As-it-happens coverage from the storage giant's first-ever global partner conference before EMC World
LAS VEGAS — For the first time, EMC is holding a formal Global Partner Summit the day before its annual EMC World customer event gets started here.
Global Partner Summit starts Sunday afternoon at the Venetian here, with some 3,000 of the company’s solution providers in attendance.
Expected on the main stage in a marathon five-hour keynote session are CEO Joe Tucci, vice chairman William Teuber, Pat Gelsinger, CMO Jeremy Burton, global channel chief Gregg Ambulos, and much more.
And, of course, I’ll be in the audience, liveblogging the event — including the keynote session Sunday afternoon — for those of you who can’t be on hand for the event in Sin City.
Good afternoon from Las Vegas! The EMC Global Partner Summit keynotes are getting underway… the event host is Mark Jeffries, the same host as February’s HP Global Partner Conference. Doing exactly the same routine, no less.
But he quickly hands the stage over to EMC CMO Jeremy Burton.
“Is there anywhere else you’d rather be in Las Vegas on a Sunday afternoon” than in a keynote hall, Burton starts off telling partners.
“Never is this industry more exciting than when it’s going through a time of transition,” Burton said — and that transition is, of course, the cloud, which is “not a new name for the same old technology,” he insists.
“There will be 100s of thousands of private cloud organizations” as every organization turns to the more dynamic private cloud environment in the name of efficiency. Add to that “thousands” of public cloud environments, many of which will be run by partners, and there are a lot of opportunities, Burton says.
“We want to make sure the guys associated with EMC are the most trusted service providers” in the cloud world, Burton said.
The debate between public and private cloud is a useless debate, he says, betting on hybrid clouds.
Cloud is not new. “We’re not here to say ‘get going,’ we’re here to say ‘if you haven’t got going, you’re being left behind,’ and to get the right supports in place for partners as they get going.
There are three partner paths to the cloud, Burton says.
The first of those is the traditional EMC world – building clouds based on VMware (of course) on EMC hardware, including the company’s first few “channel-only’ products with the VNXe storage system and the Data Domain 160 dedup array.
Plus there’s the new VMAX solutions for service providers offering IaaS, who were asking for the ability to “buy an outcome” from EMC.
The next line of thinking was to go from best-of-breed products to best-of-breed solutions, Burton says, introducing the EMC VSPEX.
VSPEX is “a very different type of offering for EMC” in that it’s a channel-only solution “a blueprint for you to take and build products for your customers.”
Burton says EMC uses its labs to offer validation for what partners have told them are going to be popular hardware configurations in the marketplace. “We prove the solution, you take the product and package it,” including partner logos on the EMC-designed hardware.
“We’ve never done this before, but we want you to leverage our brand in the marketplace,” Burton says.
Partners on board include Citrix and VMware on desktop virtualization, Microsoft and VMware on hypervisors, Cisco, Dell, HP and IBM on servers, Cisco and Brocade on networking.
And now moving on to talking about the VMware/Cisco/EMC combination Vblock storage devices.
This week, the company will introduce a series of new partner programs and services for partners, helping support the move towards the cloud, Burton says. More details to come a little later into the keynotes.
“Without trust in the cloud, there is no cloud,” Burton says, and apparently we’re moving on to the pitch for the RSA business.
Security needs to change with faster attacks, smarter attacks, and the dynamic nature of infrastructure in the virtualized world. “This really is a huge big data problem,” with organizations collecting more than 60TB of information around the information flow in their systems — and it’s the only way to detect “low and slow” long-term attacks.
“We think that big data analytics are going to change the world of security forever,” Burton says.
And with that segue, onto the subject of big data, talking about the rise of data-based businesses — Google, Facebook, Twitter — even the NYSE.
Big data “breaks traditional IT infrastructures,” Burton says. Existing infrastructure simply won’t scale to the kind of data volume being talked about.
“The real value is in the analytics,” there’s a new model for data scientists to come up with the right data set that the buisness can analyze.
And there’s a new opportunity in analytic applications for big data. “And the great news is that none of this has been built,” still a greenfield opportunity for EMC channel partners, Burton says.
