Channel Leaders: Uptime Crucial To Keeping, Winning Customers

‘It all comes down to, customers want to mitigate against downtime. That's the number one cost in IT by far. We don't always talk about it that way,’ says Jeff Ready, CEO and co-founder of Scale Computing.

Speeds And Feeds A Distant Second To Reliability

Whether it’s security issues or, hardware issues, when it comes to sales, customers only want to hear that their networks will be up and working and they don’t necessarily care how the IT professional they’ve hired manages that.

“What I tell our partners is lead with ‘We will keep the application up,’“ said Jeff Ready, CEO of Scale Computing. “All of the speeds and feeds and stuff that for decades we’ve all fallen into the trap of talking about, more and more, customers just don’t care … (The customer) doesn’t know the difference between an i9 processor and an i2 processor, but he does know if the application is down.”

Ready, along with Lenovo’s vice president of North American channel sales, Rob Cato, and Xerox’s vice president of U.S. channel sales, John Reilly, talked about changes afoot in the channel with regards to cloud, security, and channel conflict at The Channel Company’s 2019 Best of Breed (BoB) conference in Philadelphia. The panel was hosted by Bob Venero, president and CEO of Future Tech.

Click through the slideshow for more insights from Ready and Cato.

How are you supporting the “cloud first” ecosystem?

Ready: What we find more and more is that conversations around “the cloud” or “the edge” or “on-prem” don't really apply. What the customers are looking for at the end of the day are a suite of applications, and they need those applications to run. The underlying technologies, where those applications run, don't really matter.

As the company that originally invented hyper-convergence, I seldom have customers come to us now and even mention the word “hyper-convergence.” They're looking for again, high availability and they want the apps to run.

One of the challenges is that, as you move to the edge, for example, all of the things that you assume in the data center, don't necessarily apply there. The problem that customers are running into is they assume there are certain things at the edge that aren’t necessarily there. There aren’t people there necessarily. The physical size of machines can matter a lot. If you're putting infrastructure in the back of a of a coffee shop, you're not going to put a rack of gear in there. I think the conversation is shifting more and more away from, cloud versus on-prem versus edge or anything like that, to more around ‘How do I make these applications run best?’

How are Xerox and Lenovo supporting customers in the cloud?

Reilly: At Xerox, we've looked at really a change from the legacy, hardware-only model, to more of a services model for our solution providers. When you look at what we've done, we've changed to work in what we call intelligent workplace services.

We've tried to build an ecosystem, think of the Apple app store, an ecosystem of apps for every vertical, so that they can actually become more efficient within their work day. We think of the printer as an assistant, akin to the smart phone with the apps that we all use in our daily life.

Cato: For us, it's about looking at use cases. One of the things that Lenovo's done recently is to start to understand sort of different use cases that our customers are trying to uncover. We’ve actually started to verticalize our salesforce to really understand that industry, understand the pain points of those customers, and then expand our partnerships.

Over the last several years we've looked at the K-12 market. Obviously it's exploded with the number of Chrome devices that are out there, but for us it's about how do we expand beyond that? So we've created virtual reality classroom settings, classroom opportunities for our partners that they can start to leverage.

So when you look at cloud and the risk of security associated with it, how do you address that?

Ready: You start with the premise that all software has flaws, right? So everything is going to have a security problem at some stage.

As we go out and we see digital transformation happening at the edge. Oftentimes, because the last decade has been all about moving to cloud, these edge-type locations were the last thing getting touched, they're often a mess. We go into environments where you've got four different PCs that are 10 years old haven't been patched since they were originally installed, and these create massive security risks.
One of the things that we see as best practices though is starting with ‘Let's consolidate all of these disparate things that exist at the edge into a single platform.’ At least if you have one platform, then you have one thing to try and lock down. One set of firewalls, or what have you, to run on that platform. So, consolidating everything down into one, and then recognizing that everything's going to be managed remotely. Automation is critical at the edge. A task in the data center that takes an IT admin 30 seconds, you don't think twice about, but when you have to do that 20,000 times, you think a lot about it.

