 We're here live in Las Vegas, Nevada. This is SiliconANGLE's exclusive coverage of HP Discover 2013. I'm John Furrier, the founder of SiliconANGLE. Join with my co-host, Jeff Frick. And our next guest is Patrick Stewart, Vice President General Manager of AdNet Services, HP Practice. Welcome to the queue. Thank you. Great to be here. The AdNet's well-known company that's worked with HP from supplying gear to services and everything in between. I got to ask you before we get into some of the specifics. You know, Dave Donatelli was just on the queue here and he said, HP is, we're going to rework really hard to do business, make it good for people to do business, easy to do business with us. That's one of his goals. So is HP easy to work with? I mean, what's your experience? And today, even now, with all the negative press they've been getting over the whole past three years, what's HP like to work with? I think HP's company is a great company to work with. Our team, AdNet Services, specifically works with the HP software side of the business and their channel programs are very friendly. And in fact, they implemented a whole new set of channel programs on May 1st under Bill Wells' leadership that really drives a substantial amount of business to the channel partners. And in fact, incensed the channel partners in a whole new way to invest in the new technologies and the new solutions that HP has. And AdNet is positioned in a perfect way to be able to go to our channel partners, specifically our hardware partners, with the software solutions and allow them to deliver them to their own customers. It's always hard for companies to manage channels, especially when markets shift. And I remember, I used to work for HP back in the 80s when the channel was exploding. They weren't that strong. And then IBM fall, just back in the PC days, IBM fall, and HP took a lot of territory down. They moved very quickly. They've always been very channel friendly, but it's always hard to maintain that. What does HP do that's different that makes them, I don't want to say the Teflon channel partner, because they deflect a lot of stuff that other companies, it's just their size. What makes them so resilient in these changes? I think it's the depth and scale that HP brings as one of the largest technology companies in the world. I think HP has learned early on, back even from the deck acquisitions and their own legacy, that the channel was the right way to go to market. They've had a very strong channel program since I was a CIO back in the 90s, fair large manufacturing company. And I remember working with HP back then as a customer working with their channel partners to acquire specific solutions that HP had. So as a customer back in the 90s, I was very familiar working with them through the channel. And that's lived on, that culture and that vision has lived on through different leadership. And I think under Meg now, you're seeing a recommitment to that and even a stronger emphasis because as HP looks at how they're going to grow and drive new products to market, the channel is the only way for them to be successful. Let's talk about channel conflicts. It's really the core tenant of good channel marketing and good channel partnership is, not the conflict with your partners and margin, right? Margin expansion, making money. Right. You're not getting paid and no one's happy, right? So that's been a good balance for HP. How does a partner manage this kind of conflict opportunity resolution? You get cloud, you have a lot of services and platform as a service. You have all these new kinds of delivery methods of services and products. Everyone thought that mail order would kill the channel, never did. Still here. So how do companies manage that conflict in these really rapid environment? I think what you're getting to is the consumption model of IT is changing drastically. If you go back 10 years ago, you look at outsourcing. Companies, channel partners, technology partners were looking at how outsourcing, 15 years ago really, how outsourcing was going to impact their business, moving big data centers into a central area. Cloud computing is a whole new consumption model, just like any other type of evolution of IT. And I think what the channel partners need to do, all of them working with the abnets of the world is to develop solutions that meet and adapt to that new consumption model. So, Abnet views its role, especially with the services business that we run, is how can we build solutions that take hardware, software, and it deliver it as an appliance in a new consumption model. So we're actually building new appliances that we sell through our hardware partners. That helps them maintain their value, their margin, and most importantly, it differentiates them with their customer, because it's meeting the customer in needs. You know, it's the ideal expression that they see it's the old one in a new bottle, right? So, customers looking for ease of deployment and business value. You mentioned solutions, and one of the things that we're seeing as a common thread in this cloud world is as the technology's accelerating software defined storage, flash, tiering, data mobility, I mean, this is complicated stuff that's getting packaged, and customers just want packaging, they want delivery. So, the trusted partner perspective is interesting. So it's a buyer-build kind of thing. Do you ramp up a sales force, do you go to your channel? Is that something that you're seeing? Do you agree with that statement? Is that kind of the norm of most of the successful companies out there? I don't know if it's the norm, but I think what HP, well, the various types of products that HP has, HP has a wide portfolio of products, and at the end of the day, it's taking pieces and parts of that portfolio and building custom solutions around that. What I like about HP so much is the depth and breadth, and what the opportunity is for Abnet and our partners is to take that wide depth and breadth of products and to be able to bundle them into specific solutions. For instance, today, HP announced Haven, which is, I think, a fantastic reference architecture for big data and analytics. But what HP did differently, instead of creating a proprietary solution, they created an open architecture reference. So it's allowing companies like Abnet to build solutions around Haven and take it to our channel partners for them to be able to deliver to their own customers. And again, it's about allowing a partner and a customer to reuse a lot of what they have versus forcing them into a brand new solution. You've got to buy this solution. So we think Haven is a radical approach and an awesome approach for the entire channel, especially the end customers. So Pat, talk a little bit about how, in your own company, you guys stay ahead of the curve because we've got a tremendous amount of new technologies coming into play. I just