>> Announcer: Live from Madrid, Spain. It's the Cube. Covering HPE Discover Madrid 2017, brought to you by Hewlett Packard Enterprise. >> Welcome back to Madrid everybody. This is the Cube, the leader in live tech coverage, and this is day two of HPE Discover 2017. I'm Dave Vellante with my co-host, Peter Burris, Alain Andreoli is here. He's the Senior Vice President and general manager of the hybrid IT group at HPE. Great to see you again. >> Great to see you David, great to see you Peter. >> So, a lot of good energy here, the story Alain is coming together. >> Alain: Yes. >> We've seen it over the last five years but really fine-tuned the organization and seems like things are going well. >> We have more clarity on our strategy than I've ever seen in a company, and this was not easy to do because the market is changing so fast. We addressing $120 billion market in hybrid IT, we lead the market in compute, we lead the market in storage, we lead the market with private cloud, we have invented composable, we are ramping up our Harper converge offering, and now on top of the infrastructure, we building these layers of one sphere, which is managing a multi-cloud environment for the data, and we are adjusting our services to become advisory and consumption models. This is having such an impact on our customers, 74 percent of our customers are going for hybrid IT journey. So we have organized ourselves to make this journey to be basically the partner of choice for our customers as they go through that. >> I mean so cloud of the last five, seven years, cloud and open-source software have really disrupted our industry. You've had to respond to that, and basically bringing cloud-like operating models to your customers. >> Alain: Yes. >> How have you done that, how do you rate your progress and where are you to date in that regard? >> So the first decision we had to make is are we a neutral party to our customers? (laughing) >> Dave: Yeah. >> We need to redo it. (laughing) >> They're getting you back, right? So, I don't know if you can see that, alright? Alain came by on his scooter, here we go, let's catch this. Here we go, this is called payback. (laughing) During Dr. Tom's interview, Alain came by with his scooter. (laughing) >> I will get you, I will get you for this. (laughing) >> It's great fun on the Cube. >> We can kid, that's alright. >> That's good. >> So the decision we had to make is are we the partner for our customers to go to the cloud or are we saying on PRIM is better? >> Dave: Yeah. >> And we 'vedecided to be this partner. Because we believe there is value for everyone and we believe it is not a one-way street. And we see actually that 32 percent of the customers who have moved work loads to the cloud are bringing these work loads back on PRIM. So we had to advise them. We helped them go through this journey, we really mean it, we helped them to go on Amazon, we helped them to go on Azure, we helped them to go on Google, and we helped them make it work, and this is why it's a service-led journey. The problem if you go on the public cloud is that we don't really know how much it is going to cost you, and you don't really have a single pane of glass to have all your data being managed across, what is now an ecosystem. We enabled them to do that. And the market we are directly addressing on PRIM is not shrinking. We still see huge pockets of growth, in flash storage, in HPC, you've seen the results we have in HPC. In Mission-Critical X86, in Hyperconvert, so we are basically moving from the one-size fits all type of organization of freeing X86 and start off storage, to become a company that offers value to customers, in specialized pools of compute, of storage, of networking, and offering them the end to end journey across the different stack. What I think is going to make a huge difference, if you look at the five-year horizon, is the growth of The Edge and the fact that 70 percent of the data are going to come from The Edge, and then you will really see the power of our strategy of private IT which goes from The Edge, to the core, to the cloud, because we will be able to enable our customers to have their data moving seamlessly across this journey. And we have exactly organized the company that way. >> One of the obvious use cases from what I like to call machine intelligence or artificial intelligence is really infusing artificial intelligence into infrastructure for predictive analytics and predictive maintenance, IT operations management, Infocyte, you got through an acquisition of Nimble and have been impressed with the pace at which you pushed that throughout the portfolio, I wondered if you could address that. >> We've been almost surprised. We looked at, we wanted to become the flash company because we saw that the market over three years, would completely move to flash. And when there is such a pendulum shift, you want to be at the forefront. >> Dave: Right. >> So we looked at all these companies who were having very strong positions on flash and Nimble intrigued us because they had, by far, when we talked to their customers, the highest customer satisfaction, I think it was something like 87 percent. >> The NPS is off the charts. >> The NPS is off the charts, right? And then we peeled the onion and we saw Infocyte, which was almost enough to start south because it was not part of our list, right? Initially of our list of this is how we are gonna select a company we want to acquire, and when we got into Infocyte, how it works, how we can actually