On this week’s episode of the Unlearn Podcast, we talk to Ross Brown, a SVP at Oracle, about the evolution of the partnerships model, change management, and how he transforms go to market strategies. Ross has decades of experience in tech across a variety of different industries and invented lead registration.
00:00 - Introduction
4:00 Advice on balancing a big job and small kids
7:00 The tech market in the 90s
20:00 Inventing Deal Registration
24:40 - Understanding emotional heatmaps
25:51 - Looking beyond the financial parameters of a program to make it a more delightful experience
29:38 - Platform vs Product
38:21 - Gazing into the future
48:25 - Creating a great Partner experience
56:34 - Role of a channel chief
“Cultures are made up of artifacts and rituals. Rituals are how we make decisions.”
“The leader of the ecosystem channel is a very internal role. It's an operator role, not a functional role.”
00:17
To thrive in an era of visual transformation, you have to go to market differently. Let's find out how.
Hey, everybody, welcome back to another episode of Unlearn. Here, I have to spend an hour with Kelly Sarabyn, interviewing somebody else. And actually, this isn't an interview; you know, this is a conversation. But, today we're in for a treat because the guest that we have is an extremely accomplished professional and in partnerships.
So, we normally don't do this, but Ross, do you want to give us a little bit of an intro of who you are? I'm sure a lot of our audience doesn't know you, and this conversation will tell them that you are a legit leader in partnerships.
01:02
Okay, so let's uh...you wanna start at the beginning and work forward 'cause that's a fun story. So, I started my career as a developer and quickly realized how much I hated writing software.
01:15
Wait, Asher has the same story, but Asher only lasted one week. Did you last longer than a week?
01:22
Nine months working for a company? Tell you how old I am -I built a credit card verification system in a four-G-L database language.
01:33
That's what I did too. I did a credit card processing for Microsoft Dynamics products. OK.
01:41
This was way earlier than Dynamics.
01:43
Got it.
01:44
Uh, this was back in the eighties, '89, or whatever. And I created this before you even had in-room, like, on-demand television and stuff, where like Netflix didn't exist and that stuff. So, back at resorts in Florida, where I lived - 'cause I'm an original Florida Man.
02:01
I like that; that's the tagline. You should have that in your LinkedIn profile.
02:08
People from Florida—and stuff like that—I'm very proud to be from Florida. I'm very proud to not live there anymore. This is back in the day where you had video, actual VCRs, in hotel rooms at resorts like Disney World and stuff like that. So, all the Marriott, Grand Marriott stuff.
And we had this cabinet down in the lobby that would rent VCR tapes that had a little solid way to top it out. And I had to write the credit card processing system for all that stuff.
And then I realized two lessons: one, when you're a developer in a small company when the product is done, you are now unsightly corporate overhead; that's one, and prone to be got.
And second, it's boring. Like, once you've finished and gone into maintenance mode, the thrill of actually solving the problem goes away and it goes into just keeping the machine going every day, which is boring.
So, I left there and I went to a partner; I ended up running a MicroAge franchise in Central Florida, where that was my first partner experience: going out and selling Solomon 3 accounting, which, you know, then became Great Plains and a bunch of other stuff. You had orange growers and, you know, concrete manufacturers and all these other light industry folks in Central Florida.
After working there for a while, I did a short stint - a very hilarious short stint - in a company called World Wide Technology. I was employee number 17. What is now a $6 billion powerhouse.
I was one of two employees that were hired in Central Florida, and then promptly laid off six months later. Uh, because they figured out they had over-expanded too fast, even though we were killing it. We were scratching our heads, trying to figure it out.
Between my boss, Phil, and I, we had created a $3 million business at 30 points a margin within six months. So, we generated a million dollars of free cash flow for that business. But we certainly didn't cost a million dollars, because I know what I was paid at that time. We scratch our heads as to why they shut us down. And I found out later the COO was embezzling money and writing it off as our division's money.
03:57
It's happening right now, again, just in a different form.
04:01
Well, this one was hilarious because, you know, I was in my twenties and at an early stage of my career and stuff, and I hadn't done anything interesting in the industry yet. So I ended up getting laid off from this job in the same week that I also got divorced. So I'm homeless, jobless, and dogless. Like, I lost my pet dog, all that other stuff. The ex-wife took it.
04:19
So, it sounds like a redemption tale. I feel like this is the low point of the story.
04:24
The mentor and the guy I worked for Phil, was a good friend of mine. He had a long history in the tech industry, really industrial distribution and stuff. And I'm standing in his office and he's like, 'I'm fired, you're fired. We both have no plans. What do you want to do?'
And he's like, 'Well, you also don't have a house, so you can live anywhere.'
And I go, 'Again, he goes, 'How do you feel about Tampa, Florida? Like, it feels like a place, why?'
And he says, Well, um, I want you to go down and meet with, uh, my friend Steve, and just, he'll get a job for you if you're reasonably talented and you are. So, I'm like, 'Steve who?' He's like, 'Well, Steve Raymond.'
I'm like, 'You mean the CEO at Tech Data?'
And he goes, 'Yeah, his dad used to rent an apartment from me and he was over at my house all the time when he was playing basketball in high school, and I know Steve well.'
So my first interview at Tech Data was with the CEO. Uh, coming in there is a guy who's, you know, run a partner and now built this, you know, son business and all this other stuff of worldwide technology. Whereas the average employee walking in the door at Tech Data is just, you know, two years into community college and just looking for some money to go to Crabby Bill's on the beach and buy a margarita.
So I, you know, went in and, you know, did pretty well there. I built the first [thing], so I joined, like everyone does, in sales and was in volume accounts for about three months, then moved over to running the federal territory and then helped build the first GSA schedule of Tech Data and then got pulled out to do a special project to build the first build-to-order [system], because you had the situation where, say, you're a bar with 10 people and you just won, like, the state of Kansas school board contract for laptops for every student.
You had to create 40,000 laptops. You're not doing that with 10 people. And so you had to have a distributor do that for you. And so we built a bunch of those things.
After about a year of doing these little projects, I got pulled over to be the first product manager in the software business there.
And that was in my mid-twenties at this point. And, on a personal note, my ex-wife had also decided, in addition to no longer wanting to be married, that she no longer wanted to be a mother either. So, I ended up getting custody of my two boys, who were 18 months old and three months old. At the same time, I took on this job to launch 100 and 92 software vendors in 18 months. And so, that was like one of those periods where you don't do a lot of sleep; you do a lot of launching, a lot of gorilla marketing, and figuring out how to get products out there. But, that point.
06:36
That sounds like an insane lifestyle with two little kids; you don't get sleep anyway, and then you're taking on this big job.
06:42
This is a master class in personal and professional.
06:45
What's your advice there? I have to stop you, because I think, what advice would you give to someone who's in that position? Because I say this disproportionately affects women, right? You find a lot of women who struggle to do that balance when they have young kids.
07:02
Um, so one of the first things you learn to do is this, which I don't think women do well and I'm not trying to be sexist, but women are pleasers. They don't like disappointing people, and to survive that you have to make really hard choices fast on what you're going to commit to and what you're not going to commit to, and learn to say no quickly.
