 From Miami Beach, Florida, it's theCUBE. Covering VeeamON 2019, brought to you by Veeam. Welcome back to sunny Miami, everybody. You're watching theCUBE, the leader in live tech coverage. We'd like to go out to the events, extract the signal from the noise, and we're here at VeeamON 2019. I'm Dave Vellante with my co-host. This is day two. Peter Burris and I have been covering wall-to-wall coverage with theCUBE. Folks from NetApp are here. Jeff McCullough, who's the vice president of America's partner sales for NetApp, and our good friend Keith Norby, who runs alliances for NetApp. Guys, great to see you. Thanks for coming on. Thanks for having us. So Keith, let's start with you. Veeam has been a partner of yours for a while now. You guys go to market together. You have always been very partner-friendly, particularly when it comes to data protection, but what's the state of the partnership today? Yeah, this is something that we'd looked at a couple years ago and got into a very much more strategic relationship with Veeam. Over a year ago, kind of worked through a lot of ways to reconnect and establish a better together, and this is something that we think is a strategic opportunity is kind of backed by a lot of the data you see at this show. Talking about organizations are going to change, roughly 60% of the organizations are going to change their platform because of cost-complexity reasons, and together we've been working with Veeam to figure out how to deliver data protection for a data fabric, and IDC validates that in a number of ways that we can unpack here on the show or in the conversations with customers, and we've gotten great reaction to it. And Jeff, you lead America's partner sales, so North America, South America, the Hulket, and Kibbutl, talk more about your role. Sure, well, my responsibility is net app partners. I am successful when our partners are successful, so everything I do is all around putting our partners in the position of executing, being successful within that app brand, certainly being profitable, having profitable, strong businesses, and growing, growing and taking market share and helping them expand and grow their respective businesses. Well, you guys have dramatically increased the percentage of your sales that come through the channel over the last 10, 12 years, I mean, pretty significantly, and that's a fundamental part of your strategy, stator at this executive level, so. Yeah, for sure, channel is core to what we do. When we go to market with developing our products or executing our marketing plans, it's all around how do we go execute with partners, right? Whether it's the tools that partners need, the pricing, the programs to help them go engage in the market, the leads, demand generation, and we're at various stages in all these, but I think you'll see consistently from the partners that certainly will talk and talk about their NetApp businesses, we generally lead in profitability across our partner base, and we absolutely lead in terms of total profitability when you include things like services attached and how we go and execute on a partner-delivered services strategy. So, I always say NetApp is, it's not just a product category, it's a whole economy for our channel, and it puts people to work, it allows them to expand and grow their teams, and it's a critical part of many, many of the partners that are here today at Veeam and certainly at Veeam-On, and certainly in the marketplace. And you're partner-friendly in a sense that you don't have a huge services organization that's competing with your channel. I mean, that's got to be appealing for those guys. We put partner services in the forefront of everything we do. Keith, you talked about better together. What does that mean, just in terms of engineering integration, go to market? I mean, how did you sort of in the last two years get better together? What specific actions were you guys taking? I think you got to look at it first from kind of the customer in, the markets in, and you got to look at what's the dynamic that requires change, right? That sort of shapes what your PRD and your MRDs are to make a product. In this case, we've got platforms that have incredible snapshot technology, so to me, it really starts there with simplifying the way that you get the first copy of data, and then simply working with the strengths that Veeam has in their platforms, and making sure that we have great optionality between our replication and other snapshot technologies, their replication technologies, to be able to give a level of flexibility for this data fabric to come to life. No matter if you've got the traditional data center that's got these enterprise apps, like at SAP HANA or others, or you've built a next generation data center like on NetApp HCI, and you're building a scale out via more private cloud, or you've got the hyperscaler cloud with our cloud volumes. We have options on how we get data throughout the copy process of primary to secondary to cloud and tertiary data. So to us, it was about really making that as simple and as pre-wired as possible via the APIs, and then really making that easy for partners to go and grab on to to make it easy for someone to buy us, because you always want to build something that people want to buy. No one wants to be sold any of this stuff, and so building the right thing that people want to buy, the next step then with Jeff, and the reason why he's so critical to this is getting that ready for the partners to be able to have an easy process with their customers that frankly they love. People hate to be sold, they love to buy. Yeah, and let's talk about they love to buy. One of the challenges that the entire industry has as we move through the significant transformation is customers, user organizations, are themselves in the midst of huge transformations. Institutional transformations, technology transformations, relationship with their business transformation, mission transformation. Jeff, starting with this whole role that the channel has been playing and is going to play, how will the channel be an increasing source of value add in the deal? Yeah. How's that playing out to help these customers smooth their changes? Yeah, and I think, you know, I was just watching the news this morning, right? Target announced their earnings, and a big part of their earnings announcement was the improvement they made in customer interaction through digital