Converged Infrastructure Bets Are In: Where Are They Paying Off?

Just how hot is the converged infrastructure space?

Research firm IDC estimates that total worldwide spending on converged infrastructure will hit $17.8 billion in 2016, up from $4.6 billion in 2012. Converged infrastructure will account for 12.8 percent of total storage, server, networking and software spending by 2016, up from only 3.9 percent in 2012, IDC estimates.

With the momentum in hyperdrive, how can solution providers make the most of the opportunity? CRN looks at the bets Cisco Systems, Dell, EMC, Hewlett-Packard, IBM, NetApp, Oracle and VCE have placed on the market, delving into where their respective channel partners are seeing the most growth today and into the future.

Converged infrastructure refers to the tying together of server, storage, networking, virtualization and sometimes other resources into an integrated solution that is managed as a whole rather than through separate management systems.

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For customers, converged infrastructure has shifted the conversation away from the actual components in the data center to a focus on reducing infrastructure complexity, said Jeffrey Flowers, technical consultant at eGroup, a Mount Pleasant, S.C.-based solution provider.

"These conversations have shifted to one that optimizes the infrastructure and creates a much more simple-to-manage, simple-to-scale-up, and simple-to-scale-out architecture and platform," Flowers said.

Less equipment means less cost and fewer maintenance contracts, Flowers said. "Fewer moving parts and fewer steps equals fewer administrators to manage the platform," he said. "Streamlining the administrative and operational costs for customers allows those extra administrators to focus their attention on adding additional value to the business with other IT initiatives that simply fell to the wayside before."

Pre-Configured Solutions: Much Faster, Less Risky

Solution providers who for years designed solutions that combined server, storage, networking and virtualization technology have found pre-configured solutions a faster and less risky way to solve data center issues.

Consider, for instance, the specific converged infrastructures developed by vendors to meet customer requirements for a certain number of virtual servers or virtual desktops, said Dennis Mueller, vice president of innovation and emerging technologies at CMT, a Santa Clara, Calif.-based solution provider.

Implementing a converged infrastructure takes away much of the risk of designing such a solution from scratch, Mueller said.

"We can ask customers their requirements and quickly tell them, ’Here is what you need,' " he said."And, 'If your needs grow beyond that, it's easy.' "

Regardless of how many vendors are involved in defining a converged infrastructure, the result typically has two advantages over traditional offerings developed by solution providers who configure them on their own.

First, once deployed, the storage, server, networking or other resources of the converged infrastructure solution are managed through a single console via orchestration software provided by one of the vendors or by a third party.

Second, solution providers who deploy a converged infrastructure have a single support contact even if the solution consists of hardware and software from multiple vendors.

Support and management are what converged infrastructures are all about, Mueller said.

"If you follow the converged infrastructure architecture, go with a ’blessed' configuration, you get one phone number for support," he said. "I was an IT person before. I hated having three vendors pointing their fingers everywhere. With converged infrastructures, they all have skin in the game."

The reference architecture is the standard baseline of what works for most customers, said Dave Butler, president of Enterprise Computing Solutions, a Mission Viejo, Calif.-based solution provider.

"For any company, I'm going to take servers, storage, networking and software and use them to provision a solution to take capacity out and better manage billing and software licensing," he said. "These are all complex processes. With a reference architecture, I can have a good place to start. Can I take out my HP storage and replace it with NetApp? Yes, I can. But I lose some configuration capability."

NEXT: Choose Your Dance Partner

Choose Your Dance Partner

There are several types of converged infrastructures from which to choose.

The first type of solution is one fully configured by a vendor to a customer's requirements, typically as determined by the solution provider, and then drop-shipped to the customer site.

HP is widely credited as being the pioneer of the idea of converged infrastructure. But among big-name IT vendors, the main example of a fully configured system is the Vblock from VCE, a joint venture of EMC, Cisco and VMware. VCE assembles the Vblock solutions from EMC storage, Cisco Unified Computing System servers and networking, and VMware virtualization technology to order before shipping to the customer.

At the other end of the fully configured converged infrastructure solutions are those from a number of startups such as Westborough, Mass.-based Simplivity and San Jose, Calif.-based Nutanix, which use software to define the compute, storage, and/or networking functions, all of which are run on industry-standard server hardware.

