Channel Chiefs: Storage Vendors Think Beyond Storage
Man Does Not Live On Storage Alone
For all the importance vendors, solution providers and customers place on designing and deploying the best possible storage solutions, storage by itself is only a part of a complete solution that requires partnering with a wide range of technologies and technology providers.
As storage vendors look for ways to bring cutting-edge solutions to market, they're also mindful of the need to help their channel partners find the right mix of non-storage technology to complete their solutions. That technology may come from the same vendor, a partner vendor, or even a competing vendor. But in any case, partnering at some level is a must.
CRN recently sat down for a roundtable session with the channel chiefs of five top storage vendors to discuss a wide range of topics. This is part two of the series. Biographies of the participants can be found in part one.
In this segment, Bill Lipsin (NetApp), Gregg Ambulos (EMC), MIchael Sotnick (Pure Storage), Frank Vitagliano (Dell), and Jeremiah Jensen (Hewlett Packard Enterprise) talk about how their companies look at the non-storage world and the importance of finding the right partners to fit customers' IT needs.
CRN: Can a solution provider live on storage alone?
EMC's Ambulos: I think it’s going to be tough because at the end of the day, the industry’s changing so quickly. The whole cloud conversation, what goes off-prem, what goes on-prem. Then you’ve got tier-one apps. You’ve got Office 365. It’s all about cost. It’s all about agility. It’s speed, taking cost out of the system, and to us, you just can’t play in one area. You have to play in all the areas. That’s what really is the EMC strength. With the Dell-EMC merger, it’s even going to give us more opportunities. …
You have to place a bet. You can’t satisfy everybody, so if you look at who can you work with today in the industry that can address all the opportunities. … There’s not a lot of companies out there that can do that. EMC is one. With the Dell merger, we’re going to be a powerhouse in that area.
Dell's Vitagliano: I think the point about the compute piece is actually a really critical point. You can’t separate that. When you start looking at the full end-to-end solution that’s required and how you want to partner and who you want to partner with, you have to look at all the pieces of it. The solution providers, and whether you call them a strategic solution provider, or the non-strategic solution providers, they’ll all evolve to getting some form of the answer that they believe makes sense for them and their customers. They’re figuring that out.
To Gregg’s point, it’s exactly what they’re doing right now. They’re making bets. What they’re trying to do is make bets on what’s the best combination of relationships. Typically, what we’ve all seen in the past, and I think it will continue, is it’s one or two core vendors and strategic vendors for each platform or line of business.
Pure Storage's Sotnick: It comes down to innovation. I think that’s really at the center. When I think about the enthusiasm with which we’ve been met in the marketplace by partners as a 100-percent channel company. 100 percent. New technology comes out every hour. ...
I think the reality is the market yearns for innovation and companies that get it right and hit on the principles of software, purpose-built for flash and cloud, hardware purpose-built for that media. Lest we forget, we’re talking about a dramatically different media in flash than what we’ve seen for the last 25 years in the storage industry.
That media just requires a fundamentally different approach. When you combine purpose-built hardware, purpose-built software, disruptive business model, a cloud software, [and] subscription based ownership model for the customer, it really is seen as transformative and gets people excited.
NetApp's Lipsin: [What] you want to do is find the best partnerships. The partnerships can include people around this room at any point in time. It can include Cisco -- who’s not in this room -- because each one of us will innovate. You want to be able to find the best innovation that ties together for those customers, and then make sure that we’ve got the partners innovating as well. I don’t think this single-thread vertical business model is the only model that’s going to exist.
Dell's Vitagliano: Partners will vote with their business and their dollars. One thing that really is critical here: Scale matters in this business, and it’s going to matter more and more. It matters relative to human costs, and the ability to deliver the most cost-efficient solution. Scale is a big part of that, and if you’ve got the scale to be able to do that, it matters. It matters in terms of just pure resources. …
The most [important] decision is: What do I have to do to solve my customer’s problem? What are my customer’s problems? Then from there, you figure out what’s the right answer from a partnership standpoint, all that. That’s taking us back to an industry discussion.
CRN: Everyone’s got to be innovative in some way, shape or form at some point in time. Otherwise, you’re going to be out of business. How does innovation change how you work with partners?
HPE's Jenson: [Partners are looking] for a vendor that’s going to offer a repeatable, profitable, scalable partnership that goes the distance. That’s what they’re looking for. They’re looking for partners that have the ability to continue to invest, to continue to drive new innovation. …
If you’re involved in a big merger, which we’ve done, if you’re involved in taking a new company public or things along those lines, that’s distracting. At HP, we’ve been incredibly focused on our mission around 3PAR and flash and innovating for the future and for our partners, so we’re past all of that. We’re past all those things, and we’re incredibly focused on taking our message and point of view to the market. That’s one reason we were the fastest-growing flash vendor last year, and we’ll continue to be very focused on bringing that message to our partners.
