>> From the SiliconANGLE media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Velante. >> Hi everybody, this is Dave Velante. Welcome to this special CUBE Conversation. Years ago, large computer companies would set up shop, direct sales, in NFL cities. Well, that's changed quite dramatically and there's been a lot of other changes. We're moving from a world of pure box selling to where partners and channel partners are adding value in new ways, and the cloud has really accelerated that move with focus on things like security and infrastructure value added, and other factors that can bring margin for the channel partners. We're here to talk about that with Terry Richardson, who is the vice president of North America Channels and Alliances at Hewlett-Packard Enterprise. Terry, thanks for coming on theCUBE. >> Thanks for having me Dave. Pleasure to be here. >> So I was saying up front how things have changed a lot in the channel. We're kind of moving from a box selling mentality to a value add. Is that accurate? What's happening in the channel? What are really the market trends? So I think that's absolutely accurate. There's really three things happening simultaneously. Vendors like HPE are transforming, channel partners themselves are transforming, and customers are transforming. And for the first time, at least in my career, over three decades in this industry, it's all happening simultaneously. So with respect to the partners, their business is absolutely needing to shift from one that's product centric to one that's much more software and services centric. In order to continue to be the trusted advisor to their customers, they need to evolve and deliver solutions to customers that are addressing today's business problems. >> And channel partners have always been very customers focused, very close to the customers, they have intimate relationships with them. So when you talk about the customers transforming, everybody talks about digital transformation, it sounds like a big buzzword, but every company you go to is trying to get digital right, aren't they? >> They're trying to get digital right either to take advantage of market opportunity leadership, or frankly because of the threat of being disrupted and playing defense, and so they're absolutely focused on their own transformations. And it's hard because most customers IT budgets are locked up in just running the infrastructure they have today, and they're trying to figure out a way to innovate and bring on new applications that can be revenue drivers or allow them to compete in new and different ways, and it's difficult to get that balance right. And so partners play a critical role in advising how clients can achieve their goals in the constraints of the budgets they have today. >> And so from an infrastructure standpoint, the applications and data have traditionally been locked and loaded and hardened in these silos, which was kind of the right thing to do when you wanted to optimize on availability and reliability and security. But now people wanna share data across the enterprise, with partners, there's no more perimeter, and that's a real challenge for customers from an infrastructure perspective, isn't it? >> Right, and the way that not only vendors like HPE but our partners address their client needs, it's rapidly changing. In reality, to use a term that I've heard in the past, applications follow data, and infrastructure follows applications. So you really need to understand what the clients intended outcome is, and what are the business objectives that they're trying to achieve, and that will allow you to focus more on workloads and applications, which ultimately will lead to an infrastructure sale, but starting with infrastructure is the wrong way to do it. >> Let's talk about some of the channel concerns. Obviously the channel wants to make margins, they want a partner that's not gonna head fake them, and change the rules of the game, and they want to work with a leader. Talk about what you're hearing from channel partners. What are their major concerns today? Is it cloud taking over their business? Is it the things I just mentioned? Elaborate. >> I think you hit on a few. Certainly, cloud is an an enabler for some customers in some ways, but it's a potential disruptor to channel partners. And their business has to morph to take advantage of what the cloud brings and position themselves not to be disrupted by it. So that's certainly a change in partners, and the other thing that partners are struggling with is how do they keep their technical talent, not only how do they retain the talent, but how do they acquire the requisite skills that are necessary for today's market demands? And just having a strong set of network engineers, or security experts, or storage resources is frankly not enough. Now you're looking at people with DevOps skills, and people that really know how to architect the 2.0 and 3.0 solutions for customers today. So that retaining, acquiring, and ultimately training that technical talent becomes a real challenge, and then of course finding salespeople that can sell in a solution centric manner as opposed to a product centric manner, is also a challenge. >> So, Terry, how specifically is HPE addressing those concerns with partners? >> So, a couple ways, the cloud becomes an enabler, right? One of the premises of our overriding business strategy is around making hybrid IT simple for customers. So part of that is acknowledging that public clouds have a place. There'll be workloads that are appropriate with SaaS providers, and helping the customer navigate what applications and data need to remain on-prem, and what should be in the cloud and how to manage that, and how to potentially move workloads from off-prem to on-prem and vice versa is really a challenge. But one of the big attractions when there was a race to the cloud, was a different way to consume technology. The public cloud providers made it very easy, kind of pay-as-you-go, pay-what-you-use, and so HPE innovated with a technology that we call GreenLake, which essentially offers the customer the same experience from a consumption standpoint, only pay for what you use, there's capacity available to meet peak requirements already on-site, but the customer has a very predictable way to pay for it, which we're starting to see real market traction. >> Yeah, we always talk about, on theCUBE, bringing the cloud experience to your data, wherever it lives, that's an example. When you talk about making hybrid IT simple, and of course I've heard this tagline from HPE for a while now, it's interesting because hybrid IT is anything but simple, so the channel partners must love that narrative, because they're part of making it simple. >> They're part of making it simple and we've actually extended our outreach to partners. We recently announced something called Tech Pro Community, which is a way to, we've outreached to all the technical constituents at our partner, it's actually around the globe, not just in North America. And we've created a community where we train our partner's technical resources exactly the same way we train our own engineers. So, they're consuming the same content in the same training sessions together, so it provides multiple benefits, not the least of which is building strong relationships, because we