Also included in this category is Oracle's Engineered Systems, including the Exadata database platform and the Exalogic enterprise application platform. These are fully configured with both the hardware and the specific software application.

The second type of converged infrastructure solution is the reference architecture in which all the server, storage, networking or other resources are specified as a "blueprint" that solution providers can follow to build solutions certified by the vendor or vendors to specific customer requirements such as hosting a certain number of virtual machines or providing a required number of seats for a specific application.

This includes reference architectures built using components from a single vendor such as HP, IBM or Dell.

Other reference architectures are configured using components from multiple vendors. These include the FlexPod, built using NetApp storage and Cisco UCS servers and networking; VSPEX, built using EMC storage and Cisco UCS servers and networking; and Hitachi Unified Compute Platform, built using Hitachi Data Systems storage and either Hitachi or Cisco UCS servers and Brocade or Cisco networking.

Converged Infrastructure Vs. The Best-Of-Breed Approach

Converged infrastructure has become a much more flexible solution than the traditional "best-of-breed" approach under which solution providers pick the best hardware and software from multiple vendors to solve a problem, Enterprise Computing Solutions' Butler said.

"Best-of-breed gives great technology," he said. "But now you are dealing with individual personalities from all the products. Now I need to figure out how to manage it. With converged infrastructures, I get deployment from day one."

A properly deployed converged infrastructure based on a sound reference architecture prevents issues caused when adding multivendor hardware to a complex solution, Butler said.

For instance, he said, a customer with a converged infrastructure who needs a development environment for Oracle can drag and drop an entry-level, midtier or high-end infrastructure to access all the dedicated hardware and software required. "But the second you start swapping in third-party pieces, you start introducing limitations," he said.

At the heart of converged infrastructure is orchestration software with templates that can be set up ahead of time to quickly drop in new hardware and software resources as needed, Butler said.

"It can see if you need a real server or a VMware or Hyper-V virtual machine, what storage, what network bandwidth you need," he said. "If you buy an all-HP solution, I know it works together, and you get the best practices. If you want to replace an HP module with something from another vendor, it might work, but you don't have all the functions."

A solution provider such as eGroup can deliver solutions from fully converged and integrated Vblocks to the hybrid VSPEX to best-in-breed solutions, all based upon the customer's unique requirements, Flowers said.

"As all the technologies continue to evolve, cable specifications change, connectivity speeds increase, and virtualization adoption further increases, converged infrastructures offer some incredible administrative benefits while also avoiding continuous and costly cable infrastructure upgrades," he said. "Focuses are shifting more toward deeper operational efficiencies and automation of the infrastructure, and so the converged infrastructure push will surely continue in the years to come."

David Gottesman, principal at Gottesman Consulting, a San Francisco-based consulting firm and solution provider, said his company is not a fan of a best-of-breed product set if it can offer a converged solution that is supported with a single phone call/email.

"Every solution we prescribe is done with and eye on operational ease of use and simple supportability," Gottesman said.

With our eye on the vendors in the converged infrastructure space, here is a roundup of the major players' recent moves and how their respective channel partners are seeing the market shake out.

NEXT: Cisco: UCS Helps Partners Make The Leap

Cisco: UCS Helps Partners Make The Leap

Cisco staked its claim in the data center and converged infrastructure space with its 2009 launch of UCS, a bundled solution bringing together networking, servers, storage and virtualization under a single management console.

For the channel, Cisco sees UCS—and the ability to help move clients to converged infrastructures, in general—as a major differentiator, particularly for partners that can break down the vendor and technology silos across the compute, storage and virtualization landscapes.

"If you look at our channel community that works with us today, and with UCS, in particular … they also have relationships with storage vendors, virtualization vendors, software vendors, and [so on]," said John Growdon, senior director of data center sales, worldwide channels, at Cisco, San Jose, Calif. "It's bringing together those silos—bringing together the compute, the virtualization, the storage, the infrastructure. This has been our channel strategy for the past five years as we have gotten into this."