EMC's Ambulos: We created a federated program just recently, where we have ties now into VMware, into Pivotal, into Virtustream -- we’re working with Virtustream right now -- RSA, VCE, and it goes back to what I said before: If you wake up in the morning and say, ’Where am I going to invest a dollar and get the biggest return, and who’s going to be here today? Who’s going to be here moving forward?’ There’s very few companies out there that are in a position to do that. …
We listen to our VAR community all the time, trying to understand what their needs are today. There’s a convergence that’s happened in the marketplace. You have [system integrators], now they’re reselling. You have traditional solution providers that are in the managed services game. They don’t want to lose control of their customer, but a lot of them can’t make the investments, so they’ve got to partner.
CRN: So what are you doing about that?
EMC's Ambulos: We have a Cloud Connect partner program. We’re working our VAR community, our solution provider community, and our CSPs (cloud service providers) to make sure that if a solution provider doesn’t invest in a certain area, they’re going to be able to leverage a CSP that has been built their infrastructure on EMC. We’re going to give them credit towards the program. We’re going to give them investment dollars.
We have a catalogue of services … to make sure our sales teams really understand who’s made the investment, what are the services that are out there, so that we can make sure they’re getting a return on their investment. They’re going to want to know that someone’s going to continue to invest, continue to innovate, continue to partner -- which I agree with you 100 percent -- but also where they can get their return so they can continue to invest in their business and capture the opportunities moving forward.
NetApp's Lipsin: We have to expand our thinking. We just had a large service provider, a telephone company, in the other day with three VARs. The service provider realized that while they had the balance sheet, they had the customer contact, they had all the necessary structure and ability to scale, they don’t have the customer intimacy. They [are] going above the fray, and then figuring out what which pieces they bring in for each of the customers, especially in the MSP side of the space.
Exactly as Gregg said, we’re redesigning our programs to start to reflect that. It’s not the old, simple, here’s how you pay the distributor, here’s how you pay the VAR. You now have to have more of an ecosystem approach.
Pure Storage's Sotnick: We’re the fastest growing storage platform in the [Verona, Wisc.-based] Epic health care environment, as an example. Partners are participating in that with significant success. They’re going and having conversations with the Oracle team, with the Microsoft SQL team, with different stakeholders, because the economics of running IT for an organization have changed dramatically, in part because of the cloud, in part because of innovation from the likes of us and the broader vendor community that we represent. What was acceptable in the past of having people in single-threaded roles of managing a certain aspect of the data center, those financial models can’t be sustained.
That’s promoting our strategic service provider, our solution providers, into a much more valuable seat at the table. … We’re also a scarcity model versus an abundance model because of the number of partners. I think that’s a really important element.
CRN: What do you mean by "scarcity model?"
Sotnick: The number of partners that are part of the Pure Storage ecosystem. We do not look at our growth as being intrinsically tied to the number of partners. We really look at the performance of each partner at a granular level to drive our investments within [the] partner community, which allows us to get focused on the application, helping our partners evolve into being more application-aware and application-centric, to know how to go in and engage a line of business, to provide enablement services and training and investment around those areas.
Dell's Vitagliano: I think what we’re leading to, what we’re getting to … is that it’s a combination of a lot of things. And it always has been. It’s a combination of all the technology that we can talk about as to what each of our individual companies are doing and the leadership in innovation, et cetera, that we’re driving. It’s also back to basics relative to channel programs, channel offerings.
CRN: Bang for the buck?
Vitagliano: Exactly. It’s the basic stuff. It’s coverage. It’s support. It’s programs. It's, dare I say, rebates. I know I just dated myself, but I’m going to say rebates.
It’s a combination. What’s happened is the solution providers have to take all of that in addition to where is the market going: How do I figure out what vendors make sense? Then you also have to figure out, How do you layer on top of that? ...
We’ve layered on Dell Financial Services, which has been a huge advantage that we have. ... It’s those types of next-generation or add-on programs that you have to do to fit what is happening in the market, but you do it on a layer of a solid foundation that’s based on products and programs and understanding of the marketplace. That, I think, is the combination you have to have to be successful. The partners have figured that out because they always have.
NetApp's Lipsin: I’d layer one thing on that: It’s not just how do you make a buck, but how tough is it for you to make a buck? If you’ve got a direct sales team or a sales force or a set of systems and processes that are too difficult to work with, it can be expensive for the solution provider to actually make that money as well. You have to have what you just said, Frank: everything all working together. We’re going to out-innovate each other one day. We’re going to out-program-dollar somebody one day. Somebody may bring back the rebate.
EMC's Ambulos: Three words, right? Simple, predictable, profitable.
Lipsin: It’s not rocket science, but it’s how you pull it all together in such a fashion that at the right point in time, your solution providers, whether you have lots or a few, can find a way to work with you effectively.