Digital Transformation is drastically changing the enterprise technology landscape faster than ever before. Cloud, software defined everything (SDx), hyper converged infrastructure (HCI), artificial intelligence (AI) and other digital technologies have altered and enhanced the solutions portfolio of technology vendors and their channel ecosystem.
We spoke to Tian Beng Ng, Senior Vice President & General Manager Channels, Asia Pacific Japan (APJ) Dell EMC at Hong Kong for an update on company’s tech blueprint and the channel roadmap for 2019 and beyond.
What according to you will be the silver linings for IT channels on the horizon in 2019, and beyond?
One of the key trends to emerge stronger is multi-cloud and hybrid cloud. More companies are realizing that it is about keeping your data on-prem, but it is actually a combination of both. Not only hybrid cloud, but also multi cloud. Not everyone is on a major player like AWS, but there are Google Cloud and Microsoft Azure too.
The workloads and apps are moving between public clouds, and from public to on premise. The recent AWS outposts announcement is an affirmation of this big trend, which is good because there was opposition all along. Dell, for many years, has been predicting a world of hybrid cloud. And it will only get bigger, prevalent and accelerate further.
The consumption model is another market trend. More companies, rather than procuring their equipment as an Opex now, are looking at capex, and hence a consumption of the on-demand model. There is a proliferation of different types of services - platform as a service, application as a service, management services - all these are different variations of services in the consumption model.
Many traditional channel partners are exploring hybrid cloud and/or multi-cloud. Is Dell EMC forming a new army of channels that are predominantly ‘born in the cloud’ or ISVs?
Honestly, there will be a convergence in the new world. There will be some new partners who have started their business from the native clouds and they are converging down, while obviously, there is another spectrum where partners who started out in hardware, are now moving into the clouds.
Besides various different partner programs, Dell EMC’s cloud service provider program is gaining good traction in APJ.
In emerging countries like India, many channels tend to be more infrastructure focused. Hence, there is a dire need for partners to move from being a pure infra selling company to transform themselves to address new trends of multi-cloud, hybrid cloud and consumption model.
It’s been little over thirty months since Dell acquired EMC. Is the honeymoon period over or some gaps exist for channels of both Dell and heritage EMC?
I don’t think there was ever a honeymoon period, or I won’t call it a honeymoon period.
Honestly, the integration went out really well. Even from the media standpoint, when probably the biggest tech merger happened - everybody expected a lot of issues to emerge but the company results are a clear indication. If the integration didn’t go well, we wouldn’t have reported the strong results. The dedicated integration teams did the immaculate planning and therefore the results have been strong.
Let’s talk about the Dell EMC program that claims to be simple, predictable and profitable. However, the tech buying pattern of organizations is far more complicated and seldom predictable with emerging tech trends. How do the program’s tenets hold true for channels?
That’s a very good question but honestly if you take a step back, we are actually trying to solve a business outcome.
When partners sell to any customer, the priority is understanding the customers’ pain point and business objective. If channels can come up with a solution to meet the business outcome, then the most important aspect is met. That’s a very good question but honestly if you take a step back, we are actually trying to solve a business outcome.
We shouldn’t be selling our technology, but sell business outcomes. The problem in the old days was that most were trying to sell our technology - as in the all flash product or most powerful blade servers, which might not be serving a business outcome. Dell’s value proposition of industry’s strongest portfolio solves CIOs’ business challenges through our partner ecosystem.
Profitability has been a constant concern for channels with increased employee costs, vendor competition, spend on T&C, etc. And most big deals go to bigger (or platinum) channels of Dell EMC that depletes the business and hence profitability for other channels in the ecosystem.
It is not true that the largest partners contribute to majority. In fact, Dell EMC channel framework comprises of metal partners with Titanium (which are our largest partners), platinum and gold partners and then authorized reseller who work through the distributors like Ingram, Tech Data, Redington etc.
