EMC will have to address Virtustream gaps in APAC

Virtustream is the centrepiece of EMC's public cloud story as they prepare to merge with Dell, but the lack of provisions in Asia-Pacific will first need to be resolved.
Written by Eileen Yu, Senior Contributing Editor

LAS VEGAS, USA--EMC has pushed Virtustream to the forefront of its public and hybrid cloud offerings, but the lack of provisions in Asia-Pacific is a critical issue that will need to be addressed, among others in the region.

The storage vendor launched Virtustream Storage Cloud at its EMC World 2016 conference here this week, touting the new offering as a "hyper-scale storage platform" designed to host mission-critical applications and data on the cloud. Its core architecture was built to provide resiliency and performance for complex business systems, such as SAP and other ERP applications,

EMC had acquired Virtustream in May 2015 and in October announced plans to jointly form a new cloud services business with VMware, which was to integrate the platform into its cloud portfolio and financials. VMware's stock, however, dipped sharply following the announcement as its shareholders baulked at the likelihood that Virtustream's expected losses from its global expansion plans would pull down VMware's earnings.

Two months later, in December, it dropped out of the joint venture and left EMC to work alone on developing Virtustream's future and, eventually, its launch this week.

At the conference, EMC executives likened Virtustream Storage Cloud to Apple iCloud, providing the backend cloud service for the vendor's storage products in the same way iCloud supports services delivered to Apple devices and improves overall user experience.

"Any modern data centre must extend seamlessly to the cloud, which is why we're making cloud connectivity and cloud tiering an inherent capability of all of our products," said Jeremy Burton, EMC's president of products and marketing.

Customers could choose to deploy Virtustream Storage Cloud as an extension of their private or managed cloud hosted either by EMC or a third-party public cloud operator, Burton said. And these, he added, would be delivered with the same resiliency and performance that Virtustream was designed specifically to provide.

The public cloud platform, however, currently lacked such support in the Asia-Pacific region.

Naveen Chhabra, Forrester's senior analyst for infrastructure and operations, noted that while Virtustream offered services in the Americas region, such provisions were not extended to Asia-Pacific.

Asked about the gap, Paul Henaghan, EMC's Southeast Asia president, acknowledged this was something the company would have to work out and, in fact, had started to do so. He told ZDNet that an executive was just recently appointed to lead the Virtustream business in Asia-Pacific and Japan

He added that Virtustream software features were offered in some markets in the region, such as Vietnam and Japan, but while it currently operated data centres in other region, it did not run any physical assets in Asia-Pacific.

The vendor would need to decide whether to set up its own facilities or establish partnerships with data centre operators and telcos, similar to its current relationships with Dimension Data and PT Telkom Indonesia, Henaghan said.

He added that he would be working with the new hire to discuss plans on how to bring Virtustream to market in the region. Both executives were based in Singapore.

He noted that the efforts to develop the business in Asia-Pacific, likely to begin first in Australia, would kick off once expansion plans in the EMEA region had been fully addressed.

"We can't physically be on the ground in every market, whether it's EMC or through our federation," Henaghan said, adding that the company would need to find the right balance to avoid spreading itself too thin.

There are, however, still questions that have yet to be clearly addressed with EMC's impending merger with Dell.

Chhabra pointed to VMware and the VCE, EMC's converged infrastructure business, both of which involvement post-merger remained unclear, "Would the customers get continued support for their investment in [VCE's] Vblock? Or would they have to move into the Dell converged infrastructure stack?" the Forrester analyst probed.

He added that Dell's position on VMware's existing operational independence also had not been properly addressed. He noted that there were concerns among customers who believed VMware should retain discretionary independence to define its roadmap, and not be impacted "by the mothership strategy and direction".

From a growth perspective, though, Chhabra said Dell would have to work to reduce VMware's customer churn from companies moving to other virtualisation platform players as well as to public cloud providers.

"[VMware's] vCloud Air as a partner program has not achieved significant success in Asia-Pacific. If executed well, this could be a growth lever and can support the 'hybrid cloud state' the enterprises are in today," the analyst said.

According to Henaghan, VMware would remain independent following the completion of the acquisition.

The Dell-EMC merger was expected to be finalised in October 2016 pending a final set of regulatory approval, specifically from China, and shareholders' vote.

During his keynote at the conference, Dell Chairman and CEO Michael Dell reiterated EMC CEO Joe Tucci's recent comments that the transaction was "on track" according to its original timeline and terms. Integration plans also were going well, Dell said.

Following the completion of the merger, the combined entity would be renamed Dell Technologies, comprising several brands, including Dell, EMC Information Infrastructure, VMware, Pivotal, RSA, and Virtustream.

Its enterprise business and offerings would be branded Dell EMC, while its client business would be parked under the Dell brand.

Based in Singapore, Eileen Yu reported for ZDNet from EMC World 2016 in Las Vegas, USA, on the invitation of EMC.

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