SYNC Interview with En Pointe's Herb Hogue
Herb Hogue has developed more than 20 years of expertise in the information technology arena. He has held a number of technical and business oriented positions, including Engineer, Network Manager, Technical Architect, CIO, and sales General Manager, equipping him well for his current role within En Pointe.
Drawing from his past experience as an executive level technology leader, Herb crafted an efficient vision of implementation and execution of cloud strategies & data center operations, systems and processes, and cost containment. He also successfully built and managed a number of national and offshore technical organizations, establishing and unifying cross functional teams to support software life-cycle management, implementation, and infrastructure transformation.
Interview Transcript
Russ Fordyce: Good afternoon everyone, my name is Russ Fordyce from the Business Intelligence Group, and today we're going to interview Herb Hogue from En Pointe out in California. They're an IT services provider, they seem to provide everything under the sun to companies. We're going to talk to Herb about what En Pointe's doing, his role in the organization. Also, really more importantly, the trends in the market and what they're seeing. Herb, thank you for joining me.
Herb Hogue: Thank you for having me.
Russ Fordyce: Give us the elevator pitch for En Pointe, and what you guys are offering.
Herb Hogue: Sure, En Pointe is a 28 year old established solutions company. We sell both hardware, software, and services. We focus on everything from devices all the way through the data center, and including cloud, cloud solutions. We're, of course as you mentioned, based in Southern California, and we have engineers and resources all across the country.
Russ Fordyce: Well, that's great, so you guys are now focused on cloud. I imagined that is changing rapidly, which we'll talk through on here in a minute. Now, you are the senior vice president of, I think, engineering and professional services. I imagine that's probably one of the busiest departments in that company.
Herb Hogue: It's a lot of fun, never a dull moment.
Russ Fordyce: How did you arrive at En Pointe?
Herb Hogue: I was a customer for a long time, originally in my career. I've been in IT for well over 20 years, started on IT Help Desk, all the way to CIO. About 10 years ago now, maybe nine, I got on this side of the business with some other companies, and I enjoy it. I enjoy solving a lot of different solutions, and this is where I've stayed. I've been with En Pointe coming up on three years.
Russ Fordyce: That's great, so when you're out talking to customers, and solving problems, what are the most common things you guys are working through today? What are the hot items in your portfolio?
Herb Hogue: I think there's several that I hear, and they're all cloud-centric, whether that be customers trying to move their productivity apps to the cloud, reading Office 365, we see a lot of that, and we've been doing a lot of that, I'm sure as you've read and seen in the press. We also do a significant amount around VMware, and their cloud solutions, and hybrid cloudsolutions. Then, of course, with Microsoft and Azure, we've seen tremendous up-swell of inertia around those solutions, so that's particularly ... Even as recent as last week, many customers are trying to move and figure out how to incorporate the Azure portfolio, so we're extremely busy on that side of our business today.
Russ Fordyce: It sounds like you guys are really focused on taking technology in the marketplace and applying it to customers and their needs. Are there any proprietary solutions that you guys are offering, or is it taking the right widget and sticking it into the machine of the enterprise?
Herb Hogue: Well, I think it's a little of that. I also think it's a little bit of our capability to provide holistic solutions, so as I mentioned earlier, we have the ability to talk about devices, and MDM device-centric solutions. We have the ability to talk about governance, and solutions that manage, and maintain, and monitor the applications and secure process. We have the ability to do data center, and then of course, we have the ability to integrate that with cloud, which gives us a unique ability to be a holistic solution provider, as opposed to a provider that focuses on one or two portions.
I think the big thing we see right now is everyone's trying to be, or move to some type of hybrid platform, which you really need to have and understanding of both areas, which we do have, which is why we're extremely busy right now in that space; migrating some of the data center to the cloud, not all of it, but you're seeing a lot of that adoption occurring.
Russ Fordyce: When you're out there with the customers, what size customers are you looking at? Are you ... Sounds like you're on the higher end of the customer range, maybe mid-size enterprise, or large enterprise?
Herb Hogue: You know, it's funny, we're seeing it from all angles, all sectors, and all sizes. I think the only thing that changes due to size is their ability to change quickly, so obviously smaller customers can adopt and integrate quicker, because they have a smaller environment; larger customers have a little bit different use-case, they're looking for more ROI. They're obviously ... they have to integrate their current processes and security architectures into that solution, so it was a longer time horizon.
Russ Fordyce: Okay, and as you guys are out there pitching or solving problems, what is the number one problem that the companies are coming to you with? Is it ... I mean, obviously I think the solution may be the cloud, but what's the underlying problem that you're seeing the most?