often see our technical resources and partner's technical resources collaborating in front of customers to deliver real world solutions. And that's important. >> You're essentially saying that's transparent to customers. They don't really see the difference or? >> Because the training is so substantially similar. So often times a partner may be in alone, completely representing HPE, often at times we're together, or they may be times where a partner doesn't have resources in a city, they may ask HPE to augment their own capabilities. >> So a partner, if they choose, can essentially white label your expertise and services? >> They absolutely can if they choose to do that, or the other end of the spectrum, if we allow partners partners to build services, practices, around our infrastructure. So if they choose to deliver their own services around our infrastructure, that's an option, too. >> I could see it going both ways. I could see partners wanting to draft off the HPE brand, I could see partners saying hey, we want the customer to just see us. >> Because that's part of their value prop to their customers. >> Is that unique in the marketplace, where you're able to give the partners that flexibility? I know, for instance, some vendors say no, it's our brand, and that brand, the color scheme, etc., has to be front and center. >> I don't think it's completely unique. What I think is unique is HPE continues to show itself, not only as being the vendor that is fully committed to the channel and have been for decades, but really showing the flexibility to adapt with the changing times. So we tend not to dictate, thou shalt do it this way, thou must do it this way. >> From a channel perspective, this is kind of an out in left field question, but it just popped in my head; when HPE split in two, and you guys focused on infrastructure, was that good news for the channel? Or was it harder for you as the channel partner because you got less in the bag to offer? >> I think it was a little bit of a mixed bag. It was initially harder for customers 'cause they now had to deal with two vendors instead of one, but I think the overwhelming benefit, it certainly played out with the success of our counterparts at HP Inc., that equity's done very well and the company's done terrific in the market, as has HPE. So, still a broad enough portfolio because we cover all the infrastructure elements from compute to storage networking and services, that's certainly enough to keep us busy and keep the partner's focused. >> And I would think that you're more focused as well. >> Absolutely. We're building deeper relationships with our partners, we're being focused and as we transition from selling products to delivering effective solutions to customers in this new hybrid world, and let's not ignore the opportunity at the edge, it really gives us an opportunity to really zero in on what the partners need in order to successfully scale their businesses. >> I'm glad you brought up the edge, because a couple misconceptions where the cloud was just going to take over and swipe a credit card and you don't have to worry about IT anymore, cloud brought a lot of complexities, particularly in terms of governance, security, data migration, >> Sovereignty. >> Sovereignty, right. Now you've got the edge which is kind of redefining what the cloud is all about. >> It's redefining, really, the definition of data center. >> Right. >> Right, because for many customers, what they're recognizing is with the technology advances, and the requirements on their business to make decisions with the data that's produced outside the data center at the edge, processing storage, analytics have to happen right there, real time. And then, it's really a booming part of the market, so we're starting to see partners that have historically been data center focused taking advantage of this redefinition of what the data center is, and how IT operations, and traditional systems and application vendors that operated outside the data center, are really now relevant in order to allow that customer to achieve their business objective. So it just kind of widens the opportunity for channel partners. >> In thinking about the edge, I know HPE was one of the first to really go hard after the edge in terms of starting to build an ecosystem in its early days, but I've talked to a number of HPE and ecosystem partners that are more IOT related or edge related. So, what does that mean for the partners? Are they able to tap into that ecosystem? Is it still too early? >> No, I think we're definitely in the earlier days, Dave, but partners are able to tack into the ecosystem. We have edge specific products on the server in compute and storage side, we have technologies that brand under the name Edgeline. We certainly have Aruba because wireless networking at the edge is a pervasive technology and the associated security and other software elements that the Aruba team brings. That's available now, and we've been on the forefront of forming new partnerships with entities that have relevant business applications to allow customers to complete their edge projects. And it's cutting across industry, so it's an exciting time on the one hand, on the other hand, it's putting pressure on the partners to learn yet something new, and like any business, you kind of have to make your bets, where you wanna invest, 'cause not all partners are gonna be expert in everything. >> Yeah, they gotta be careful about getting stretched too thin. At the same time, they want new opportunities that they can lean into. Alright, bring us home here. I'd love you to summarize why HPE, talk to the partners out there and explain to them, why HPE? >> Well, really I think it's a multifaceted set of reasons. I think number one, HPE is a vendor that you can trust. We've certainly earned that over more than three decades of being fully committed to the channel. We have invested in infrastructure, if you wanna take trust all the way to the customer, that we focus on security like nobody else, down to the silicon level. So there's real comfort in the solutions that HPE produces for clients and for partners to sell. We have a portfolio that's better than ever, and it's comprised really of three distinct elements. We continue to invest in R&D, so organic development innovation. We've done some really smart acquisitions that allow us to further deliver on our stated strategies. And we're approaching partnerships like never before. So, companies of all types, whether it's ISV software providers, global systems integrators, kind of everybody in between, and that technology partnership approach is allowing us to extend the portfolio. So partners have never had a better suite of offerings to provide to customers. We continue to have the industry's richest program when it comes to partner compensation, and we have increased commitment to sell with, co-sell with the channel. >> Well, Terry, partners are a critical part of the value chain, very clearly as I said before, a lot of intimate customer relationships, they gotta move fast to stay competitive. Thanks so much for coming to theCUBE and talking about some of these trends. >> Thanks for having me. >> You're welcome. Alright and thank you for watching, we'll see you next time. This is Dave Velante, you're watching theCUBE. (bright techno music)