 Live from Austin, Texas, it's theCUBE, covering Dell EMC World 2016, brought to you by Dell EMC. Now, here are your hosts, Dave Vellante and Stu Miniman. Welcome back to Dell EMC World, fourth time I've done that today Stu. 2016, we're here in Austin, Texas. This is theCUBE, the worldwide leader in live tech coverage. Scott Winslow is here, he's the president and founder of Winslow Partners, CUBE alum. Scott, good to see you again. Glad to be here. So what a difference the year makes. We were talking about this last year. That's right. But now we're actually living it. I remember last year vividly we met and spoke and the intention to do the acquisition had just been announced. And yeah, here we are a year later and it's happened. So what's happened in the channel? Give us the update, a lot of people are concerned. Many times you have a big merger like this. You got two companies very well known for direct sales. Although the industry has become much more channel friendly, is it true from your perspective? Yeah, we're excited about what's happening. I mean, I think if I look at our company and maybe go back five years ago, we were a compelling partner and Dell acquired compelling in Q1 of 2011. And it was kind of an uh oh moment, like boy this could be problematic. And it really turned out to be an inflection point for the growth of our company. When Dell acquired compelling, we were doing $7 million a year in top line sales, you know four years later, four and a half years later, you know now we'll do $25 million a year in top line sales. So I look at that acquisition that happened and the opportunity that it presented for us to have a broader portfolio and how we grew the company. So as we look at this opportunity, we're saying hey, this could be the same thing. Maybe now our target should be 100 million a year and I don't think we'd have that opportunity without this acquisition taking place. So we think it's exciting. Scott, so has the acquisition changed the product mix that you're selling? Maybe give us kind of the last year versus this year, you know, what's the same, what's different? Yeah, well we've still selling the legacy Dell product line, server storage, networking, hyperconverged products. So for us, the big revenue producers are Compellant, Dell Nutanix, FX2s, Vertex, R900s, R700 servers. In the last 90 days, we've become an EMC partner. So we signed up, got on board, and you know, within 90 days, we've closed a VCE, a VX rail, a data domain and a Unity solution. So I guess what's changing in our mix is it's broader and while we're still learning it, we've got the EMC portfolio in our bag now. Okay, so you've been a partner on the Dell Nutanix, the XC line, and you've also sold VX rail. One of the things everybody's kind of looking at and trying to say, okay, Michael has said, Nutanix is an important partner. We even saw Chad Sackage, who runs the EMC Convert Platform Division, saying, yes, of course it's in the portfolio, he kind of paints it in a corner as to where it should be positioned. What do you see? How do you talk to customers? When is it Dell Nutanix? When is it VX rail? How do you see that progressing? Yeah, well I think one we feel fortunate to have all of it, the XC series, as well as the Blocks, Racks, and Rails in our bag. So that's probably for starters. For 18 months we've been out there developing a nice hyper-converged business with the XC series, so I'm glad. One of the things we love about working with Michael is that he's got an open standards philosophy, so he didn't walk away from that relationship. They've continued with the XC series, they just introduced the Haswell processor into the XC series, so they're continuing to develop that. They've signed a long term relationship with Nutanix, and I think Michael has the foresight to see that he's going to need both of those solutions in his portfolio. For us, we have customers that are with us here this week at Dell EMC World, that have invested in this technology that are very happy about it. We're bullish on the Dell Nutanix technology. We think maybe it scales a little bigger than some people in the industry would give it credit for. We think they've got something really special going on. At the same time, as a good Dell EMC partner, we're getting trained on VCE. VCE is certainly a leader in the converged area, and then they've quickly made up ground with VxRail and VxRack. There's a lot of people out there that have very strong relationships with EMC, and they're very interested in those products, so we see it as an embarrassment of riches, I guess. It's great, Scott, give us a little bit of a window into the customers you are talking to. David Golden this morning got up and said that 80% of customers are still kind of asking to buy ingredients, and you sell Dell EMC pieces, and you sell the fully baked VxRail hot out of the oven or the Nutanix, so how do you see that 80%, how fast do you see them moving over to that? Where do you see hyper-converged? Where's the natural water level in your mind as to how much of the market it fits today or maybe in the next 12 to 18 months? I'd say most of that, we try to be a trusted advisor, that's kind of our role as a solution provider. Most of our customers are talking to us about, do we make another turn of the crank with a kind of traditional three, two, one server networking storage solution, or do we move down the hyper-converged path? So it's kind of up to us to help them through that. A lot of it depends on workload, some of it depends on do they