port easily these to three power and then to SimpliVity and then to the rest of the portfolio we felt this is the crown jewel that is going to be the foundation of us making >> Dave: And not just the storage portfolio. >> No, end to end so we're gonna do these for everything, now we cannot do it in one day. The priority was to give a seamless experience to customers going three power or Nimble, so we've done that very quickly. We acquired the company six months ago and it's already there for three power. Next one will be Simplivity, very soon in a few weeks, then we go to the whole computes platform as well, then finally to networking. I hope, it's not a commitment, but I hope that by the end of next year, and under a year, we will be done for the whole infrastructure portfolio. >> And explain the benefit to customers. >> And then the benefit is that you basically have, you eliminate the need for level one and level two support because it's proactively, now you have to be wanting to have your device calling home, right? Because otherwise, if you want your device to be in the data center and insulated from communicating with the network effect, that is not going to work, so but assuming you want your device to be connected centrally, so that it can be monitored centrally the artificial intelligence that is embedded in Infocyte is basically going to monitor the behavior of your device compared with hundreds of thousands of other ones and therefore anything that is deviant will be flagged as a potential problem and resolved before you even know about it. That's one. So when you end up having a problem eventually, which is becoming very, very rare, then you directly call the level three engineer who is an expert and who has, on the screen, the behavior of your device for the last month compared to others, and the resolution is in less than a minute. So it's a revolution in the way to do service. >> So, one of the things that we've observed as we've talked to customers is that the characteristics of the problems that they're now trying to solve have real world elements, and that's really what The Edge is about in many respects. For the first 50 years of IT, we were doing accounting, and HR, and supply chain, and we were able to define what the data models looked like, we could therefore say, the data's going to be here, the processing is going to be here, we could build data centers. Now as you said, 70 percent of the data is going to be coming from The Edge. It's not clear, necessarily where the best place to process that data is. Where's the compute going to be? How's it going to integrate with people? In many respects, hybrid IT is about diminishing the degree to which infrastructure dictates the way the problem gets solved. Would you agree with that? It's kind of like where does, let the data reside where it needs to reside, and make sure that the business is a natural infrastructure that reflects and corresponds to the work that needs to get done. >> I totally agree with your problem statement, and the way you position the question. In terms of semantics, I would just say we need to make infrastructure invisible. It's still there because it's all running on infrastructure. The iPhone is infrastructure, your PC is infrastructure, your camera is infrastructure, it's all there. >> A C.I.O said to me not too long ago... >> But you know what? We are having this interview, we are not thinking about what makes it happen. >> Peter: Right, right, right. >> Our business is to talk and communicate right now, this all has got to be seamless and that's how we need to make IT, seamless. >> I had a conversation with a C.I.O. >> Invisible. >> Yeah, who said that the value of my infrastructure is inversely proportional to the degree to which anybody knows anything about it. So, is that kind of what the HP promise is, is we're gonna let the data and the work loads define where the infrastructure goes and ensure we have those options? >> It's exactly right and the vehicle to do that, we call it autonomous data centers. Your phone is a data center. Your data center is a data center. Your off-frame cloud is a data center that you are subcontracting, right? So we want all of these to be autonomous, in terms of self-healing and everything else, and then the intelligence of where these data are being moved and how you use what and when is the single pane of glass that we are developing around one sphere. And how to get the customers to move their work loads and their business around that is what we do with point next with services. This is our strategy. >> So let me break that down a little bit. So, we've got devices that are powerful enough that we could put new types of control, new types of work loads there if we wanted to, we've got now the ability to package infrastructure, and have a single pane of glass, and have a common management framework. >> Right. >> But when you say the autonomous data center, it's we have a common business approach thinking about policy, thinking about value, thinking about how we're gonna do things, and we can put that into this entire vision, and let it actually execute how that manifests itself from a business standpoint. >> Exactly right. >> Have I got that right? >> It's exactly right. I love the way you put it. That's exactly what we are trying to do. it's not going to be done in one day, but that is our strategy, and we have organized, once again, the whole company around it, to execute this strategy and to make it happen for our customers. >> So