Herb Hogue: I would say the number one challenge that a lot of customers are experience is two-fold. One is changing fast enough. Obviously, their executive level leadership in all these companies today are inundated with what the cloud can do for them and their business, and they want to take advantage of those capabilities. So, you're seeing tremendous adoption of change within businesses around technology. When I was at CIO, it was very lethargic with change, and customers are now looking to change much, much faster than most IT organizations can handle; so, they don't have enough resources, and they're going through a tremendous amount of change.
The second is their ability to proficient in new technologies. All of the platforms that we're talking about are two years or less, most of their internal resources have no experience, have no background, or limited to no training; so, they really depend on partners like us that understand where they are, and how to migrate to those types of platforms. That takes time given that we've obviously done many, many of those [inaudible 06:08] engagements, they definitely leverage that type of experience from other partners. If they had to make that capital investment themselves for a one-time migration, this doesn't make economic sense for them. They often times need a lot of training through the process to understand how to manage and maintain that environment going forward.
Russ Fordyce: That's a good topic, is you guys obviously do a lot of the integration of the technology in with the customer business. In what ... If you had to rough guess, what's the percentage of hardware/software services against the migrations services, and all the professional services to make it work? What's that look like from a cost standpoint?
Herb Hogue: Generally, on average, I would say 60 to 70 percent of the spend is software-related, and probably 30 to 40 percent is ... Yeah, 30 percent is hardware, and then the remained would be services. We're continuing to see that hardware spend shift to software and/or services, it's not going away, but it's different. It's changing.
Russ Fordyce: As it changes, it's shifting more towards the software side?
Herb Hogue: I would say so. I mean, obviously you look at ... I'll use Microsoft and/or VMware's push, we see they're trying to migrate that infrastructure somewhere else, so that definitely gives them a different platform and strategy to do so.
Russ Fordyce: That's interesting. Now, as you guys have adopted this, I guess, this newcloud-focus, or these cloud platforms, are there different needs that are driving the customers into the cloud? Is it wanting to have more security or more disaster-proof items? What is it that's really driving folks into the cloud versus building their own data center, other than capital?
Herb Hogue: I think the other piece is most customers are looking for moving ancillary services or secondary services out to another environment. I'll Azure as an example for that question. A lot of customers are looking at, "How do I move branch storage, for example, or tier two storage out to the cloud?" and Microsoft has done a great job with StorSimple, and there's other partners as well, [Manav 08:36] for example, that have put solution sets in place to easily integrate that to extend their storage environment, for example. So, that gives them a great opportunity to move that infrastructure out seamlessly, without having to do a significant holistic migration, and it's a low-cost entry point for them, which makes it very simple without having to turn their whole IT organization upside down.
Russ Fordyce: It's interesting you say that, because it sounds like they're moving things that are easy to move into the cloud, and things that are secondary to them. What needs to happen to get that shift into the primary role? What needs to happen from a services standpoint, or even from an integrator standpoint?
Herb Hogue: Well, I think two pieces. This evolution with cloud is very similar to the evolution of virtualization. Customers need to trust and believe that it works in production, and with their most important business applications, and then they gain continued adoption of it. If you have legacy applications, which most enterprise customers have for short, making that migration to the cloud is much more difficult for them. If you're developing that new applications, then it's just extending your security [artifacture 09:51], and using the cloud as a platform much, much easier for adoption. But most enterprise customers don't fall into that use-case, which is where we come in trying to help them plan to find, design, and architect, and implement solutions to make that transition. Particularly if they're in a highly distributive environment, there's performance metrics and things that they want to validate before they make that holistic jump. You see that time horizon much longer. But for platforms like SharePoint, for example, that's a much easier migration, right? Because the platform is consistent with what they're used to, they can make that migration much easier than a legacy app.
Russ Fordyce: In terms of the scope and the horizon for cloud, I don't know if you've ever seen the Gartner Hype Cycles, but there's always these new technologies that are building up the curve, and then there's these other technologies that are coming through the curve of the hype, and getting into real solutions and being adopted. What do you see that's coming up that curve, or on the horizon, if you will, you know, that's really starting to gain some traction in the marketplace, and that will soon be under rapid adoption?
Herb Hogue: I think there's two key areas, security across the cloud will be a big one. You're seeing a lot of customers look to, as they make that migration, how do they manage across multiple environments? Whether that be [SAS or PAS 11:18] environments, they still want to retain security control and understand where that sits, and there's some new emerging technologies in some of those phases that I think will be interesting as that space continues to evolve. Microsoft's doing a lot of things in that space as well to do that. Then, orchestration across the cloud. Many customers probably won't have just one cloud. Being able to orchestrate virtual assets across those different environments will be very important to manage from a process and workflow perspective. Then, you know, governance is always out there when you talk about security and control.