It is important, like the ability to eliminate things that aren't achieving the mission of raising healthy children and succeeding at your job and stuff. So, you know, do I want to go out with my friends? No, I'm going to write a marketing copy. I'm going to stay home and make mac and cheese with the boys, you know, that sort of thing.
07:35
That's good advice: prioritize and organize beforehand.
07:38
And you know, learning that 'no' is not a bad word, and it's also a complete sentence. Like, 'I don't need to explain. No.' Like, 'No.' The minute I start giving explanations, I'm opening up for negotiation. And if you have made the decision, 'no' is a complete sentence. The best advice I could give people is if you mean 'no', stop there.
07:57
No, that's very good advice. And in partnerships all the time, right? 'Cause partners are often overwhelmed with people trying to reach out, wanting to network, wanting to partner.
And a lot of those partnerships are just not viable, and I do think you're right: women are disproportionately how it's, you know, society raises different genders, feel compelled to explain and, and to explain and to justify.
And once you do that, ruthless people will hone in on whatever you said. And then it comes back and forth. And a lot of times, you end up saying, OK, I guess you're right. I'll go ahead, and that's where you get the 95-hour weeks that are not sustainable.
08:38
This is a very negative word; you know, it's like people who know what they want.
08:44
You're free, exactly. So, you know, all I did was this job, which was fun. We got locked up, and I realized at that point that there was never going to be a point again in my life where I felt that tired. That was a freeing moment, like, 'This is the hardest it's ever gonna get.'
And I was right; that was the hardest labor effort I'd ever had to do. I had to put sprinkler systems in as a high school kid and stuff. This was harder work, mentally and physically than anything I'd ever done. But you get to the other side of it.
You know, you've done good work. We managed to, the hard part of this, by the way, was not launching a bunch of single-title products like, you know, Ace Database and things like that, that doesn't matter.
It was making the argument to get Lotus and Microsoft, and at the time, Borland, and were perfect in these companies that had flagship products who already had distributors; they already had good coverage to add another distributor. You had to solve a problem for them. The other guys weren't. And so, the kind of scene I went after was.
We became the largest distributor of OS2 on the planet just because we focused on how to goal-land that thing with partners well. Um, in the case of Microsoft, I didn't focus on Office, I focused on landing Windows NT and going out and building a server-based business through the value-added channel as opposed to a reselling license business of software products, right? Same thing with Lotus: you go after Notes, you don't go after 123; you show them how you can make Notes a platform and build bar businesses on it.
And so we were doing more technical marketing than necessary. Hey, it's this price and this kind of rebate and that sort of stuff, which, to me, was interesting given my engineering background.
It was a great time there, but then IBM called, and I got a job offer to come run worldwide channel marketing for the DV2 products at IBM. And at the time, IBM's challenge was, 'How do we become a multi-platform company?'
Because right then, all of their software products were running on their mainframe, their mid-range, and on the Windows, you know, the OS2 environment and stuff. And so they'd released DV2 for Windows NT, DV2 for Sun, DV2 for HP-UX, and all these things.
Which was great. It was an interesting experience, but keep in mind that, at the time I joined them in '94, they were laying off 120,000 people that year, and I was one of 12 external hires that were brought in. So, it was kind of a big honor to get selected to get hired, because of the work I'd done with gorilla launching things. Ian Bonner, who was my boss at the time, had gotten to know me through a different company. He was at DCA Software, and then he went to IBM, and it was like, 'I want that guy to come to figure out how to launch all these things.'And so, it was great.
I got pulled into very strategic discussions at a young age. IBM was a fantastic employer in my late twenties, and early thirties, to do all this stuff. In terms of skill set and development, so much so that I got an offer for a promotion to go run one of the product marketing roles for DB2 in summer New York, and I was like, I'm ready to go. Let's go follow the IBM career, for better or worse. My boss at the time said, No. I need you to stay in the partner role. I can't let you take the promotion. And I was like, 'Well, OK, then promote me here or let me go.' And he was like, 'No.' Yeah. And he needed to be one of 12 external hires. He was critical to this business; he's still critical to the business. We don't want to move him. But he had promised me a raise in six months.
What he didn't know is that, at the same time, I had another job offer externally. So I told him, 'Either let me take the IBM job in [location], or I'm taking a job outside the company.' He thought I was bluffing, but I wasn't, and he said, 'No, I really can't.' Then I slid the resignation letter across the table and said, 'I'm going to McAfee and go build the software business there.' So I was the first channel chief at McAfee, brought in to go build the first bar program because everything was retail. It was all antivirus licensing, and they had acquired Saber and all these other networking products and stuff.
That was an interesting experience, uh, without dishing too much dirt on it. I began to realize there were some accounting irregularities there.
And so, after one year and one day, I left McAfee, um, took a cliff, fasted, hit that 24% cliff, and I'm out. And then a year later, the cards collapsed on him and they had a goal; their CFO ended up doing some jail time, and a bunch of other officers got in trouble. But that was a great experience about, you know, just because the company is growing fast doesn't mean they're growing well. And you can dive into looking at that. I was, uh, I took a job up in Seattle and this is when I moved out of Dallas and ended up moving up to Seattle. And it was a fascinating opportunity. I know this is the longest-winded introduction ever, but I promise I'll get through. Oh, this is...
13:20
Very interesting, because we have a, we have like four.
13:22
Hours...there's a lot of history here....
13:25
The company I went to work for was a company called Management Sciences Institute, based out of Seattle, which is a kind of a BS made-up name that was a strategy consulting firm for tech firms.
In that job, I had the opportunity, in a four- to five-year period, to just do everything: design new licensing programs for enterprise customers, build enterprise sales models, build product launches between Intel and Nortel as a joint venture as a sort of for-hire product manager to bring two companies together. So, in short, I had the opportunity to design 70 different go-to-market programs in that time, which, when I look back on it, was like, you know, that experience had taken data of 192 launches.
Following this, I solved these strategic problems for folks that were channel chiefs and CMOs at companies like Cisco and Apple during the 1997-2002 time period, which included the dot com boom and collapse, as well as the Y2K issue. The company I was working for ended up getting bought by WPP, the parent company of Ogilvie, HR, and J Walter Thompson.
And the reason they bought us was hilarious. Uh, 'cause it, I'll dive into this a second: if you look at buying a professional services company, the way those are structured because the only value is the people, is a little bit of money upfront and a whole lot of money over time-based on an earn-out of making the business sustainable without you there as a principal. So, how do you make this a functioning division of a company, as opposed to a consulting firm that's run by its seven principles?
Normally, you would do that as, like, 20% upfront, 80% over two years, or whatnot. These guys gave us 90% upfront. Here's the money, go away. You have a non-compete. Now, the question was, Why? And it was because we were telling every CMO and every tech company in the valley to stop spending money on advertising, television, and radio, on print, and move everything into the display, search engine, and digital marketing.
And LVI HR and J. Walter Thompson, all these ad agencies hadn't created or bought digital agencies yet. So, they had no way to deal with that shift in spending, which was moving a billion dollars in pass-through fees off their books and moving it to Google, and moving it to Microsoft Search and moving to advertise, you know, Avenue A and all these other sorts of firms. Um, so that was a, here's a bunch of money for you guys to shut up and go away.
Now, because I was hired as opposed to one of the founders, I didn't have the original non-compete documents. So, I started a small firm with my employees and immediately started doing the same thing, cooking alone. Then, 9/11 happened and 9/11 killed all discretionary spending; as every company in the world went from, Hey, let's hire people to do stuff, to No.
