CDI CTO Is Watching The Broadcom Merger, But Says VMware’s Channel ‘Amazingly Good’
‘Over the years, it maybe wasn’t the healthiest. We have our ups and downs just like any relationship in life. But right now, it’s amazingly good. You can definitely see that they are viewing the channel, I think as a means for growth,” said Will Huber, CTO at CDI, VMware partner of the year.
CDI Chief Technology Officer Will Huber said he does not know what may be in store for partners, should Broadcom finally make good on its year-long, $61 billion quest to buy VMware, but one thing is for sure.
“VMware can’t do it alone,” said the technology chief at VMware Pinnacle Partner CDI LLC, a New York City-based solution provider. “They were a much more direct-minded company. They did a lot more direct business with end-user customers. That works to a particular size and scale. Now they’re in the many multiple billions of dollars. They have very aggressive growth goals. They can’t do it themselves.”
And that extends to integrations as well, Huber said. VMware partners, he said, are closer to the customers as well as the technologies that can multiply VMware’s ability to solve complicated technology problems.
“We’re tremendously valuable to a company like VMware because we know their technology as well as they do, but we also know everything else that sits beside and in between, and we can make them more relevant,” he said.
Technology infrastructure has never been more complex, or the choices more varied for businesses which need to navigate hybrid cloud environments, how to leverage generative AI, and ways to protect and store all the data that is created, Huber said.
“If you ask any CIO, ‘Is your job easier today or harder today than it was 10 years ago?’ And they’re all going to say, well, it’s harder today. There’s more concerns. There’s more complexity,” said Huber, who runs technology for one of the largest solution providers in the nation. “Most of our customers, they don’t want new friends. They’re not looking for more partners. They’re looking to double down with a fewer number of more strategic, highly capable and highly value driven partners that they work with. And again, like I think that’s what’s fueling the growth of the MSP market in general.”
CDI is a Dell Technologies Titanium Black partner, No. 50 on CRN’s 2023 Solution Provider 500 list. It has also been growing. CDI was bought by private equity firm One Equity Partners in a deal that closed in January 2020. Since then, the company has completed seven acquisitions in three years.
“What’s interesting is I think there’s an imbalance of supply and demand in terms of skill sets that are required to be able to make sense of all this complexity and to operate this technology and to sufficiently protect these businesses,” Huber said. “What customers are realizing is that they need partners.”
Huber said, for its part, CDI needs vendors to step up as well. As a longtime VMware partner, the company, he said, has been watching VMware’s pending acquisition by Broadcom as it has wound through a year of takeover talks.
“The good news is, I guess from our perspective, is they’re saying what I think are the right things. So, (Broadcom CEO) Hock (Tan) released a blog that came out that directly said, ‘Hey, we can make this work without increasing prices. We can continue to invest in innovation. We’re not going to stop or slow that down.’ “ Huber said. “I think the encouraging thing is it seems very clear that the VMware brand will stay and that VMware is going to sort of emerge as we think of sort of the dominant DNA for their enterprise software division.”
Huber talked with CRN about the generative boom, what’s coming next for VMware partners, and how cloud chaos is still dominating the conversation.
There has been some development on the Broadcom and VMware acquisition, with the news that Europe has agreed to let the deal go through, bringing it one step closer to reality. You folks are big VMware partners. How are you looking at this?
It’s interesting. We spend a lot of time with VMware. I was just out in Palo Alto. I got a couple minutes with (CEO) Raghu (Raghuram), which was cool. And, listen, I think the there’s still a lot of uncertainty.
There’s not a lot of detail yet. You get little bread crumbs here and there. The good news is, I guess from our perspective, is they’re saying what I think are the right things.
So you know, (Broadcom CEO) Hock (Tan) released a blog that came out that directly said, ‘Hey, we can we can make this work without increasing prices. We can continue to invest in innovation. We’re not going to stop or slow that down.’
I think the encouraging thing is it seems very clear that the VMware brand will stay and that VMware is going to sort of emerge as we think of sort of the dominant DNA for their enterprise software division, which is a good thing.
So what that means for the channel and how our relationship changes or doesn’t, like we don’t, we don’t really know? They’re not really saying anything about that at this stage.
But what I will say is that our channel relationship with VMware today is far and away better than it has ever been. Over the years, it maybe wasn’t the healthiest relationship. We have our ups and downs just like any relationship in life. But right now, it’s amazingly good. You can definitely see that they are viewing the channel, I think, as a means for growth.
It seems that the overall posture towards the channel has changed in a positive way. And that’s good for us, because they’re partnering earlier. They’re partnering with more intent and more frequently, and that leads to positive outcomes for customers which is why we do this in the first place.
We’re trying to stay positive about it. We’re taking a wait and see approach. Whatever happens, happens. There’s not a lot we can do about it.
Do you have any sense of whether leadership at VMware is planning to stay? Or what that structure is going to look like if this deal closes by the end of October, which is what Broadcom has been saying?
I don’t know how. It’s super, super interesting. I mean, we don’t know. I hope they do. Think they’re good partners together. They’re doing a good job running and growing the business. So I hope this day we’ll see.
You say the channel relationship has never been healthier with VMware. What is making it that way? Why do you think it is different now?
I think in the early VMware days, my perception of them is that they were a much more direct-minded company they did a lot more direct business directly with end-user customers. That works to a particular size and scale. Now they’re in the many multiple billions of dollars. They have very aggressive growth goals. They can’t do it themselves.
Our other partners of that scale, think of Dell, say the same thing: they can’t grow beyond a certain point without a force-multiplier, which in their case is the channel.
