtustream and VMware. It will provide a spectrum of on and off premise cloud and hybrid cloud offerings. VMware will manage Virtustream and report earnings. The most important strategic challenge for the new EMC Enterprise division of Dell is to create a viable and compelling cloud and hybrid cloud story. This Virtustream reorganization and branding is crucial to the execution of this strategy. VMware is the most widely used virtualization platform in the industry for spinning up and tearing down application development machines. Virtustream will need to embrace it and provide VMware users with the multi-tenant, orchestration, automation, full development software kits and development services that will allow it to compete with AWS and Azure. Offering Cloud Foundry as a service could also help differentiate their offerings. EMC has great products such as XtremIO All Flash Array, which can offer unique ways to enhance the development data flows and drastically reduce costs through data sharing (using snapshots and logical copies). QoS management on XtremIO is crucial for service providers and should be accelerated for use by Virtustream. EMC will need to be aggressive with the pricing of this offering and go for volume rather than margins. Virtustream will need to aggressively expand to other SaaS offerings in addition to SAP and SAP HANA. With the data protection and data boundary legislation sweeping the world, the international market is the biggest opportunity to provide Virtustream services. Virtustream will need to leverage the Dell/EMC’s global reach to execute internationally. The investment in Virtustream will need to be significant ($Billions/year), at a time when Dell will be trying to reduce its borrowings necessary to acquire EMC. The strategic investment priority should be Virtustream, paid for if necessary by reducing investment in traditional EMC storage areas. Virtustream and VMware need to be marketed to both service providers and VMware enterprise customers, as the least risk/lowest cost of migration path to a hybrid cloud. Virtustream is of vital strategic importance to Dell/EMC to expand their total available market (TAM), or they will be left fighting for shares of a decreasing private cloud market. Action Item: CIOs should follow Virtustream success as a key indicator of the relevance of Dell/EMC/VMware as a strategic IT partner for the enterprise. © 2015 Wikibon Research | Page 2 Key Strategic Challenges for Virtustream David Floyer spent more than 20 years at IBM, holding positions in research, sales, marketing, systems analysis and running IT operations for IBM France. He worked directly with IBM’s largest European customers, including BMW, Credit Suisse, Deutsche Bank and Lloyd’s Bank. Floyer was a Research Vice President at International Data Corporation (IDC) and is a recognized expert in IT strategy, economic value justification, systems architecture, performance, clustering and systems software. David Floyer @dfloyer [email protected] © 2015 Wikibon Research | Page 3.
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