Majority of the revenue comes from the gold and authorized partners who buy through these distributors. Actually, it is the other way where our big number of smaller partners contribute to the bigger percentage of the revenues.
Are the channels changing their GTM as more than 50 percent of IT demand emerges from LOBs, CMOs, CXOs in digital transformation age. Do channels’ teams speak to customer stakeholders beyond the CIO?
That is exactly our pitch to the channel partners to sell to the lines of business. Our portfolio is well equipped on both sides of infrastructure with desktops, notebooks, server, storage and other assets within Dell Technologies family like VMWare, Pivotal. This comprehensive portfolio helps in meeting the business outcome when we sell to a line of business.
Few APJ region case studies include our partner selling a solution to the line of business at a large multinational insurance company which resulted in increase in percentage of claim settlements and made their agents more productive, which is exactly solving a business outcome. Dell EMC partner Intuit Technologies powered Australia's largest Atlantic salmon farmer IoT project.
The extensive portfolio leads to classic debate of ‘one throat to choke’ or best of breed solutions for an IT infra vendor.
Whenever we speak to customers and partners, majority of them want to work with less vendors, in fact I haven’t met anyone, who prefers to work with more vendors. I mean the natural answer is to work with less – especially if you are a best in class.
In a very small company that operates across domains, even a big portfolio with number 10 ranking in market share is quite difficult. But our value proposition extends from encompassing a broad portfolio to command market leadership in most of our offerings. We respect our customers and obviously we would partner to be a single point to choke and sell across solutions. But if they do not, we do work with our partners in part-infra deals.
As APJ Channel Chief, what is your ‘top-of-the-line’ priorities at Dell EMC?
We really want our partners to make the transformation from just being a hardware reseller to reselling solutions that meet business objectives. They may not be able to move 100 percent in quick time but they can at least start the journey. It will be a good start for partners to sell more lines of business at their customer end, for example, they can sell storage or networking products than just selling a server.
We would like our partners to give us candid feedback. While we are doing well in our results, we definitely do not want to be overconfident. We remain humble as we want to hear the feedback as there might be many things we still need to improve on.
If given a crystal ball, what tech trends do you foresee for 2019?
Multi-cloud and hybrid cloud, as we see companies not sticking on to AWS, but we see them moving away from them as well. A hybrid cloud, as in just not putting it on public but moving between public cloud and on premise. Multi-cloud, as in not sticking to one public cloud provider, but moving between different ones. We would want customers to use VMWare as the control to move the workload between different clouds and also between public and private.
Nutanix says everything will be hyper converged in next few years which sounds farfetched. Do you see a giant momentum for HCI?
Obviously, HCI will continue to grow rapidly, in fact, in the recent quarter, we grew triple digit year on year globally. We shipped over a billion dollars’ worth of VXRail - our hyper converged product with VMWare.
Hyper converged comes out from a much smaller base, so the storage market is actually still very huge. Hyper converged will grow much faster than the other storage space but the storage space is so much bigger. Honestly, we remain focused on both as our partners continue to sell large buckets of storage too.
What channel mantras will be relevant as technology changes its course at a rapid pace?
The key tenets of our program are simple, predictable, and profitable. It sounds really simple in a way but it is really important as you want to stay focused. And if we can really achieve it and make our channel program really simple, really predictable, really profitable for partners, I am sure our businesses will continue to grow.
Channels for us is success for our partners. If our partners are successful, we will be successful.
My ‘top-of-the-line’ priorities for channels: Tian Beng Ng
- Make the transformation from hardware reseller to resell solutions that meet customers’ business objectives.
- Channel Partners to sell more lines of business to their customer to enhance their profitability.
- Candid feedback from channels help us remain humble and stay aware of aspects we might need to improve on.
Tian’s 5 Tech Bets for 2019
- Hybrid Cloud
- Hyper Converged
- Storage & Flash
- Next Age Compute