With the recent conclusion of EMC World 2014, EMC NZ country manager, Phil Patton, provides perspective on the changing scenario in the country and the disruptive technologies that we should be watching out for.
Q: How has your time at EMC been so far?
Phil Patton: I have been with EMC for two-and-a-half years now. I joined from IBM and came on board in November 2011. It was an interesting time in the market. At that time, we had just seen the government mandate that a bunch of departments had to go IaaS and it had just gone through the process of selecting the IaaS vendors.
That really changed the landscape in NZ, not just for EMC but for a lot of organisations. Essentially, the government is 40 per cent of the market here, and that changed the dynamic of how that sector is going to buy and that has an impact on how you as a vendor work with that part of the market and then work more broadly with the market.
We embraced that as an organisation and have supported Datacom in what they are doing in providing structure and services to NZ government, which was a change in our model.
As the market changed, we as EMC had to really redefine a little bit of who we were. Probably we would always be known for having great top end products and probably the mid tier product range has not got a lot of exposure. We had been dealing with the big banks, large government departments. That is typical; everybody starts at the top.
We then had to migrate and change that strategy. We had always only ever had a strategy of non-direct, channel only. We had two direct customer sin NZ, which were globals, which were mandated to us, and you can't change those rules.
It was then a case of how we take our position in the marketplace and go and drive that much more strongly with the product set that was evolving into our channel partners and mid-market. When I came on board we put that strategy into place and have watched it evolve along with EMC product sets, and their go-to-markets worldwide, which we have adapted to locally.
Q: How do you balance your direct and non-direct customers now?
PP: We have maintained two direct accounts and we will only ever have those two. I am very strong on that. Our channel partners have made a commitment to us through getting their staff trained and enabled. For us to deviate from that puts insecurity into the channel.
When the channel partners are looking for new ways to do business and are investing in some of the new technologies we need to be able to give them surety that when they go into an opportunity that as the vendor we are not going to take the opportunity off them. Our job is to work with them and our teams engage with them directly with the end-customer but we must always ensure that we are driving that business back through our business partner community.
Q: What are the customer purchasing trends that you have been seeing in the last few years?
PP: Over the last 3 to 5 years we have seen customer attitudes to procurement change. We all dream of the lofty days of early 2000s and even the 20th century where customers would happily buy five years worth of storage based on some forecast that was not well-defined, but looked like a good idea. Customers now are much more demanding around understanding what the workloads are, procuring for those workloads and looking at different ways to procure.
Customers are looking more at finance options, more at utility type options and also looking at how they would start to build either private or hybrid Clouds that allow them to procure some on-premise computing power, and be able to burst out when they need to either local or international cloud providers.
We have seen a real change in the way they are looking at their workloads and therefore the way they want to procure them. It is no longer about here's a big lump of capital, go buy something for the next five years. It is how do we use the money we have got wisely and for the projects we have got to ensure we are getting the best bang for the dollar.
We have got to add to that as technology has developed there is no longer a one-size fits all. When you look at the product set you have got all sorts of different workloads now that require different types of storage technology.
If you are the top end and you are doing lots of storage with high performance and its structured SAP or Oracle or something like that, and lot of that storage is ERP and you are looking for performance, you would put a VMAX at the high end. But then you have got different workloads. When you look at VDI, which a lot of people are using, all flash arrays and EMC's Extreme IO are ideally suited for that.
So rather than going and selling sort of opposite ends of the spectrum - then you have got object, mid-tier and then you have got backup and all of these things going on - customers want to come out and buy products that suit the jobs that they are doing, not just saying we need storage.
That has been an important change in how they procure because they procure that per project.
Q: How are your revenue ratios split between customer types in NZ?
PP: We are probably reasonably split on that. I would break it into three categories now: the service providers, the large enterprises and then the mid to low end of the market. Because service providers are becoming so important both to customers and to us as to how we can support them support their customers we really see that as a separate category in NZ and we align our teams to those structures and tiers.
