How VCE Created an Amazing Joint Tech Venture

24.10.2014
VCE, the joint venture between VMware, Cisco, EMC and Intel is making a major organizational ownership shift. I remain fascinated with VCE both because it has been massively successful with an annual growth rate in the 50 percent range (fantastic for a company, unheard of in a joint venture) and because it was a creative way to successfully create a best-of-breed solution that actually was best of breed itself.

Both facts are unique -- generally joint ventures bog down because the related executives focus on announcing things and not on executing after the announcement. As a result, these joint ventures are lucky to break even due to lack of ability to execute. Instead they become a place where the partners dump underperforming employees or technologies.  

But no Joint Venture is sustainable forever. Things change, partners grow and conflicts arise.   Generally when this happens the joint venture, even if marginally successful, begins to fail, and if one of the partners buys the other out it typically happens too late to save the effort.  

[Related: Industry Reacts to Cisco Cutting Stake in VCE, EMC Taking Control ]

VCE is unique not only in how successful it is, but in that when it is transitioning underneath one of the partners. It is making the move not when failure is eminent but while it is still successful, suggesting it has sidestepped the problems that might otherwise have occurred in the firm's future.

The Problem With Partnerships

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