 Live from Las Vegas, it's theCUBE. Covering Oracle Modern Customer Experience 2017. Brought to you by Oracle. Okay, welcome back and we are here live at the Mendeley Bay in Las Vegas for Oracle's Modern CX. I'm John Furrier with SiliconANGLE. This is theCUBE and my co-host, Peter Burris, here for two days of wall-to-wall coverage day. To Doug Kennedy, Vice President of Business Development, partner strategy at Oracle, former Oracle, left Oracle, went to NetSuite, now back at Oracle, running partners. Great to have you on theCUBE. Thanks for joining us. Thanks for joining us. We were just talking before we rolled live about some of the history and some of the dynamics in the industry and it's a very interesting time because the partner landscape is becoming a critical linchpin for this digital transformation as vendors get cloud and the suppliers become cloudified, if you will. The role of the partners is beyond strategic. It's actually tactical. Well, you've got to look at actually the expertise that you need to actually work with the customer. Always sit in the customer seat and look back at the vendors and the partner ecosystem to determine what they need to be successful. And candidly, we bring part of it as Oracle. Partners bring the rest of it, whether it's industry expertise, vertical expertise. They deeply understand agencies. Whatever that expertise is, we have to figure out the right partnership with them to go be successful together. And that's the trick. And that's why partners are so important. And what's the message and focus here at Modern CEX? Obviously, it's not just pillars of solutions. It's you got a little bit of unification. You have this modern CEX. So it's got a platform play. I'll see the data center of the proposition. What's the conversation like with partners here? So the ones I've been having this week. So I've been back all of seven weeks. So I'm rolling out a new partner strategy pretty quickly here. And I introduced it to several of our top partners here this week. And it really is to specialize and focus on the prioritization you can bring to our partnerships that is back to specialization. I roll everything back. I've done partnering for, good Lord, a couple of decades now. The number one question is, how do we both be profitable? We're in partnerships to actually each make money and win together. So back it up to that and look at how they specialize. And don't get too thin, don't get too wide, but look at what you're successful at doing as a partner and for us to then figure out how to work together in that partnership to go win. So I've been amplifying that up with the partners this week. You'll fail if you're spread to thin and trying to be everything to everyone. And I'm pushing the partners to make sure they bring that to the forefront with us first before we actually go engage the prospects and customers. So I'm kind of backing up again before I do this. So it's not a general purpose philosophy. It's really find some swim lanes. If you're, everyone's got a unique specialty. I mean, PWC's got their thing. Deloitte, Accenture, they all kind of have their swim lanes developing. But Specialism seems to have much more domain expertise now. I was talking to Accenture, CTO of Analytics, John Luke Shatlainian, and then they have tons of data scientists. They're coding away before there used to be project managers. Now they got coders. So you're seeing that transformation. Is that also a dynamic you're seeing? Yeah, it definitely seeing that. If you look at our ecosystem, we've got a little over a thousand partners right now that focus on OMC, the marketing club. Their ISVs, the old traditional SI shifting into more managed services vein and still doing implementations. Then you got the agencies, which is unique in and of itself because they're running on behalf of the customers. They understand the marketing industry deeply. And so now they're taking our solutions and running on behalf of customers, but they're also a partner type. So it's determining which type you are and some by the way are all three. So how do we work with them most effectively? Because this is a cost. And what's the plan? So what's giving you any details to the strategy? Well, the strategies, first of all, there is an ideal partner profile for each of those partner categories. And to replicate that, the programs we're putting in place, we want more of those that fit what I call the ideal partner profile, which comes at the end of the day. They're going to be profitable. We're going to be profitable. But if you look at the agency model, how do they actually have the reach and coverage with the customers that they currently actually service? How can we actually work with them to introduce our solutions into that product mix they already use in their managed operations environment? How do we make sure we're bringing that to the forefront in a way that values the agency's business and then also values their customers? Right, so that's unique is because we're in sense dealing with two customers. We're dealing with the agencies as a partner who's running on behalf of their customers. We have to have a solution that fits that equation. Think of it that way. But there's something else going on. I want to test you with this. And that is it used to be the traditional partner model, the on-premise orientated partnership model was that the partner was a channel partner who might embed their software on top of the product, et cetera. But Oracle could be good and the partner could be good. If Oracle was really good and the partner was okay, it still could work out. This more deeply integrated world where data is the asset and how you flow it and the speed with which it flows and the degree to which you can show that end-to-end coherence is going to determine winners or losers. That means that whoever is the weakest link is the weakest link for ever or sets the quality for everybody to a degree. How is that going to change the way you talk to partners? Because they're going to have to step up their game in a big way for Oracle to be able to step up the game. No, great question. So we have a co-selling model, first of all. We've indirect in certain markets. Japan and some of the Southeast Asia markets are indirect, so we will rely on the partners to do most of the selling as well as the delivery and managed services. The rest of the world's co-selling. So with our co-sellers, half of the equations are