Kent MacDonald, vice president of converged infrastructure and network services at Long View Systems, a solution provider based in Calgary, Alberta, shares Growdon's belief. Long View's rich heritage in working up and down the data center stack—and partnering with vendors including EMC, Cisco, NetApp and VCE to do so—has really helped propel its converged infrastructure business, MacDonald said.

"We have been in the networking, storage, virtualization and compute game really since day one," he told CRN. "All the elements of converged infrastructure are in our DNA."

According to MacDonald, not only has Long View's UCS business been very successful in and of itself, but UCS has become a key driver behind customers also choosing to embrace VCE's Vblock or NetApp's FlexPod converged infrastructure offerings, both of which are also sold by Long View.

"I would say 80 [percent] to 90 percent of our UCS sales have been selling into a converged infrastructure architecture with FlexPod or part of a VCE Vblock," MacDonald said.

MacDonald noted that UCS, as a stand-alone product, still serves as a major "differentiator" to legacy server architectures. But when customers choose to take the leap to unified compute with UCS, MacDonald said most of them ultimately decide to go "all in" with a converged data center infrastructure.

"When you are making that transition to unified compute from what you've had formerly, we are really selling a customer on, ’When you make that transition, go all in and go for the converged infrastructure stack, and don't necessarily do it as a phased scenario,' " MacDonald said.

It's become clear that data center convergence is a priority for customers, MacDonald said. Converged infrastructure sales are expected to drive about 15 percent to 20 percent of Long View's overall revenue this year, with that figure expected to double or more over the next year or two.

To best meet this rise, Long View decided to create a dedicated converged infrastructure business unit in October 2012, which MacDonald now heads.

"I think it was important for us to put our investment in, and to say, ’We are making investments, and we are creating this alignment of skill sets to go to market effectively,' " MacDonald said. "So, really, I think it's just a validation or confirmation of where the market is going to go."

Cisco, for its part, is also placing its bets on infrastructure convergence. Its UCS business has flourished into one that's valued at roughly $2 billion, growth that Cisco attributes, at least in part, to the significant ROI seen by customers who take the converged infrastructure leap. Cisco said integrated data center infrastructures, according to customer studies, have been found to reduce provisioning times and data center cabling by a whopping 80 percent, and reduce ongoing system management costs by as much as 59 percent. — Kristin Bent

NEXT: Dell: Acquisitions Are The Building Blocks

Dell: Acquisitions Are The Building Blocks

Dell may be a relative newcomer to the converged infrastructure space, but the company has caught up quickly thanks to a series of acquisitions made over the past few years.

From EqualLogic to Compellent to Force10 Networks to Quest Software, among others, Dell has purchased more than a dozen companies to upgrade its converged infrastructure portfolio to include storage, networking, software and more.

"If you're going to build a system, you need your own components to build it and write it and optimize it. You have to have compute. That's the central universe," said Andy Rhodes, executive director of Dell's converged solutions. "We didn't own a huge amount of IP so we bought EqualLogic and Compellent. Then that's great, but you need to bring it together through a fabric. We had PowerConnect but that's not enough to shift data traffic, so we bought Force10. Now we have three legs of the stool in core hardware IT. You look at the convergence of those three things and it starts to come together."

The fourth leg of the stool came last November, when Dell acquired Gale Technologies, said Rhodes.

Gale gave Dell, Round Rock, Texas, an infrastructure automation software developer whose solutions help customers focus on converged and enterprise workloads, he said. After Gale, Dell rebranded its converged portfolio to Active Infrastructure from vStart and redoubled efforts to get more business with solution providers and customers.

"We really needed a manager across everything. That was the acquisition of Gale. Gale allows you to go off and deeply virtualize clusters and workloads across storage networking. You can go off and do deployment but configure the hardware in the right sequence," Rhodes said.

John DeRocker, senior vice president of worldwide channels at Stratos Management Systems, a Westlake, Texas-based solution provider, said Dell's converged infrastructure portfolio now stands up to any competitor.

"They have a good shot just because they have best-of-breed across different manufacturers," DeRocker said. "The advantage Dell has is if the customer owns some [Dell] products and part of the portfolio, then it's just a bolt-on with the remainder of the products versus a forklift change. They have a good play."

