UPDATED 17:07 EST / MAY 19 2014

Finding profitability with Services, not hardware | #IBMEdge

Source: SiliconANGLEIn their second interview at #IBMEdge, Dave Vellante and Jeff Frick interviewed Bob Elliott, VP of storage at Mainline. An IBM partner, Mainline handles a lot of server storage business, and is one of the larger IBM storage partners in the United States.

First, Vellante asked Elliott what was changing for Mainline due to current trends like software-defined solutions, virtualization, and the cloud. Elliott described the changes in Mainline as a push from hardware-specific to solution-specific solutions.

Finding profitability with Services, not hardware

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Vellante continued with this line of questioning, wondering how Mainline is handling narrowing margins and “pivoting” to add more value — “Is it services? Is it application affinity? A combination?”

A combination, Elliott agreed. In services, he said, businesses can “open the door to create [their] own profitability” whereas with hardware, profitability is very limited. At Mainline, Elliott said there has been a movement towards creating services ranging rom migration, to installation, to consulting.

  • Building Customer-Vendor Loyalty

Next, Vellante asked Elliott why they have chosen to stick with IBM even though they’re “an independent.”

“It’s our heritage,” Elliott replied, citing his business’ beginnings as an IBM partner. He also mentioned that as part of a 25-year relationship, IBM and Mainline have a strong bond: many of the Mainline sales force, including Elliott himself, are former “IBMers” who are comfortable with the IBM product line, which they consider very solid. Furthermore, Mainline’s continuing relationship with the tech giant that allows them to asks questions, share issues and comments, and to make suggestions.

When asked whether there is loyalty in the channel to specific vendors, Elliott replied that he thinks there is. Vellante pressed further, asking, “What creates that loyalty.” Elliott explained that comfort level and confidence have a lot to do with creating loyalty between customer and vendor: ” Knowing that you’re gonna get a response in a timely fashion.” He was sure to mention, though that loyalty works both ways. He used his own company as an example: “We’re very loyal to IBM, but at the same time, IBM needs to be loyal to us.”

 

  • Maintaining Sustainable Advantage

Vellante then put forth his notion that in the storage business, from a product standpoint, it’s hard to maintain a long-term sustainable advantage. Then, he and asked Elliott whether that was a fair statement. And if it indeed is a fare statement, Vellante wanted to know, “How do competitors compete?” The sustainable advantage, Elliott said, is an issue “that we’ve seen through time.”

When it comes to storage, Elliott explained that different companies continue to “leapfrog” each other. He believes that in the current environment, IBM is one of a few companies with a sustainable advantage — their V7000 product, Elliott mentioned in particular because of its combination of the “basic virtualization and “real time compression.” This blend, Elliott believes, makes it a product that everybody else should be shooting for. He did explain, though that sustainable advantage varies based on the storage component. He highlighted Flash as an area where companies will continue to leapfrog each other: “the competition learns from what other companies have done, and they can build on that.”

The Effects of Big Data and Mobile on Storage

 

Source: SiliconANGLEJeff Frick jumped in, asking Elliott to touch on how the explosion of big data and mobile has changed the storage business and whether customers are “tracking” to the expectations that technologists predict.

Elliott said that he does believe that customers are “exactly tracking with what we’re expecting.” He used the example of text archiving to illustrate his predictions for tiered storage, saying that storage will provide “multiple tiers for multiple reasons.” Next, Elliott touched on how much smarter customers are now, in part due to the technology that they use to compare their technological options, which is stronger than ever. He finished by saying, “Yes, the data is exploding and customers are doing a better and better of managing it.” He expects this trend to continue to grow.

Frick followed up Elliott’s observations, asking, “Are you able to stay ahead of their planning cycle?” For the most part, Elliott answered, that yes they have been able to “do a good job of keeping a head of the curve.” But, he added, “We do get calls.” These “emergency calls,” Elliott explained, are a sign that “capacity-on-demand ability has not caught up to what customers are doing.”

  • Customer-Specific Recommendations Help Handle Customer Cloud Needs

Vellante, bouncing off Elliott’s capacity-on-demand observation, asked what his customers are doing with cloud and public cloud. Further, he asked how Mainline is handling their customers activities.

Elliott explained that not only cloud usage vary from customer to customer, but every customer has a “slightly definition of what cloud computing is.” Mainline has handled these differences by making customer-specific product recommendations based on that customer’s needs. “A lot of customers,” Elliott added, “are creating their own clouds within their enterprises.”

Touching on his questions about the Mainline-IBM relationship, Vellante asked what recommendations Elliott has for IBM. Elliott’s principle recommendation was for IBM to “market [their] own products a little better. Step forward. Get out in front of it.” He believes IBM needs to position itself at an “enterprise, global level” and as more than “a great technology company,” but also as a storage company.


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