 TheCube at EMC World 2014 is brought to you by EMC. Redefine, VCE, innovating the world's first converged infrastructure solution for private cloud computing. Brocade, say goodbye to the status quo and hello to Brocade. Welcome back, we're at EMC World 2014 in lovely Las Vegas, the Sahara Convention Center in the back of the Palazzo. It's our fifth year here at EMC World and we're so excited about it that we brought not one but two cubes, first time in cube history. Double the fun, double the pleasure, double the guests that we can bring on and get the insight. So we're really excited to be here. I'm joined in this segment by my co-host. Steve Kenniston, the storage alchemist, double the insight as well. So this afternoon in theCUBE we have Bill Lipson, our VP of Global Systems and Integrator channel sales from Brocade. Welcome Bill, first time on theCUBE. It is my first time. Yeah, so when did you show up here at EMC World? I came yesterday. Yeah, did you catch the keynotes and everything? I purposely made sure I caught the keynote. And so what do you hear, what do you like, what are you thinking? I'll tell you what I love is the theme, redefine. If I think about the common conversations we're having with partners right around the world with Brocade, it's all about how the partners are redefining themselves, redefining their organizations and it's all because the customers are pushing them to be a whole new set of solution providers. I think he hit on a great topic, this whole redefine. I don't know if Jeff and I have even talked about that whole theme yet, but so as Brocade, you know, kind of sitting in between the storage and the servers and looking at what are your clients most asking you guys about? How are they redefining themselves? What's a common theme you're hearing? I'd say they're being pushed by the technologies and realizing that the cloud is not a fat but it's going to be here for a long time. Now, they're also saying by the way it's going to be a hybrid model. So they'll have some in-house on-premise capabilities but they'll also be using the cloud where they can. That's then forcing the channels to rethink not only what they do to make sure they have value for the customers but also how they have to look at investments to ensure they're managing both the second platform which was also discussed yesterday but also the third platform, that brave new world. And the key here is to challenge the status quo. So what used to work in the past is not working anymore. They can't afford to continue to scale up their networks to support storage, support data, support mobile. So they have to find new innovative ways to do that. Some software defined, software networking. Some of it is just finding ways to use more automation and more management. Can you give us a little insight on how to brocade software defined networking thoughts and strategies? Okay, that's a softball. Well, hey, you know. The 60 minutes questions are coming. Don't get too comfortable, Bill. Wanted to be comfortable? How's that? There we go. But I'm so glad you asked that question. Not that we rehearsed this. I've never met you two before but it really is about trying to have a vision as to where you're taking your business as a channel partner. And so software networking is critical. It's not just making sure you have the network that's going to support the traditional side of the business but thinking differently. Making sure that you're taking advantage of the Intel technology that now supports the types of network function that used to be only available on purpose-built routers and switches. And between the three of us, that's just sort of behind the scenes and nobody really cares. It's all really about how do you make sure the customer's applications are running? They're up and running with a nine, with a maximum nine performance that they possibly can but doing it as easily and as seamlessly as possible. So you use automation, it's really scalable. And so in that case, you want to make sure that you're taking advantage of not just the new technologies but also new management tools. So talk about how they are redefining their organizations. That is not an easy thing to do. I mean, we constantly talk about people trying to bring innovation in-house. How do you innovate? How do you redefine? So what are you seeing in terms of some best practices? Maybe some examples of people that have been very successful at executing this redefinition of their business and or their people, I assume. And Jeff, that's exactly it. It's both the business and the people. You have to provide new skills. You have to teach both the sales and technical people how to handle the brave new world at the same time, making sure you don't abandon what's currently working. And that's a trick. The issues we're seeing though, really revolve around a meeting I had recently in the UK where I wanted to see a channel partner and he said, just so you understand, Bill, we're very comfortable right now with our current business we're using these vendors and we're getting the job done. I said, that's great. Because we don't want to disrupt you, but not to the point where you're not going to be in business. I said, but just answer a question for me. When you're selling this specific technology, is it everything you need for a true solution? Or then do you leave it in the customer's hands to make sure it really works the way they need to? And he said, well, we're working with another vendor right now to see if there's a way to build a gateway behind the solution that we've already sold. And I said, we already have that. He said, yeah, but you're like all the other vendors, you say you have it, but do you really, really have it? And I said, well, the vendor you're talking about that you've already sold, has said that brocade is the seamless interface to make sure you can now manage this thing as a true solution. Brought out the press release. He said, I've never seen that before. So let me try and give you three things here. First of all, this gives you the ability to go back in and sell to your existing customers. You sold the other technology and you've got a new revenue source. Secondly, it's new services capability for you. And third, as you try to get to the software defined data center, these technologies are the stepping zones to get you there. The frustrating thing for me is, they didn't know about it. How do we raise that? Exactly, and that's exactly it. I think that's one of our biggest challenges. Well, the thing that strikes me the most is his statement of being comfortable. If there's any time for anyone in IT not to be comfortable, it seems like this is the time between crazy developments. You've got the cloud, you've got big data, which you better do something about. You've got mobile and BYOD, you've got increasing compression of your funding in the IT side and everyone wants you to no longer be a maintenance guy keeping everything running. You're supposed to be now an innovator taking a seat at the table. So, I don't know about that customer. Well, and I think that's a great point because those that are not redefining themselves, those that are not taking advantage of the disruptive technology and networking technology is probably the last bastion that hasn't been fully virtualized. They're the ones that may not make them. Yeah, you've got to send them the Andy Grove