 from theCUBE studios in Palo Alto and Boston. It's theCUBE, covering IBM Think, brought to you by IBM. Hi everybody, we're back and you're watching theCUBE's coverage of the IBM Think digital event for 2020. This is the socially distant and socially responsible CUBE, my name is Dave Vellante, I'm here with David LaRose, who's the general manager of the IBM partner ecosystem. David, good to see you. Likewise, great to be here. Yeah, so this is your first year in running the ecosystem. You probably didn't expect to be managing through this world crisis, this novel coronavirus, but what was your first move? Your outreach to partners, how are you communicating to them? Maybe you could share with us how that's all going. Sure, it certainly wasn't in the brief. So when I took this job, you're right. We have a very strong relationship with our partners and what we have is we have a global advisory board. So it's about 25 or 30 of our largest partners across the world. We engage with them very, very quickly. That's all of the CEOs, presidents, vice presidents of sales. And we engage with them on a survey and said, how are you thinking about this? What are your big concerns? And not unusually, they came back with a couple of key things. Number one was, and their primary concern is how do they support their clients? That was probably number one on their list of things, followed very closely by enabling their firms to have a financial stability. That was number two. And then probably number three, I would say, was managing their workforce. You know, moving to a digital only type of environment similar to what IBM's done. That were kind of the three big concerns. And then we spent some time talking to them about how we could help them really deal with that and address some of those problems. And earlier this week, we announced sort of four very key things around how do we help them? One, how do we adapt our programs and our incentives and really looking at providing them with extension of things like loyalty programs? So don't worry about your ability to revalidate and re-certify. We're gonna protect your loyalty for 2020. We added a lot of incentives in our hardware, our systems program in the second quarter. So we've increased by half a percent of their based incentive from the first dollar. And so a lot of areas around programs and terms. Then we sort of really tried to address their point of view around digital. Some companies were digitally ready, but there were many companies that weren't digitally ready. No digital platform at all. So we very quickly rolled out what we call our My Digital Marketing Platform where partners can come in, download content and curate content from IBM and then wrap their own campaigns around that and get that out and continue to engage with their clients and their partners. And we're funding all of that 100% from an IBM perspective on using our co-marketing dollars. We used to have a 50-50 funding model with our partners, but in this particular scenario, that's a digital program that they're running with funding at 100%. And then we're also opening up to provide consultancy on how to optimize digital campaign. So I think, Dave, the thing that we've done here is adjust our programs and terms quickly and put more money back into the program during the second quarter and kind of protect liquidity for our partners and then really try to help them and enable them to get to a digital workforce and a digital program. Yeah, a couple of things there. I mean, we were talking earlier to the folks from IBM Global Finance and that's a key part that you mentioned liquidity. Certainly these partners are obviously very much concerned about the uncertainty ahead. So having a partner like IBM that can, whether it's pass on lease terms, et cetera, and provide that sort of backing is key. I think the other thing too we've heard from a lot of executives is you got to stay close to your clients during, and we always do, but especially during times like this. And that's where partners are so crucial. I mean, IBM, huge company, massive direct sales force, but you can't cover everything. And so having the partner who's got intimate relationships, I mean, I was on a call earlier this week with a partner in Minneapolis. I mean, he knows everybody in that region. And so that level of intimacy, I think becomes very, very important in times like this, doesn't it? Absolutely, and staying connected with that. So we have about just over 10,000, 11,000 active partners across the world and staying close to the senior members of our largest partners is really important to us. We had a, let's say we hosted a call earlier this week, actually, with our advisory council to test the programs that we've got in the market. Are they hitting where they need the help the most? We take a lot of feedback. We've adjusted our programs. We're looking at this on a literally a daily basis right now and would envisage that we would update and be pretty agile in terms of how we maneuver that. But to your point, having a partner network that we do have around both our hardware and our software portfolio and it's great to learn what they're hearing from their clients and allows us to more easily and quickly address needs across all of the IBM clients. So we interview a lot of partners and when you talk to them, oh yeah, they got to make money. The margin is very important to them, but it's almost, it's a table stakes. I mean, they can make money a lot of different ways. So what differentiates the suppliers is all these other things that you're talking about. So I want to ask you, when you came into this role, what were your priorities in terms of partner outreach, retaining that loyalty and what do you see changing as a result of this pandemic? Yeah, that's a great question. So look for key priorities that we declared very early on. And by the way, took over from John Telch at the time and John has spent the last two years really transforming the channel and the way we engage with the channel. And so there was a lot of hard lifting that was already done, but there were sort of four things that we focused in on. One was obviously how do we continue to accelerate IBM's drive into the hybrid multi-cloud market, particularly now with the integration of Red Hat into the organization. So that's a very different sales motion that we had. And so accelerating, that was one of our key priorities. The second one was, and how do we continue to differentiate partner value? And so ensuring that our programs are staying up to speed and that they're being