 Hi everybody, we're back live from San Francisco the EMC v specs announcement We've heard a lot today about choice about flexibility It's a it's a definitely an expansion of that converged infrastructure play for emc We because VCE got it all started off in 2009 with V block Which was a lot of choice as long as you wanted it in black and today. It's all about really Expanding the choices in terms of server Vendors that you can pop in hypervisor. We see Citrix here. We see networking Flexibility and we're here within a big big big channel emphasis today, of course It's a hundred percent channel product and solution and we're here with two members of the channel Scott Look is the VP of enterprise storage at Avnet and Al Chin is the VP of sales and marketing at dasher Which is a reseller gentlemen. Welcome to the Cube. Thanks Dave. So silicon angle dot TV We go out we cover all the events and we try to bring in people who really understand The business and extract knowledge from them and share it with our community So as I said in my little monologue up front, this is really a big channel emphasis You guys are all about the channel It's been amazing Scott to look at how important the channel has become in the last ten years and how companies like EMC and net app and HP and others IBM as well have really embraced the channel What's changed there and why has the channel become such an important factor? Well, I think that over time that you know the suppliers are out realizing that the way to get to the scope and scalability of what they need To achieve their goals is through the channel and they can't continue to invest in direct selling organizations and things along those lines So I would you know, I would compliment Greg Ambulos who's been doing this for ten years now at EMC and I've worked with them all all of those ten years and and the progress that EMC has made in the channel and the commitment to the channel and now with channel only products and The v-specs in other colors than black as you as you said is is a true testament to not only Greg But Bill Tuber Joe Tucci and Billy Scannell the whole management team that just done a great job over the last number of years I mean, let's face it. EMC hasn't always been a channel friendly company I mean it's done some head fakes and I have no problem saying that I've been observing EMC for decades and Big you know meat-eating direct sales force still have a meat-eating direct sales force But I think realizing as you pointed out Scott that they get a lot more productivity by working with the channel So Al I'm interested in you so your relationship with with Avnet. You're the reseller You're the the point of contact with the customer, right? So you're Adding a lot of value. I'm interested in we heard the panel this morning talking about the cloud And everybody's very positive on the cloud How can you not be positive in the clouds big trend the trend is your friend at the same time as a reseller? The cloud is somewhat a threat to you in terms of you've got to change to adopt to the cloud if everybody buys from Amazon Well, what does that mean for you? So How are you changing your business to accommodate that trend? So what I think we've done pretty effectively over the last couple of years is anticipate those customers that are moving away from Amazon they become disenfranchised They may have realized now that they're paying way too much money for what they're getting and they want to start managing their own Infrastructure not ideal for them, but in many cases. It is a conscious decision to pull away from a Opex perspective and move into a capex model. They may still need a hosted relationship or a managed service somewhere What this now offers them is the best of both worlds they can move off of the Amazon play and manage their own infrastructure and truly own it and do with it what they want to have done It's not a shared resource. They actually own it themselves Yeah, so I mean Amazon is alluring right because it's oh, yeah great. I can outsource it, but it's expensive It is very expensive and unwieldy What do you mean by that? It's not flexible The the customers typically don't get a say on what platform they get to run their infrastructure on or what the Utilization might be they can turn it up and turn it down as needed But they don't know what the hardware is going to be this that there's a very definitive Definition of what this will be running on so you building so we've as a small company faced that same thing We used to we went to Amazon. Wow. This is really expensive as we we started looking at hybrids We do some backups on s3 and maybe you know, are you seeing that same thing? Are you seeing sort of that hybrid cloud or is it really more focused on the private right now? I Think all three universes exist right now. There is private. There is public There is hybrid most customers are somewhere along their journey right now smaller ones are going to be definitely more in the public cloud Because that's what's convenient It's it's purely a cosplay and how do I get ramped up and get resources quickly? Larger companies are probably in the hybrid mode. They've got Utility models out there or they need extra Utilization that they don't necessarily want to pay for because they think it's a short-term need And then you've got the commercials or mid-market companies that are now moving away from an Amazon play and into their own private cloud so I'm interested in the whole value chain of how The channel catalyzed this announcement because when VBlock first came out I know a lot of channel partners said, you know, we're gonna do our own We don't want to go for that single schema. We're gonna do a little bit of this a little bit of that Maybe a different server. We don't want UCS. Whatever it was and the MC obviously responded to that Scott what What have you seen change in the last like two years since the VBlock announcement? You know came about and how important is this notion of of choice and channel only to you and your channel partners? I think the converged infrastructure certainly has become a little a lot more mainstream than it was in the past over the last Couple years so VBlock came