book, right, about being paranoid. Exactly. And those guys are sitting on big, fat market position and continuing to innovate, right? And if Andy Grove was paranoid at this time in Intel, this guy should be a little bit paranoid too. I was just upstairs at the EMC Business Partner Summit, the Global Partner Summit, and they had a speaker talking about Kodak who disrupted the entire camera industry back in 1900. And now, in 2012, they were disrupted. Right, and we're at service now and Fred Lenny brought up Kodak as one of the great innovative companies that actually had the selfie, unfortunately, about 60 years too early. But so timing is important as well. But also, I think you're another good point, Jeff. You can't sit back as a channel partner and wait for things to happen. You need to take that initiative. You need to challenge the status quo and you need to ensure that what you're doing is right for the customer, right for your business and right for your people. Right. So do you see any trends? So when folks are looking at redefining their business, we talked about converged infrastructure, we talked about cloud, we talked about big data, we talked about all of these different permeations. What are some of the things that tend to come up right now versus things that are on the horizon that folks are looking to redefine today versus into the future? I'd say probably one of the common themes or conversations is around current capabilities and what are adjunct technologies, adjunct skills that I can add to my organization to start moving them there without being totally disruptive. And the challenge with that, by the way, is there's also these built in the cloud organizations that are popping up. And while the strategy in terms of having a evolutionary set of steps is a good one, you better be aware that others coming behind you with that heavy breathing on your neck that you better be aware of as well. So let's talk a little bit about, as you're thinking about that, both we talked people, process and technology, we've talked about this change in innovation at the end of the day, Jeff, I think you brought this up, it comes down to finance and budget and that sort of thing. I mean, I only, the IT budgets are getting squeezed and getting pressed. We have capital expenditures, folks looking at cloud for maybe that's going to help with operational expenditures. Tell us what you're seeing and how Brocade is helping its clients with a little of both. Well, in fact, we've introduced an offering called the Brocade Network Subscription. It's a consumption model, different than a lease. So on a lease, there's risk that the leasing company, the channel and potentially the customer will take. In this case, Brocade owns the asset and we allow you to buy the network once. You can add additional capabilities, reduce capabilities based on either seasonal adjustments, your business, but what it also allows you to do is to change your technology so you can focus on your business and have the network grow or unfortunately in some cases shrink with you. But either way, you take away that entire CAPEX issue and you turn into that OPEX model that organizations like because the cloud has introduced it. It gives you more flexibility. It also just gives you, especially as a channel partner, a new value proposition to bring to your customer. Well, in theory, they should be able to manage that stuff better than the client anyway, right? That's their expertise and I always think back and I don't know if this still happened but it's an example that gets thrown out the day when GE no longer sells jets to airlines but sells jet propulsion and they're the ones that manage it. Nobody knows how to manage those engines better than GE. They've got a lot bigger data set. They've got many more things coming in so to sell everything really as a service that's enabled baby by some underlying piece of hardware or some underlying technology. But at the end of the day, they just want what that delivers in the form of a service to support their other activities. And if you take the EMC and the Brocade package and you put them together in a converged infrastructure whether that's technology or whether it's a financial solution, now you start changing the conversation with customers. Now you start to lead the customer to where they want to get to but you do it in a fashion where there really is a partnership between two industry leaders, EMC and Brocade but also where you tie the partner in and exactly your point, Jeff, you make sure that you do it in such a fashion you meet the customer's needs uniquely, uniquely. Kind of a challenge though for your guy CFO, right? He maybe likes the big moments of bunny that come in every now and then versus the ongoing services revenue. It is. But it's flip but then you get recurring revenue too which is what the guy likes. And that's key. Upstairs in the Global Partner Summit they were talking about predictability. Absolutely critical words and an approach for partners and for CFOs. And with a subscription model that helps improve your predictability. So let's bring it back to technology a little bit. VSpecs just celebrated its second anniversary. Tell us a little bit about Brocade's integration with VSpecs and kind of how you've been a part of that growth for the last couple of years. Well we've seen a lot of customers who now want to have a converged infrastructure type of option. Not necessarily always default to that but at least have that option. And by working closely with EMC we've become part of the VSpecs stack. Which is a great way to help give both customers and channel partners confidence that there's a reference architecture proven technology that actually does all work together. Which can make it easier to design and install. And that's worked well for us. The nice thing about VSpecs is it takes advantage of the open systems, open stack approach as well. So it really does give the flexibility to the partners and customers. They can mix and match to serve their purposes best. Very good. So what are you going to be excited about next year? When you get you on next year you'll be a Cube alumni. You'll be a wily little veteran as we like to say. What are you looking forward to for the next 12 months? I'd love to see the realization of some of the technologies, some of the concepts that we've talked about at EMC World 2014. But I'd also like to see how much of this reality for the partners has shifted. How many have moved from I'm comfortable to now I have been part of that disruption. I've changed my business model and they've started to realize the benefits of doing that. How far into that baseball game are we right now, do you think? First standing? Top of the first? I'd say right now we are in a very nascent stage where people are just talking about it. Those that are going to take that leap of faith and get there I think will have huge returns. Awesome. Well Bill, thanks for coming on the Cube. My pleasure. Appreciate it. So it's great insight. Whoever it was who's not paranoid in the UK I suggest you go get Andy Grove's book. So we are live at EMC World 2014 in Las Vegas. We're in the Cube. We get the smartest people in the room we can find. We get them on the Cube. We ask them the questions that you wish that you would. We'll be right back with our next segment after this short break. Thanks for watching.