EMC VP Hollis: VCE, Vblocks Not For All Partners

EMC Vice President of Global Marketing and CTO Chuck Hollis, a 15-year EMC veteran and one of the driving forces behind the storage giant's private cloud offensive, spoke with CRN Editor News Steven Burke at national solution provider GreenPages' annual Solutions Summit about the Virtual Computing Environment (VCE) coalition with VMware, Cisco and EMC and the Vblock building blocks partners are selling to bring private clouds to businesses.

How many partners are out there fully engaged with the skills to sell Vblocks?

VCE and Vblocks aren't for every partner. You are talking about very, very daunting certifications. You have to go through the whole EMC portfolio, the whole VMware portfolio, a lot of the Cisco portfolio, networking servers, management security, backup, project management. So we don't have a long list of people who are Vblock- and VCE-certified. My personal view is that is not a bad thing. If someone is able to make that investment, they get access to a very premium market that wants to move very, very quickly. I am sure over time the certifications will get more streamlined and more rationalized. But the people who have made the investment in how to go sell Vblocks tell me anecdotally they have no shortage of people to go talk to.

How many partners are selling Vblock now?

Probably a couple of dozen around the world. Some of those are traditional resellers with value-add models like Forsythe and folks like CSC. This is not something where we want everybody in the world selling Vblocks door to door.

What is the market demographic you are looking for?

Let's start with the customers. You walk into a shop and they are doing the virtualization thing. We don't have to talk to them about virtualization. They want to do more and go faster. They have a backlog of new applications they want to put up in a virtualized environment very quickly. Whatever they did with virtualization 1.0 isn't going to cut it for virtualization 2.0, and so they are kind of casting around for a bigger, more mature infrastructure.

The third thing we find in these customers is progressive leadership. There are usually one or more people in the organization who have a clear view of where they want to be. I call that a 'proactive' IT stance rather than a 'reactive' one. By industry it covers the gamut from health care to financial services and retail, lots of different industries. Geographically, [it covers] North America, Western Europe, Australia, New Zealand, [with] strong initial waves of interest in some of the Asian countries.

Perhaps the most interesting split is traditional enterprise IT vs. service providers. We have seen a number of service provider organizations coming from a hosting model or an ISP model or some other predecessor models buying Vblocks and using them to operate a variety of services: infrastructure as a service, platform as a service and software as a service.

In many ways you can look at these new service providers as a new channel forming. Traditional IT channels were buying and selling technology that landed at a customer's data center floor. Well, what if I want to consume that as a service? I think that we all would be well served when we fully understand that when you have cloud and IT as a service, disruption happens end to end. Not only in the IT organization and the vendors, but in distribution channels as well.

Wouldn't it be great for a partner to go to a prospective client and say, 'Here is what I can do for you: I will give you a choice -- you can consume it the traditional way by buying a bunch of technology and putting it on the floor or I will give you a by-the-drink option to consume it dynamically and, by the way, I will let you change your mind anytime whether you want to do this as a service or traditional way.' I think that is going to be the hot spot for the next three years as we see traditional value-added distribution and reseller models and systems integrator models meet this world of service providers that offer IT as a service. Customers need both. It is not that one is better than the other. You have a roster of 30 to 300 applications in an IT organization and it is pretty clear which ones need to run in the data center and which ones could run somewhere else or some combination.

The real gold ring on the table here is who owns the trusted relationship with the customer and may make these decisions.

NEXT: Who Owns The Trusted Relationship?

Do you think there will be a shift in who owns that trusted relationship with the clients?

No I don't. I think it will be the people who own it today. The opportunity for folks like GreenPages and other partners is to expand that relationship with the quality of services they provide. Historically, GreenPages has done, as an example, a great job of figuring out who is the best vendor, the best technology, etc. and providing that final mile, if you will, to the client. In a world where I have hundreds, if not thousands of service providers offering everything as a service, there is a natural value-add there to pick the best people, package it together, and wrap it up so the customer gets a seamless experience.

Talk about who you see breaking out in the service provider industry.

Too early to tell. Everybody is jumping in. Telcos. Anybody who has been in the hosting and the traditional co-location business is getting into that business. We see some new pure-play folks who are just building legacy-free models and doing cloud-based services. Then there is all the platforms: Microsoft as a service, Oracle as a service, SAP as a service. And let's not forget that we have a whole bunch of software vendors that provide higher-level business apps: Salesforce.com is a classic. So cloud is disruptive. It is disruptive for us as technology vendors. It is disruptive for customers. It is also disruptive for everybody in between the two.

What is the biggest myth about this VCE and Vblock product coalition?

