Tucci Refutes Hurd, Spotlights EMC Partnerships

I extracted a couple notable takeaways from ChannelWeb’s interview with EMC CEO Joe Tucci.

First, it’s obvious that Mr. Tucci took offense to HP CEO Mark Hurd’s suggestion that Cisco and EMC derive pornographic margins from their product sales and will be decimated by HP’s lower-cost, lower-margin blitzkrieg.

Said Tucci of Hurd and his margin-inflected battle cry:

This is the guy that makes how much money?

EMC has 14,000 developers -engineers. Do you know how many do hardware? 300. So what are we? A software company. There is always great margins in software. So he’s got it wrong. And then fundamentally when you talk about the margins what does he make on (printing) ink. Give me a break.

Tucci was ticked, so he retorted that the margins EMC derives from storage are more defensible than those HP derives from printer ink. It might not have been checkmate, but it was an effective countermove.

The other takeaway I took from this interview was something Tucci suggested rather than said outright. It’s clear that while EMC has many technology partners, those partnerships are not created equal. There are firsts among equals, and Cisco remains at the head of EMC’s queue. Said the EMC head honcho:

Cisco is an EMC partner. Dell is an EMC partner. We are working very seamlessly. Obviously with Cisco what they bring to the party is their networking (technology and skills). They built a very innovative server and UCS (Unified Compute System) which combines server and unified networking.

Cisco also brings all the interconnected networking skills. So when you think of what you need in a stack we can also offer customers a complete horizontal stack.

Dell, on the other side, partners with us on the server side and we partner with them on the storage side.

It doesn’t take a semiotician to figure out that Cisco, as EMC partners go, is the top dog. Doubtless Dell is a valued server partner, but Cisco, as far as EMC is concerned, brings a full banquet to the customer’s table.

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Timing of HP ProCurve Exec’s Departure Prompts Questions

There’s probably a good story behind Karl Soderlund’s move from HP ProCurve, where he served as vice president and general manager for sales and marketing in the Americas, to his new post as senior vice president for worldwide sales and business development at Certeon, a virtualized WAN-optimized vendor.

But, if there is good story, Soderlund isn’t telling it.

Instead, in explaining his recent HP ProCurve decampment, which coincided with HP’s acquisition of 3Com, Soderlund offered the following anodyne rationale to Chad Berndtson of CRN:

“It was a professional decision for me to leave to pursue this opportunity, and it’s not a reflection on HP to leave,” Soderlund said in an interview with CRN Friday. “What compelled me to make the move was that with Certeon, what a differentiated technology they currently have. There’s a big need in the marketplace for it.”

Soderlund declined to provide details on when the moves were made to bring him over from HP, but he told Berndtson that Certeon had approached him.

Certeon is doing some interesting things in virtualized WAN optimization, and I’m sure that the company made Soderlund an attractive offer, replete with all sorts of bonuses, options, and other remunerative goodies.

Still, the move prompts questions. Was the timing of Soderlund’s departure just a coincidence, or is something else afoot within the group formerly known as HP ProCurve?

It isn’t just a matter for idle speculation. HP has indicated that it wants to usurp Cisco as king of the networking castle; its 3Com acquisition was billed as a significant move toward the realization of that grand ambition.

Successful integration of 3Com is required for HP to make market-share gains against Cisco. We knew overlap existed between 3Com’s and HP ProCurve’s product portfolios, and we also knew that HP ProCurve and 3Com personnel would be displaced as a result of the merger. It’s obviously in HP’s strategic interest for integration-related disruptions and distractions to be minimal.

An old refrain is that people, including employees, vote with their feet. Industry watchers will be looking to ascertain whether Soderlund’s move was anomalous — as a result of his receiving an offer too good to refuse — or a possible sign of disaffection within the HP Networking camp.

 

Will Electric Cars Redeem the Smart Grid’s Reputation?

Michael Kanellos of Greentech Media has written a commentary suggesting that electric vehicles might be the silver bullet that overcomes public apathy and outright antagonism toward smart meters and the smart grid.

After explaining that utilities in the United States and Australia have discovered that consumers aren’t enamored of the concept of demand response or of the higher electricity bills that frequently accompany smart-meter rollouts, Kannellos writes the following:

Even avid greenies seem blasé. In Canada, Toronto Hydro has scrutinized the behavior of around 115,000 customers on time-of-use plans. Has cut rate power at night goosed them to shift their behavior? “No. Not really,” said Toronto’s Karen France during a meeting at eMeter’s customer event.

Matt Golden, co-founder of retrofitter/software vendor Recurve, told me recently that the company has installed some energy management dashboards in the homes of clients. After two weeks, the frequency of interaction with the dashboards drops considerably. There have been success stories — customers surveyed in a test conducted by Silver Spring Networks and Oklahoma Gas and Electric were overwhelmingly surprised to learn about their rate of energy consumption — but people seem to be dozing off on what is a very important technology.

So what’s the problem? Utilities and building management outfits are asking people to change their behavior to save pennies. PG&E’s residential rates range from 11 to 49 cents a kilowatt hour. Will you alter your laundry schedule to save 37 cents? Toronto’s spread is 9.9 cents at peak and 4.4 at night.

Indeed, Kanellos identifies the problem, in Toronto and elsewhere. But the problem runs deeper than that, and Kanellos, to his credit, addresses it.

A little later in his commentary, Kanellos writes that consumers are wary of smart meters, and of the larger smart grid, because they suspect strongly that utilities will be the only parties to benefit from them. There’s some truth to that assessment, too, especially when one considers utilities’ operational costs savings: no more truck rolls for meter reading or for shutting down or activating service, plus the capacity to shave peak demand and to avoid having to add costly electricity-generation capacity.

For the consumer? Well, the benefits aren’t so clear, and certainly not as compelling. In some jurisdictions, careful consumer ministrations to smart meters mean only the difference between small increases in electricity bills and larger hikes.

Kanellos thinks electric cars will enhance the consumer appeal of the smart grid. To his way of thinking, electric cars are destined to be a huge hit with consumers, who will come to understand that the smart grid, including charging stations at home and out in the wider community, is essential to the sustenance of their new vehicles. At that point, Kanellos believes, consumers will grasp the importance and value of the smart grid, and they’ll buy into the program the utilities are pushing.

Maybe Kanellos is right. Perhaps electric vehicles will rescue the smart grid from public apathy and infamy. Then again, electric cars will not become ubiquitous overnight. A year from now, even a few years from now, not everybody will have one.

In the meantime, the braintrusts at utilities, regulators, and smart-grid vendors will have to devise other means of engaging, rather than alienating, electricity consumers.