“If cloud was a twinkle in our eyes two or three years ago, it is absolutely a revenue opportunity today,” Burton says, as he wraps up his presentation and hands off to channel chief Gregg Ambulos, who’s cued up by a Mission: Impossible themed video — Mission: Transformation
The theme of this week’s event in Vegas, by the way, seems to be “Transform” so expect to hear a lot of that.
Back in the 90s, Ambulos suggests through an anecdote, partners would “rather have a root canal” than turn to EMC for help.
His anecdote involves a partner, in 1995, turning to EMC for support, and EMC came in and took the deal direct. He says that was because EMC was a single-product company, focused on the enterprise. “Our corporate culture was not conducive to partnering. It was not in our DNA,” in the days where EMC’s sales engagement model was features in the Wall Street Journal.
“But that was then,” Ambulos says.
That changed with the market crash of 2001. “EMC went from 3 a share to .5 a share. It was painful.”
Ambulos says the arrival of Joe Tucci helped the company reorient itself around solutions, enter new markets, created the channel-only commercial segment, and increased the number of services deliverable through solution providers.
Ambulos’ walk down memory lane continues into the launch of the Velocity partner program.
“If this decade taught us anything, it taught us that we can transform, we can continue to lead, and we need you, our partners, beside us every step of the way,” Ambulos says.
Fast forward to today, and “we’re all working together to accomplish the same objective.”
“It’s never been a better time to be an EMC partner,” Ambulos says, due to a single, integrated, consistent partner program and channel community.
He says the company has “opened up hundred of new accounts” to the channel.
“This is not a program change, this is a cultural, and a go-to-market change,” Ambulos says. More details to come later this afternoon, Ambulos promises.
“We’re engaging with you differently,” Ambulos says, including top leadership making sure EMC is working with partners in “a positive and profitable way,” including new rules of engagement that feature more accountability for EMC sales reps.
“Everyone at EMC, everyone, is focused and committed to making sure you’re successful. And when EMC focuses on something, it gets done.”
If partners are hearing that 2012 is “the year of the channel,” Ambulos says he’s pushing back. “This is the decade of the channel.”
And out comes Terry Breen, SVP of Global Alliances, who talks about the journey to build a partnering culture at EMC.
“We have done a lot to transform how we work with our partners, but we’re not done,” Breen says. “We still have a lot to do.”
He proclaims (via a very bright slide) than “100% of EMC’s business is affected by our partners.”
Of course, this includes the work of the company’s biggest alliance partners — the example he gives is Accenture, doing a cost-reduction project for a customer.
“No longer can we control 100 per cent of how we go to market,” Breen says, largely because of things like cloud, security, big data, analytics and mobility. “What they can do to help customers transform their businesses if phenomenal, but it’s complex.”
Customers are getting more sophisticated, and want solutions to business problems, want fast ROI and are extremely risk-averse.
“We need you to be successful,” he says. “And many of you need to have a relationship with EMC to be successful.”
He says his goal aren’t more strategic alliances, but a few larger ones that “move the needle on both sides.”
There are three main types of partnerships for his business, and they are not necessarily mutually exclusive.
The first are “high quality relationships” where many parties on either side know each other, so it’s easy for either side to ask for help at any point in the sales process. Usually, there are dedicated resources on these partnerships, and the business is measured every six months.
Secondly: “Powering up service providers,” and by SP, he means IT-as-a-service hosts. “We believe the market is accelarating, and we have no intention of being an SP ourselves, but we’re betting on it being successful.”
Third: “Market makers,” partnering to create a new business or enter a new market. “If we’re successful doing that, we’re creating something that’s net-new to both of us.”
“Our mission is to collaborate with you and dominate the cloud,” Breen says, wrapping up his presentation.
“Our industry continues to change so quickly,” he says — time for a strategy update and some product news.
On the strategy side, it’s all about cloud. “Cloud is fundamentally transforming what we do in terms of delivering IT,” he says. Cloud has gone from “this vague, fluffy notion” to something that is concrete.
And onto big data. “Data is the most valuable stuff” in the data centre — that’s why they’re called data centres and not server centres, Gelsinger quips.
The database used to the heart of every application, but not anymore. “The game has changed in the world of big data.”
And then, of course, there’s the issue of trust. In the current world, IT has lost control of data, control of devices, and control of software, due to cloud, mobility and SaaS.