So, I got all 10 employees' jobs at clients. Uh, we landed them as employees in those places. And then I ended up going to work for Ciric Systems in 2002. Um, where I had done a bunch of projects, they built their enterprise sales team, their licensing model, and their, you know, transaction models and all that stuff. The CEO there and I had become good friends, and he called me up and said, I need you to come to work here.
This was on June 27th, or whatever, of 2002. And I said, 'Great. When do you want me to start?' He's like, 'Next month.' And I'm thinking August, 'cause I live in Seattle and I'm gonna move to Florida and all that stuff and I'm like, 'Yeah, next month is fine.' It goes great. I'll see you Monday, which was July 1st. I was like, 'OK, so I'm going to the local Nordstrom's and buying some clothes. I guess I'm getting an apartment and not going back to Seattle.' Um, I ended up going to work there and had a great experience.
Where the challenge they had, and I'll do this as an introduction because I'll get through this and explain my history, but this is an important part of it. They had screwed up their go-to-market; their product was fine and had gone through a transition from being used for remote access to networks to being a way to deliver complex applications like SAP. Uh, and it, without going into technical reasons, was the only way you could deploy large SAP environments. That has to do with SAP as a client is very chatty. And as soon as you get 5,000 of those clients, you've got this packet firestorm going off on the network, and all of a sudden, voice-over IP doesn't work and nothing else works.
So, uh, the upshot is they were declining 11% year-on-year in gap revenue, but we were losing partners like crazy.
And so that was the place where I developed the first deal registration program in the industry and created a concept of a complex solution sale. There's only one person who knows about it, and that's the partner; the customer calls to talk about the problem and get recommended solutions. And once that's there, by the time it gets to procurement 45-60 days later, you've done the POC.
It's now a question of, What's your price? Right. And so you end up with this model where somebody spends six months creating a deal and then procurement could say, All right, so you've got six months' cost of sale, you've got the cost of a phone call. My price is now 60.2 points above the cost. And you end up with the person who spends six months developing that deal saying, 'There's no economic incentive to generate new deals; I make as much money in professional services, servicing customers that already bought it. Why would I spend that energy?' So, we moved 25 points of discount off of the front end for distribution and moved it to the back end as an incentive.
So, if you registered this and at least 45 days pass from the date of registration of close, which means you have a customer who's going through an app POC because if they're buying additional licenses, you don't need to wait 45 days; you need those within two days. If they buy it for the first time, it never happens in less than 60 days. So, we're able to distinguish between net new deals and resales of licenses. That dramatically shifted the company; the stock went from $5.80 to $35, and the company's revenue went up. We started seeing 27% year-on-year growth, and things were back and good. So, that was all because...
19:07
What's that? Of deal registration? It said, was this all because of deal registration?
19:11
Yeah, absolutely. It was the very first time it had been done where we had created a technical observation: the APAIS at Salesforce was now open. So, you could create a web form and directly create an object inside of Salesforce without needing a login. That enabled us to create a partner portal to create this capture form that says, 'Tell me about your deal and I'll create a lead object in Salesforce.' And the conversion of that led to an opportunity for our sales rep to approve the deal. Cool.
19:41
Sorry, was this the first time deal registration was introduced at that company or in the market?
19:47
In the market. Did we invent the program?
19:50
Oh wow! Well, that's great. OK, because I understand the web-to-lead conversion like that. That's a simple thing that I recommend everybody do today before they go into this whole best PRM system thing, right? But this is super interesting. OK,
20:04
The ops' problem, too, right? As it sounds, for the API to Salesforce to make a reasonably efficient solution, you needed the connection to the CRM, which didn't exist before.
20:15
It has an incentive.
20:18
Were other people recognizing the friction, and just not seeing the solution?
20:22
Yeah, I mean, the only precursor before this, and I'll give you the whole history, is a guy named Doug Kennedy who then went to Microsoft Partners for years. Doug created the first conflict resolution deal registration system at Oracle, which was, 'If you tell me what you're working on, our services team won't quote services to them.' And that was just, 'If you tell me what you're on, we won't step on your toes.'
The insight I had was the economics of there being no money in actually selling these things unless you're the one who's product-creating these deals, and that there was no behavioral incentive to create deals. Now, my academic background is in behavioral science, so I realized we had to create a negative disincentive curve to the way it was set up. And we'd also the prior channel. She had done something that, you know, seemed logical but was bad, which was that our top-tier partners got a bonus for every $100,000 they sold, which gave them a lower margin than everyone else. So they became price aggregators and started eating everyone. And so this notion of putting the effort equals the reward as opposed to capturing the P/O equals the reward was a big insight.
21:26
We're experiencing that dysfunction though; basically, you were having partners who were putting in the work, and then that person with the huge discount was swooping in at the end and saying, 'Well, I got the better deal,' and then the other partner would just get frustrated and kind of back off from doing it, but people would still do it; just a lot of conflict in the market. Is that essentially what it is?
21:45
Was it? Yeah, but more importantly, there were actors in the market who were specifically taking advantage of this market structure and complex software—like somebody goes in and spends a lot of time configuring and selling this, and hopefully they get the service dollars to deploy it. But for the actual transaction, we'll go capture that transaction at a higher margin than our cost of sales. And so you had folks like—and I'm going to pick on some folks like Dell, S&P, and C-Deed W—who were selling licenses but not creating deals. And this shifted that balance of power dramatically away from them, towards the people that were actually in there, technically creating deals. And so, this leads to a slight anecdote. So, we launched this program in January 2004 at Uh Synergy, which is the CRIS partner event and it's at the Dolphin and Swan Hotel down in Orlando. This is such a Florida Man story. So, I.
22:38
It's Disney World for people who don't know where that is.
22:41
The dolphin swam at Disney World. And so, I'm leaving the Swan Hotel to go back to the Dolphin. Uh, we had dinner at SaaS with a bunch of partners, and as I'm walking back in, um, I won't tell you who, but there's a product manager from Dell S&P who is a very nice person. I'm gonna be clear: she's a very nice person, but I had directly shot across their bow that they're no longer gonna capture deals on price, and not them particularly, but anybody who is doing that.
But the thing about Dell's calendar is they had just locked their financial goals for the year. So, she had a plan that was predicated on being able to do this, and all of a sudden found that it wasn't going to happen. So, needless to say, she was in the bar having a beverage or two while trying to figure out how to reset her life. And I had had a beverage or two. But I'm walking through this lobby, which is where the bar is, and all of a sudden I hear this woman, whom I know, yell, There's that wanna-be economist who thinks he can dictate how free markets are gonna work! And I'm like, Oh. I turn and look at her and go, 'Oh, hey, how are things at the best little whorehouse in Texas?' Uh... And that got me a note from my CEO saying, 'Please don't talk to partners that way; it's inappropriate.' I said I was just quoting a movie; it's very popular.
23:52
I was just quoting a movie. I love how that would affect me.
23:56
It's a great movie. I was just texting. It came to my head and Heath Mark was very funny. It's like, OK, I've admonished you. I've done my duty to tell you not to do that. That was hilarious! Oh!