Michael Butz Sr., president and CEO of UltraLevel, Detroit, was a Dell customer for many years but became a partner after Dell acquired EqualLogic. Since then, many of the acquisitions Dell has made were companies that UltraLevel already was partnering with.

"When they were doing their surge of acquisitions and I would do a keynote, I'd get to our strategic partner slide and joke that it was shrinking because of Dell. We were a Wyse partner. We were a Force10 partner. We were a SonicWall partner," Butz said. "I'd joke that either I'm pretty smart or Michael Dell is pretty stupid because we keep picking the same technology companies out there."

Kidding aside, Butz said Dell's Active Infrastructure solution has helped him win business.

"From PowerEdge servers to SonicWall to Force10 and Powerconnect to EqualLogic and Compellent, we have been able to deliver full data center stacks to our customers and give them a lot of value. In many cases, Dell has the superior product and a lower price," Butz said. "To be quite frank, it's more than we expected."

Looking forward, Butz expects Dell Active Infrastructure to mature and improve.

"It's been labeled version 7.0 but for all intents and purposes, let's face it, it's the first iteration of Gale software with Dell hardware. To me, it's a 1.0 solution, but it's a solid 1.0 solution," Butz said.

"Dell has done an excellent job making it an attractive business model to pursue. We're approached by EMC, IBM, HP all the time.

We compare the opportunity and average potential margins and how they treat deal registration programs and it's not even close," he said.

Dell's Rhodes acknowledges that Active Infrastructure is in a "ramp-up stage" and said Dell is working on solutions that don't require major overhauls by customers.

"What we've found is, as much as customers might like to throw away their legacy equipment, they can't always do that. The move to converged infrastructure isn't always a greenfield deployment. For some customers, they've made decisions and are standardized on NetApp, or they just bought an EMC array. They've got to get ROI but love the thought of a single management system across three entities to deploy services and workloads and applications. The inherent nature of the Gale product allows vast heterogeneous support. We allow customers to protect their legacy and support non-Dell storage and network stacks." — Scott Campbell

NEXT: EMC Making The Point With VSPEX

EMC Making The Point With VSPEX

So while HP pioneered the idea of converged infrastructure it was EMC, along with partner Cisco, that turned the concept into a well-known driver of data center infrastructures. EMC in the late 2000s was the largest storage vendor, but unlike its competition had no server offering. It collaborated in 2009 with top networking vendor Cisco, which had just introduced a blade server line, to build a reference architecture that included both their companies' technology along with virtualization technology from VMware.

Instead of publishing their reference architecture, however, the three instead formed a joint venture, eventually named VCE, to develop Vblock converged solutions that were fully configured and tested before shipping to customer sites.

After EMC archrival NetApp countered VCE with its FlexPod reference architecture, EMC fought back with VSPEX. With VSPEX, EMC published a reference architecture to show solution providers how to integrate the vendors' technology into a single managed offering.

VSPEX originally included EMC's VNX and VNXe SMB storage arrays and Cisco's UCS servers and networking technology. However, EMC is keeping its partner options open. Networking technology from Cisco rival Brocade is in some VSPEX blueprints, and EMC has signed an agreement with Lenovo to eventually make that company's servers part of an entry-level series of VSPEX blueprints.

EMC, Hopkinton, Mass., also updated VSPEX to include more of its storage technology, including its Avamar and Data Domain deduplication technologies.

EMC has signed up several distributors as well, including Arrow, Ingram Micro, Tech Data and Avnet, to do the actual integration of the VSPEX solution on solution providers' behalf before drop-shipping it directly to customer sites.

Solution provider eGroup works with both VCE Vblocks and VSPEX, said Flowers, adding that the EMC VSPEX Proven Infrastructure offering provides an alternative to a fully integrated VCE Vblock.

"VSPEX serves as a solution validation point for customers who choose their own server platforms but still want to ensure everything functions properly for their intended use case and workload on EMC storage," Flowers said.

VSPEX helps eGroup ensure EMC storage array code levels are supported by the server and virtualization components before it is deployed or before an update is rolled out, Flowers said. "This simplifies the IT environment, as it prevents the customer administrators from having to do all the legwork themselves to validate every component independently and brings further value to our solution and service offerings," he said. Customers may not always know what VSPEX is, but they know who EMC, Cisco and VMware are, said David Gottesman, principal of San Francisco-based Gottesman Consulting, which is partner to both EMC and VCE.