need server networking storage all at the same time, because you got to look at the acquisition piece of this. If a customer is in need of a storage solution, then it might not be the right time to go with a hyper-converged infrastructure. That's why I think VDI has certainly been the kind of classic application for hyper-converged because any kind of new application like that, you've got to acquire all of those at once. So how do you help customers position, take the Nutanix example, from other hyper-converged products in your portfolio? Be they converged infrastructure like VCV blocks, or VxRail, VxRack, how do you adjudicate or help customers understand the differences and the fit? Yeah, one that gives us a great role, right? Because we've got a pretty big portfolio, so it's tough for them to sort through it, so it gives us a great role to play. Like I said, we look at workloads and try to identify based on the workloads, we run tools like Deepak and get an idea of what the IO requirements are, what the storage requirements are. Sometimes it comes down to relationship too. You might have a situation where a customer has a very strong relationship with one OEM vendor over the other. So we go in with a sales and systems engineer team, sort through the data and make a recommendation, but we've got a couple of horses in this race. So notwithstanding the relationship, because I would actually argue that's probably the most important, right? But notwithstanding that, take that out of the equation for a second. Do you actually discern significant or meaningful differences in platforms? Well, I mean, one of the things that we've loved about the Dell Nutanix platform is that it supports multiple hypervisors. So that's certainly one thing. That's a feature function capability that may not be available elsewhere. Right, so you're supporting VMware, you're supporting KVM, Hyper-V, Cropless hypervisor. So that becomes an important distinction. One of the things we like about that technology is it has the ability to do a lot of things non-disruptively, kind of one-click upgrades, whether it's storage, operating system. So that's some of the things we really like about the technology. But if you look at like a VxRail, you know, very one-throat-to-choke, really a great solution around VMware. So again, it just, Michael's all about having choice. It gives us options, and we like having options because we think it gives us more of a chance to win. What are your thoughts on the VMware, AWS deal, and how that might affect positively or negatively the business that you're currently executing? Yeah, well, I mean, again, I think it shows that Michael's committed to open standards. I mean, you know, the coming together of Dell and EMC was a kind of miraculous moment, and I think you see them, you know, to have VMware and AWS partner together kind of underscores his commitment to open standard. Well, it's interesting, right, that you're calling AWS open standard, right? A lot of people would, but it's all about your definition of open, right? If it's available and it's popular, it's open. So, and it's about choice, as you said. Let's talk about the profitability model. From a partner perspective, the channel's perspective, how do you look at that? Obviously, you want to make money, margin's important. What do you look for in a program, in a framework? Yeah, we've had a very good experience with Dell, I guess I would say first off, as a legacy Dell partner, so the profitability model was very good, and when I talk about that, I talk about things like, as we're providing value, opening new accounts, providing the technical team that's got the technical goods to evangelize and the sales people to close the business, they've rewarded us handsomely, I would say. So, whether it's been just the gross margins or MDF money or onsite vendor resources, we feel like they've been a great partner to work with. So, as we move forward now with the Dell EMC combined companies, we're very excited and we know that our top line's going to grow, we've already seen that. In 90 days, we've closed the VCE VX rail data domain, as I mentioned previously, and a unity opportunity, so we can see that's an incremental 1.3 or $4 million in business. The question we have, and we've posed to John Byrne, is what does that mean to our profitability at the end of the day? You like what you know, we know the Dell model and we know how good it was as we've grown our business. So, I think any businessman on uncertainty rears its head, and I guess one of the things that makes me a little concerned is talking to some legacy EMC partners, and we've kind of compared P&L's, I've seen that they tend to drive more revenue per head count, but the gross margins tend to be a little lower, and their net profit tends to be lower. And we've seen it already on the four opportunities that we've brought home, that the gross margins are lower than what we've seen with Dell historically. So, that's a big deal for you guys, because if the mix shifts dramatically, and you're making an assumption about the profitability model that you're going to invest back in your business, you want certainty. So, I think, and that's why John Byrne's program is going to be so important, and that's why we've been really involved as, I'm on the partner advisory council, we're advising him. I will say they're listening, they've got big years, we've got a lot of confidence in John, but I think that, you know, he says it's going to be an extraordinary partner program. This is the new