out and then there were other Suppliers that came out with other solutions There continues to be Additional offerings out there. They're all kind of going towards that Converged infrastructure that that allows for some flexibility although some Some of the vendors unlike the way EMC built up this V-spec thing is is more Independent on on on all of their products and so it's it's it's been Progressing regularly over the last couple years towards this more of a total solution solve the customer's end user problem with a converged infrastructure with a focus around the cloud whether it's public or private or hybrid and Probably gonna see a lot more of it. Well, and you guys are driving a lot of it, right? We have a huge market power You move in a lot of Equipment and you'll actually do some of your own innovations, right? I mean you guys will will actually build single skew Cases where the vendor might not and so That's different for Avnet, isn't it? I mean not necessarily no We've been part of our heritage in in in one of our other operating groups is really to have single skew total solution build it from the ground up kind of methodology or Or we're utilizing and capitalizing those skills internally with our integration center and using those engineering forces to be able to do proof of concept builds and come up with a single skew solution that we can take it from Quote from the quote all the way through the integration in some cases. We can follow it out and do the implementation services So we will continue to do that and we plan on doing that with the v specs So I'm interested from your perspective again one step closer to the customer. You've got the spectrum of you can have Integration and simplicity and the other end of spectrum spectrum is choice and sort of Jeremy put that spectrum up today Yep, and then said hey, there's something in the middle Which is sort of proven choice How do you Help clients understand which way to go? What are they telling you? so the fact that this is a reference architecture and is Tested robust and proven out will mean the world to customers This is what they're looking for as they are moving away from the cloud of the public cloud operation As they move into a private cloud They want to know that this is bulletproof When you cobble something together yourself as many customers do when they first initially move off of Amazon IT is not really their business Delivering a product is their business. Most of you know, if you look at San Francisco, there's a lot of SaaS companies and This is a means to an ends the IT piece of it, but it's not really what they want to do This will allow them that flexibility To pick and choose the devices and the products that they want and still have a reference architecture that emcee standing behind So you put in a scenario forth where where customers may be started go to Amazon and then now sort of being forced to Manage their own private clouds. There's another scenario too, which is I wonder if you've seen this the business line is in running IT you want to reach around start in a project you may be doing a public cloud with Amazon and then Realizing this is expensive. It's hard to manage. It's maybe not secure Amazon goes down I got to pay a lot for their you know platinum level SLA and they go back to it and say this yeah, okay Do you help me right? So are you seeing that they're bringing that back in? Absolutely now they're saying that converged infrastructure gives them the ability not to be integrators But to be sort of what somebody earlier called cloud brokers. Yeah, so now your VP about IT and your CIO Can regain the control and strip away that shadow IT that exists and get it under one house one Total infrastructure How about let's talk about services a little bit of silicon angle launched a site called services angle com last year and We at Wikibon just did a study on converged infrastructure. It's a huge market I mean it's absolutely the tam we calculated by 2017 is going to be $400 billion and I said earlier somebody might have said what are you crazy Dave Vellante 400 billion But if you think about it, it's all the servers all the networking all the storage all the infrastructure management software and the services And the services is the biggest piece almost half from the pie is services So Scott where do where do your services leave off and now where do yours pick up? And what kind of services are customers asking for as it relates to converged infrastructure? So one of the things that that avnet has been doing is we're building out our services offering in our services businesses We really look at the need of the reseller partners or intent isn't to Do services without our reseller partners So in an effort to help them build out reseller services to make them more effective at the end user site or where they Don't have those resources and they can outsource those resources to us. That's really our play in the supply chain of this and when again if the reseller doesn't have it or Doesn't have the capabilities in a specific city or something along those lines And we'll have specific services that they could outsource to us to help them out And so those services how are they branded? Are they avnet services? Are they dasher services? Are they a hybrid I Would I would say a hybrid in most cases if in this instance Al wanted us to do a implementation down in Phoenix then it would most likely be us going in on behalf of dasher and we would be dasher Badged if you will right instead of avnet because avnet isn't a A big brand at the end user site right very large company, but we're kind of like a BASF The BASF commercials right and we're kind of where the guy behind the scene Yeah, and that's that's what we like to do. So it's not about us creating a brand at an end user site It's more about supporting our reseller partners and how they want us to go represent that's very clear dividing line from a Branding standpoint and now does any of that ever come back to the vendor? Let me you know emcee global services or other some of their competitors where you're actually bringing some of their services through that That channel does that does that happen? You're pretty