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CRN: How are partners responding to those incentives?
Hennessy: I think the response has been very good. We're getting more and more applications from partners to cross over and sell both hardware and software. And, I think it's a combination of the incentive, which provides some margin for them to make the investments that they want to make.
But, I think it's also driven by the marketplace. Their clients are looking for them to bring a more complete solution, which reduces the client's requirement to do integration and also speeds up the time-to-value. I think this is the big motivator in the marketplace.
The end-user clients want a system that will take less integration on their part, will deliver value more quickly and will be optimized. And so, our partners are bringing the different pieces of the solution together for them for the clients.
CRN: Are the partners who are responding to the incentive more of your existing partners or is it the guys you're recruiting? We've done some research where the "vintage VARs" [are] about 15 percent, and there's the progressives who are moving into managed services, and the transformative VARs that are offering cloud solutions.
Hennessy: We do see more partners who have been with us for a long time capitalizing on the expanded offerings. I would say that is a major theme in the marketplace right now. They are moving up the stack, they're moving from their traditional approaches to more high-value solutions.
They're going about it with different approaches. Some of them are doing it on a fundamental IT base where they're providing more capabilities for their clients around implementation and management of their IT environment. Some of them are doing it on a solution base. Some are becoming really excellent at analytics -- we have a number of partners that we work really closely with that are doing a really good job using analytics for a CFO dashboard, for example, [also] embedding Cognos in the solutions they are taking to market across industries. And then, there are others who are going for an industry dimension: They're focusing on healthcare [for example] or on retail.
But, the vast majority is moving into higher-value spaces. And, by the way, PureSystem is really helping to accelerate that, because here is a system that is integrated by design; it's not assembled from different components. We spent two-to-three years and $2 billion developing a system that's integrated from the start. There [are] different compute nodes available, different operating systems that are available, different hypervisors that are available.
So, the partner can take this system that's been integrated by design, yet is flexible enough to meet their clients' requirements, and implement it quickly with significantly reduced implementation, maintenance and management costs. That's wonderful for their traditional clients, but it also opens up lots of new opportunities with line-of-business execs like CFOs or chief marketing officers.