24:09
Wait, right...Before we go further with the story, can we just take a second to recognize the contribution?, can I have forgotten about Doug? But Doug was the guy who had the, the, the scale or the temperature scale, or is, is, is that correct for Ross? Uh, he had brought that from Oracle over to Microsoft. Dude, to understand them, what is the feel of the partners or something like that? You just elaborate, this guy's a legend, right? Like, and, interestingly, he's not even around, but the thinking was very profound. Like, even when he brought it in.
24:40
Doug had this notion of emotional heat maps that I liked; which was, you know, it and this is key to understanding a lot of partners: the program itself can be fine on paper, but the operational experience of it can be in its level of overhead and work you have to do. And we have this problem in Oracle, and like I'm trying to shift from a license-based model to a consumption-based cloud model as quickly as possible inside of a company that still has a massive application business that's licensed and job business is licensed and stuff. So. There's a general, how much are you, uh, protective and restrictive versus expansive and allowing in the way you approach interactions with partners? And that's one of the things he looked at Microsoft: you know, we have a loyal partner base, but not one that enjoys us. Like, there's a huge amount in the system, and how do you delight partners instead of just serving them? And that was a key thought. I look, Doug is a fantastic guy; I encourage everyone to model and role model after the stuff he's done there. He's also an incredible drummer; if you get a chance to see him play music, very! Talented.
25:48
The nicest guy ever - like, you know.
25:51
Well, I'd love to hear your thoughts on that, though, because I think even today, that's a question that's still very relevant to the partner experience. And I know that you've studied behavioral psychology, so you've probably thought a lot about it. What's your advice to other organizations on how to look beyond the financial parameters of the program? How do you make it a more delightful experience so that the emotional attachment is positive at a core level?
26:19
Well, so one of the core things, and this is gonna sound horrible, but just bear with me.
26:24
That's right.
26:27
The podcast to see it on.
26:29
Uh, look, one of the things we do as a tech industry is we get overly fascinated with our bits and bytes and what we're making and the things we're doing. There are very few platforms out there. There's a guy named Peter Evans, Doctor Peter Evans, who writes a huge amount of work around the value of platforms and what it means to be a platform as opposed to a product. Brand, I encourage you to read his work. He's also. Uh, on the side, one of the better EDM DJs you're gonna meet, he, he works.
26:58
Do we gotta get this guy on the show? Yeah.
27:01
Dj Provost is a great I to talk to; he's a wonderful guy, but he talks about platforms and very few things are platforms, like cloud services. You could look at Oracle Cloud and say, 'OK, that's a platform,' but is something like Metallic Backup from Val a platform? It's a product, right?
And the reason you do that is, you begin to realize that, from a partner's perspective, if you use the metaphor of an architect or general contractor building a house, their customer is the one who's dictating: 'This is what I want in the house; these functions I need; this many bedrooms; I need to occupy this amount of space and functions; this is what I want it to be; how the ease of ownership.' There are certain things you can put in your house, like all German appliances; they run great until they don't. Then, all of a sudden, you've got to read manuals on how to repair them and you realize. Probably, we should have bought something a little easier to understand, because they're very precise, right? This is the point I tried to explain to people: the vast majority of products are toilets. I mean, by that, no one is going to buy a house because of the toilet, but no one's going to buy a house without a toilet. So, just know where you sit in that partner's overall perspective of 'we're a...'
28:11
Product instead of point solution: it's a toilet, and I love it!
28:17
Do I need it? I think so.
28:18
Some products are air fresheners.
28:21
Do I need an S.S.D. storage device? Yes, I do. Do I need it to be that particular Toto version as opposed to the American Standard version? Maybe I might need the fancy bits the Toto one has; I just returned from Japan. I'm fascinated with the toilet. OK. So, uh, that, that's kind of the bigger thing is just realizing that the amount of friction you put around just installing the toilet inside the house, we get into the, well, you have to be, you know, this kind of skill set and this kind of train da da da, we wanna make sure it's a great experience. You're creating friction on something that isn't that hard. Whereas, if it's a platform and the customer's going to build on it, Like the customers, going to continue to build and build and build, and then are you cloud services, things like Snowflake, Adobe Marketing Cloud, Salesforce; you know, those are SaaS platforms that operate truly like a platform. You build integrations, you build on it. Yeah, you want to be careful in those choices and make sure that it's a great experience on the platform. Everything that's a product, you want to make as easy as possible to adopt and put in that environment and not create unnecessary barriers.
And that's a challenge for a lot of companies: when are you a product, and when are you a platform? And when can you have high exacting standards around certifications and expect the partners to have done the work to understand this, as opposed to just installing it?
29:38
Right? So, you see a lot of companies who perhaps think of themselves more as a platform, but really they're a product, and so they're putting all these, um, kind of certifications, requirements, particular things that potential partners need to.
29:52
Reasons everybody wants to be a platform, but very few people are right. And platform effects are documented; this is again where I'm gonna quote Peter Evans. But his work on platforms attracts investment, not cost. You know, a bunch of things on those lines are key to understanding. I do want to pause for a second and just give credit where credit is due. There's a lady named Colleen I who is the SVP of Alliances at Snowflake Software. She was my director of programs at Citrix when we launched Deal Reg. And while the idea of the behavioral side of it came out of my head, the ability to put the rule systems in place and think through the operation of it.
She was fantastic at it, so I give her co-credit for creating Gil Ridge. I never want my name out there without hers as being foundational behind.
30:35
We should probably have her on the show as well, to understand the operations of all this stuff. And I'll tell you why I'm saying that deliberately in the podcast. Go ahead. OK, finish your...
30:47
Story. So, anyway, after Citrix Systems, you know, left, I went and did a couple of projects for VMware and I became CEO of a company called EI Digital Security, which was a turnaround. We ended up getting it turned around, but I didn't see an exit, so I left and went to Microsoft and took over worldwide partner strategy in 2008, right as we were converting Red Dog to Azure. That's where I ran the original Azure partner team, and the original Office 365 partner team, as well as converted Microsoft's $1.7 billion in incentive spending from Transactional incentives shifted to consumption-based incentives, and you get paid based on what you deploy, not on what you sell. That's a profound shift for Microsoft to go through. Taking 270,000 licensed specialists in the field and trying to turn them into roles that could drive consumption and be much more technical was a challenge. In 2013, I left and started another consulting firm; we did a buyout of a small firm.
That became what's called the Spur Group. I left them in 2015-17. I can't remember that period; I went to work for VMWare for a couple of years, and then.
32:01
Was the Spur Group the Channel Consulting Spur Group? OK, that one. OK.
32:06
Yeah, they were just bought by Reply. Yeah,
32:08
They were just bought, yeah, yeah.
32:10
Randy and Chris, those guys are fantastic. I had a great time there. We got it up and running, but then one of my customers, uh, just similar to RIS, basically said, 'We're tired of leaving money on the nightstand; come be an employee.' Um, so I ended up going to work.
32:24
When, when you were at Microsoft, was that the time that SAA was moving over to the group?
32:30
And was running the server and tools? I was the executive sponsor for Cisco, so I got to work with him there, and then he moved over to running as CEO about a month or two after I left.