"A box-pusher will sell a box," Gottesman said. "But for my customers, we start the conversation understanding their skill sets, and then I may come back to them and say this looks like something for EMC, Cisco and VMware. And then I say I have a converged infrastructure in mind—here is what it is; here's how it scales over time." — Joseph F. Kovar

NEXT: HP: Innovation, Stepped-Up Strategy

HP: Innovation, Stepped-Up Strategy

Kelly Ireland, founder and CEO of CB Technologies, a Westminster, Calif.-based HP enterprise partner, scoffs at the stampede into the converged infrastructure market by HP competitors.

HP, she agrees, pioneered converged infrastructure solutions years ago. But now she sees HP stepping up converged infrastructure research and development to extend its lead with new innovative converged offerings.

That's just one reason why CB Technologies is in the midst of a major HP converged infrastructure offensive, getting new certifications for its engineering teams. Ireland envisions a huge sales opportunity around HP converged infrastructure solutions thanks in large part to HP CEO Meg Whitman's big bet on innovative new technology such as HP's Moonshot servers.

"When Meg came in she recommitted to research and development and innovation," said Ireland. "HP had strayed away from that for a while. Now we are seeing new HP innovation. I think Meg has HP back on track. We are awed by the new products. And we are very optimistic about the HP converged infrastructure sales opportunity."

One sign of HP's stepped-up converged infrastructure push: the creation just four weeks ago of an HP Converged Infrastructure Group with dedicated resources to create converged offerings around big data, social computing and the cloud. The new group is working on "converged application appliances," including systems based on SAP HANA, Apache Hadoop, HP Vertica and HP Cloud System.

Just two weeks ago, HP, Palo Alto, Calif., launched a line of HP prepackaged appliances called AppSystems. AppSystems, according to the company, are based on HP ProLiant servers and combine SAP's HANA in-memory database with SAP's Business Suite ERP applications. The HP AppSystems appliances will be sold through HP channel partners, which can offer services such as data migration and system updates around the devices.

Keith Norbie, principal at Norbie Enterprises, a Minneapolis-based technology consulting firm, said that HP has not gotten the credit it deserves for its converged infrastructure leadership. "HP is underappreciated and undernoticed with its converged infrastructure solutions," he said.

"HP ProLiant is still the top server platform, and the heartbeat of any converged infrastructure solution is a strong server platform. That is the core of converged infrastructure. And don't forget about HP's network and storage leadership. They have done the hard work of pre-integrating those solutions in a way that is as consumable as anyone else's converged infrastructure solutions."

A top executive for a large national HP and Cisco partner, who did not want to be identified, said he sees HP converged infrastructure sales doubling over the next year.

"We are investing the resources to partner with HP on converged infrastructure in the data center," said the executive. "HP is the leader in servers and compute, and the converged infrastructure market is starting to pick up. Three years from now the majority of server sales will be converged infrastructure. That's where the market is going. The fundamentals of how the data center operates are changing with virtualization and disaster recovery. What is converging is the definition of a server, storage device and networking all coming together where you have everything in a single box. That's the way customers want to buy." — Steven Burke

NEXT: IBM: The PureSystem Push

IBM: The PureSystem Push

IBM launched its PureSystem converged infrastructure servers a little more than a year ago, combining IBM hardware and software,including compute (either x86 or IBM Power processors), storage, networking and systems management technologies. The systems are based on an architecture called the IBM Flex System for managing hybrid cloud infrastructure environments.

IBM executives at the PartnerWorld Leadership conference in February said the Armonk, N.Y., company sold 2,300 PureSystems in 2012.

Only about one-quarter of potential customers specifically inquire about converged infrastructure systems, said Mark Wyllie, CEO of Flagship Solutions Group, a Boca Raton, Fla.-based solution provider and IBM partner. Instead they face IT or business problems for which converged systems are a potential solution.

One prospect Flagship is currently working with, for example, is running out of physical space in its data center and is looking to consolidate the Intel- and IBM-Power-based systems that have proliferated, Wyllie said.