on people. So I'm doing a couple different things. First of all, on our side, we're defining roles and responsibilities of co-selling and making sure our own salespeople know not who to engage, how to engage the partner. Going back to the basics of how early you pull them in, do you have them do pre-sales? Do you do pre-sales? Who does the demos? Basically through the entire sales cycle, defining roles and responsibilities and taking that same set of rules to the partners. So we actually have ground rules of how we want to engage through the sales cycle. The last, the just important point, the last thing you want is for the partner and our own sales rep to meet each other in the prospects lobby at the 11th hour of a sales cycle. We're trying to fix that, but more importantly, you raised a really good point. What am I asking the partners to step up and do? We're just putting in place, depending on the partner type, six different criteria, and there's also a seventh criteria that I'm measuring our best partners by. It's around capability to execute locally on both pre-sales and technical implementations and operations. I'm looking at revenue. I'm looking at number of customer ads so you're not just out shooting elephants once a year, but you're also bringing in a volume with us. I'm looking at references. That's the proof in the pointing that you're capable of maintaining an environment and you're helping your customers derive the most value out of the service and solution, right? And then the last one is really looking at, are you in an industry in a vertical and can you bring that to the forefront effectively in co-selling? So I'm putting a bar out there that says, these are the criteria you've got to get to over this bar to be one of the partners I take into my co-selling engine and promote you to my sales force. So extremely prescriptive on who we're going to co-sell with. So it's sales synergy, not conflict. So you're trying to identify hand and glove kind of fit points. Defining how and who. But let me offer one other one. See if this resonates with you. Make one other suggestion. Is that especially for partners that are part of the cloud mix, have you talked about end to end performance, end to end effectiveness, end to end efficiency and start to benchmark some of these partners and say, you're doing okay, but we got other folks over here who have done. I mean, the time of execution, the number of errors that are generated, all these other things, because we're now talking about an integration that is not just in the marketing function, not just in the selling function, not just in the service function, but in the execution. That that's where the customer's going to determine whether the partnership is working. Are you starting to look at some of those measures as well? Yes, so the back end of this, I'm now looking at a report that says, where are we churning? Where are we actually having down sales? In other words, the subscription's not renewed at the same level. And I'm correlating that report for the first time back to the associated partner. Then I could sit back down with them and say, look, we're correlating you to a certain percentage of churn, what do we need to do to fix this? Is it better education? Are you not focusing on the whole life cycle of the customer? So we'll be able to come back at that with the partners as well. We haven't done a very good job at that candidly. It's kind of the front of the sale, move through, get them running. And then once in a while, we turn up to make sure they're delighted and that they're renewing. You can't do that anymore. The interesting thing that you're getting at is, I hate to say that you're going dog food or drinking your own champagne or whatever you want to call it. You guys are saying here, use data and change business practices. Exactly, exactly. So you're going to look at the data and bring that in. But ideal, the data model is first, if I hear correctly, is identify clearly your parameters for ideal partnership. Yep, yep. On a profitable win-win scenario. Who we're working with and then to find how we're working together so our field can effectively co-sell with them. Okay, so what's the reaction? I mean, the agencies I can see as a potential, a lot of moving parts there. So I think that's challenging in general. Just agencies are different than more committed partners. I'm more more committed. I was good enough to say that, but I don't mean to put down the agency. But agencies have a lot of moving parts. What has been the reaction from agencies and the other different types of partners? And this is literally this week for the past three days I've been meeting with a lot of on top partners. Scanification. They're very pleased. No, they're very pleased. They say we want this approach. Because candidly, if I say, look, here's why I'm going to bet on you and here's how I'm going to work with you, you can invest ahead of the curve. Most partners aren't going to invest ahead of the curve. They kind of look in the rear view mirror and go, yeah, I got a couple of deals last month. I'm going to maybe start adding capacity. I could say, look, we're committing to you in these regions, in these areas, and here's how we're working together. It gives them more confidence to start investing ahead of the curve with us. And that's the best you can ask. You don't want them lagging behind the demand. And what about the swim lanes? We talked about, you mentioned, I call swim lanes, you said some special terms. Yeah, partner priority map. Because that seems to be on the partner, not saying an oracle. You could bring a lot to the table and say, here's how we think you might be fit based on the parameters. But that's the transformation that the partners are going through. Are you being proactive and recommending? Are they coming to you? They seem to be kind of in swim lanes. If you leave it up to the partner, they'll come to you and I swim in every lane and I do everything. In a past life, what I was able to do, and we've done a little bit now, we're going to finish this job, I was able to run transactions through DNB for the past like three years of my partner ecosystem. And partners would say, I play in every industry and every vertical. And I'd bring data back and say, actually, no, you don't. Here's where you focus. They hope to be in every vertical. Right, they want to. They want to. And that's how they fail. They spread themselves through