I think we have to overcome the natural skepticism around industry alliances. Not a week goes by in this industry where there isn't a glowing press release where some number of vendors have come together to create something magical. Where I think VCE stands apart is the level and depth of the investment. We have hundreds of people who wear VCE badges. We have got many hundreds of millions of dollars of joint R&D behind VCE. We have coordinated well with a partner ecosystem and customer engagement model.

Talk about the criticism that VCE has a high price tag.

The problem with cloud is they don't get efficient until they get big. So there is no such thing as a small cloud. That would be an oxymoron. So you don't get these efficiencies until you start getting some decent scale, anywhere from 500 to 1,000 virtual machines. Then, holy moly, you start getting some of these cloud economics working for you. Five hundred virtual machines may sound like a lot, but your first virtual desktop deployment will probably have more than that. I think the resistance isn't necessarily the price of the technology. It is the price of getting to scale. Many IT organizations have gotten into the habit of buying a la carte: a server here, a storage device there, a network switch over there. There were no cheap mainframes in the day. There are no cheap clouds.

Talk about where the early bets are being made with VCE.

First of all, there is critical mass of people already running 500 to 1,000 virtual machines who realize this is just the opening gambit. Now they want to think about their platform going forward. The second is virtual desktop implementations. Here come 1,000, 5,000, 10,000, 50,000 virtual users all running off a shared logic system.

Anything to do with application development and testing, be it for Microsoft, SAP, Oracle, Java environments, if you have got a lot of application developers they tend to look for scale.

A new one is business analytics. A number of industries are providing self-serve data warehousing business analytics. And, again, the traditional physical capacity plan of IT really doesn't work. You need to provide that capability as a service.

NEXT: Who Is VCE's Biggest Competitor?

Who is the biggest competitor for the VCE?

I think the question is, who will be? I think we have got a nice advantage in the market. But as we know, gaps close over time. We expect HP over time to make more investments in this area and be a serious voice in this market. Microsoft has started making noises around the Azure appliance. We haven't seen any deliverables yet. I think they have a strong interest in being a player here.

The real competition here is what I would call public cloud or commodity cloud. Think Amazon. Think Google. All that cheap and cheerful [stuff]. Our competitors with VCE are less the traditional IT vendors. It is more of the 'good enough is good enough.' I have met customers who have said collaboration and end-user productivity is not a core competency, I am going to send all my guys over to Google. They didn't have any security concerns or compliance concerns. IT was more of a necessary function than something critical to their business model, and they have been very happy with the experience. So I think that competition over time will be the public services that are available that satisfy 80 percent of what people want to do for a fraction of the cost.

Anyone who surprised you that came out of nowhere?

Google more than anything. I meet people all the time who are using Google Apps: smaller companies in industries where IT is not a front-burner type of issue. They need some stuff and they are reasonably happy with what they are getting.

Are you surprised that HP has not made a bigger push here?

I think the challenge with HP, IBM and a lot of the vendors is their legacy. The technology and the business models that got them to this point won't be the technologies and business models they'll need for the next five to 10 years. When you look at the VCE stack, you have VMware, not a lot of legacy, they can virtualize and go. Cisco, relatively new to the server business, doesn't have to worry about 10 years, 20 years of an installed base to bring forward. In our world, storage is storage. We have security and management technologies. I think different large IT vendors will react to this differently.

Getting back to your audience, you also have to ask what is the role of partners: VCE is 100 percent partner-centric. It is the rare VCE stack that shows up in a customer environment that didn't have at least one partner involved, if not several. EMC is not going to learn all of VMware and Cisco. Cisco is not going to learn all of VMware and EMC. And VMware is certainly not going to learn all of EMC and Cisco. That is just not going to happen. You need integration. It is not partners are a 'nice-to-have.' This model does not work without a heavy investment and collaboration with industry-leading partners.

Talk about that. What is the next marker on that partner road map?

I think the biggest marker is the acceleration of partner enablement. There are new skills. There are new services to be delivered. This whole VCE thing is about this [cloud] wave is coming: Let's get there before everybody else.

The strongest demand we see from our partners is helping them get next-generation services offerings, whether it be technology, operational or consulting. So all three companies are working very hard to stand up and blueprint and provide the expertise to enable these partners to offer the services. Cloud is all about transformation. It is all about services. Technology is there. It has been for a while.

NEXT: The Customer Appetite For Cloud Solutions

Talk about the customer appetite for cloud solutions.

I have been writing seriously about cloud models and private cloud in particular since the beginning of 2009, and when I started I was getting polite smiles and eye rolls. I guess it was the bad economy, but now everyone is taking cloud seriously.