modernized, the IBM Partner Wall Program has been a program predominantly built on resale over the last 10 years. Now the market shifted, we're now talking about platforms, we're now talking about consumption. And this week during Partner World, we're going to talk about how we are going to evolve the Partner Wall Program to move into and address partners who are building on platforms and how they're moving to consumption. Again, all around hybrid multi-cloud. That's kind of the second thing, skills and expertise for our channel. We kind of have declared that we want our channel to be the most skilled channel in the industry. And it's really interesting, Dave, during this period of the pandemic, it's one of these times where we seem to have more, we seem to have more time. And the partners have been giving us a lot of feedback to say, during this time where our workforce is home and is connected digitally, why don't we, why doesn't IBM help with enhancing the enablement program, certification? And so we're doing a lot around that. We see it as a great opportunity to really develop them, certifications and skills and expertise during this period. And then the fourth thing is around winning in what we call our selective segments. And so we want our partners to operate across the IBM portfolio and across our client set, but where we really need their help and where we're putting the money in the programs is around the mid-size organizations where they can bring our portfolio into places that it doesn't exist today, new clients or existing clients with IBM, but an adjacent product. So those are kind of the four priorities. And what we're seeing is this situation that we're going through, this pandemic that we're going through is actually accelerating the areas around moving to my hybrid multi-cloud, cloud is becoming differentiated for us and accelerating our need to get a program that is relevant beyond just resale, but this concept of platforms and building, partners that build with their own IP on the platform and consumption. So I think it's actually accelerating what we've seen and how we're moving forward on our priority. It's interesting what you're saying about resale. We've talked many, many years for now in theCUBE about how the partner ecosystem, it really used to be about resale, we're sort of pejorative as box selling. And you could make a lot of money doing that, a decade or two ago, but when cloud came, partners really started to understand that there was a sea change happening in IT. For a while there, they thought, wow, this is really going to be challenging. Cloud's going to kill us, but what they realized after a while is what cloud is actually complex. Hybrid cloud is not simple to secure and create a seamless experience across clouds, on-prem, et cetera. So the huge opportunities open up to add value. So there's been a massive change in the mindset and it sounds like, particularly with digital, that the pandemic is going to accelerate that and people are going to come out of this almost having done some exercises, maybe in a little bit better shape than they came into it. Do you buy that premise? No question, there's no question at all. I mean, if you think about IBM's portfolio for a minute and over the last really six to nine months, we have containerized our software portfolio. It's based on the Kubernetes containerization and all-back around OpenShift. So we're ready from a portfolio perspective and now we're catching up from a program perspective. We're introducing this week in partner world, this concept of a build program and a service program. And so that is, we'll preserve and continue to evolve the sell program, the resale, but this concept of a build program and a service program is going to only extend the reach that we have to the partner and the ecosystem that we're operating in. New sets of partners, partners that want to transition their business from resale to consumption, and we're going to support that. But then to your point around this whole digital, everything from digital capabilities around generating demand and opportunity. And we talked a little bit about that earlier with my digital program and the funding that we've got behind that and the expertise that we're offering as consultants, but also this concept of digital selling. Not all of our partners are savvy around digital selling. So we've been doing that for many, many years. And so we're opening up digital selling enablement sessions, webinars, consultancy, and a bunch of assets that IBM has invested in for many, many years and opening that up to our channel. Yes, so great opportunities there for partners. I mean, theCUBE has been covering the Red Hat Summit, we've had Jim Whitehurst on, we're in the process of scheduling. Arvin, so it's great to see, kind of connect the dots between those franchises and identify the opportunities. And they're significant. I mean, Red Hat has a lot of momentum in the marketplace. IBM has huge presence, great opportunity to modernize applications. And then your point about the hardware side, we just saw an IBM's latest earnings release that the fish are running in hardware right now. And obviously tailwind of the Z cycle, but other parts of the portfolio storage grew 19%. So some exciting times for partners, even though there's so much uncertainty in the market, again, staying close to customers, doing right by your employees, leveraging the IBM relationship where you're obviously providing a lot of backdrop and support. David, I wonder if you could just sort of wrap a bow around, thank 2020 as the virtual trucks are pulling away from the virtual digital Moscone. What's the takeaways? Give us the bumper sticker. Look, the bumper sticker is that it's never been a better time to be at IBM partner. We've got a leading portfolio that is now ready for the new world, the world of consumption and the world for building on. We are, we're modernizing our programs to ensure that you can make money here. There's a lot of money to be made as we get into this new world. And we are behind you right now to support you both financially and to get you digital, digitally enabled and engaged. So never a better time to be an IBM partner right now. David, great message. Thank you very much for coming on theCUBE and best of luck to you. Stay safe and again, really appreciate your time. You too, Dave. Thanks very much. Stay safe. Bye bye. And you're watching theCUBE here. IBM's think 2020, our digital coverage will be right back right after this short break. I'm Dave Vellante and you're watching theCUBE.