if we think about what an HPE customer is gonna look like in, you know a really good HPE customer in 2023, what.. >> Alain: That's a long time. >> That's, five years, but I'm giving you that much run way, because you're right, it's not there yet and if it's too ambitious then so be it, but how is a business person going to think differently about working, about the role that IT is going to play in the business, and what it means to have a great partnership with a company like HP? >> Yeah, so we are basically, our motto is One size doesn't fit all, so we are first trying to understand the business of the customer, and then we will apply solutions to enhance this business, or to empower this business, right? So, we have the biggest brace of infrastructure that you can think of, think about this infrastructure becoming self-healing, but this infrastructure is more and more specialized, there is HPC, there is Mission-Critical, we just found Superdome flex, or SAP, we have all these specializations that, for those customers to optimize their business outcome. Then we have the single pane of glass that allows everything to seamlessly operate the data around, and then our point-neck services are going to work with the customers to architect their IT model in a way that their work loads are optimized. And one of the key is the right mix. The right mix of what you do yourself, what you got from multi-cloud, how much do you pay for it, how much do you anticipate that you're gonna pay for it, do you want this to be CAPEX, do you want this to be OPEX? And then how do you manage The Edge, and with Aruba and with Edgeline, and then with all your IT platforms that can manage the data across The Edge. We have the capability to also let the customer decide, do I want a lot of analytics and decisions to be made at The Edge, in my devices, and this is highly valuable depending on what customer business model we are talking about, or, do I want all the data from the analog world through the censors to come straight back to the ranch. All of these decisions, we are gonna have platforms to allow customers to make these decisions, to decide, kind of templates if you want, this is how I want it to run, and to be executed, and then to be automatically, autonomously operated. That's our vision of how we can help our customers moving forward. >> Last question, so the attendees of Discover, your customers, when they go back and he or she talks to their boss, what do you want them to say about Discover 2018? >> I invested two or three days of my time to come to HPE Discover. It was really exciting because I felt that it's like a new company, it's the company I know. I know they are customer first and customer last, and they are the ones who help me when I have a problem, whether they created it or not, they are here to help me. This is not going away, but they are taking us to the new world. They are gonna help us to build our hybrid IT model, and I think we need to trust them to have a seat at the table when we make these decisions, boss. >> Intimacy, innovation... >> Alain: Yeah, innovation. >> Trust. >> HPE's no longer wandering in the desert. (laughing) >> Alain Andreoli thanks so much for coming on the Cube, it is always a pleasure. >> It was a pleasure. Take care, thanks Peter. >> Keep it right there, everybody, Peter and I will be back with our next guest, right after this short break, we're live from Madrid. You're watching the Cube. (techno music)

>> Presenter: Live from Las Vegas it's theCUBE covering HPE Discover 2017, brought to you by Hewlett Packard Enterprise. (light techno music) >> Okay welcome back everyone we are here live in Las Vegas for HP Discover 2017. This is SiliconANGLE's, theCUBE is our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, the co-founder and co-CEO of SiliconANGLE with my co-founder and co-CEO Dave Vellante with Wikibon, and our next guest is Alain Andreoli, who's the Senior Vice and President General Manager of the DCIG, the Data Center Infrastructure Group at HPE. Great to see you, welcome back to theCUBE. >> Thank you, it's a pleasure to be here again. >> Great show, you guys have a lot of great innovations. Notable was the analyst press conference that we were at. You were feeling all the questions, the buzz around Gen10 and all the action you guys are putting inside the new service from security to all the innovation that's happening, pretty great opportunity and the true private cloud numbers coming out of Wikibon are showing fastest growth is cloud on-prem. This points to significant opportunities, your thoughts? >> Yeah, well, the need for compute is clearly growing and you continue to grow forever. What we see is that the compute points are also expanding so it can be on-prem, it can be off-prem, it can be in the edge, and on-prem there is a bit of a revolution which is coming from the experience of the public cloud, and so, private clouds are becoming very, very fancy. So you see on-prem compute basically turning into two families, very specialized for high-performance computing, for mission-critical, for AI, and others. The things that are really, very critical to the business. And then for all the other workloads, they need flexibility like a public cloud but on-prem because they can keep control, they want to mimic the agility and they want to have the same economic level. So we are playing on both fronts, we are doing very well on the specialized front with HPC Acquisitions of HDI and so on, and we are making a breakthrough