If you look at our business the service provider quotient is certainly growing. We have got a strong base in the corporate world. When you look at banks they still buy a lot of on-premise or private Cloud storage but now they are looking at ways to burst out to service providers. You have got a big core mid tier set of organisations in NZ, who have been experimenting with Cloud, but are still buying storage as a core as they look to see how cloud develops, how the pricing changes in the Cloud, how they fully understand all the pricing mechanisms of some of the service providers, because it is not just about the real cost of the storage, it is about some of the other services that get add on top. It is an evolving price versus market share long term. I don't know how it would pan out. It would be a brave person to put a risk profile around saying whether it is going to be x or y. I think it would be a combination in the long term.
Service providers are providing different tiers of storage and different services, as a service to their customers. So within the service provider environment they are looking for multiple types of storage. They are looking for the best way to procure at the best cost per gigabyte ratio for those workloads., exactly the same as the high end and mid tier customer. That may be utility, leased to own, leased or outright procurement. In some of those options, a capital procurement might actually work out cheaper than buying it as a service, for a certain type of workload.
Q: How do NZ businesses fare in understanding and using Big Data?
PP: I think there is still a lot of ground to cover for organisations when they are thinking about big data, but I think we also have to go beyond whether it is just Big Data and its really about Big Data and vast data.
Big Data is about how we are in a telemetric world now where there are millions of sensors everywhere, vast amounts of social media and data out there. Traditionally we have been always able to capture all of that data in one shape or the other. It is about how quickly we can capture and analyse and make decisions on that data. That is where we have to extend the Big Data concept into vast data.
We have been working with a number of organisations on how they are going to start utilising vast data, as well as bringing together all the telemetric information and make the decisions rapidly, because that is the type of world we are in, where decisions have to be made quickly based on the vast amount of data that we have got to get the best results.
There is a huge opportunity for businesses in NZ. We are going to see much more of it in the next 18 months to two years. There will be some early adopters who will do well in the analysing of data. For organisations it is going to be about understanding where they can get the best use of it.
Some of the trends we are seeing globally is the importance of the CMO and how they are starting to use big and vast data, because it has become much more important to them. As it has been taken away from the traditional IT guys, doing data warehousing churning out reports for the CFO, when you are looking at the CMO and how he is going to drive thing to market, position product - in all of those areas, that is where it is going to become important.
And there are a number of vendors other than us who are really starting to talk about that technology and how we can help those people. In the next 18 months to 2 years we are going to see a real growth curve in organisations using that type of technology.
Q: Can you give a brief on your partner network in the country?
PP: We have got a fairly extensive network. We work via distribution. We have a single distributor in NZ that looks after the entire EMC portfolio. They have been a partner for 8 or 9 years now. They have got a well established team and they help us drive into market.
We also have a channel manager in NZ. We sit down and work with distribution and our partner network to work with them around how they want to work. Which is how do they want us to help them from building marketing campaigns, how do we help them develop co-op and market development funds, generate leads and follow up on leads. A lot of the time business and service provider partners have some great ideas, they have some marketing funds available, but they don't have the ability to grow and drive the lead to do the callouts and follow up.
We sit and work with our partners. If you are enabled in an area and then you want to drive and run campaigns. We will help you do that by providing some resources to back fill and help. Then it is very much about joint selling with them.
It is important that they are successful in both products and services. We enable them to sell the product and also implement the services because a lot of these partners have teams of people and it is important to keep those teams busy. We have got to ensure that is happening and making sure we are interacting with them at all levels within their business.
This would include the supply, the installation and the after-sales service for customers, because we - partners and EMC - jointly own the customers. They are their customers because they are dealing with them, and we are there to support them with our technologies to ensure that customers are looked after.
All my reps deal with partners. I am happy to go out and meet any customer with any partner. I engage regularly with all the partner principals and most of the reps and partners know who I am. It is about being visible and engaged with the channel.
If they are successful we are successful. They should know that they can turn up at our door and say here's an opportunity and we are going to support them all the way through with it. There are always rough bits here and there and you have got to deal with a competitive environment, because we understand that the partners just can't be EMC or just another vendor. So we have to ensure we can work through that with them and not get precious sometimes about the fact that they may take another technology because they have evaluated that that is the best thing for the customer. Sometimes we will win with those decisions, sometimes them. It is about being mature and adult about it.
Q: A consultative sell for mid-tier businesses - does it make business sense for EMC and its partners?
