EMC's Basiliere: In A Complex World, Keeping Things Simple For Channel Partners

In a recent interview with CRN at EMC headquarters in Hopkinton, Mass., Bob Basiliere, senior director of global account marketing, touched on EMC's balancing act when it comes to emerging vs. legacy technologies, the impact of new startups coming to market, and how EMC is helping the channel tell its story.

"The reseller channel is more business-focused and solution-minded than most of us think," said Basiliere.

Following are edited excerpts of Basiliere's conversation with CRN.

CRN: How do you balance emerging technologies like software-defined with your bread-and-butter legacy technologies? How do you help the channel embrace something like software-defined or converged infrastructure?

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Basiliere: Software-defined means customers no longer have to make decisions on applications and data frameworks based on the infrastructure that's underneath. If they decouple those things completely, then they can do things in applications, and applications rule these business models. We are not limited by infrastructure that doesn't support the new applications framework. They can do whatever they want and continue to move along with us. Think about the channel and how does the channel, without having to become experts in the entire portfolio, pick off some things they can use in their selling motions in things like converged infrastructure. When we rolled with that in 2009, it was a direct result of customers saying, 'We're going with these technologies anyway, why are we spending our time, money and effort on configuring something that maybe you could configure for us?' That led to template-based systems, and basically big VM hosts rolled out in the form of a VM block. Now, you take that model and see where it's gone in just six years.

CRN: How big a threat is startups and hot young companies like Pure Storage? How do you decide what's real and what's Johnny-come-lately?

Basiliere: There are so many new technologies that get written about. When you get underneath some of those technologies, they're small companies that might have a compelling technology, but there's no real backing behind it, and no real adoption of the technology. Some of our biggest customers would never take chances on some of those very early stage things. But you have to pay attention to those technologies. We've acquired 75 companies in the last 15 years, and we have to pay attention to which of those technologies is compelling enough for us to buy it and integrate it rather than try to develop it ourselves. We always wait for the customers to speak on that. They're going to vote with their revenue on those pieces of technology. There are a lot of those right now. They're Hadoop optimization plays, or they're niche storage plays, or new network plays or data framework plays. All those things are things our customer base and our partners are accustomed to us being really good at -- not waiting too long and making sure there are pieces of those things that are going to be part of next-generation infrastructure.

CRN: Is it more difficult now for legacy vendors to keep up with the pace of change in the industry?

Basiliere: Back in 2003 and before, our engineers were asking, 'If we're all using Intel processors for storage and network and server, why do we have these three distinct layers in infrastructure? Why not just collapse that?' Now, we're seeing that. How important are Dell servers when it's really just an array of processors the customer wants? They don't want the physical encapsulated units, they want an unlimited virtual supply of processors that they can run processing against. Storage is the same way. All the barriers that are represented by a system sitting on the floor are done away with when we start talking about software-defined. Software-defined, virtualized, not defined by data center. Applications and data frameworks are pushing that faster and faster. It took 30 years to get to this point, but the cycles are going to compress. Every time we've thought information is going to grow at a certain rate, we were wrong. It grew much faster. Every time we thought it was going to take longer for the adoption of this kind of technology, like flash, it's done it much faster. We've always done a good job disrupting ourselves, and making sure we didn't get too comfortable in one space, we've seen what that's done to a lot of companies. But we have to organize ourselves, and that's a lot of what the Federation is about, organize ourselves so that we don't fall into this big, comfortable, long-tail, legacy revenue situation.

CRN: Do you see that happening? Is that the big risk for a company like Cisco?

Basiliere: Cisco does have virtualized networking now, but they weren't the first-mover. And you wonder who would move before Cisco on a new networking technology? Well, Nicira, which was bought by VMware. Cisco then had to adapt. The problem for Cisco is they had so much market share in one layer of technology, a bit like us, but they really didn't move very fast. They started to get into other businesses that weren't adjacent to their core business. One thing Joe [Tucci, EMC Chairman and CEO] continuously says when we're making acquisitions is never make an acquisition unless it's adjacent to one of our existing business areas. Then you can build on that strategy for the customer as you introduce the new technologies.

CRN: What's your biggest risk working with the channel?

Basiliere: The channel can be agnostic. We can make it really uncomfortable for them financially -- not in a threatening way -- but if they get accustomed to our line of business and they train their people on our products and our portfolio, they can't just move over without considering what's going on. But they can be agnostic, and unless you provide a strategy that's very compelling and the portfolio is market leading, as a salesperson in the channel it's about where my next month's revenue, and my next month's margin and my next month's spiff opportunities were coming from. So despite whatever strategies are happening at the executive levels at even some of the big partners, you have salespeople who are motivated the same way our salespeople are motivated. Where's my opportunity, where's my near-term opportunity for revenue and margin, if that's the way I'm paid. The minute someone packages something up that is not only compelling for customers, but we're going to give you lots of air cover in marketing and branding, and we're going to make it easy for you to sell, we have to think that way.