32:40
Ok, yeah, 'cause there was a time where something was like, I'm gonna go do this uh dynamics thing, and then for like maybe like two months, he's like, Forget the dynamics, this $1.1 billion business. I'm gonna go do this other thing, which is a fundamental shift in how Microsoft as a company has to go, go, go. And then it was like strange because, and Kelly, this is super interesting because the guy comes on stage, he gets applauded, and then literally two months later, he was like, Ah yeah, that was a mistake.
I'm going to go over here, and then literally, like that, that one assignment put him on a path to become CEO, because it was such a big shift in the entire company. You...
33:19
Got to understand the culture of Microsoft, the dynamics of businesses like New Zealand; it's completely self-contained, it's its essential value, like you know, but it's not connected to anything the way, you know, Exchange and Office 365 is the backbone of productivity, or, you know, was, was there.
33:39
A joke inside Microsoft is, Hey, you know what, when you go running Dynamics, you're like XYZ.
33:45
No, I mean, it was really good business, but it was seen as an app business as opposed to infrastructure right now. You know that the whole business was an innovative one. I'll give Love credit for it. Yeah.
33:58
That was a really good lead.
34:00
Well, what he did was he was the first dev leader to leap. We're gonna publish to the cloud first and then snapshot for installs locally, as opposed to building an installer and then updating the cloud service. So, build and deploy every week to the cloud, and then every six months take a snapshot of features and ship that as the CD; that was his mantra, and it worked, and he drove the rest of the company into that.
34:22
Wow! And, and, and that, for again, for folks that are getting a history lesson over here, Microsoft had had ACT. It's not that the Dynamic Suite became Dynamic Suite out of nothing. It was like the Great Plains app out of Solomon Division. These are all the acquisitions that Microsoft did on a project, I think called Project Green. If I remember correctly, or something like that, that was supposed to bring them all together. This is like a massive integration project.
34:48
It was an interesting play, and I'm just going to unpack some strategies there that might not be obvious to a whole bunch of folks. The division was a very different product than Great Plains. It was very different from Solomon in the sense that they went after different segments of the market. I'll give you a way to think about enterprise software like that. So, if you look at Oracle Financials or SAP, you're talking of 400-600,000 table applications. So, the table being like products or customer numbers or social security data or whatever in the case of Dynamics and similar things along that size, your Netsuite or whatnot, you're talking about a 30-40,000 table application.
If you look at QuickBooks, you're talking about maybe 800 tables in the entire thing. So the complexity and the amount of integration that's possible. What they decided to do with the Dynamics business is they bought these 40,000 tables that work well for manufacturers. So this one works there. These work well for businesses that operate across many borders, 'cause we've got all the tax tables. So it worked well there. And so that's why they never brought them together; if they brought them together, they'd end up with this chimera that was 120,000-table, which isn't quite big enough to take on SAP or Oracle Financials and it's not focused enough to win the industries they're going after. So, I think there's a really interesting strategy there of how they've pulled that together over time and put it into a cloud service, where it's easy to adopt what you want out of it, as opposed to it being this massive ERP you have to implement. Now, that's it. I think Netsuite is kicking their ass left and right, but you know...
36:20
A different, different strategy, totally different.
36:23
Numbers, right? That's that. Uh, so let's see. I left Microsoft and went to VMware. Uh, no, I did the Spur Group thing after that. That was interesting. Then I went to VMware. The VMware challenge was how do you get VMware to not be just vSphere and build a channel around NSX and be realized in VC and become a multi-product company? That was fun. It was good for about a year and a half running partners there all up. Uh, and then Dell bought us. Uh, and when that happened, all of a sudden all the OEMs thought of us as 'You're compromised. Now you can't possibly be neutral. And so, actually enforcing that neutrality and trying to be an independent software company owned but not controlled by Dell was a bit of a challenge, especially given the history that I talked about earlier. Um, so I did that for the new...
37:14
Recording things or no things - just kidding!
37:18
That would be the, uh, how are things at the best? Little? Um, exactly. That's what I said anyway, nice people. Really good business. But they have a very different business. It's around, you know, really an efficiency around logistics and ordering and, and sales processing and not really a services company. Uh, so I left. Uh, now I have to digress at this point and tell you about my lovely bride. Um, uh, she had just completed her 80th quarter of closing as a sales leader and had an exit. And so her company payscale had gone through a private transaction that bought out her equity, and she was in this mode of, I'm gonna take a break, I'm gonna take a sabbatical and take some time off in 2018. She looked at me and said, So, are you? And so I took it.
We did a bunch of private investing. We uh invested; we had been invested in a winery since 2013, but we expanded that to a restaurant, two champagne bars, and now a bakery. And so we've got a side business, a bunch of things that make me fat and happy.
38:18
Fat and happy.
38:21
But then, in 2000 and, well, 2017, one of the last things I was doing was putting VMWare on all the public clouds. And I'd started the conversation with Todd Weatherby. It was great, like five days before I went to work at VMWare. I'm at Seafair, which is a big event up here, and we're boaters. So, my boat's tied up next to Todd Weatherby, who runs Proserv in AWS. And he and I worked together at Microsoft and had a chat with him like, Do you think Amazon has an appetite for putting VMWare on their cloud? And he's like, 'Yeah, I think the timing is right. We've got enough enterprise customers that need it.' So that started the VMware and the cloud conversation. And my last conversation was we'd gone through K5 with Fujitsu and Alibaba, AliCloud, and all these guys. My last conversation with Don Johnson at Oracle was when he started telling me what they were building. I'm enough of an engineer that when he got to their network design, I spit-takes a very nice Merlot at the Purple Wine Bar in Fourth and Madison downtown.
Uh, when I was chatting with him, I looked at him and said, 'You're gonna win; what you're building is such a game-changing level of technology.' Uh, I won't bore you guys with the whole technology thing, but the short version of it is they had figured out what was wrong with the other public clouds. The short, strategic-level view of it, without going into engineering, is what we think of as the public cloud, an app execution environment built on top of an architecture that already existed for other purposes. Like, Google wasn't built to run GCP; it was built to run YouTube and search. And so it's a horizontally-scaling environment that does well for a search engine and does map review and all these other things well.
You know, Azure was built to run global foundation services that run Xbox Live, Bing, Office 365, and Dynamics Online. Azure was an app execution environment on top of that architecture, and then AWS famously had their EC2, and all that stuff was built to run their e-commerce engine. And so, we kind of realized that the cloud can never do what it was never engineered to do. The underlying architecture wasn't built to run state databases or low-latency applications. The entire environment is full of network collisions and full of, you know, conflicting resources of different people trying to share resources.
The observation they had was a couple; I'll just share with you a high-level one: you had to have a hardware-based control plane. So the notion of running the thing that controls the cloud on the same hardware that has the client tendencies on it, you're always contending for network resources. And, as a control plane, you're a fire hose of data; you know, logging data, security data, and all this other stuff. So, the amount of traffic in the control plane itself creates collisions with tenancy workloads, creating all this latency. Then you have to deal with what happens when you're in the same rack as Netflix's recommendation engine. When it's got a new Stranger Things out, everybody's logging in to see it and it's spinning this thing saying, What should this person be shown to watch and what should we spin up there? That's a massive traffic generator. So, you start realizing having this hardware control plane, having it on the same hardware problem. So, we created an off-box hardware-based control plane that runs everything and doesn't contend for network resources with the client.