mentioned Haven. You've got mobile social cloud. It's all moving very, very quickly. You're a trusted advisor to your clients. How do you keep ahead of the curve and how do you either focus or stay on tasks that you can provide that service to your customers? There's two paramount tenets to our strategy. Number one is stay close to our channel partners and to their own customers to listen to them. Because at the end of the day, it doesn't matter what the technology is, it has to solve a problem, a pain point for a customer. So we have to stay very close to our channel partners and their end customers to listen. Second of all, to your point, we have to stay very close in our ears to the ground to look at where the technology is going. Because it's the combination of where the new technology is and where the business seeds are that meet the creative solution. So it's a challenge. And Avnet feels that based on our depth and breadth of services and that we offer, that's something that we can do very efficiently. We can help our channel partners because we have the scale and depth and breadth to do a lot of that heavy lifting that they can't do. So because they're out there still trying to sell this current solution to their customers. We're trying to stay out in front of this for these partners. So Patrick, you mentioned you were CIO. Is that true in the past? Correct. So are you glad you're not one now? I mean, so I mean, this is a tough environment. I mean, it's changing role. More CFO like, more compliance like chief legal officer, chief financial officer deal with density and servers. I mean, I had a friend of mine as a CIO. I was like, I'm moving to an architect position because 80% of my time is in facilities meetings, power cooling. So that's a whole angle. Now you have the whole technology evolution. What's your take of the current market of CIOs today? The current market for a CIO is very difficult. The CIO has a lot of challenges. I was a CIO for many years in the 90s of Fortune 200 company, manufacturing company. And many of the challenges that we had then are the challenges of today. What's different is the velocity, how fast things are changing and how quickly you as a CIO, if you look at the CIO, what does he wake up thinking about every day? It's got to be thinking about how does he solve the business problems? It's when the CIO now has to keep up with all the rapid velocity changes in the market of how IT is being consumed. So it's a double challenge for them today. When I woke up 10 years ago as a CIO, I spent the majority of my day focusing on solving business problems. CIOs today are pulled in opposite directions because this is so challenging. So let me ask you a question. If you were a CIO today, assuming that, you know, I'm over a simple number, you have to speed up all the threshold issues. And I could say, hey, I'm going to take your data center pain away. Would you give it up? Depends on what business I'm in and what value proposition that data center brings to me. I think a CIO has to be able to look at what is his core business and how do I serve that core business? If you're a financial institution and you've got all these regulatory compliance issues, odds are you're not going to be able to give up that data center. If you're in a business that could afford you to give up that data center and you focus more on the applications and solving the business problems, I would strongly suggest the CIO look at that. There's not a vanilla answer because it really depends upon the business they sit in. You say, hey, I'll take all that power and coolant off your plate. Yeah, absolutely. Well, as an example, I was in a manufacturing environment. I made a decision in the mid-90s to outsource my data center because it was not a core part of our business. However, I kept all of our process automation systems that ran on our seven miles of plant floor. Yeah, that was core competency. That was core competency. So again, you have to make these trade-off decisions. Where you outsource, where you don't outsource. Correct. Keep your knitting close to the vest. And I think that's what CIOs are doing right now with cloud. You're starting to see them take advantage of public cloud and hybrid cloud because they're realizing that there are opportunities inside of the IT organization that they can utilize a private cloud or hybrid cloud without risking their business versus what do they need to keep internally? But it doesn't stop the CIO from understanding that ultimately he's got to be as competitive from a pricing perspective and a service level as a public cloud offer. So it's a real challenge for these CIOs to evolve their organization to be able to, I don't want to say to work compete but to be equal to the offerings that are out there in the market. Okay, so since it's an HP conference and if I ask you a question, you're not going to say, oh, HP's not very good at this and that but I do want you to stretch a little bit and be honest and I'm sure you are at HP. What does HP need to work on as a channel partner? What are the things that you give them direct feedback on? So it's not really like you're throwing them under the bus. I think it's what they're working on right now. If you look at what Meg is presenting and Donna Telly presenting, especially Bill Vecti because we spent a lot of time with them. It's taking this broad set of solutions that they have and compiling and combining it to specific end customer solutions. I mean, really what it's about, again, it's solving the pain point that you and I talked about. They have all this technology and it's boiling it down into specific pain point. Haven is a great example. It takes into consideration a ton and the vertical to do the logging function of the ESP products. So all those products that they have, now what they were able to do is build a, what I think is a brilliant reference architecture that solves a business problem. So their challenge and our challenge in working together is to find ways to take this broad portfolio of stuff that they have and create into really high value solutions for our end customers. And Haven is an awesome example of how they're doing that now. Okay, we're here inside the queue with Patrick Stewart of the General Manager and VP of AppNet Services, HP Alliance here inside. HP Discover, a channel partners perspective and obviously the services angle is a really big deal in the market. It's also laid a lot of growth, a lot of new opportunities, whether it's reseller, integrator and value partner on the software side, a lot of great opportunities. Thanks for sharing your perspective. Obviously CIOs have a lot of challenges as this business is. So great opportunity for channel partners and gross margin and developing great solutions. So thanks for coming on theCUBE. We'll be right back with our next guest after this short break. Thank you, have a good day.