Implementing a converged system is an IT architectural decision — not just adding another server or storage rack, Wyllie said. That can mean longer sales cycles. But it can also tie the customer closer to the technology and foster a long-term relationship.

"We're trying to drive the demand by setting the [IT] architectural discussion," Wyllie said. "It gives us a leg up in terms of [selling] additional capacity and future upgrades."

The PureSystem management console, which provides a single interface for managing multiple server platforms and storage systems, is "strategic" and a big selling point, he added.

Flagship has verbal commitments from two customers for PureSystems and another half-dozen in the works, Wyllie said. "It's early stage, but moving," he said.

Sirius Computer Solutions, a San Antonio-based IBM Premier Business Partner, also has high expectations for its IBM PureSystem business. "I think this has accelerated more than we had anticipated," said Mike Fischer, vice president of sales and alliances, noting in an interview the amount of interest from customers. "So we're all in."

"We've seen continued growth in the pipeline," he said, disclosing only that the company has sold "multiple" IBM PureSystem units so far and the company has a "substantial" pipeline for the current quarter and the rest of the year.

Sirius is primarily seeing interest from existing customers with x86-based System x and IBM BladeCenter servers who are looking to upgrade and consolidate those servers. Offering system implementation, consolidation and virtualization services are the big opportunities, Fischer said. "More than 80 percent of these systems are virtualized," he added.

Sirius has developed "prebuilt statements of work"—fixed-cost/fixed-price bids—for IBM PureSystem projects, Fischer said.

The solution provider has more than 80 sales and technical people with certifications to work with Pure Systems, and 20 of them are devoted exclusively to the product. "We fundamentally committed to this product line prior to its announcement," Fischer said, saying the company was the first to get PureSystem implementation authorization from IBM. Sirius also has PureSystems in five data centers. But Fischer couldn't quantify the company's overall investment.

Fischer declined to disclose financial details about PureSystems sales, including margin guarantees and other financial incentives IBM has offered. But he said: "IBM has done a really good job in putting the incentives out there for the channel." — Rick Whiting

NEXT: NetApp: FlexPod On Fire

NetApp: FlexPod On Fire

NetApp in late 2010 unveiled FlexPod, the first multivendor-branded reference architecture for converged infrastructure, in response to VCE's Vblock preconfigured converged infrastructure offering.

FlexPod is a blueprint for building converged infrastructures using NetApp storage, Cisco UCS servers and networking, and VMware or Microsoft virtualization technology.

When first introduced, NetApp and Cisco said the "FlexPod" moniker also could be used to refer to preinstalled solutions that included the right mix of components. That led rivals EMC and VCE to question out loud how serious that reference architecture was.

They're not questioning it anymore. Tom Georgens, president and CEO of Sunnyvale, Calif.-based NetApp, in February said more than 700 channel partners had sold solutions based on the FlexPod reference architecture to 2,100-plus customers across more than 35 countries.

NetApp and Cisco have continually revised the FlexPod architecture. Late last year, they introduced an entry-level version, ExpressPod, targeted at businesses with up to 500 users. This year they introduced flash-based storage capabilities as well as the ability to configure FlexPod with up to 10,000 servers compared with a previous limit of 160 servers.

NetApp and Cisco also rolled out several FlexPod reference architectures targeting specific applications including Oracle Real Application Cluster and SAP.

In addition, the two companies offer a combined FlexPod Premium Partner Framework channel program to give solution providers a single channel support system.

Solution providers that prefer to focus more on selling and less on configuration can work with Avnet and have the distributor integrate the solution. Avnet then ships it to the customer site where the solution provider can do the final deployment.

NetApp and Cisco have a very easy-to-work-with partnership when it comes to FlexPod, said Scott Miller, director of data center at solution provider World Wide Technology, with corporate headquarters in St. Louis

"The two work very well together," Miller said. "Their sales account teams are not afraid to engage each other."

Selling Cisco UCS technology a la carte is difficult, Miller said. "But if we do it as part of a FlexPod, it's easier for UCS to blossom and provide the full benefits to customers."