“Cloud, big data, and trust are at the centre of everything we do,” Gelsinger says. “And partners are at the center of our strategy.”
In the past “we were chickens with the channel,” but in the future “the channel is our business.” (This is a reference to the old joke about pigs and chickens at the breakfast table — the chicken is involved, but the pig is committed.)
“I have about 600 engineers that only do one thing — engineer solutions,” Gelsinger says. That’s what’s led to VSPEX.
Gelsinger says EMC is shifting its engineering to put focus on things like multi-tenancy, to make its products more valuable for partners who are in a service provider mode.
“Our strategy going forward put you at the middle of what we do,” Gelsinger says, in terms of strategy, products and solutions.
And with that, he wraps up his presentation.
He was “a Radio Shack guy” back in the early days of computers, he says.
“EMC is first and foremost a technology company, but services, as you all know, is a key enabler of the customer’s success in using our technology,” Elias says.
He talks through the changes in EMC’s services delivery model over the years. And more changes are coming thanks to the cloud.
“It’s a massive, massive opportunity, and we want to continue the dialogue with you on how we can continue this journey and make this even more successful for you,” Elias says.
Of the billion services market this year around EMC products, EMC itself delivers less than five per cent, he says.
Partners have “the right of first refusal” to service, manage, operate the EMC gear they sell to customers, he says.
“Our strategy is to do what is necessary to enable your success,” he says.
The company will always do services, though — it allows EMC to get feedback on products quickly, and to support partners as a backstop.
“We’ll let the water find its own level, and today, it’s about how we enable you to do that,” he says. That definition of success will be largely driven by channel partners.
In the second half, Elias says EMC will introduce “the voice of the partner,” as part of its customer satisfaction efforts. “We want your voices heard in how we develop our solutions, our go-to-market, our offerings and our services.”
Building off the Velocity services and its Velocity specialties, the company has begun to introduce a set of co-operative services, “meant to amplify your capability and scale.” The idea is that partners can and will deliver most services, with the ability to plug in EMC services through a framework. Elias suggests this will include flexible delivery — white-labeled, a simple knowledge transfer, etc. “In any situation, you own the customer, you decide the deliver, you decide how you want it branded,” he says.
These co-operative services “are being built as we speak, and will roll out over the coming weeks and quarters.”
Elias says the company is introducing new partner specialties: Cloud Builder and Cloud Provider, although it’s just starting to talk about Cloud Provider.
Cloud Builder is about building partner-branded private clouds and delivering applications that way.
Cloud Provider is about partner-branded public cloud offerings, and it sounds like Elias is still working on what, exactly, partners are looking at in terms of support options to make this happen.
Elias and Gelsinger out now for a little Q&A with keynote host Jeffries.
Talking about the Sub-k product program, Gelsinger says that not too long ago, EMC was “totally screwed up” in every regard for building out solutions for the midmarket and SMB space. But a look at market trends showed that it was large and growing faster than the rest of the market. EMC’s goal is for sub-k to be 60 per cent of the company’s revenues.
“It’s been a comprehensive redux of how we build and design our products,” Gelsinger says, and it’s a journey where they’ve made a lot of changes, but they’re still only half-way there.
“We’ve seen great market gains and phenomenal share growth, but we’re just beginning,” says Elias.
After a brief break, it’s time to talk about the services model and the cloud, and back up to do so is Terry Breen.
“For the past decade or two, almost all of us have behaved in front of our customers in an agnostic way,” Breen says, “We can work with anyone” was the mantra of the day because “we didn’t want to take the risk of having a point of view.”
“The market for that is going away completely,” Breen says. Customers want to hear about bundled solutions to solve business problems, whole subjects.
Alliances and partnerships “are messy”, even with the best intentions in the front office when it gets out into the field, Breen says, that’s why EMC is focused on close relationships.
But not exclusivity, clearly – services companies will have partnerships with multiple vendors, and EMC will have relationships with multiple services companies. But there will be a focus on doing unique and differentiated things together.
EMC is aiming to double the number of partnerships it has over 0 million in yearly business, Breen says.
The goal going forward is repeatability – create a solution together and sell it not once, but dozens or hundreds of times.