CRN: Where are EMC's R&D dollars going today?

Basiliere: Just when you think it's all going to be software-defined, and completely abstracting all the hardware layers, and it doesn't matter; they can buy anything they want as long as fantastic software sits on top, and who cares what I'm buying underneath? Customers who have dipped their toes in those waters … they keep coming back to the reality that all of these different things need to go into some sort of a system because under the software is real hardware, and it needs to work, and it needs to work with this software, and if it breaks someone needs to be there to fix it. You see us innovating and investing a lot of R&D in disrupting ourselves with cloud platform infrastructure that is built on Docker containers, not even VMware VMs. The reason we need to continue to do that is because customers say, 'We've been a hardware customer of EMC for a long, long time. Don't abandon us because we have real workloads that run on these systems and we can't just run them on anything.' That's music to our ears.

CRN: How do you get partners to wrap their minds around the Federation?

Basiliere: Just like we do with our own sales force. Their companies and their leadership, just like our leadership, they want to get behind solution sets that are really compelling and, if some of those high-level solution discussions are not immediate sources of big revenue for them and for us right now, they are things that get you into the conversations that allow you to talk business impact and business outcomes with customers rather than just my technology vs. your technology.

CRN: Is the channel getting better at telling that story?

Basiliere: The reseller channel is more business-focused and solution-minded than most of us think. The Federation, as it stands, I can tell you the story and make it sound perfect, but if the customers don't understand it and if our channel partners and their salespeople don't understand it, there's no way to bring out the value and they just sink down to the lowest common denominator, which is we've got a storage product, we've got a backup product and we've got a converged infrastructure product and a security product, and it's just pitting one against the other, and that doesn't really help customers.

CRN: How has the messaging around the Federation changed?

Basiliere: When we started messaging around the Federation, we talked a lot about choice. It's giving customers choice by allowing them to say, 'I'm going to be a VMware operating system customer, but I'm not necessarily going to be an all-EMC storage, or all-RSA security customer.' That delineation and choice helps; it does provide unique integration when I use it this way. However, a fair number of our largest customers come back quickly on that discussion and say, 'I'm not looking for choice. I want you to recommend to me what I do to get from here to here. I don't want to have to become an expert on your products and everyone else's products.' They don't have time to learn everything about everyone's products, and they don't have engineers any longer that they can pay to do that for a living. They want us to propose, to force them into making some kind of a decision based on a business outcome, not just based on your stuff is a little bit faster, or a little bit this or a little bit that.

CRN: How big a challenge is it, and how much urgency is there on EMC's part, to get partners to sell the whole Federation stack? Is that the ideal? Are your best partners the ones who sell all of it?

Basiliere: Yeah, I would say so. That's leverage for us, clearly. We feel like if we can do it, if our people can understand the portfolio and know how to position the portfolio in certain situations, our partners can certainly do it. We have some partners that are deliberately in one part of the functionality or another. That's part of Joe's genius. When we configured this, he was, and is, very transparent in saying none of these can lean on the others for financial support. If Pivotal is going to survive, it's going to survive as the best, market-leading data and application platform company in the world. VMware is going to be the software-defined, virtualized infrastructure operating system company that people go to first. That separation, yet the value of the integration, is hard to wrap your head around initially. That passion, urgency, competitiveness among the individual companies sometimes looked to the customer like internal conflict, but I guarantee it is a healthy conflict.

CRN: Talk about the blurring of cooperation and competition among the big players in the industry. I heard a lot at EMC World about open, and flexibility and software-defined, and that's something that Cisco doesn't have, but you have a longstanding relationship with Cisco. Is the aim to beat them, or cooperate with them? How do you maintain the relationship while also competing ?

Basiliere: The term is overused, but there is tremendous 'co-opetition.' The degree to which the co-opetition is direct or indirect varies over time as people come in and out of certain businesses or release certain products. Overall, the big players that are market leading in any component area, we know we need each other and we know that we have to work together even if publicly it never appears that way. Because customers, if they don't find value in having that kind of choice, then they're probably going to find alternatives, and all of a sudden, things like AWS or Google, or who knows what is next, comes in and says, 'We're easier, we're going to smooth out all the edges for you.'

CRN: How big a danger is that to the top IT firms today?