thinns. But we come back with the data to say, look, here's where your references are. Here's where the majority of your revenue has come from. I'm going to promote you in these swim lanes. You can move into another swim lane over time, but let's focus here. And we've done that. We've actually, we're about 95% through this exercise over the past six weeks. I've taken some of the maps back to some of the partners to say, here's where we believe we're going to win with you. That's an exercise we're going to finish over the next couple of months. And it'll evolve over time. But those are going to be the swim lanes. I'm glad you used that. I used that privately. Which swim lanes are they in? And how do I promote those to be the swim lanes my sellers, my co-sellers are going to work with them on? And that's the way it will work. By the way, it helps me with the capacity too. If I'm missing somebody in a swim lane, I will first of all try to take somebody out of a lane and get them into an adjacent lane for capacity. They like that instead of just bringing somebody net new in. I mean, I always say in the partner business, it's pretty straightforward. It comes down to money, right? What's in it for me? I want to make some cash. Profitability is I think really important. I think it's cool that you're being transparent about saying, hey, we're in business to make money. Let's just put that on the table. Because they're going to have posture and say, but at the end of the day, it's what's in it for me. I still think that this notion of moving from a product orientation to a service orientation, which Cloud describes means a churn, CX, those types of measures. At the end of the day, if Oracle's going to win, it has to be able to demonstrate to the marketplace our ecosystem operates better than anybody else's ecosystem. And starting to bake some of those measures and bake some of those ways of thinking into the relationship so that partners are lifting their game up, it's going to be really crucially important. Well, the ecosystem thing is going to be tested by the fact that at the end of the day, at least my experience in talking to customers and the experience of dealing with the partners is, at the end of the day, the 11th hour sales conflict is ultimately the indicator of if it's working or not. If there's conflict with the customer and trust, like, wait a minute, this guy's not going to deliver, that's going to undertone that if that sentiment's there, it's not working, right? If it's working, pass, shoot, score, everyone's happy. Sales gets comped on the Oracle side, feeding more business to the partner. You know, this is a relationship where it flows to the good partners. Right, that's why you don't deal with the, all thousand can play in the ecosystem, but you place your bets on the top ones and get that right, and that's where your growth is going to come from. It's gamification. Also, think of it another way is that, I'd rather give the next dollar to one of my top partners that fits my ideal partner profile and can drive growth with me. They give it to the person on the tail end of the tail because they can't turn that same dollar into more revenue together. The guys at the top of the pyramid are more capable of reinvesting in our business, so I'm advocating. And the emerging ones that have an ascension vision of sending up into be a partner will see the cash being doled out and will align. We're going to be transparent of where the bar is. You want to get there? Here's the things you've got to be able to do, right? And how, you guys helping them with any kind of software, so let's just say, partners say, hey Oracle, thanks for the mentoring, thanks for the clarity. I really want to be in this swim lane, and I'm willing to invest. What are you going to do for me? So the education, the training for them. Some of them, as we look at their profile, how successful they are, we will grandfather them into certain lanes as well. Like, this isn't go off in a dark room and prove to me you're successful and pop your head up and I may like you. We're going to still look at that next tranche of partners that want to get above that bar and work with them because if we get them over the bar, we'll be successful, we'll be more successful. So we have to help them through training and education and enablement as well to be able to do that and some opportunities to participate in different marketing programs and campaigns. Well, you're a pro. It's good to coast challenge, it's challenging, it's got a great, I like the formula. Seven days in, show, seven weeks in. What's your feedback on the show here? Yeah, no, this is very good. It's good for a variety of reasons. Obviously the customer focus is extremely good. The other thing it does for our partners is it gives them a chance to network because a customer doesn't just buy one solution from one partner. Typically our sales involve three or four partners at times. It gives them a networking opportunity and I'm trying to aggregate those solutions together into more of a complete offering and we're just one part of that equation. So these type of events help those partners network together and we drive some of that networking as well. Something good. So next year when we're sitting on the cube at a location, maybe here, maybe somewhere else, what's success in your mind for one year out in terms of in your mind's eye? What do you want to see happening and envisioning happening for next year's event? Well the stake in the ground for our own ecosystem is we've doubled the impact of our co-selling for our top line with partners. That's a pretty big challenge, but that's what I'm committing to. It's a big nut that we're going to go after. But also here you're going to have a partner ecosystem to be blunt, they're more profitable. They're doing better. They actually want more. I would argue we're going to have more people attending here for my partner ecosystem next year, hungry for more information and more opportunities to work together. So grow it up. Grow it up top line and grow the ecosystem. And other partners that are not part of that growth wanting it because if you make some poster children the rest are going to want more of that. So we'll see more of our herd mentality start. Doug Kennedy in charge of business development and partners here at Oracle on the cube. I'm John Furrier with Peter Burris. We'll be back with more live coverage after the short break.