 Live from Las Vegas, it's theCUBE. Covering Dell Technologies World 2019. Brought to you by Dell Technologies and its ecosystem partners. Okay, welcome back, everyone. It's theCUBE's live coverage here in Las Vegas, day three as we wind down. Three days of deep coverage, two sets, a lot of content flowing on siliconangle.com, theCUBE.net. I'm John Furrier, Dave Vellante. Day three's still got a lot of action to a rich, Steve, senior director, worldwide partner programs. Welcome to theCUBE. We just talked about people calling you Rick. I excited you're gonna happen. Rich, welcome to theCUBE. Good to see you. It's been a really honor to be on with you guys. Worldwide partner programs. Obviously VMware is hot, revenue's up, Pat Gelsing was on yesterday. That's right. Everything's going up as a right. A lot of things that the bets that VMware made paying off, still a great customer base. That's right. Growing, cloudified, mobile partnerships. So you guys are in a good market position. Clearly. Now with the Dell Technologies integration, you got touchpoints with Azure, VCF, the VMware Cloud Foundation. That's right. You have a foundational bedrock now to integrate into multiple environments. Really puts the software to find data center in play for everybody. That's correct. Now you're bringing it out to the partners for money making opportunities where they can deliver value and get paid for it, make a lot of profit. Win, win, win. This is the equation of partnering. Correct. Where are you guys at right now? Again, a lot of now partnering. You do joint programs. So it seems complex to me. Break it down for us. Yeah. Well, clearly we're at a great moment right now where the portfolio is coming together. The market opportunity is coming together. And we're really looking to help drive a change in the vision and the way that we partner together in the marketplace to win together with our customers. We feel like our responsibility is if we're going to have the opportunity to win the business with our partners for the foreseeable future and to become that essential ubiquitous digital platform to help drive innovation together with our partners for our customers during their digital transformation, we fundamentally have to change the way that we look at the business and the way that we engage in the marketplace. We have to make it radically simple. Simple to engage, drive profitability, and drive growth, and spend less time focused on maybe some of the traditional motions that have been aligned in the channel programs of the past around traditional routes to market or silos of complexity within the program. Like what's an example of old versus new? Give us a little bit. Yeah, I think I've had the opportunity to lead and drive some of the changes and transformations, some of the larger vendor programs in the marketplace. And I think there are some pitfalls and traps we've all fell into in the past. And a lot of that has come into really siloing our partners based on traditional routes to market. Here's the VAR program. Here's the distributor program. Here's the OEM program. But what we're seeing in this cloud, hybrid cloud, mobile first world is that our partners are delivering value across the spectrum. And yet many vendors are continuing to look at their partners as individual segments in silos. We've got to do better, right? And that's really the business proposition in some of the exciting announcements. Well, I would just add just some complexity standpoint. Because of data and AI and now scalable infrastructure, you now have every vertical industry with specialty capabilities apps. So your surface area for partnering is increased. So not only do you have to simplify the programs. You're at a bigger landscape to take territory on. Clearly, as we look at building on the foundation that we've built through the compute layer and vSphere and the ecosystem of incredibly valuable partnerships that we've built. As we take that across and help our focus on accelerating the cloud journey, but also transforming networking and security or also empowering digital workspace, we've got to look at that broad base of partners and how they're delivering value to their customers. So what is the segmentation? It's not by the old traditional buckets. What are the new buckets or seams really? Yeah, no, it's a great question. I think we're coming to the market with a simpler proposition that says, we want to offer our partners greater flexibility and choice to choose the business model that makes sense for how they want to go to market to solve their customers' most pressing IT needs and priorities. So whether I'm a reseller or a cloud service provider or an OEM, I want to have one engagement model, consistent experience as I engage with VMware and I want you to recognize the total value I'm bringing to the customer relationship rather than the individual piece part. So one agreement, any business model, one single program. So take some friction out of the complexity, make it simpler. What about specific programs? What are you guys launching? What is some of the news that you're rolling out to get these guys up and running quickly? Yeah, we're really excited. We've had the opportunity over the last few weeks to change what has been in the past, the tradition of over a decade, the VMware partner network evolving to become the VMware Partner Connect program. So we announced three weeks ago to our most strategic partners the introduction of that one program framework offering simplicity and choice to focus on their customers rather than how we've asked them to engage based on how we're aligned often internally by business unit or route to market and the reception's really just been incredible. The other thing that partners want and I hear this a lot from my friends that are in the business own a bunch of firms. Hey, what's in it for me? I need to make some cash. So I would need simplicity. I don't need a lot of high cost of sales. That's right. And I want to have high margins on what we're doing but also I want to wrap services around it. Clearly. How are you guys helping that scenario? Yeah, really in multiple ways. I think for VMware, as we look at the opportunity and I know you guys had a chance to catch up with Pat and we've got some really bold statements of where we want to grow the business in the coming years together with our partners. I mean, it's a pretty powerful position to say we want to double the business together with you in the next three to five years. We want to go from 5% of revenue delivered through SaaS and subscription to 20% together with our partners. And that's going to come through a vibrant and committed partner ecosystem. And that vibrancy as we go forward is really going to be in the way that partners differentiate based on their skill sets and capabilities rather than program tiers, names and brands. So I'll give you an example. We've had the opportunity in this last year to introduce our master services competencies. Really industry best of breed recognition of where partners are unlocking value for their customers. So whether they're driving data center virtualization, network virtualization or desktop and mobility, we now have the ability to say to our field, to our services organization and most importantly to customers, here is the partner that is going to drive