The Virtual Computing Environment Coalition

Worldwide spending on data center technology infrastructure and services exceeds $350 billion annually, according to McKinsey and Company estimates, with half of that spent on capital expenses and half on operating expenses.

Further, an estimated 70 percent or more of those costs are expended to maintain existing infrastructures, leaving 30 percent or less for new technology initiatives and applications that can provide breakthrough differentiation for businesses.

It is also estimated that approximately $85 billion, or 20 percent of this total market, can be addressed with data center virtualization and private cloud technology by 2015.

Cisco and EMC, together with VMware, have introduced the Virtual Computing Environment coalition, an unprecedented collaboration of three information technology (IT) industry leaders.

Virtual Computing Environment Coalition Charter
The coalition has been created to accelerate customers' ability to increase business agility through greater IT infrastructure flexibility, and lower IT, energy and real estate costs through pervasive data center virtualization and a transition to private cloud infrastructures.

Cisco, EMC and VMware have worked closely over the past year on a shared vision for the future of enterprise IT infrastructure -- private cloud computing. A private cloud is a virtual IT infrastructure that is securely controlled and operated solely for one organization.

It can be managed either by that organization or a third party, and it can exist on- or off-premise -- or in combination. Private cloud computing offers the controls and security of today's data center with the agility required for business innovation at substantially lower costs.

The Virtual Computing Environment coalition offers organizations of all sizes an accelerated approach to data center transformation with dramatic efficiencies that promise significant reductions in both capital and operating expenses. As a result, organizations will no longer have to choose between best-of-breed technologies and end-to-end vendor accountability.

Ecosystem Collaboration and Open Innovation
The Virtual Computing Environment coalition already has partners committed to the coalition. This includes representation from the entire partner ecosystem, including systems integrators, value added resellers, service providers, and independent software vendors.

Can Retailers Respond to Changing Corporate Needs?

Joe Panettieri did a great job describing the IT management and business implications of the growing dispersion of today's workforce in his post "Managed Services: Safe at Home".

This trend is not only creating new challenges that are driving greater corporate interests in managed services, it is also attracting a broadening array of managed service providers (MSPs) to satisfy businesses' escalating needs.

The office supply retailers are increasingly nibbling around the edges of the IT services market. The most obvious example is Best Buy's Geek Squad which has primarily served the consumer needs of the residential market, but is also responding to the needs of the small office/home office (SOHO) market which Joe described in his post.

The latest example of this trend is the recent news that Staples is going to deliver a portfolio of IT services to small and mid-size businesses (SMBs). These services are going to center around the acquisition Staples made in late 2006 of Thrive Networks Inc., and the online storage services offered by EMC's subsidiary, Mozy Inc., formerly Berkeley Data Systems which was acquired in 2007.

Although Staples' new services are primarily aimed at SMBs, they could also appeal to large-scale enterprises trying to support remote workers working in branch offices or out of their homes. Both Thrive and EMC are already serving large companies grappling with these challenges.

So, should you consider out-tasking your IT support and management requirements to these retailers?

Your Selection Criteria
Staples' on-site and remote services will appeal to many companies who could get the best of both worlds -- economical field support and cost-effective managed storage services. You can also bet that Staples will continuously expand its portfolio to include managed security and desktop services, along with a wider array of on-site capabilities.

But selecting a retailer to support your IT needs will still depend on the complexity of your end-user requirements, and the geographic reach of the retailers' local personnel.

The Scalability Challenge
While EMC's Mozy service is location agnostic, the scalability of Staples' Thrive Networks staff is still unknown. Best Buy has been able to grow its Geek Squad to satisfy the bulk of its residential customers' needs. The key to success for Staples will be the retailer's ability to recruit and retain IT professionals to satisfy the on-site needs of SMBs anywhere, anytime.

If Staples, and other major retailers, succeed in delivering these on-site and managed services they will disrupt the highly fragmented IT services market in the same way they disrupted the office supply industry.