“Customers don’t want us selling individual pieces, they want us to collaborate, create and come in with a complete story to tell them,” he says.
Target solutions to put together with partners: Cloud migration, mobility, big data, analytics, and security.
As cloud gains prominence, you have three choices: Be a service provider, work with a service provider and/or resell their choices, or shrink. So sayeth Dennis Hoffman, senior vice president of service providers.
Just as emerging markets skipped the landline world and moved straight from nothing to wireless, there’s the potential for the same to happen in computing with the cloud, says Ricardo Di Blasio, SVP of worldwide cloud service providers at EMC.
The market is getting bigger with the cloud, Di Blasio says, as cloud makes it easier for startups to get started up. Each customer may be buying less infrastructure, but the exploding numbers of new, small businesses looking for cloud-based computing solutions will help grow the business opportunity for solution providers.
“The market is going to challenge every IT vendor to solve a very complex customer equation, and we can’t solve that equation alone anymore,” Di Blasio says.
Breen, who until recently came from the global SI market — Accenture, to be precise — agrees with that idea.
After some rather lengthy panel discussions, here comes CEO Joe Tucci to bring this keynote home.
“Every company, in any industry, needs a footing, a soul. And the soul of EMC is technology,” says Tucci. That’s supported by an R&D investment of between 11 and 11.5 per cent of revenues each year.
But even at that “it’s a very small portion of all the innovation that goes on in our industry,” hence a similar budget item for acquisitions.
Tucci walking partners through the changes he made when he came to EMC more than 10 years ago to make the company a more channel-friendly organization. He’s beginning to sound like John Chambers and his Partner Summit “The first thing I did was to bet this company on partners” mantra.
“We care about your business as much as we care about our own, and we hope that you care about our business as much you care about your own,” he says.
He says he knew that the company had to fundamentally change after “about a week” at EMC.
And with that, he’s spending the rest of his time on the main stage answering questions from partners.
When he came on, he felt that the company’s confidence had given way to “a little bit of arrogance,” with P/Es of 150 and above. That growth also made it very hard to lobby for change. But the 2001 downturn provided the impetus for change, and he found people much more receptive.
“Innovation can come from anywhere,” Tucci says in response to a partner question about the role the company’s solution providers play in its R&D and product development efforts.
Tucci says EMC is not “a classic VC” but is “a pretty significant VC,” making quiet investments in new technology companies. He says EMC has placed “multiple, sizable investments” in enterprise flash. In that case, one of them ended up being acquired by EMC, several others were successful and drove a nice return for EMC, and ultimately, a few fizzled out.
After making a joke about the valuation of a post-IPO Facebook, Tucci offers his thoughts on growth — he says there are two ways of doing it, slow an predictable a la IBM, or very fast topiline growth, a la Google, Apple, Facebook, etc.
“The market is saying ‘If you don’t give me this growth, I won’t give you valuation today,’” and in that way, things are very different than the boom before the 2001 bust, even though it does mean some good companies, which aren’t as focused on growth, aren’t doing as well as they probably should be.
Tucci answers a partner question about declining license sales for its Documentum business.
“When Documentum was built, it was built as a big platform, and you put it in and then decided what applications to put in,” he says. But that’s not the way customers want to buy now — more into SaaS and individual apps. He says the company will “transform its content business into where it needs to be for tomorrow,” a shift towards getting value and insight from unstructured data.
He says it will probably not return to growth as soon as next year, but remains “an integral part of the family.”
Tucci avoids a moderator question about which of his competitors are doing well and which are at peril by saying that the best-case scenario for the market and for EMC is a field where EMC’s competitors are growing quickly but not as quickly as EMC. He says the company has competitors that are following yesterday’s strategy but executing well, some that are following today’s or tomorrow’s strategy but executing poorly, and even some that are focused on tomorrow’s strategy and executing well.
He says that as important as it is to have the right business plan, execution counts just as much. “I’d rather execute really well against a half-baked plan than to have a great plan and fail to execute on it,” he says.
Surprisingly, Tucci declines to comment on whom might be next in his crosshairs for acquisition, but does say that he’s focused more on building up the core business than on adding new adjacencies to the business. Automation, in particular, will be a focus area for growth, either organically or by acquisition.