|Kelly Teal Blog|
Kelly Teal, senior editor of Channel Partners, relies on nearly 10 years of reporting on telecommunications business, regulation and the channels for her perspectives on industry trends.
San Francisco v. Las Vegas: Doyle, Teal Talk VMware, IBM Partner Conferences
Two tech titans, two gigantic partner conferences. Throw in two Channel Partners editors, two great American cities and a flurry of announcements, and you have the components for an interesting dialogue on the industry. Here, editors T.C. Doyle and Kelly Teal compare and contrast IBM and VMware — two vendors at different junctures in their histories. IBM, of course, is the venerable stalwart repositioning itself for new potentialities, while VMware is the software wunderkind that has come of age.
T.C. Doyle: Kelly, IBM always puts on quite a show at its partner events. This year, I think you had X,000 partners, CEO Ginni Rometty and even author Malcom Gladwell. You were at the Cosmopolitan, which bills itself as the place where there’s “just the right amount of wrong." Is that what you found at PartnerWorld?
Kelly Teal: Ha! [laughs]. IBM is re-skinning itself for a new future. Hardware and software still have a place – to be sure, Big Blue was dogmatic last week at the event about why infrastructure continues to matter – but the company realizes they are two parts of a larger whole. That's because technology keeps growing past the premise, into the cloud, into the mobile realm, and into the need to manage and make sense of all the information organizations produce.
TCD: Where do they stand on cloud?
KT: Do not expect IBM's work in cloud to constitute a passing phase. Quite the opposite. At the event, for example, IBM CEO Ginni Rometty a packed venue at The Cosmopolitan that, "We are a serious partner in cloud." She also said IBM is "remaking enterprise IT for the era of cloud." For IBM, that means, "cloud first, mobile first" in all Big Blue development. Them's fighting words from an industry stalwart that going up against the likes of Amazon Web Services, which is eating competitors' public cloud lunches. But IBM armed itself for that battle with the purchase last year of SoftLayer. IBM has said it's going to reach $7 billion in cloud revenue by 2015. Expect it to hit that goal in part by focusing on a hybrid approach to cloud. Hybrid is the key, executives emphasized during speeches and in one-on-ones with press. And that's why infrastructure remains crucial, hardware-entrenched Big Blue insisted throughout its partner event. Similar message for VMware?
TCD: VMware was a hoot. In fact, IBM came up a lot, but not in ways you might have expected. IBM was a reference points in conversations, as in, “Is there any danger VMware will go the way of IBM or Microsoft?"
KT: What does that mean?
TCD: One partner, a guy I’ve known for years who works at a $500 million-plus company, said VMware is now a top five vendor in terms of strategic importance. (In terms of revenue contribution, it’s more like a Top 10.) Other vendors have reached this level of influence, only to have fumbled it with greed, business miscues or technology endeavors that fell flat. When they have, partners have suffered. VMware is at the point where its capabilities and potential are coming together. Partners love that and just hope that VMware’s ambitions, which are pulling it into many directions at once, don’t blunt its momentum.
KT: Cloudy in San Francisco?
TCD: Good one. Yes, is the short answer to your question. In fact, the company believes everything will be in some sort of hybrid cloud eventually —and sooner than later. At PEX 2014, VMware CEO Pat Gelsinger, a lifelong hardware engineer, told partners that their future lies in software and cloud computing. Nothing in technology today, he said, has offered customers the business value that virtualization has. VMware is the company of the future, he added, while others with legacy hardware businesses are destined to be relics of the past.
KT: You wrote about Gelsinger’s “must wins"?
TCD: Yes, Gelsinger laid them out. First, he said the company must make the “software-defined data center" mainstream this year. Next, he said VMware must win the “network architecture battle" and become the de facto leader in mobile enterprise management. Finally, he said, VMware must establish vCHS as the definitive hybrid cloud platform. So to your original question, it was cloudy with a little fog in San Francisco.
KT: Now you’re just trying too hard to be clever.
TCD: OK, let’s switch to partnering. What did IBM say about partners?
KT: The only way IBM can meet its financial objectives for cloud is, in large part, through partners. At PartnerWorld, IBM talked a lot about its push to a co-sell model in which, for most deals, direct reps will not be paid unless they sell through or with a channel partner. David Carlquist, vice president of worldwide channels within the Systems and Technology Group, told me that strategy has aligned the IBM field sellers' interest with the partners' interest. "It's provided what partners tell us they want, which is clarity around our routes to market — where we want and need them to engage," he said.
TCD: Real progress or mere words?
KT: IBM is serious. The elimination of channel conflict strikes me as smart, as does IBM's addition of the Business Transformation Initiative, which helps partners identify and develop a core competency. After all, if partners don't buy into Big Blue's evolution, then who will?