Reilly: So what we've done is we partnered with both Cisco and McAfee, both best in class, to build into every one of our ConnectKey platform devices which go up and down the stack from the smallest, A4 business-class machine, up through A3, and into our production line. So we leveraged them and all the assets that they bring, and then I would also offer up as a proof point that we are FedRAMP authorized.
So, we're authorized to operate in the cloud for the federal government. In fact, we just recently closed a large, five-thousand unit opportunity with one of the VA hospital areas, and frankly that has proven to be quite good for us.

Are you guys seeing that across your lines in the businesses, that secure supply chain, ISO certification requirements, counterfeit protection policies, that being a requirement for an RFP?

Cato: It's continuing to be a requirement. I think customers want to understand ‘How do you control from end-to-end, through the supplier base all the way through delivery of the product?’ ‘What is your security around that?’ And at Lenovo we do a lot to make sure that we have one of the most secure supply chains in the market.
Obviously, being a Chinese-based company, we have to go to extra measures to make sure that we can meet those requirements. I would say that we have to kind of go even further than maybe some of our competitors to ensure that we've got a completely secure supply chain. We brought in some talent both externally, as well as from the federal government, to actually help us go do that and so over the last year it's been a big focus for us.

Ready: I see those requirements, and not just from you know, sort of supply chain side of things, but extending all the way down into the customers environment itself. Things like chain of custody, digital signing throughout the entire system.
So, they can go back on an audit trail and say ‘this is when this file was touched and changed.’ Now with the rise of ransomware that becomes even more important because I've seen customers where ransomware sits idle on systems for over a year, such that all the backups get infected too and then when you go to restore that file, you just restoring more ransomware. It all comes down to, customers want to mitigate against downtime. That's the number one cost in IT by far. We don't always talk about it that way.

How do you handle channel conflict?

Reilly: We've made immense strides in the last couple years. So when I got to the company a couple years ago we had a direct team, and the channel team and never the two shall talk. And frankly, what we did very quickly is we realized, bringing some of my history into the company, we realized the channel brings an immense amount of scale, and opportunity, and relationships. You can cut those sales cycles down by seventy-five percent if you can get in quicker with the solution providers in the channel.
And so the team got together and they've reorganized in such a way that we all go up to the same general manager of the Americas now. We now have a co-selling process. We put that in place over eight, nine months ago. It's now in full stride. We're having success. We’re having wins, we've got a solid pipeline.
We've put our attention on the acquisition of new business and welcoming the channel into that direct side of the sales motion. We sell together. We put the revenue through the channel. They recognize the revenue and profit. So, it's actually been quite successful in terms of that collaborative spirit. But, we found it was a mindset within the company. Some of it was just ignorance around what the channel brings, but some of it was an openness to, financially, put the numbers on the paper to show this really is going to be incremental to us overall.

Cato: A lot of times, in our case it starts with compensation. How do we compensate our reps? So we've made some significant changes to the way that both our field reps, as well as our channel reps are compensated. The second thing I think that, for me is one of my most important jobs, is to advocate on behalf of this audience. Advocate on behalf of the partners. So I continue to do that.

I think the third thing that that we've started to do, we've actually seen some really encouraging signs here, is that we've started to bring some of our actual end user sales organization into channel roles. So my leader for our VAR business actually has a tremendous amount of end user background and experience and understands how to go call on customers and how to do that successfully with partners. So as you start to get that sort of inbreeding I'll call it, whatever you want to call it, where you've got some different people from different roles being able to do that, I think it starts to breed success.

I think the last thing that we're really doing is, we've had a lot of new folks doing Lenovo. Many of those are actually coming from our competitors, where you know direct was sort of there their first kind of thought process. So we've done a lot of education to make sure they understand, number one, the value that our channel and partners bring to an engagement, and then secondly making sure they understand all our pricing policies and understand sort of the deal registration process and all those things.

So we've done a lot in the last 12 months to sort of change the landscape within Lenovo, and we're back to what I'd call kind of historic numbers as far as business through the channel for commercial people.