VCE Is A Company That Will Soon Hit $1 Billion And Had No CEO For A Year

Praveen AkkirajuPraveen Akkiraju

Photo: YouTube/CiscoSP360

A key executive from Cisco has been named the CEO of a company called VCE.Praveen Akkiraju nabbed a job that has been vacant for almost a year. He was formerly senior vice president and general manager of Cisco Services Routing Technology Group.

VCE is a joint venture between Cisco, VMware and EMC to sell hardware and services to data centres. It’s been a pretty successful venture, but its management history has been a little odd.

Its last CEO was Michael Capellas best known as being the CEO for Compaq Computer during the contentious time when HP bought Compaq. He was also the guy that ran MCI after it changed its name from WorldCom. He helped sell MCI to Verizon.

Capellas also sits on the board of Cisco and was hired by VCE as CEO and chairman. About a year ago, he mysteriously dropped the CEO title from his role. He is still chairman. An EMC exec, Frank Hauck, is president. For a year there simply was no CEO.

VCE is a significant company for Cisco and EMC and is itself a sort of odd bird. VCE has “annualized order run rate approaching $1 billion,” a VCE spokesperson told BI.  But “VCE revenues are recognised by Cisco and EMC, so VCE does not report revenue” in and of itself. It has 1,200 employees.

It sells something called “Vblock” which is a piece of equipment that marries EMC’s storage, Cisco’s UCS servers and networking, and VMware server virtualization software into one package.  Although all three companies are involved, EMC owns a majority stake, 58% because EMC also owns a majority stake in VMware. So EMC is two-thirds of the partnership.

Now, VMware makes a technology that helps companies build “virtual” networks, similar to how it makes  “virtual” servers. A virtual network is software that can take the place of a piece of hardware. Cisco makes lots of money selling real hardware switches. It would not be thrilled if VMware’s virtual networks became super popular.

With VCE getting a prominent CEO from Cisco — not EMC — that says a lot about how Cisco is wanting more control over its partnership with EMC.

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