The second thing we did--uh, this is a little wonky--but for the folks out there who are listening to this, who are network engineers: most every cloud out there is a switch at the top of a rack, and it acts like a switch for everything within that rack, and it acts as a router for everything between the racks--its east-west versus north-south traffic. Um, that's called a hub-and-spoke topology. We've got a hub at the top, and the spoke comes down, and it's left, right.
Um, we built a folded-leaf and spine network, what's called a Clos non-blocking network. So, two spines come down, and every neck has two connections to it. And then we built a hardware-based virtualization device for every RJ-45 port. What that hardware device does is virtualizes all the traffic at layer two. Now, without going through the seven layers of the OSI interconnect model, layer one is the physical layer, how do we encode 0 to 5 volts to make a bit? That's Ethernet, right? Or that's 802.11 base WiFi spectrum. The layer above that is how do we control the signaling?
The actual electricity going on the wire, who has protocols, all that stuff, by virtualizing it layer too. We created the only cloud network that never has a collision between any tenants, and it's actually at a point where you get better latency on our cloud than you do on most on-prem data centers. Well, what does that mean? Well, the entire work of getting to the cloud is twofold. One is moving your app to a microservices architecture for cloud-native, so you can put it in CI/CD and run full DevOps and have this constant cascade of value on the app tier.
That's fantastic. We do that well; the second part is the part that's the labor that everybody goes through that you don't need to do, which is moving from a stateful database to a stateless database in the cloud. Well, why do we move to stateless databases? For two reasons: one, they scale well horizontally in terms of the CAP theorem and how you make consistency, availability, and partition tolerance. They do well at that scaling thing, at the expense of some of the availability.
This is why, when you hit 'refresh' on Twitter, it's always a different answer; it's never the same one coming up. It's really what's available within that chart at the time for you to see. We can do stateless, and we can do stateful as well, which means for us, every workload can move to our cloud as is. So, most of our migrations are three weeks, not 30 months of trying to rewrite the entire architecture. And then, you run into this fact: because I don't have any latency and I don't have these collisions.
This is my favorite stat: By the way, 30% of every dollar you spend on computing on another cloud, you lose to network collisions with other tenants in the control plane. And so, if you think about economic throughput, it's not just that the apps don't perform well; you're paying for those collisions because you're paying for the computer cycle that didn't complete because of them. So, you know, like when Uber moved on our cloud, they were like, We're scratching our heads; we did the spreadsheet exercise and we normalized your cost of compute versus their cost of compute, and you're still coming out a third cheaper.
And they figured out that it was every time they had a task in our cloud, it completed. Whereas in other clouds, it was only seven out of 10 times that it completed in a reasonable period. So, that notion of creating a more clean network and a whole bunch of other stuff we did around GPUs and the ability to do 20,000 GPUs in a data hall cluster, uniquely, has led to this high performance. As an engineer, I look at this stuff and go, there's nothing else like this on the planet.
That we've built. And you know, it shows up like 65% of my customers don't have an Oracle application; they don't have an Oracle database. They're coming from custom-built data centers, like Zoom and Uber, and all these guys who are running their infrastructure could never make the public cloud work. They looked at it and said, 'There's no way to get any performance out of that.' They took one like what we're doing and said, 'We're going there 100% way better than what we've built.' And so that was my opportunity coming to Oracle: 'Hey, this is now, this is where you come full circle. My entire career has been working with partners.'
And I'm fundamentally at the core of being a partner guy, right? Oracle is not a partner company and for good reason. And, to be clear, it's not that they don't dislike partners. It's let me just tell you the Oracle value prop before 2018, in the launch of our cloud: We sold four horizontal applications that ran everything in your business--an ERP system that runs all your financials and all your manufacturing, all that stuff; the supply chain system that runs all your suppliers and inbound systems.
HCM, the old people-soft platform that runs all your people-management and then sales app, the Sales Cloud and CX which runs all your customer experience, marketing platforms, all that stuff. If that's not enough, I also have 87 industrial apps like Opera, that'll run your hotel or Flex Cube that will run your mind, you know, regional bank, you know, across telephone systems that can run your OSS BSS, and your customer experience and all your packet core networks; all of those things we've built for, you know, really 3,000 customers globally that depend on us to run everything.
Then we deliver that on an engineered appliance called Exit Data, running our database with our version of Oracle Linux with our Java operating, you know, application environment delivered by Oracle Consulting. Then run to buy advanced consulting services or MSP in-house for day two. There isn't, like, if you look at that compared to the SAP environment, it's OK. Now go screw your Cisco switch at the top, get your Dell servers stood up here, put your NetApp storage on the bottom, load Windows in, put VMWARE on top of that, then load the I environment. That's all integration, integration, integration, pulling all these things together. If it all comes pre-integrated, there isn't a partner play. Now you go to Oracle Cloud, which is a platform for everything in it, and it runs everything as is, whether it's cloud-native or serverless or whatever, it just runs.
Now, Oracle has to shift from being an app company that delivers our apps in a very tailored experience to being a platform for everything in IT. This means that for everyone who builds their business off professional services, Oracle is now a place they can show up to work and deliver better results for their customers. And so, that's a massive pivot for Oracle to go from not needing partners to.
It's like Willy Wonka coming after 30 years in the chocolate factory, opening it up and going, 'By the way, all this massive engineering we've been doing for 44 years, building the most performant databases on the planet, the most performant compute platforms on the planet, that's now available for a subscription - come get it!' And so, like, I have a team that's just out recruiting new partners, which Oracle has not recruited new partners in like 20 years, and they're walking into customers, partners who have 60,000 people on the bench.
And the reactions we're getting are like, Where have you been? You guys have been off in your land for so long, and then we show them the candy factory of what we've built and their reaction is, 'Oh my God, this is unbelievable what you've done.' Now, are you guys behaving? Are you guys still jackasses to everybody? And I'm like, 'Well, we're a little bit like teenagers; bits of us are maturing.
There are a lot of awkward interactions in schooling that we have to take people through. So, a lot of my job is how to transform Oracle into being partner-friendly. At the same time, I have to introduce partners to this platform, so they can do scale work on it, which is a long process.
48:25
I think that that goes to...I feel like listening to your whole career journey, which is super interesting and I think there's a lot of market history packed into the story. So, it was great. But, change management does seem to be a key part of your career, whether you're coming in and changing a partner experience or you're coming in and changing the go-to-market from within an organization. And it sounds like that's really what's in front of you right now, both partner-facing and internally.
So, I would love your advice on how to do that most effectively. I know it's a very broad subject, but I think a lot of partnerships are in organizations where their C-suites are not fully bought into that motion. So, there are a lot of people in that position of saying, 'I need to do the work. To change the mentality around that, I would love to hear your advice.
49:19
So, this is where the shift to an app platform makes a big difference, because the argument against partners that most senior execs have is, 'We're selling our stuff; our stuff is our stuff. Why do I need this third party to sell our stuff?' It's a little bit like, 'Hey, we got miles of toilets back here. I don't know why we need a contractor to put these in houses.' Well, because they're not selling the toilet; they're selling a house, the toilet is just part of it, right? So, some of this, like storage products and things like that, get dragged along on solution sales.
