You see, what vendors typically do is build solutions they can execute and then give them to the channel to sell as well. The problem with this more typical approach is that the channel is always at a disadvantage against the direct sales team. And the solution is also locked down so much that the channel has to break the solution to add value.
VSPEX is very different, and incredibly innovative. I doubt it could even be created in most companies. But EMC isn’t like most companies. They drive customer loyalty in a manner that allows the firm to do things no other enterprise provider has yet done.
When you are talking about a major distributor like an Ingram Micro, they have limited services capability but great reach, particularly into the mid-market where their economies of scale make them more competitive than direct sales forces.
However, they’re at arm’s length from the technology OEM and that means they’re always at a disadvantage, because an OEM designs solutions for its direct sales force. This means they are highly tied to the OEM’s products, or so locked down that the channel partner can’t make any changes.
This often makes the channel partner feel redundant, largely because the value they’re providing is simply sales and minimal service. In addition, their solutions capability is limited because they can’t afford labs or extensive testing facilities (it’s what helps make them cost effective). So when competing against a direct sales force they have a huge disadvantage in terms of quality assurance.
EMC designed VSPEX to specifically address these issues and with this offering is treating the channel as the customer. EMC has pulled together a variety of vendors around a common platform and wrapped it with an EMC quality assurance process to assure the outcome.
This means the channel can sell VSPEX as their own product – they make the selections between partners, and they can point to EMC to assure enterprise-level quality for the result.
This also means VSPEX, while it should maintain a high level of quality throughout, will also be different from each channel partner, and that should allow them to differentiate around their individual core strengths.
This is a derivative of their earlier VCE joint venture, which was designed to address the large-scale enterprise market. VCE was uniquely designed to appeal to very large enterprises and was also based on an impressive partnership. VCE has turned out to be very successful, and it, too, was a unique way to address a market that EMC alone was having trouble reaching.
It is doubtful VSPEX would exist had it not been for the creativity and success that surrounded VCE.
Wrapping Up: EMC’s Advantage
Technology is at the core of most companies but the ones that truly stand out are those that can find creativity in other parts of the sales process. Microsoft got creative in discovering that OEMs couldn’t do software well and created a company that did outsourced software. Apple discovered that retailers weren’t great at showcasing technology and first introduced the store within a store concept, and then launched the most successful technology OEM store chain that has ever existed.
EMC is showing a similar level of creativity, first in creating a company, VCE, that can go head to head with the IBM’s and HP’s of the world (without itself having to become an umbrella company). And, too, now with VSPEX creating a custom solution package for channel partners designed to make them more successful, which will likely favor VSPEX over their other choices as a result.
Thinking out of the box is what created the technology market. It is always a thrill to see one of the more established companies do this. Nice job EMC, nice job!