The FlexPod reference configurations are all based on Cisco Verified Designs, or CVDs, Miller said. "There's nothing missing," he said. "The vendors are looking at more application-specific designs, but have a good selection now. At any rate, the CVDs have guidelines for the cloud or Exchange, and get you in the ballpark in regard to budget."

Solution provider CMT offers FlexPod-based converged infrastructure both as an on-premise solution and as a cloud solution in conjunction with PeakColo, a Denver-based provider of white-label cloud services to channel partners.

CMT's Mueller said PeakColo uses its own FlexPod infrastructure to provide a service that CMT then offers to customers for a monthly fee.

"This lets customers investing in FlexPod locally to have the same experience in the cloud," he said. "This lets them expand to the cloud without having to invest in more blades and storage, and lets them use the same management tools."

Having a relationship with PeakColo helps CMT's NetApp relationship, Mueller said. "When we take customers to the cloud, NetApp knows it's going on NetApp infrastructure," he said.

CMT also sells the ExpressPod. "The price point is low enough that, for $50,00 to $70,000, smaller companies can have the beginnings of a private cloud," Mueller said. "And, as they grow, they can add more NetApp storage and Cisco servers. ExpressPod works great for customers who want to stick their toes in the cloud, but who are not ready to go with a full FlexPod." — Joseph F. Kovar

NEXT: Oracle: Banking On Engineered Systems

Oracle: Banking On Engineered Systems

Oracle, of course, once sold only software. But the company became a hardware player when it bought Sun Microsystems in 2010. Since then, Oracle, Redwood Shores, Calif., has launched a line of converged infrastructure products called Engineered Systems that combine server, storage, software and networking components. The line includes the Oracle Database Appliance, sold largely through the channel, as well as high-end systems such as the Exadata Database Machine, the Exalogic Elastic Cloud and the Big Data Appliance.

Oracle Platinum partner Enkitec is one of the top Exadata partners, with some 200 installations to its credit.

"It's skyrocketing for us," said James Garner, sales vice president at Irving, Texas-based Enkitec. Most customers are either consolidating many smaller servers or are looking for systems with more performance to replace servers that no longer keep up with processing demands.

The company resells Exadata systems and offers a range of services around them, including implementation and configuration work, data migration and database-tuning services, and total-cost-of-ownership analysis and other consulting services. While Garner said his company makes good margins on Exadata (he didn't disclose details), it resells only about 30 percent of the systems it provides services for, with customers buying the rest directly from Oracle.

Enkitec did make some big, up-front investments in that it acquired three Exadata systems, an Oracle Database Appliance and other Oracle Engineered Systems to run in its lab for development, testing and demonstration purposes. The company also had to get its sales and technical consultants certified under Oracle's Partner Network Specialized Program—not just on specific products such as Exadata, but in practices such as data warehousing.

The situation is quite different for Cloud Creek Systems, also an Oracle Platinum partner. Cloud Creek, Westlake Village, Calif., only sells the Oracle Database Appliance and Executive Vice President Rhos Dyke said the money isn't in the system and its tight margins.

"I make no money, zero, on selling the equipment," he said in an interview. "The box is a vehicle. You know the razor/razor blades model? You know how Hewlett-Packard makes money on printers with ink cartridges? It's the same model."

Cloud Creek focuses on selling software and services around the Oracle Database Appliance, including database upgrades and tuning. "There's always a service component to it," he said. Many customers, for example, are still on Oracle 9i or 10g and want to move to the current 11g or get ready for the upcoming 12c release, he said.

Oracle Database Appliances are sometimes installed in a Real Application Cluster environment and need to be deployed correctly to take advantage of RAC's failover capabilities, Dyke said. And the Oracle Database Appliance's high performance often leads customers to consider bigger projects such as assembling a data warehouse. "All these other capabilities become possible," he said.

Selling converged infrastructure systems can be challenging. Prospects don't call up asking for a converged infrastructure server, Dyke said, they call because they want to cut costs or they have a business problem to solve. Oracle's Engineered Systems, with their vertical integration and reduced licensing costs, play into those needs. "The challenge is making people understand that you can do more for less," he said.

Some customers like the vertical-integration characteristics that eliminate the need for multiple vendors, Dyke said. But some are uneasy about vendor lock-in—committing to one vendor for so many IT components in one package.