on the private cloud with Synergy and soon with the new stack. >> So the whole notion of DevOps and cloud have opened up the doors and certainly you guys have been very clear with the simplicity message. Big data is big part of the application process, cloud providers, multiple clouds, so this right mix conversation-- >> Alain: The right mix, the right mix >> Is what Meg is putting out their is a nice message, and what you're saying is "hey the on-prem is not going "anywhere and we have the data to prove it." But you look at the big clients, they want the control. What is the conversation that you're having when you say, "Hey I need more capabilities," obviously high-performance computing, powering AI, and machine-learning, we're seeing, obviously those things. But from the business model side, what are the customers asking from you for solutions? What are the key things they want from HPE right now? What is that-- >> In terms of economic control? >> Solutions that are top priorities. When they sit down and say, "Well, you know, I need more compute." Okay, what does than mean? What specifically are you building for customers to help them with the digital transformation, to simplify the business model of on-prem with cloud and to deal with the multi-cloud world. >> So, they believe that the management of the mix between the different alternatives that they have right now with, certainly, a complexity and they rely on us to take this complexity away. So we are very bullish about the project New Stack because we think that this will allow data to be managed across the different horizons in the data center, across multiclouds and with more and more data being created and eventually computed at the edge. So these three horizons together make intelligent distributed computing, which will be more self-tuning, which will be extreme data analytics, and ultimately, this will allow customers to manage data seamlessly across everything. We think that this is kind of strategically where our customers want to be. Then the way they get there depends. Some customers have a view, which is just modernization of what they have right now. Some of the customers want to be more dramatic and run everything they have as if it was a seamless cloud, and then they have to decide the mix between on-prem and on-prem. Most of the customers, I was looking at what is actually making the public cloud. More than 50% are born from the cloud, they are people who never had the data center and may never have one until they grow up because then when they grow up, they need one. >> John: (chuckles) For control? >> What we have learned, for control-- >> John: And expense-- >> Dave: The Cloud Cliff. >> Expense, That's The Cloud Cliff. So, more than half of the public cloud customers never had a data center. About 15%, 15, 16% of the customers of the public cloud are consumers. And then, you have a small third which are enterprises. That's the first thing to realize, right? That the move of the enterprise is still pretty small. I was discussing with the largest systems integrator in Germany yesterday, and their view is the German perspective, because here in the US we have a tendency to believe that everything is public cloud or will be. The German view is totally different, for instance. So, I think, you know, we have gone through a cycle which has been public-cloud-heavy in terms of marcom where the market believed that public cloud was going to be everything, and we are now landing in a reality zone where this mix is an opportunity for the customers. They have some trivial workloads that can go on the public cloud, but we see that on-prem remains, basically, what people are doing. >> That last point's really important because even though you said, "Well, less than maybe a third is enterprises "in the public cloud," if you look and feel the workloads that are going to the public cloud, it's not the core of enterprise IT workloads. >> So what I believe is that we are thinking it the wrong way when we think in public cloud and which workload goes there. The workloads are not going to the public cloud. It's that a lot of the workloads that used to be run on-prem are now coming from the cloud, SaaS-- >> John: Right. >> That's different, that is very different. So, customers are not deciding what is on-prem, off-prem, they are now looking at software packages that come from the cloud, like Salesforce, or others. And this means that while they're running their data center as vital applications that don't come from the cloud, so it's more and more specialized, and then they have a variety of applications that don't come from the cloud, that they will run on their public cloud. This is why I see these two topologies, if you want, of specialized-- >> John: Yeah. >> Super compute and data-centric, and then, very fluid, and this where Synergy plays so well, because Synergy allows this fluidity-- >> John: Yeah. >> Of pools of resources, and you can basically adjust to the various applications that you have. >> Oh, this is classic early adopter kind of behavior, you mentioned the SaaS coming in and being influenced because they're easy to get into right? You can get some subscription and get some value, but then I think the true private cloud is interesting to me because what it really shows, to extend your point, is that the business models are changing for the agility piece, that's the DevOps. So, as you see IT consumption changing to cloud-like, or true private cloud-- >> Dave: Yep, yep, yep, yep. >> Essentially, that