Yet, the sales reps think, 'No, we're selling them a storage refresh, not this is part of an architecture and it's just a component.' So, I think there's a lot of… No, especially in the software business, if you're buying a license, nobody's better equipped to tell you about what's in the license and what your rights are than us. So, how is a partner gonna do a better job on it? Now, when you look at it as a platform, you realize this is where they show up to work. As I said, this is my favorite conversation to have with people inside Oracle. It's like, what do you think Accenture does every day? 760,000 employees. What's the typical day for an Accenture employee? It's showing up at one of our customers and building code and then pushing that code to the cloud. That's what their job is. Now, do you want them to push that to Azure or do you want them to push that to OCAI? Very quickly it becomes, 'Oh, no, they're like, I'm not gonna compete with them. I'm certainly not gonna replace Azure with my 270 people in the US that do services with their, you know, several 100,000. This is just a physics problem, right? I'm not gonna compete with them in any way, shape, or form for the footprint they have.
So, it becomes a 'how do I get them to look at my platform as a better place to solve problems for customers?' And 'better' is a soft thing because it gets better for the customer, easier for them to get stuff to the outcomes they want; you know, long-term value for their customers. They're not taking their customers down a cul-de-sac they can't get out of, and stuff like that. So, that's very different from 'sell my product.' That's 'please work on this platform,' that's 'do what you do, let me help you do more of it, let me help you do it faster. When you position. And this is the senior exact conversation: If I position partners as they sell our stuff, they look at it and go, 'Why do I need them? I've got all these sellers over here.' If I position it as our sellers sold a platform and now we have a remaining performance obligation on the books of these credits; we've sold this customer that unless they consume them, we're not going to renew them.
These people will consume them. How do we get them to work? Consuming them? Now, I'm very interested in having them show up to do work because now the sale is separated from the work, and this is kind of a truism about us. My fastest-growing segment of my partner is in what's called solution delivery only. I pay them a percentage of the consumption, but they're nowhere involved in the transaction. The transaction for cloud credits might have occurred two years ago, where they bought, you know, $20 million worth of cloud credits. What I want this partner to do is push this next $500,000 worth of consumption live in the cloud, so that… $2 million for the cloud credits gets consumed. And when we get to the end of that contract, the customers say, 'Let's re-up for four; let's buy more so we can keep going faster, right?' So that's the shift. I think it's really difficult in a product's business to say the partner can do more than the field can. Now, you can make the argument that they can reach customers; the field can, that's a coverage model. Typically, most enterprises are covered by a direct sales team and you go to the mid-market. It's not. And they say that's the wrong way with the channel, but that's a flaw in the sense that no partner organizes itself based on customer size.
Like, if you look at a partner in Atlanta, they're selling to Delta and Home Depot, and to Atlanta Screw and Supply that does hardware stuff, and to local restaurants and stuff. So, it's not an I that only does enterprise or only mid-market. I do the whole thing. So, you end up with these conflicts: if I need you in mid-market, but I'm not sure I need you in the enterprise, but all the money is in the enterprise. But, so how do I tailor incentives? And it just ends up creating this conflict. It gets a lot easier when it's, We've sold them a platform now; somebody needs to show up and do the work of deploying the platform and consuming it. So, that's kind of the… The hook inside of Oracle is, 'I'm not trying to change their mind on the value of partners as it relates to software licensing; skip right past that. What I care about is, do they show up to work on our platform, and are we valuable to them?'
53:30
And so, are you then recruiting a lot of regional system integrators and selling, like, who's who, who is part of the recruiting?
53:39
Charter? So, it's interesting. Um, we're going with I have to explain some things about it. So, we're a multi-cloud company in the sense that the other cloud is kind of built with this notion of a moat around them. And it says, once data comes in, it's expensive to take it out; our res costs are 90% lower than the other cloud. So, inter-cloud work is very easy, and we have a partnership with Microsoft where, in I think 12 of our regions, there is a sub-two millisecond fiber connection between the Azure tendency and the O C I tendency. So, there is a high, high, high need.
In the Azure partner community, for the performant state, full databases like Exist and Oracle stuff that we do, we have a lot of customers that we're getting through partners. They look at us and go, 'Look, there's a set of problems that Azure just doesn't do well, like around performant, low-latency networks, HPC, bare-metal VMWare, those sorts of things that you guys do well. If I can set up an environment where they have both clouds and they're federated under a single identity structure, I as a partner can decide which workload goes to which cloud based on the economics of performance that's been growing like crazy for us. And it's been good for Microsoft because their customers are happier; they're looking at going through these things that we didn't think there was a path to solve in Azure. We've solved it with Microsoft and Oracle. And so that message is getting out well in the marketplace. And so we're going after a lot of partners that have Azure practices and showing them how to add OCI on as a way to extend.
What are they doing there? It's not in my interest to tell people to move anything off Azure; it's working right there.
55:10
Already there. What else can you do?
55:13
Only 30% of the enterprise workloads have made it to the cloud; the other 70% are state performance, things like that, that I'm the natural repository for. So, we end up winning a lot of those. The other thing is, the way we build cloud regions is different from everyone else; I can build an entire cloud region in a customer's data center.
In 18 racks, I can do it at the same price as the public region with no hardware cost, no incremental markups, and all that stuff. So, I can move the cloud on-prem, and for customers that are running GCP or AWS. So, there are these workloads that aren't going to go out for regulatory control reasons or performance reasons, like something running a… Distribution warehouse, you have these robotic pick-pack-and-ships that, you know, these robots that go around and pull packages off and bring them down for distribution. Those require extremely low-latency connections to the server that's governing those robots, right? I can put that on-prem as a cloud service at the same price as the public cloud and run those things as a single-rack cloud solution. So, I have this notion of distributed and integrated that's opening up for partners a tremendous sort of field of, like, you can solve stuff the other guys can't.
That's additive; that's a blue ocean; that's not competing for Azure's business; that's competing for stuff they can't do and creating some value. And that overwhelming creation of value for partners is kind of our goal, not contesting for a share of the wallet.
56:34
OK, so I know we have four minutes left. I'm sure we're gonna have you back on again. I did want to talk about one thing as I'd say almost 10 years ago. You wrote the six roles of the channel chief. I'm in love.
56:44
Right now.
56:45
I know it, and it's, I, I, I looked at it and I was like, 'Man, so many of those things are still true.' Although my only beef is that the channel chief isn't necessarily a recognized hard title. It's just like, 'Yeah, we, we like you, you wanna be, we wanna see him fancy out there, go do it, we'll give this to you, right?' Um, but what, what are some of the things that you're seeing because partnership leaders are, um, in the business of helping create the next generation of leaders and partnerships? But legit people, folks like yourself, right? Not people that are just those, uh, let's go out of the bar and stuff like that, right? We're all about impact and revenue and things like that. That, right? So, that's one of the reasons why I exist. So, I wanted to understand, as you connect the dots in the future, the role of this, let's call it 'challenge chief' for a key product office or whatever, the leader of indirect growth, what's required now?