PP: The mid tier customers want to buy solutions as well. They want to buy outcomes. That's the market. That is what we have to adapt to. That is where we use the skills of our distributor to help us with that and that's where we use the skills of our internal team. EMC in NZ has got 40 people. A lot of people don't understand how many we have got. That's because we are out there focused on helping and ensuring our business partners get to that end solution.
We have got a group of sales people but we have got a core group of customer service and services people who are out there helping partners at any level do that. But standing behind the partner, not getting in front of them. It is important for the partners to be seen to be able to deliver those solutions. It is not out job to be in the front, it is our job to be behind and beside them, ensuring whether customer with 100 staff or 500 staff, it is our job to be beside the partner.
Now you can't do that with every deal and every business partner but that comes down to the different opportunities and how they want to engage with us and how they have built up their skill portfolios.
Q: What are the challenges for EMC in NZ?
PP: The world's evolving at an incredible pace. The NZ market is a long way ahead of the world. That is because NZ has been a great adapter of technology. When we talk about the trends, Cloud in NZ is more dominant than any other place in the world.
That maybe because the government mandated IaaS and that gave a lot of confidence to the community but also gives some scale to the community. We have had to adapt to that.
We are looking at how we adapt to Big Data and vast data, how we adapt to the third platform, how we adapt to putting in place software-defined datacentres, how do we start to work differently with different types of partners - partners that did not exist 18 months or 2 years ago.
There is no recipe where I can say we are going to do this and that. We are going to have to ensure that the messages that we are taking to the market are aligning to where the market's going. What we are doing here might be slightly different to Australia and slightly different to Europe.
When you look at EMC's global strategy around where we are going, from storage, virtualisation layers, the security layers and with the launch of Pivotal, we are really embracing not the vertical stack that many organisations have gone for but much more of a horizontal stack so we can give customers and partners choice.
If you use EMC at your infrastructure layer, you don't have to use VMWare, you can use other options like OpenStack and HyperV. When you are getting into security, you are not tied to EMC's security.
Now that is different to most other players in the market. So what we believe is the right thing for us to be doing in the right strategy is giving customers that choice.
Q: What can we expect from EMC in the next couple of years?
PP: We announced changes to the partner program at EMC World. This brings together some of the broader elements of the EMC federation of companies to help partners right across that federation of companies.
We recently had our partners over in Australia for our partner awards. NZ was well represented and Datacom won an award. We also had our worldwide head of channels in NZ recently. He came down to spend some time with NZ partners to understand where their challenges are, because NZ is seen to be out in front.
We had our partner forum or advisory board happening before World in Las Vegas. Historically, Dave Rosenberg from Westcon sits on our partner advisory board. So NZ is represented at the highest level within EMC as they look to broaden their channel program.
There is a lot of stuff going on.
We brought on late last year three new heads. We are pretty stable in that regard. I would love to get more people, but we have got a stable and solid team. It has been together a long time and it works really well. If you go out into the market place the people are both well recognised for sales, for knowledge and for their engagement with the market.
Q: What are the disruptive technologies that you would advice customers to look out for?
PP: Big Data and vast data - how are they going to adapt to the third platform with this huge influx of social media and how are they going to able to rapidly develop apps to take advantage of them. Gone are the days when organisations can wait 12 months for the implementation of a large project. Things are moving too quickly. They need to take advantage of the market.
And once they understand how to do that how do they then go out and find the right solutions who can deliver that quickly with the right partners and the right technologies.
Cloud is adapted but yet disruptive. There is still a lot more that is going to be happening in that service provider space as the cost per gigabyte changes, as they look at what additional services they can layer on top. We have seen partners start to put video conferencing as a service. All these layers stack and become disruptive in their own right as services that are layered on top of the Cloud.
That's the way of looking at it. The telemetric data around Big Data and vast data. Every phone can tell you where you are on. How do people start to take advantage of that, that becomes useful and disruptive data in technology, that everybody can get their hands on and how do they use it to make change.
It is about lifecycle. It is about looking at your assets and being able to fully utilise your assets across a broad spectrum. That is just going to grow out as we look at software-defined networks and software-defined datacentres - how you use software to better define and get more use of the assets that you have got. They might be EMC assets or third party assets but as an organisation how do you view them as one under a single software layer so that you can take advantage of them.
It is disruptive and it is going to become a trend.