and deliver on the transformation through for the partner, margin rich services opportunities. And again, in a lot of these conversations with our partners, as they're making that change and transition, many of them from traditional resale business models to cloud, a lot of the services opportunity is really delivering most of the profit. So part of that transition, you just mentioned is it's quadrupling the subscription component. How are you dealing with the obvious challenge of how you compensate for that? What a lot of SaaS companies do say, oh yeah SaaS, pay by the drink. And it's like, but you got to sign up for three years. So it's really not cloud. But so how are you dealing with that challenge and how is the channel absorbing it? Yeah, it's a great question. I think, you know, if we look at the economics of the relationship in the past, it's been really focused on the initial transaction. But that transaction in the cloud world, it means it is an important milestone along the customer journey, but it's only the initial step, right? In this tribe by proof of concept life cycle, we've got to do a better job of taking our investment envelope and wallet and spreading that across the customer journey, looking at monthly recurring revenue, looking at the ways that our partners are unlocking value and driving consumption. So moving it from the initial transaction to deployment consumption and expand the opportunities with our customers, it's going to add tremendous value to the equation. So you got a new playbook. Things are changing. That's right. How you got here is not how you got to move forward. Whole new ball game. What kinds of mechanisms are you guys going to put in place? Because you guys had, you know, channel has tried and true programs, soft dollars, training, you got to get the word out. That's right. You got to watch the journey. So you got to instrument that. That's right. What are some of the things you guys are doing to be new and be fast and be relevant? No, it's a great question. I mean, a lot of it comes down to the evangelism and I'd say, frankly, doing a better job of listening to our partners. So we've had the advantage through VMware Partner Connect through our partner advisory boards and councils, doing the listening along the way to say that this is a program that not only is VMware building, but this is the co-investment and co-building together with our partners. So from inception to design and concept and ultimately to the announcement and rollout, we've had our partners, you know, hip to hip with us in this rollout. We'll certainly look to leverage opportunities like VMworld. Hopefully we'll see you guys there. We'll definitely be there. We'll see you guys there to amplify that message. But the key piece, and this is what our partners tell us is, help me leverage the investments I've made in my VMware relationship today, but position me for the opportunities ahead. Give me a sense of where do I need to invest, sometimes ahead of the curve to make sure I'm taking advantage of the program. And are you guys funded for that right now? Is Pat getting behind this with actual cash to get the Prime to pump here? What's the update there? This is from Pat and E-staff on down, a commitment for the organization, Brandon Sweeney, Maurizio Carly. Everyone's really rallied around this. It's one of our top priorities. You know, Pat wants to ensure that we've got that vibrant, committed partner ecosystem that is bringing incremental value to our customer relationships, and we're putting in the money behind the commitment. You got to get the community action going, got to get some content, doing a great job right here. Question on the customer piece, I want to just shift gears, because at the end of the day you're, it's an indirect channel ultimately for VMware, but you're going to get deep in and enable your partners to be successful. They then have to think about your customer too, their customer, the joint customer. How has that world changed? As we were talking before we came on camera, that with the VMware cloud foundation and all the now bundling that's going on and all the integration, you got tight relationship with Dell technology as well as other partners. There's a lot of cross-wired programs. Who gets credit for what? So I did some complexity there, but ultimately it's an opportunity for the partner, your customers, and then their customer to actually be a cloud service provider. That's right. A whole new generation to take away the system integration challenges that customers want to get rid of. That's right. Yeah, I mean for us, I think it really comes down to being disruptive by being radically simple, right? Really boiling it down. And you talk about the relationship. There's some great announcements this week around the Dell Technologies Partner Program, change and evolution. And one of our partners, as well as our customers, frankly, have been asking us is, make it easier for us to do business across the full Dell Technologies family, right? All of the strategically aligned businesses. So whether you look at our VMware cloud on Dell EMC, VxRail, on any number of the engineered solutions that we're bringing to market, it's about adding value to the customer, simplifying the engagement, and really, again, driving the profitability for our partners. I think being agile, rich is going to be key for success for you and making sure that it's funded and that the money's going into the partners. That's right. In the gas tank to get them to go faster. Clearly. And we feel like we have one of the richest programs in the industry that's really driving incremental value for our partners. And I think what you'll see us do is, again, a better job of differentiating the partners that are certainly co-investing in VMware, but most importantly, and this is what we hear from our customers, is invest in the partners that have demonstrated the ability to unlock value in those engagements. Well, thanks for sharing the insight. We love this topic. I know it's kind of like a channel thing, but it's becoming a very key part for creating value. That's right. And also delivering a simple solution for customers. Give a quick plug for what's going on at VMware. Also, as you mentioned, VMworld. That's right. How do you guys run your partner programs, events? What's on the schedule? Take a quick minute to give a quick plug. Yeah, we've got a few opportunities ahead of us. We're really excited to continue the success around our VMware Empower events, where we bring both sales and technical enablement conversations to our partners. Certainly, VMworld to be able to- What is that event, the one? Yeah, Empower coming up in Lisbon. So we're really excited towards the end of May. VMworld in the US, as well as in EMEA. And what- Is it co-located an event within VMworld? Yes, we also do our distribution advisory board, our partner advisory boards, trying to add as much value, but also, again, do a good job of listening to our partners. Great. Rich, thanks for coming on. Appreciate it. We'll be following the money. And that's the end of the day. Success is where people exchange their value. You guys are doing a great job. We're bringing you all the CUBE content here. Day three, wall-to-wall coverage. I'm John with Dave Vellante. Stay with us for more after this short break.