The Dynamics and Risks of Purchasing Converged Infrastructure

Spend Matters welcomes another guest post from Jon Winsett of NPI, a spend management consultancy focused on eliminating overspending on IT, telecom, and shipping.

Infrastructure sprawl is one of enterprise IT’s greatest challenges. The costs and manpower required to integrate, update, and upgrade different components across the IT architecture have spiraled out of control. As a result, many CIOs are turning to converged infrastructure solutions that combine best-of-breed technology and managed services to alleviate the burden.

VCE, formed by Cisco and EMC with investments from VMware and Intel, is a leader in the converged infrastructure space. VCE currently owns 57 percent of the market and claims a growth rate of 50 percent a year. Yet, for all the simplification that VCE brings to IT infrastructure management, the sourcing event for customers is anything but simple. The price tag is high and the contracting dynamics can be hard to decipher.

If your business is in the market for a new VCE investment or renewal, here are a few things to keep in mind.

Determine if VCE’s converged infrastructure is a fit for your enterprise IT budget and philosophy. Experts estimate only 25 percent of businesses are ideally suited for a converged infrastructure. While nearly every CIO wants to reduce the burden of IT management, only a few are ready to make the leap to a high-performance storage, networking, and virtualization solution that is integrated, optimized, and maintained directly by VCE. It’s imperative to evaluate the hard and soft dollar savings in comparison to the short and long-term costs of moving to a converged infrastructure environment.

Navigate the political dynamics within VCE’s sales approach. VMware, Cisco, and EMC represent three of the industry’s largest superpowers – and, sometimes, their competitive spirit gets the best of them. Despite the joint venture, each vendor is vying to get the biggest chunk of client revenue. This leads to even less visibility into fair market value pricing, terms, and conditions. Be prepared to benchmark pricing and discounts.

Optimize Vblock usage. Many businesses invest heavily in VCE’s Vblocks without understanding how to provision for their unique IT environment. Develop a strategy for how you will eliminate under- and over-provisioning to ensure you get the most value out of your VCE investment.

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