much on your own to develop your own services portfolio. No, there are there are other other vendors and with emce We're actually having conversations with them about helping out from a scalability standpoint on some of the lower end service offerings that we can go out and be that integration implementation Person so they don't have to build out their store or their services organization. Well, they're in an interesting spot right now Right because you know their CEO says we're not going to compete with our services partners But at the same time service is a great business for them. They're growing like crazy. It's a huge opportunity So they think they're walking a fine line My prediction would be you'll see you know emcee get much more into that business and start maybe doing things like you've seen some Others do with with branding, but we'll see So anyway, the services remain I mean despite the fact that converged infrastructure is all about the simplicity Why is it that services are still required? I mean a sort of an obvious question, but maybe how you could take us through that well It is a complex solution It's not quite as easy as you know just throwing the box over the wall. It does need to be specced out it does need to fit the customer's application and Get integrated into their holistic solutions. So This should make things a lot easier quite honestly That is the hope and that is kind of what we're betting on. I want to talk about the branding a little bit come back to that I was at the IBM announcement yesterday. I've been a big converged infrastructure announcement and you know I'd be impressive company, right? They got a lot of capabilities and and they did it, right? But I asked Steve Mills who basically runs the whole hardware and software business What how you how are you branding this thing and how can the channel participate in that branding the brand's IBM? That's the brand today. We heard a different message and we had Jeremy Burton on generally saying you know We want to share that brand with the channel. How important is that to you to see you know your name or your names up on that box? Is it a nice to have a need to have or you don't care? Well from from a launch perspective and just the visibility it was it was great to see our name up there when you get down to Practicality or reality avnet isn't going to Brand the V specs that that is more for the dashes of the world to put their brand on there So it was cool to see but it's probably the only time we'll see it And we certainly won't see it in any data center But I think it's really important from a partnership standpoint From a reseller now you could comment on this But I think having their name there associated with that and building their brand in the data center Is there's a lot of value in that it is about credibility, right? And the truth of the matter is Dasher doesn't have a big brand or a big presence You know we're a good-sized company, but you know we pale in comparison to EMC and let's not forget who the big Logo is on the box, but if you can be associated with that and give the customer a great Experience based on what you've done and the solution that you've delivered. It's never a bad thing Well, my colleague John Furrier would as always tell me when you're talking to channel guys talk about how they make money Because that's really what drives these guys So talk about converged infrastructure and the the the economic opportunity that it brings maybe Scott We start with you and and I'll take it through that's really my last question. Okay again, I the old cliche there's Margin in the mystery and and when you bring the converts converge infrastructure together It's it's it's not easy to for it for an end user to Cobble all of this product together and get the same outcome as we could with a Dasher building out a Total solution and taking it into their integrations or into their data center and doing the implementation aspect of it so I think from a profitability standpoint There is the opportunity of The total solution and the total solution including the services aspect of it And so as as resellers and dashers and even us balance out our portfolios around hardware software and services It's certainly going to be able to help with the profitability In the supply chain and so it really is the the services we come back to services It's the biggest piece of the pie is that and and now is that you know planning design, you know consulting planning design Implementation management, you know, yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes And this all comes back down to efficiencies and simplicity So if it takes a customer four weeks to Cobble their solution together on their own versus having us do it as a professional service You know in the traditional sense which might take two weeks or rolling this in in a week They're gonna read their return on investments going to be that much faster. There's value in integration Actually, I do have one more question So what do you tell the customer who says, you know, I really like this idea of converged infrastructure But I'm afraid that I'm gonna lose pricing power And so I'm just gonna go with the roll your own and I'm gonna go through that nightmare of Rolling all it rolling it all up. Do you hear that? And what do you tell those guys? You know, we do and it's our job to help educate them on what those efficiencies are and what can be gained Versus just the bottom line on an acquisition cost if they can turn up the system that much faster Know that it's bulletproof day one and that it's gonna run for three years. There are definitely gains there Excellent. All right Scott now. Thanks very much for coming on the Cube. We're out of time. Appreciate you guys coming on It's a pleasure to meet you. It's me. Thank you and keep it right there. Everybody. We will be back after this brief break and No, we're not gonna leave Yeah, we're gonna take more than a brief break. So about 15 minute break We're gonna run a few programs that we have and we'll see you right back here live from San Francisco This is Silicon angle dot TV's continuous coverage of the EMC v specs announcement. Keep it right there. Thanks Dave