Russ Fordyce: If we're at ... We're probably at a take rate of ... I don't know, I see stats that ... like 60 to 70 percent of new deployments of technology are moving into the cloud, and I know that's probably inflated quite a bit, but as you guys ... you guys are in a good position to judge that as you're solving things for customers. How much of that is done OnPrem versus in the cloud?
Herb Hogue: It's quickly evolving, and I would say most of the OnPrem that we see is in conjunction with a migration path. I spoke a lot about Office 365 and we're doing a number of those engagements, even currently with customers migrating them, and usually what happens shortly thereafter, when they do an Office 365 migration, there's a SharePoint migration, because that goes hand in hand. Obviously, extending their active directory environment system center, and before you know it, additional services start kicking in.
Russ Fordyce: Okay, now if you had a magic looking glass, and you're looking out five years, maybe even 10, what does this look like in that period of time? What does En Pointe look like? What does the cloud space look like?
Herb Hogue: Well, that’s a big question. I think the industry is evolved from one where individual solutions were sold to holistic solutions, adding the ability to deliver application development capability, cloud management capability, cloud brokering capability will be important. Manage services is going to evolve across the space. I think it's going to make [manual13:42] services somewhat easier, because customers are going to ... I believe you're going to see customers want to spend less and less of their internal IP on managing boxes, and more devoted towards their internal IP, to help [sell them 13:57] whatever rigid they may be trying to sell.
You're already starting to see that shift in spend. You talked about Gartner Hype Cycles, and I'm sure you've seen the [Gartenal study 14:07], 70 or 80 percent of IT spend goes to maintenance. I think you're going to see that invert over the next five to 10 years, where IT organizations will be looking for value much more than looking for keeping the lights on, and I think that will occur in that transition. That will open a great opportunity for us.
Russ Fordyce: Yeah, it's interesting, most people think that means all this means less jobs in IT, but it probably means more specialized jobs, and more development resources and jobs like that.
Herb Hogue: Absolutely, and I think, this is very "dot com"-like in what we're seeing right now from a talent pool perspective. As I mentioned earlier, there's not enough resources because the technology that we're evolving and deploying today is so new that people haven't either been trained or brought up on, and the ones that are fluent and trained, are in high, high demand.
Russ Fordyce: So, is the secret sauce to all of this the ... what seems to fall under your command, which is that professional services? The guy that puts all those pieces together? It seems like we got a lot commodity infrastructure and commodity services, is the secret sauce really finding a great IT company to put it all together and to build it out because they're the most knowledgeable people?
Herb Hogue: Well, you know, I put my customer hat on when I was at CIO. At the end of the day, most customers are just looking for someone to solve problems, and be their advocate. Given that we have such a diverse portfolio, we can be holistic and agnostic, which puts us in a unique position. Sales develops and manages and maintains our relationships, which we have many, and our engineers are responsible for solving problems, helping to find and design future solutions, and being their advocate across whatever solution set makes best sense for their particular use-case.
Many of our relationships have extended well over a decade, and I think the reason we have customers of that longevity is because of that ability, because of those services that we deliver. We're going to build on that because we've recognized that the more value we add to our customers, the greater trust, and obviously, spend, we're able to capture and maintain. But at the end of the day, if we're doing a good job and solving problems, our business file is going to be scalable, and we'll be fine. If we're not solving problems, then obviously we know what comes with that.
Russ Fordyce: Yeah, your value comes down a little bit. Now, when you're not in the office and pushing buttons and fixing servers, what are you doing on a personal level?
Herb Hogue: Well, I don't push too many server buttons anymore, but we got a pretty large operation. We're doing a significant amount of revenue, and we have engineers flying all over the country. I spend a lot of my time speaking with customers, and going to conferences, and trying to keep up on the latest and greatest. For a personal perspective, try to spend time with the family as much as I can, I have a young daughter, so I try to have some fun there, and that's about all the time I have left over at the end of the day.
Russ Fordyce: Well, as you may have seen, I have a young daughter too, I think she was at my door a few minutes ago.
Herb Hogue: [Inaudible 17:22] I have a little one myself.
Russ Fordyce: Well, I appreciate your time today. It sounds like you guys are definitely off and rolling, and moving in the right direction helping customers migrate their infrastructures into the cloud, and it sounds like you guys have a great portfolio.
Herb Hogue: Thank you very much, I'm very excited about what the future has to hold for us in the industry, and I think these are very exciting times. So, thanks for your time and your including us today.
Russ Fordyce: Yeah, absolutely. This has been an interview with Herb Hogue of En Pointe Technologies. I encourage you, it's E-N-P-O-I-N-T-E Technologies, there's a link at the Big Awards website, and we look forward to keeping an eye on them and see what they're up to. I really appreciate your time.
Herb Hogue: Thank you very much.
Russ Fordyce: Have a great afternoon.
Herb Hogue: You too.
Russ Fordyce: All right, bye-bye.