57:46
So, I'm gonna tell you something that may be obvious once you hear it, but it's kind of non-obvious for a lot of people until they hear it. Most companies are driven by committees, right? There are formal hierarchical structures, like this is the person who's in charge - like the Chief Accounting Officer can say no to a rebate payment - that's their job, right? But, at VMware, there's a pricing committee that controls everything having to do with price - the price of products, discounting, incentive programs, all that other sort of stuff. That gets to what the margin is realized on the product. When I joined that company, my team under me was very adamant: 'You go get on that committee.' Like, don't be a petitioner to it as the channel chief; be a decider on it. And so I worked with the folks running it and made my case as to why having the partner's voice in that committee would make a ton of sense. Now, all of a sudden, partners had a seat at the table and how prices were done. And so what I argue, and this is the thing, is it's not just saying, 'OK, there's this...' Channel chief owns, you know, getting the partner's point of view into the product planning process. Some committees decide things around the product planning process, and the partner needs a seat at that table. Go work for those committees; go argue for your position in those committees, because that's where the decisions of the business are made. The mistake I see a lot of channel chiefs making is that they think their job is external.
They think their job is literally to be the guy on the stage, telling partners what is going on. And it is to a certain extent; you know, the partner chief as a communicator is an absolute external aspect of the job. But by showing up and being part of the levers of power inside the company, you have to be able to craft and make an argument as to why you deserve to be there.
If you make that argument in a cogent way and get the right exact sponsorship partner, it becomes the core of the business. It's not a case of we build a bunch of stuff, then the partner team takes it and does stuff with it; you become part of the design. I can't emphasize enough that that is the art of cultures being made of rituals and artifacts.
Artifacts are things like who wins recognition for, you know, 'Employee of the Month' or, you know, 'Partner of the Year.' That sort of stuff; rituals are how we make decisions. Being part of those rituals is key. I'm quoting Kennedy and Deal's corporate culture book from the 1970s if I want to read it, but it's the foundational thing that injecting yourself into those rituals is how you develop power.
59:58
Ah, I'm so glad you said this because, for the last six or seven months, there's been this notion in the market that we need to go and educate the CROs and CMOs and all these people about the value of partnerships. And my personal view, having gone through some of this myself, is that, well, if the partner leader sucks, They're just not listening to anything. You're gonna say the partner leader has to stand up for themselves, become an industry benchmark leader, actually have the gravitas to say no and things that we've talked about, and show up and then go and demand that there is a vision that they have, a point of view that they see to drive the company versus just taking orders. Yeah. So, I'm really glad you said that because this is the whole reason for all my thinking.
01:00:43
I had this conversation with an employee (who will go nameless on this one) at VMware, where he was like, 'Man, our CFO, and our CAO just don't get it.' I looked at him and said, 'You mean to tell me a guy who can correctly and accurately assess the valuation of private companies off the top of his head, just based on a view of their IP and what their revenue has, has no idea how to value partners?' That's all he does: value things. That's what they do. Now, let me give you a different perspective. You haven't made a cogent argument in the language they use to evaluate the product. Oh, right now it's me and...
01:01:21
It requires practice; the problem is, like, there's no place to go practice. Fortunately, I mean, this is gonna be like Astro just being Astro, but this is why partners exist because we provide the area for people to understand how to do these things. But the framing of what you need to do first is to correct yourself on how to become an industry benchmark executive. So you could do that. I think everything else will be fine.
01:01:48
You have to tell your value story and the language of the listener. For example, the value story for the sales guy is how you build and close pipeline; the value story for the CFO is how you control and get leverage of the business and control costs; the value for the ops person is how you off-book a whole bunch of ops to other businesses to be able to run operations for us. I mean, just getting that language down is key. Second, hard, hard, hard.
01:02:08
To totally, totally...and, and we had this conversation internally in P&L as well, 'cause we have 1300 members. And the question was, like, the value prop for partnerships is always so hazy. And we're like, 'No, it's not; it's just indirect, generate indirect revenue, figure it out.' And that's it; it's literally 'generating indirect revenue.' It's three words. If you just circle in on that.
01:02:29
No, it's not that simple. I think what Ross is saying is true. You have to put it in the language of who you're talking to, and that's different in every conversation. It's a skill and a talent to be able to do that; it's totally.
01:02:40
That is true. But you've got to have your own beliefs correct first and not be like all these other things; just have your thing first and then go talk in the other person's language to communicate, which is like the basis of communication and it'll go, it'll get through.
01:02:52
One of the best conversations I ever had was with a guy named Dave Friedman, who is the General Counsel at Citrix. And the conversation we were going through was on this program where it was obvious as daylight to me that the impact deal was going to have on the industry and our business like it was going to correctly identify who was creating business and hyper-shift the rewards to that creation activity as opposed to capturing. All right.
So, that's the argument for the CFO, that's the argument for the Chief Revenue Officer, and that's the argument for the Head of Products. My conversation with the General Counsel was on how we're going to shift risk off of our books and onto the partner: they're going to own the delivery and configuration of more deals, and we won't own the go-live. Our partners will own a greater number of go-lives. As a result, that moment of truth is going to sit outside of our company and not be tied to our license contract. Yeah, he loved it. He was like, I like all the stuff that I thought growth and H blah ba; that's the real reason to do it. But the language for him was risk reduction. And it's not.
01:03:49
A great example.
01:03:50
I know, I know we're at a time when we're respectful to everybody and also we get feedback that when our podcasts are over an hour, they become super long. But I do want to close on this one thing: the leader of the ecosystem channel, whatever you call it in Direct Grow, is a very internal role. It's an operator role, not a functional role. And yes, you should be going to conferences and stuff like that to shake hands, etc.
A very internal role because there's a lot of internal building happening inside the company. And if there is no other takeaway that people took from this, at least the people that want to become leaders of indirect growth in companies, this is the key takeaway. And if you don't enjoy it, don't do it, because you're just fighting something you're not naturally designed to do, and very few people and partnerships will go do this. So, I know you have a comment on that.
01:04:42
Do, but I'll share with you what I told Kelly on a prior call as a teaser. Maybe we will get back together to talk about this. There is no greater wealth creation event than a turnaround, and turnarounds are inherently leveraged by partners, meaning it's really hard to turn around a direct sales company because you don't get any leverage out of it. But if you can get the channel moving productively around a new offer, a new change in strategy, whether that's a change in your go-to-market model, a change in your product offerings, or changing those things, The leverage is predictable, and so I've spent most of my career going into companies where they have the product right; they've just screwed up the go-to-market and the economics of getting that right. As an employee, the rewards are astounding if you can do it right.
01:05:22
All right, on that note, we'll pause here. We'll bring you back; I mean, this is like all the guests, at least on this podcast, we all have to bring it back on because these conversations we're having, and then we're like, 'Let's give the market some time to digest them and then bring you all back again to share some more goodness.' But in closing, I'll just say there are a lot of people; I'm really glad we talked a little bit about Dick Kennedy on this call. Um, or this podcast, but there are a lot of people who have done things in the past that people who are listening to this podcast should go find out about. Oftentimes, the people who are, let's call them, the innovators, just think that people in the past didn't know what they were doing, so they'll just go create everything new. That's not true. Right? Because amazing things were done then, too.
01:06:05
We're not great at documenting your past.
01:06:07
Exactly, all right. Well, Ross, thank you so much, Kelly. As always, this was great. Uh, just hold on for one second so that we can get the podcast uploaded, but we'll be back for another episode of Unlearn in a few.
01:06:19
Weeks--awesome! Great talking to you.
01:06:23
Thank you for listening to Unlearn. Subscribe wherever you listen, and visit UnlearnedPodcast.com for the transcripts.
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