Cloud Creek expects to make about 80 sales this year with at least 20 of those Oracle Engineered Systems—either Oracle Database Appliance or Exadata platform-based packages, Dyke said. "That order volume share will likely increase and grow to 50 percent of our transactions," he added. And he said Engineered System sales generally have a value 10 times or more than a typical transaction.

"Engineered Systems work [new and add-on sales] represented 50 percent of our total revenue in 2011 and 2012, and may grow to 70 percent in 2013," Dyke said in a follow-up email. "Oracle's converged or integrated Engineered Systems enable us to sell CPUs, storage, OS, database, database tools and extensions, data warehouse and BI applications—data storage, retrieval and analysis being the largest driver for investing in this technology—and provide the professional services [consulting] support to deploy and roll it all out."

New York-based Cintra, also an Oracle Platinum partner, sells both the Oracle Database Appliance—25 in the first 18 months since its debut and 20 in the two months since the X3-2 generation launched—and Exadata systems.

As with Enkitec and Cloud Creek, the key to selling Oracle's Engineered Systems is combining them with software, deployment services and management services, said Cintra CTO Adbul Sheikh in an interview. "The key thing is we're wrapping a complete solution, a complete bundle, around that appliance," he said of the Oracle Database Appliance. "We make a small margin on the hardware."

Because Exadata is such a "disruptive technology" that departs from how IT departments are usually run, Sheikh said it can have a "high cost of sale" in that it requires a lot of customer education during the sales process. — Rick Whiting

NEXT: VCE: Vblock's High Availability, Low TCO

VCE: Vblock's High Availability, Low TCO

Solution providers say there's a simple reason that converged infrastructure from VCE is on a $1 billion annual sales run rate with more than 1,000 Vblock systems sold: high availability and lower total cost of ownership in the most demanding data centers from financial services firms to hospitals.

"It's all about availability and performance," said eGroup's Flowers. "Customers appreciate the overall stability of the platform, which is locked down."

Flowers said VBlock has been particularly strong in virtualized desktop and large-scale Microsoft Exchange environments. "Those are environments that simply can't go down," he said.

Richardson, Texas-based VCE was one of the early proponents of converged infrastructure, entering the market more than three years ago.

Jamie Shepard, regional vice president North America for Lumenate, a Dallas-based national CRN Solution Provider 500 power, said VCE momentum is picking up as a result of a stepped-up focus on C-level executives from CEOs to chief marketing officers, along with a big kick from VCE's new Vision Intelligent Operations software aimed at providing rapid provisioning and management of cloud infrastructure with new APIs.

Shepard predicts Vblock sales will shoot up some 150 percent in the next year. "We're very bullish on VCE," he said. "They were on to this converged infrastructure earlier than anybody. VCE has matured and the converged infrastructure market opportunity is accelerating very quickly."

Shepard said Lumenate is seeing a "significant increase" in converged infrastructure sales opportunities. "We had more [converged infrastructure] RFPs in the first six months of this year than in the last 18 months," he said.

World Wide Technology, the $5 billion CRN Solution Provider 500 powerhouse, is seeing strong traction of Vblocks not only in large enterprise and federal agencies, but also in midmarket companies where VCE has done a good job in the past six months expanding the Vblock product line to appeal to a broader market, said Bob Olwig, vice president of business development and innovation.

"It's not surprising that converged infrastructure is resonating with both small and large enterprises," said Olwig. "It's about speed to deployment, simplifying and managing a converged IT environment rather than silos of storage, virtualization and compute."

One large World Wide Technology Vblock customer quickly followed its first Vblock purchase with multiple buys because of the "simplicity and ease of management," said Olwig. "Vblock has freed up time so they can put more effort and resources into custom applications and the things that are driving their business versus just keeping the lights on with infrastructure."

Olwig credits VCE CEO Praveen Akkiraju, a 19-year Cisco veteran who took the helm last July, with driving significant improvements in VCE's channel sales effort. "Praveen has helped make VCE overall a more channel-oriented provider," said Olwig. "We appreciate that. We knew him when he was a business unit vice president at Cisco. He is a strong leader and has carried that over to VCE." — Steven Burke