Konstantin Sutyagin - Fotolia
It's not been that long since Denzil Samuels took up the global channel chief role at HPE. He came into an organisation that has an established partner organisation with high levels of satisfaction from resellers. His task is not only to keep the current ecosystem happy but to look to the future and prepare for some of the changes that digital transformation is bringing.
He took some time out from an EMEA partner advisory board session to sit down and sketch out his vision of the future.
Let's start with asking why you joined HPE?
I have been here 100 days. I joined from GE Digital so I had a chance to see first hand from my days at GE Digital what was going on in terms of this digital transformation. It is very powerful this whole industrial revolution, the internet of things and the amazing technology shifts that are going on at the edge. I also had a chance to see the portfolio of our competitors and our ability to address that. It was clear to me that HPE hands down had the best strategy and the best portfolio to really take advantage of this incredible change that is going on in the world.
In addition to that HPE has the best partner programme. It's not just saying that but partners and independent third parties comparing it and reviewing it. So it is great to come to a company, especially a guy like myself who has been a channel and alliances person for a very long time, to come to a company that is channel first, partner first and partner centric. We have built that reputation over decades and we are the most profitable partner programme in the industry by orders of magnitude. So it is exciting to come to a partner centric organisation and help take this to the next level.
What does taking it to the next level mean?
So as rich as our programme is, and by the way when I say rich our profitability with our partners is in some cases 4 to 8 times our nearest competitor, on top of that we are making it richer. We are announcing pay at net, which allows our partners to get the highest level of back-end rebates in the industry and in addition to that we are announcing the inclusion and development of competencies. We already have product certifications but we are introducing competencies, because as you look at this world of digital transformation and driving outcomes for the customers it is knowing how to use that product portfolio and knowing how to put it into an outcome for the customer that is going to drive success. In order to do that you need to have the competencies, the industrial or vertical know how and the horizontal know how, etc.
How real is digital transformation?
The digital transformation that is going on is significant, so let me give an example, because often the best way to show what is going on is to tell a story. I will use a story that is familiar to me, which is GE. Over the years when GE, Rolls Royce or Pratt and Whitney sold jet engines to airlines what they would do is sell the engine and an onerous maintenance contract. Because you really don't want a plane to have an engine fail on you mid-flight. That onerous maintenance contract is 80% of the profit that GE makes from the sale of the product. It's good for GE but at the same time it's not so good for the airline because they have to have that engine physically removed from the wing of the plane for three weeks a year. When the engine is off the plane it cannot fly so the loss of revenue for three weeks is significant. Along comes digital transformation and every blade, and there are 100 in an engine, has an electronic vein oir sensors. That blade is transmitting significant amounts of data, per flight per engine is anywhere from 1-5TB of data. That data is taken and analyised and it can tell the airline or GE if the blade has lost some coating or if it is cracked. It can analyise it based on the weather conditions. It can analyise it based upon whether it is flying above the dusty skies of the Sahara or the polluted skies of China versus the less polluted air over North America or Western Europe. Because that wear and tear all effects the blade in the aircraft. Because you are able to look at that information real-time you have eliminated the need for off-wing time because the moment you notice deterioration in any blade you are able to replace it while the plane is parked or in a hanger without the need to take the engine off the plane.
Now that is productivity. For the customer the airline is getting three weeks of flying time back. You think of the number of times that plane is used in a day and the number of customers that fly and the cost per ticket and multiply that by the number of days you have just given back. That is an increase in productivity which is huge and that is an outcome.
Now in that solution have we sold edge technology? absolutely because it is collecting information on the plane itself. Have we sold servers? Absolutely. Have we sold storage? Absolutely. We have sold everything in our portfolio that they need but we never once mentioned a server or mentioned storage we talked about outcomes and more importantly our partners talked about outcomes. That is something that is really important.
Not only did we drive greater productivity with this partnership with GE to the airlines but with another ecosystem of partners, such as the system integrators we can actually connect that intelligent engine to their flight scheduling systems, crew selection systems, baggage handling systems. So that engine is not only talking about its own condition but it is transmitting information that those other systems need to know because it knows its whereabouts. That value is tough to measure but what you are driving for the end customer is outcomes, and you are doing it through this incredible ecosystem of partners.
The reason I use that story and tell that example is because we have to have that ecosystem. It's not just a reseller and it's not just a distributor. These are now channel partners that have a myriad of different characteristics and competencies. From system integration, to ISVs, technology providers, device manufacturers, sensor manufacturers, mobility and telecom providers to a whole host of MSPS.
You can see that as we evolve our partner programme it has to encompass all of the above and still deliver the highest level of training, enablement and profit to our channel.
How do you react to all of those different partner types?
You have different types of partner categories, different geographies and countries, different verticals, different horizontal solutions and different business models. So we have to have a programme that encompasses all of the above. The beauty of what we are designing is that we will deliver all of that as and when the market is ready but in a way that just makes it simple. It is not a one size fits all but embracing the dynamic nature of the market but taking the very complicated but making it simple. We have architectured that solution already but we not going to announce that at Global partner Summit and we will do a cautioned roll out of some of it over the next year to 18 months. The reason we want to do that is we don't want to disrupt what is already 70% of our business, which comes from the channel. We can't do an all change, we have to be very sensitive to that. We have to manage our volume business, which is our bread and butter and slowly evolve the new value added business, the new consumption models that is going to help us pave the way for the future.
Does it help going through the transition working in a company that is channel first and understands the role of partners?
It is interesting for me to come here. I have worked for companies where the word 'partner' was an ugly word. But here the management team above me: Meg Whitman [CEO], Antonio Neri [executive vice president and general manager, Enterprise Group] and Peter Ryan [chief sales officer, Enterprise Group] know the channel partners as well as I do and they meet with them regularly. They are engaging in all of our advisory boards and are very attuned to the needs of the partners. When you have that level of interest and support and engagement it becomes a lot easier to be the guy bringing the changes to that ecosystem, because you have that support.
We were born in the channel and have been in the channel for decades and that's why the partners trust us. They trust us more than companies who were maybe born direct and are now trying to copy what we are doing. There's a lot of copying going on. What's great about that is imitation is the highest form of flattery.
It sounds like going forward the channel is even more important than ever?
I agree because if you look at the solutions we are talking about there is no single vendor providing everything. It's an ecosystem of vendors and partners that are providing those solutions. So I think that the vendors that don't allow for that within their partner ecosystem, who don't allow for a myriad of different players, they are going to fail. That's why we have to be one step ahead. I think our partners view us as the leaders and look to see what we are doing and then a lot of our competitors look to see what we are doing and try to copy it.
I think the ecosystem is more relevant now than it has ever been and partners are more relevant now than ever. They are excited about the future and they know that this value add is going to drive greater profits for them and they are going to be more relevant to their customers because they are now talking about business transformation.
We also have the speed at which to do this. It's nice being a company with zero debt. It's nice being a company with billions and billions of dollars of cash in the bank. It's nice being able to hand pick technologies we acquire, such as Nimble which was recently announced, which are technologies for the world that we have described.