Basiliere: It's dangerous. Dell starts to look like an old legacy company, and so does Cisco, amazingly, so does EMC, amazingly. When Cisco gets into storage, outside, there's a big deal made of that, but inside we know exactly what they're doing and what they're not doing and vice versa. When we say we need to give customers more choice than just the VCE version of the VBlock, I don't think they're surprised at that. With Dell, we've had a tight relationship with them for many years, an OEM relationship, a partnering relationship in cooperating in accounts where we have share and they have share. We're all expanding our businesses and getting in each other's backyards a bit. In Oracle's latest earnings release, their license revenue was down 17 percent. In the 2000-2002 recession and in '08-'09, their license revenue had never been down anything close to 17 percent. This isn't just a performance problem, it's a massive change in the industry. It's a lesson for us, it's a lesson for Dell, it's a lesson for everybody. When we talked to customers about cloud at EMC World, we talked about all the benefits of hybrid cloud, a couple of big customers came back and said, 'Our biggest problems are not understanding how your technologies fit together, but what are you going to do about license cost? ' A lot of these customers are still paying the same licensing they were when they were measuring by the server.

There's a maturity that the big, established IT companies have to go through or risk people leaving our operating environments and going to something new and easy. Five years ago, we never would have said that JPMorgan Chase, Citi, Bank of America, Credit Suisse would've ever considered doing something off-prem with a commodity cloud provider. They're all doing something off-prem with a commodity cloud provider. Every one of them. Maybe it's an archive workload, or it's a development environment. But we know as well as anyone once you have an in with your value proposition, it can expand and grow into other areas. There used to be healthy conflict with our partners, and that's still there, and a level of cooperation. I think now there's a level of paranoia we walk in with every day. Who's next? Who's appearing with a different model where it doesn't matter how well we work with Dell, Cisco or anyone else.

CRN: Do customers care less and less who they get their tech from?

Basiliere: Established companies are trying to take cost out of their infrastructure models. We hear that every day. They're happy to invest in our strategies, and there are compelling use cases around big data, which are not a giant revenue generator for us. But customers are telling us that whoever comes forward with the clearest path to dramatically reducing infrastructure costs and running our business wins. They don't want big, expensive Oracle protocols, they want big Hadoop environments that will perform just like the fastest, last-generation Oracle stuff, but the applications are much easier to write, much easier to distribute, much easier to junk and re-write if you want to do that. The customer is saying, 'Give me the cost advantages, but you can't turn my business upside down to do it. ' Tesla, Nest, Netflix, those are companies that didn't have to deal with the legacy infrastructure that most of the customer base has to deal with. They are new companies built on next-generation technology; it's the software-defined car, software-defined entertainment, software-defined niche services for consumers. When someone like GE comes in, they say the only way for us to continue to make money is to take advantage of those technologies is in our industrial equipment business, which is as old as the hills, so how do we do that? They apply some of those principles to their existing business model. We didn't see that initially. People were sort of waiting. It's not a huge percentage of the overall spend that we and the channel are interested in, but it's enough now that you can see the path forward. We have to balance helping them drive cost out of their existing infrastructure and drive innovation in.

CRN: What do you need from the channel to win over a company like GE?

Basiliere: We need to have them tell the story the way we tell the story, and position this [Federation] the way we position it, and not – even a Dimension Data or a WWT – you can't go in with a complete different angle on this because then all we're doing is confusing the customer, and if the customer gets confused, it absolutely stops whatever they're going to do. We have to manage that internally, and we absolutely have to manage that with our channel partners.

CRN: How big a problem has customer confusion been?

Basiliere: Fairly big. Take flash storage technology. It's compelling because it's fast-growing, and there are lots of competitors swooping in. How do we get the channel to work on the same methodology that we work on and give customers the choice of cutting over to flash where it makes sense without disrupting revenue streams we have established in those accounts that we need to preserve? If we can all get on-message, and customers understand where this is going and how fast it's moving, we believe in our strategy we can walk into big accounts or midsize accounts and decide who's going to lead that discussion and who's going to take that discussion and spread that throughout that account very tactically.

CRN: Is that a challenge for the industry as a whole?

Basiliere: We all want to lead the discussion, but if we're telling the story differently, and it gets confusing and someone like AWS makes it sound really simple, it makes all of us sound like we're really old and complex. There's big risk in that.

CRN: How do you balance that scenario with motivating and educating your in-house salespeople, as well as your channel?

Basiliere: If I'm a channel sales rep, and I get some EMC person standing in front of me saying, 'Here is our strategy, but listen to this too, and listen to this, and listen to this,' because the customer viewpoint on these things might be slightly different on these things and we have to listen to the customer. We have to have the right strategy based on the customers' point of view, and it's not easy. In the end we have to get to a point where it's not 12 different scenarios we have to solve for, it's just a few and people can consume it and learn it. When our sales go-to-market is at its best, it's when we help our field understand a positioning statement, give it to everybody and say, 'This is what you're going to say. Not this, or this. Now off you go.' Now, how do we do that for what is clearly a broader and more complex situation? We view the channel as an extension of our own sales force.