The question on people's minds isn't so much, 'What is it? Do I want one?' It is how do I get to the parts of the cloud that matter to me and my IT situation.

There are a lot of different journeys and paths to the cloud. The way I would position VCE is very simple: It accelerates the journey. Once you figure out you want to get to a nice destination -- maybe it is a private cloud now or a fully virtualized environment -- the question is who can help me get there fastest? When I look at the deliverables around VCE, there is the reference architecture, Vblock, an incredibly strong partner ecosystem. We can argue about the relative merits of the technology. I think they stand well on their own. But at the same time you are seeing the ability to get where you are going very quickly.

When you put a Vblock in front of a progressive IT organization -- and remember all Vblocks have to go through channel partners, you can't sell them direct -- one of two things happen: People in the line discipline, the server guy, the storage guy, the network guy, their general reaction is this is not how I do servers, storage or networks. Then you pop up a level, maybe a director of operations or a VP of data center infrastructure, and they see something very different. They see the benefit around this is not how I do things today. The roles are different. The responsibilities are different. The workflows are different. We are using Vblock to signify this is how good looks like when you are all done. It is your decision whether you want to get there in three years or one year or three months.

How does the role of VCE and Vblock change the partner landscape?

The role of the limited value-add box-shifter, technology mover, distributor is I think getting commoditized. All the value has moved to consulting, integration, skill set transfer, service management practices.

For partners that invest in next-generation skills capabilities whether it be technical skills, operational skills or business consulting skills, we see a bottomless opportunity. We are having a tough time keeping up with demand even in our own customer base for meeting the needs of very smart IT leaders who understand that something has changed, want to understand it and want to figure out what it means to them and get there very quickly.

We are here at GreenPages and they are putting all their weight behind this journey to the private cloud concept. It is not a hedge. It is not, 'I want to talk to you about 10 things; one of them is cloud.' It is the thing they want to talk about. When you look at cloud it is nothing more than IT as a service.

This happens in our industry every 10 to 15 years. I was around when the Internet came into IT and Unix came into the IT world. Paradigm shifts have a way of changing how we deliver services to end users. We are very fortunate to have a partner like GreenPages that sees the opportunity and wants to get ahead of the demand and invests in the skills and capabilities to get customers on the journey.

NEXT: A Shortage Of Cloud Consultants

Talk about how the role of IT changes with cloud computing.

If you really step back, this is a new relationship between IT and the business. Old-school [IT] was about a project, budget and IT guys would put the stuff in and make it work. Now the relationship between IT and the business is different. It is providing services on variable infrastructure. You can't touch your server anymore. It is part of a pool of resources. So IT organizations typically look for help in a couple of ways: How do you make the case to business that this is a good thing to do? What is the upside for business owners to change how mission-critical applications are delivered? What is the upside for them? Sure, they would like to save money but how can they do a better job with these new variable resources? That high-level consulting service is most valuable.

One level down we are not only talking skills in IT but entirely new roles and organizational models. In old-school capacity planning, the storage guy did his thing, the server guy did his thing, the network guy did his thing. In a cloud model that is all aggregated. You have to basically decide ahead of time how much local provisioning you are comfortable with, so we are seeing new titles like cloud capacity planning. With architecture it is not enough to be specialized in one technology discipline, you have to understand all of them: security, management and how everything comes together. So there are titles like cloud architect and cloud application developer. Now that we have the requirements for those skills, where are people going to find smart partners to help them adapt and train their people on the new consumption model?

How dramatic is this shortage of cloud skilled IT employees?

If you are a cloud architect or have cloud architecture skills or have some success justifying cloud models to business or even mundane things like cloud security, cloud governance and compliance, you get a different relationship with your customer than somebody who is talking about technology that was invented in the 1990s. There are plenty of those folks around.

What is your message to partners who are looking at how to evolve in this technology landscape?

In three to five years, this will all be mainstream but during the disruption from the previous to future models there is opportunity for everybody. You have to get the wide range of technical certifications required. It is not just enough to have VMware. You have to have storage and networking and database certifications.There is a very broad list of certifications required. Good project management skills are necessary. Cloud doesn't happen magically. It is usually a sequence of projects that not only includes technology, but organizational changes and people change control issues.

You are measuring IT very differently. What are those new skills? I put it this way: I have to unlearn just about everything I knew about IT in the last 20 years. The good news is we have seen this movie before. There are those of us of a certain vintage who remember the golden age of mainframes which were fully virtualized, oversubscribed resources for thin clients where everything was integrated end to end. A lot of these people who will be very successful in the cloud world actually have hard-core mainframe skills they learned in an earlier generation, simply because a lot of the disciplines, mind-set and thinking are the same. Just the technology is different.