I think VMware has realized that. I think they’ve realized that their technology touches a lot of adjacent technologies that are not necessarily within their control. So organizations like us, we maintain partnerships and expertise across a myriad of technology domains and OEM relationships. And it puts us in a position to be able to make them more relevant, and to integrate their things with all these other adjacent investments that our customers need to make to be successful.
That puts us in a really strong position because we can help them do that. I think particularly in service, we’re tremendously valuable to a company like VMware because we know their technology as well as they do. But we also know everything else that it sort of sits beside and in between, and we can make that more relevant.
Last year, coming off VMware Explore, you talked about “cloud chaos” in describing the state that most customers find themselves in. Almost a year later now, is it still cloud chaos out there? Are we getting cloud smarter?
There’s definitely chaos. I’ll say that. You know, it comes in varying states right?
I think right now, we’re seeing a little bit of everything. We’re definitely seeing cloud chaos.
We’re seeing a subset of customers who are still of the mindset, ‘Hey, we’re going to we’re going to shift everything to cloud. We’re going to shut down data centers. We’re going to evacuate that business. And just be all cloud going forward.’
We’ve got customers that are, you know, not doing that yet. They’re thinking about it.
We’ve got customers that are opposed to that. We’ve got customers that did that four years ago, and are now starting to think about maybe reversing course. So the chaos is certainly a factor.
Like most things in life, I think that there’s the absolutes, and neither one is right. I think the truth is probably somewhere in the middle.
I think that I think the VMware, messaging of cloud chaos and cloud smart it certainly hits close to home for customers. I mean, if you when you explain that story to them, the light bulb goes off and they’re saying ‘Yeah. I’m really having I am really having all these problems.’
That said, I think there’s a lot of customers who the pain isn’t really bad enough yet. Right? Because a lot of clients who say, ‘Hey, I’m going to the cloud,’ but maybe they’ve got a handful of apps or you know, something like that in the cloud.
But at scale, that problem starts to get a lot more painful. And I think that’s where when you think about these multi cloud solutions, and sort of abstracting away control planes, and they used to talk about like consistent operations and consistent infrastructure or any app, any cloud, any device.
Their strategy really hasn’t changed that much. So using slightly different words, to describe the same thing, but I think when the pain gets bad, they’re going to be really relevant to customers because they’ve been thinking about this for a while. Their products are maturing. And you know, once that pain comes, customers are going to come looking for, you know, some medicine.
Given your comfort and experience with infrastructure vendors, it seems like if a customer wants to start a generative AI practice, CDI is going to be a place where they can go to have a discussion. What are you seeing out there in terms of demand and how places are using it?
Every briefing we do today, it’s on the agenda. It’s interesting, if you go back, probably what six months now Chat GPT sort of democratized access to this this concept or this technology where your average person could go sign up for this account and experience generative AI themselves.
And I think what that’s done is it’s created sort of this this phenomenon. It’s crazy, actually. Everybody’s talking about it, and everybody is trying to figure out well, ‘How do I use this to my advantage?’
Maybe not ChatGPT, but some something like it right? And ‘How do I use this as a as a means to be more productive as a competitive differentiator for my business? What does that look like? How do I do that responsibly?’
There are all kinds of, you know, privacy concerns, and validity concerns about the result that comes out. You got to do sort of that whole trust but verify thing. It I think it’s still very early. Everybody’s talking about it. I think there’s a lot of ideas floating around.
I believe there’s still some there’s a lot of FOMO out there, as it relates to GPT and generative AI in general. But yes, we are seeing customers are taking this very seriously. They’re starting to think about how they can apply it to their business and that will ultimately lead at the end of the day, you will have customers building their own large language models. And we know that by extension, that means they’re going to need a tremendous amount of computational power.
They’re going to need a lot of servers. They’re going to need a lot of storage, whether that’s in the cloud or on prem, to us, there’s a lot of choice out there. There’s pros and cons to that. It’s going to be really interesting to see to see how that all shakes out.
Now, I think for us, the more interesting equation is, how can we put ourselves in a position to add value sort of further up the value chain? So much like our traditional business, I mean, we’ve been selling servers and storage and infrastructure and building networks and data centers and working with the hyperscalers for many years now.
But I think there’s a whole other side of our business, which is our digital business. That is the layer on top of that, that drives the consumption of those things. So, we’ve built practices around automation and, DevOps, and we’ve gotten into other application ecosystems like ServiceNow, and Salesforce, and, our security practice, like there’s, there’s all of those sort of, I’ll call them adjacent. Technologies that feed the infrastructure.
I’m not suggesting we’re going to go out and build large teams of data scientists and build these massive models and those types of things. But I think there’s a middle ground there. One step above just saying, ‘Hey, I’m just going to sell you a big server with a bunch of GPUs in it. That’s sort of like there’s a lot of people that can do that. So we’re looking at ways to create value and add value to the data scientist conversation and to the applications conversation, to help customers get more value out of technology like AI.
I heard about engineers getting calls from customers who say we don’t know exactly what we’re gonna do yet. We know we have a budget for a generative AI and we know that we were going to need something?
Yeah. We have taken some of those calls. For sure.
This really does seem to be like the smartphone or the cloud, no?
It’s crazy. I was meeting with a legal customer yesterday, a large law firm yesterday. And they’re, thinking about, like, how this is fundamentally going to change their business.
Think of the paralegal application? Generative AI is going to have an impact on that right now. It’s never going to replace, well, I shouldn’t say that. It’s not likely to replace the human touch or the human factor. Replace outright anytime soon. I don’t think.
But it will have an impact in terms of how long it might take to do something or do I need a human to do these certain tasks? Or can I just have our AI application do this for me and then have a team of people to validate and verify? There’s a big efficiency play there. That has a lot of benefits, of course, but it’s just going to be so interesting across all different verticals. But again, it’s super early, and we’ll see. We’ve got to be careful.