TCD: VMware had some new things for partners and similarly broad promises about partner commitment. In fact, a lot of what it did at PEX followed a proven script. Many of the changes unveiled at PEX 2014 bear the fingerprints of SVP Dave O’Callaghan, the one-time Cisco executive who joined VMware as head of channels and alliances in May 2013. He’s borrowed some of the best of Cisco’s partner philosophy and blended it with his own ideas to help make VMware’s partner program one of the most progressive and popular in the industry. Today, the program boasts more than 75,000 partners worldwide.
KT: So what was the script in San Francisco?
TCD: First, VMware thanked partners for their contributions. Then it outlined the opportunity partners have working with it. (In this case, VMware says there is at least $50 billion worth of hybrid-cloud technology to be sold in the next few years and as much to be made selling associated services.) Then VMware rolled out some new tweaks to its programs. Among other things, VMware unveiled a new ‘Enrolled' tier, which will allow new partners to join the VMware Partner Network and receive training, and then select the program that best suits their business focus. In addition, the company has created an early-adopters program for partners looking to pursue new opportunities around VMware NSX and VMware Virtual SAN technologies. It will be named the “Elite Partner Initiative" and be limited to a few select partners. VMware also unveiled new program competencies and a simplified reward structure. Beginning in May, for example, VMware will offer a new Cloud Provider Solution Competency and vCloud Hybrid Service Solution Competency.
KT: Kinda wonky but important bread-and-butter stuff. What about inspiration: What did VMware offer in terms of something that puts them on a level of Microsoft, Cisco or AT&T?
TCD: You mean like big think?
KT: Yes, what did it do to inspire people and let them know that VMware has a vision that is bigger than most?
TCD: Great question. For its last speaker, VMware bought out Sal Khan, the founder of Khan Academy. He was a brilliant choice and a terrific speaker that made you feel smarter about your choice to be in San Francisco.
KT: How so?
TCD: If you don’t know Sal, his back story is pretty compelling. He’s the guy who was running a hedge fund and quit to create a free, online academy for anyone who wants to learn. He literally stumbled across the idea after trying to help his niece or someone get a better grade in math. He took the stage at PEX the way a comedian does, told a very funny story about attracting the attention of Bill Gates, Google and others, and then made the case for technology being put to use to help advance humanity.
KT: Why would partners care, other than being curious about things having to do with raising kids?
TCD: Ah, here’s the genius in choosing him. Khan is both an entrepreneur and a philanthropist of sort. So he was able to speak to both the heads and the hearts of the assembled partners. Running a startup at scale? That appealed to their heads. Helping disadvantaged kids the world over get a leg up on their education? That appealed to their hearts. Partners want to align with companies that do both well and good. And Khan showed partners that VMware, by extension, was at least thinking about this.
KT: That’s pretty cool, I’d agree. IBM, of course, established itself as company that does both years ago. Its challenge is to persuade partners that it will be a company of the future as much as it was in the past. Rometty, herself, said, “There is no doubt we will lead not only the past but the future." The future is wide open, from Big Blue's point of view, and contains everything from cloud and big data to professional and managed services, and cognitive computing. IBM is all agog about that last one. "Watson," a computer that actually learns from the information fed to it, must have cropped up a dozen times in executives' speeches. Much of Watson's fame right now comes from its appearances on "Jeopardy," but IBM is keen on turning cognitive computing into a relevant business opportunity.
TCD: Final thoughts?
KT: Yes, cognitive computing is shiny and interesting, rife with plenty of social and cultural implications. But I'm struggling to wrap my head around how Channel Partners readers, especially those who target small and midmarket organizations, can capitalize on the capability. Maybe I should relax about it for a while, though. I gathered, from snippets of overheard conversation, that cognitive computing as a business reality remains at least five years out. That said, IBM seems to be inserting itself back onto the forefront of technology. The key is whether the company can maintain a focus on delivering platforms that help partners solve their customers' business problems. Pie-in-the-sky efforts are great for dissecting around hors d'oeuvres and drinks, but they have to come down to earth to mean something for firms eager to stay relevant and operationally responsible in a fast-moving, ever-changing business environment. It's good to be a visionary. It's arguably better to have the chops to fix problems in the now. If Big Blue can do both at the same time, I think we've got a formidable powerhouse on our hands.
TCD: Listening to you now I’m beginning to wonder if you missed lunch.
KT: Ha! [laughs] What are your final thoughts?
TCD: At both events, “consistency" and “predictability" were held up as virtues. And no doubt partners need those things from their vendor partners. In fact, they are the hallmarks of good partnering from Cisco to Lenovo and beyond. But I worry that with all the attention paid to making gradual changes, the industry as a whole misses opportunities to move the needle in a more dramatic fashion. A little revolution can be a good thing now and then.
KT: So can a good meal.