platforms, right? The ability to order online, pick up in the store, or order online and have it delivered same day, right? And these are, and it's just one example, you can go down the list of customers that have really used transformation to change their business, right? And Chipotle, who's trans, they've transformed Burritos now, and a lot of their success has come through digital transformation platforms. So, you know, the evidence is overwhelming that digital transformation drives better results, and we've done a lot of study at this, right? We have lots of detail around customers that know how to use data, and you know, the basic fact is, one out of 10 customers is in a position to actually leverage data effectively, right? This is all of the research we've done along, you know, with partners, with other companies. The other nine need help, and this is where channel partners come in, and this is what I tell partners all the time, is this digital transformation wave is real, the results are real, and the customers need to move is real, and so they play a role, and can play a role in helping customers accelerate that digital transformation, and so our portfolio is all around accelerating customers and their ability to leverage data to transform their business, and partners through both of the portfolio that they sell, but then the partner-driven services that we promote and drive, you know, really stand out in the forefront of being able to help a customer execute these really tough strategies, and you know, the reason why customers love partners is partners bring choices, right? And you know, for us as vendors, we have to deal with the other side of that, which is partners have choices on who they sell, so we represent a portfolio that is forward-thinking, it aligns to where the market is going, it aligns to the tough problems that customers have, and it's, you know, and it's a position that allows partners to be profitable and make money helping customers transform and deliver their own success. It's got to be more than just partners create choices, and let me explain what I mean by that. It's increasingly, your typical CIO, medium-sized company, large-sized company, which is where we spend most of our time, is thinking in terms of what is going to bring me value today and also generate a stream of value for me in the future, so I need choice now, but options for the future that are relevant and meaningful, and so partners increasingly have to be part of that options equation, how are they going to create options for customers, and you know, one of the nice things about the relationship that you have with Veeam is that you are a partner to Veeam, and presumably you're going to help Veeam customers create additional types of options through this, expanding portfolio of value that you guys have, so talk about that dynamic, because it really requires an even greater dependency on that customer partner engagement, including the dependency that Veeam has on you guys. Yeah. Do you want to maybe start with just the Veeam partnership, partnership? Yeah, I think, you know, which we create the conditions with which I think a partner comes to life with what we've tried to do in the product, building solutions, and then trying to develop the go-to-market around the partners ability to go meet the market and what the market is asking for. In such, you know, the partners have natural services on the front side of the assessments, a bit like trying to help you plan your 401k, they help you like see what kind of data you don't even see, we have a wealth of partners that just have incredible skills there, and then as they take that through our solution, we do everything we can to make that process easy to match our technology to that design requirement, and then afterwards the partners always have these great capabilities for things like, you know, a one-call or a managed service to help take even more complexity off the table for people to just live with the ability to have data protected across all spectrums of where they have data live. So the partner equation is definitely getting more complicated, right, if you dial back, you know, half a decade, decade, you had guys who sold hardware boxes, they were box sellers, we love them, but they moved a lot of product, and they worked with you. Okay, now the cloud comes in, you guys are going, you know, software defined, so you can run your services in the cloud, you know, or you run it on-prem, you've got hybrid, so it's a complicated equation, much more so than it was in the past. So how are you seeing the partners evolve and transform, you know, beyond the sort of box-selling mentality? Of course, you know, VMware specialists, you get those guys, SAP, maybe Oracle, but it's even more than that now with cloud, isn't it? Oh yeah, yeah, you know, cloud is, you know, kind of the third big disruptive wave in the channel, right? If you think of kind of client server is the big first disruptive wave, virtualization, the second disruptive wave, and now cloud, just purely from a channel perspective, the third big one, and maybe the biggest, right? Because it is completely changing the dynamics and the economics of how partners operate. And, you know, and we've been looking at this for a long time, and certainly as we move our portfolio, as we transition our portfolio to be cloud-enabled and native to the cloud, it creates options. But, you know, the market is moving from, you know, deal-based revenue to reoccurring revenue, and what I see partners moving to is various degrees of reoccurring revenue strategies, whether they're setting up their own MSP business and they're opening up shop and they're doing data protection on demand, or they are doing managed services on-premise, and they're charging a customer, or they're buying out the infrastructure and charging a customer once a month, or they're selling services in the cloud. And what I think is also interesting, you can see the kind of the direction where the industry of the channel is going, is when you look at the acquisitions that partners are making, not only of each other, but of software development, right? IP, they're going out and buying software development because the long-term opportunity is not just selling the infrastructure, it's selling a solution, solving a big problem, right? Which could be this digital transformation opportunity, but it's more than just, sure, I can upgrade