partner program and the logo, they've introduced that, and they're referencing the rest of the industry. What does some of the other large OEM programs look like? And he says at the end of the day, we're going to think it's extraordinary. We have to have a leap of faith here, and I believe that if we can deliver the kind of things that the new combined company wants, opening new accounts, being really strong technically, I think that they're going to reward us, and we have to bet on that. But it might mean you have to grow faster to throw off as much cash as you have previously, so then the question would become, presumably to Dell, Dell EMC is, how are you going to help me support me in that growth? You mentioned MDF and on-site partner resources. How do you spend the MDF today, and do you see that changing? Yeah, I mean, well, so it's a very rich program. It's been largely selling, compelling and Dell Nutanix and servers. And so we've gotten some pretty significant rebate dollars. I mean, as high as seven or 8%, even north of that. So you can imagine, for a company that's doing 25 million in top line, that's pretty noteworthy to the bottom line. So we'd like to see that continue under the new program. I'm guessing it may be moderated somewhat. Cause historically, if I talk to some other EMC resellers, the rebate and the MDF levels haven't been that high. The other thing is with the MDF, we've had to spend money back on the business. So even though we've made good, sizable rebates, like we have 36 people here at Dell World this week, 24 customers and we've got 12 employees. And their program encourages you to spend back on the business. We know that those customers are going to come back and continue to invest in Dell EMC. So those are the kind of things we'd like to see to continue. OVR is an onsite vendor resource. So Dell will actually help you as you grow. And if you show loyalty and you grow the business in the right ways, they'll help you add resources to your team. And we hope that that kind of support will continue. So time will tell if the program is sure and nice. Well again, it's critical for you. If in fact the margin model is going to shift, you got to do more business, right? Stu, go ahead. Yeah, Scott, one of the questions I think we had a year ago was you're in the Northeast. You're in, you know, legacy EMC's backyard. You know, was that saturated from a channel standpoint? And it sounds like the answer is no. I think the answer is no. We actually think we're in a unique position. You know, we've got Hopkins in right there. We have the ability to use a lot of their demo facilities. One of the things being a loyal Dell partner, we're able to go to the EMC teams and say, listen, we sell only your servers, storage, networking. We don't have any encumbrances that we're coming in with. Some other larger partners that might have an HB relationship. Many of the EMC channel partners are heavy Cisco networking and server partners. Precisely. So what a unique position that puts us in to not have any of those, like I said, encumbrances where we can tell them that we're going to sell, we've sold only Dell. We're a small company. We want to be relevant to somebody with Joe's Dell. And now we can continue that and have it be Dell EMC. We think that's a win and it's gotten a lot of traction with the local Dell EMC sales teams. So what's next for you guys? I know you're trying to sort out the uncertainty right now. You're making that leap of faith, but focusing on the customers, what are they asking you for? Well, I mean, keep plugging away. What the customers are asking us for is infrastructure solutions, how do they move their businesses forward in a pioneering kind of way? And we think we've got the portfolio to provide that. I think one opportunity here that a lot of people aren't talking about is EMC has never had a compute platform ever in their history. Who are the experts on providing compute to end users? We are, because we've been selling that Dell portfolio for a long time. So we think one benefit we can bring back to the EMC team and to our customers is the ability to help that EMC team sell compute against UCS and against HP. And that's a real unique opportunity. Where are you investing in your business? I mean, obviously growing in capacity, sales capacity. Are you investing in, everybody talks about solutions. Are there so-called solutions that you're investing in to create new opportunities? Yeah, well, we've been hiring about one person a month for the last 12 months. So we've been adding across engineering, sales, inside teams. I think the area we've been investing in is EMC training. There's just such a broad portfolio there. So we're in Hopkins in Marlboro in Franklin, getting trained by the EMC teams on VCE, on VxRail, on IceLon, ExtremeIO, Data Domain. So they've got a lot of different product groups and so we've been spending a lot of time with them because one of the value ads we provide to Dell today is we go very deep technically. And we can't do that today with EMC. We'd be kidding ourselves. So we have to continue to get trained and to be able to provide that kind of value ad. That's the only way we're going to be of benefit to them. So that's an area we're investing in a lot. Awesome. Well, this is Scott, thanks for coming back on theCUBE, sharing the insights. Very frank conversation, really appreciate it. You bet. All right, right there, everybody. Stu and I have a back with our next guest. This is theCUBE. We're live from Dell EMC World 2016. Right back.