your servers. It's their digital transformation, right? I mean, that is their digital transformation. It is, you know, kind of cloud's not really a destination, right? Everybody thinks cloud's the destination, I got to get to it. You know, it's not a destination. It's a tool in the bag that your customer's going to use, and certainly a partner's going to leverage cloud to create a money stream, right? A business model that is sustainable and can grow, but it's super dynamically different than what we do, you know, what they're doing today. So you guys talk about profitability before, you had a point, go ahead. I was just going to say, balance all that against, I think, where the volume, the mass of the volume is, even though the hyperscalers have a tremendous amount of growth, it is still VM-based, it is still kind of on-prem-based, and so there's still, in this two-year window of change, the vast majority of the opportunity is going to be on-prem, but you also have to factor in how you involve the cloud in that strategy as what Ratmir would call the second wave, right, of Veeam's strategy, and we're right in the heart of that. I mean, there isn't any greater strength than what we're doing as a company with NetApp than what we're doing with cloud, and it's just a natural way for us to extend, a partner's capability, a customer's ability to buy what you'd want to get from NetApp and VM together. Well, and what the hyperscalers have done is they've changed the way in which people consume technology. Oh, absolutely, and NetApp is a great case study of a company that's moving through that process from a product orientation to a services orientation, but Keith, I want to come back to this notion of how the NetApp relationship with Veeam creates new classes of options for Veeam customers as they try to think about data protection differently because, precisely because, as Dave said, you have expanded your portfolio, you are going to market with a different value proposition that you did a couple years ago. How is that playing out in your conversations with customers as they think about moving from a data protection that's focused on devices to a data protection that's focused on delivery of digital services? Yeah, well, isn't that a great topic to talk about? Where do you start with that? Organically, I think you look at the way people try to operate and deal with the operations of data protection. It really starts there because, cloud is really about IT operations. What we've done is really try to simplify that stack to get beyond it being one single endpoint of technology, so it's not just about how we take data sets from, say, a NetApp FAZ or a NetApp HCI and bring it through Veeam to another FAZ or E-Series and then off to the cloud. It's beyond just the basic technology. It's much more operational in its nature. So if you look at all the stuff they're talking about here with VOA and all the discovery elements that they're doing to help make it easier, one of the areas that IDC caught particularly in one of our benefit statements on taking complexity off the table is our ability to have auto discoverer VMs. It's ways that you can make much more autonomy and orchestration of operations kind of come to life as a way of you doing this technology together. That's only just one of the example points that we have on this better together with Veeam. Taking the heart of their core technology and where they're being pervasive in not just a VM-centric crowd, but also Hyper-V and some of the other things they talked about at the top of their rationalized stack and then bringing that down through the heart of our data fabric portfolio and saying, anyone point at which you're at, we're able to put these things together at the heart of the first step and we kind of map this customer journey and our presentation to the attendees here was this customer journey from the current form of complexities you have and moving that all the way through to snapshot integration, platform selection of which ones would make sense for what scenario, how we work through Veeam's data replication and management technologies, our data replication, our data fabric technologies to get from one end point to the other. And then ultimately, you got to be able to talk about the ability to restore or you really shouldn't be talking about backup. All right, we got a wrap, but I'm going to ask you guys each question, Jeff, from Trip Reports. So from your standpoint, you're talking sales momentum with partners. What are you going to tell your colleagues? And Keith, obviously the partnership with Veeam, what are you going to tell your colleagues when you get back home? Yeah, so for me, it's, you know, this is, we've talked about transformation. This, you know, I think our relationship with Veeam and the strategies that we're executing is all around transforming data protection, right? And it's really around this concept of simplification. And I think, as we were chatting before, you know, before we started taping the, you know, simple matters, right? Simplification or simple is really attractive feature. And, you know, our ability to simplify data protection for customers in partnership with Veeam, deliver a solution that's, you know, clearly world-class and, you know, NetApp bringing world-class technology to the table. It's a great partnership. It creates an opportunity for us to go and have conversations with customers that maybe never thought of NetApp before. And it's, you know, an opportunity for us to open a lot of doors. And certainly for me, what I care about, it's an opportunity for our partners to open a lot of doors. Right, yeah. Keith? I would just say, listen, we've worked from our joint CEOs together. So George and Ratmir, starting this, like, joint bond of alignment all the way down through product solutions, field geos, channels. We're going to have explosive growth together. You know, we're going to go address this market that is looking to change. We've got something we're bringing together and it is absolutely better together. Great, power players aligning at the top all the way down through the channel, through the partners, into the cloud, bringing you all the data here at theCUBE. Jeff and Keith, thanks very much for coming on theCUBE. Keep it right there, buddy. Peter Burris and I will be back with our next guest right after this short break. We're live from Miami at VeeamON 2019. We'll be right back.