is an OPEX business model. So, the business transformation is now where the rubber hits the road for what digital is. So to me, we see this dynamic so with that being said, what aspects of HP taking advantage of? You mention Synergy, what else do you guys have cookin' up? What's out there that customers are using to turn the knob and go faster on the acceleration on that? >> With customers, I wouldn't like us to look at customers only as being enterprises, because as more and more business is being generated from the cloud, people who do business from the cloud, whether they are enterprise service providers, or software providers, or business born from the cloud, these people also acquire technology, and they have need for services, and they require infrastructure. So, this is a segment of the market where we're going to to double down in the future. So, we are looking, we call them, like, Tier 2, Tier 3's, because the very large ones have a tendency to try to build their own things-- >> John: Yeah, service providers-- >> But, a lot of other service providers and there are-- >> John: Cloud service providers. >> You know, a small third of the market also demand technology and support from us. So, we are going to expand our cloud line strategy. We are going to offer open systems, and be very aggressive there, both for compute, storage and for networking. So there are kind of two prevalent markets. If you want more, there is a market of completely open systems, we call them whiteboxes, you know, we call them for the cloud, Cloudline, which is now a multi-billion dollar business for us. And then you have the people who want products that offer a lot of value that are differentiated, like Synergy, like Proliant, like Blade Systems, like 3PAR, like Nimble, and so on, and obviously we are doubling down on these as well with our Acquisitions and own development like Gen10. >> So the narrative from Hewlett Packard Enterprise and all of your competitors is, you know, hybrid is the reality, fair enough-- >> Alain: That's for sure. >> And we agree, but there is an aspect of zero-sum game here in that the markets at the macro level are not growing like they used to. So, market share becomes very, very important. You've put up a slide in your keynote, 81 straight quarters of leadership. Now, we all know that you can play games with the numbers, but the most important metric we would argue is revenue share. If you're number one in revenue, that's the true market leadership. So you've had 81 straight quarters of leadership, as we've just defined leadership. That's 20 years. >> In this quarter, we had leadership, and next quarter I think we'll have leadership as well-- >> Dave: How have you been able to do that? >> We are not looking at market share for the sake of market share. We want to bring value to our customers and to our shareholders. So if there is, moving forward, a part of the market that does not yield value for either party, we may not want to measure our market share against that because we may not define this as being our own market. But so far, we are leading the overall market in compute. We are now a strong number two in storage, with the acquisition of Nimble, and we're happy to be there. But our strategy is not being number one for the sake of being number one. >> Now on Dave's point, I'm very critical on this, I've been readin' about it, and again I may be overstepping my boundaries here, but I believe that if we're going to a new era of modern computing, dull metrics don't apply because everybody seems to be number one at something. I go to so many shows where I go to Dave where I'm number one in this, I'm-- So, the question is if the old is shifting to a new model, and it's horizontally scalable, vertically specialized kind of a marketplace, which you guys are addressing with some of your tech, what are the metrics? So that we're asking ourselves the question, what should be the benchmark standard? >> So I have a strong point of view and I was discussing with an analyst last night, we had dinner, and I've had the same point of view for the last couple of years. The history of the market is to measure by product category: rack, towers, old flash arrays, disk arrays, mixed arrays, and so on. I think this is a rear mirror view, it doesn't matter. The decisions that customers are making are: what is my specialized computing? Which includes computing, storage, networking. What is my specialized data center, basically. What is my private cloud? Then what is my consumption of IT coming from service providers and therefore, you have the service provider market, which itself can be separated into different segments. That's the way to measure the business. So, I want to be leader in specialized compute. I want to be leader in private cloud because this is what enterprise will be consuming. And basically, we're already leaders there, but I want to be continue to be leader in providing gear to service providers, who have decided to rely on partners to build their data centers and not build them themselves. This makes sense, because then you look at the market differently, you're not looking at micro-territory-- >> John: I agree, I 100% agree with you. >> Density, optimized whatever, you're saying, okay, what is a service provider going to need in the future? What is going to be specialized computing in the future? What is going to be a private cloud in the future? Once you have covered that-- >> John: Yeah. >> What is going to be compute at the edge in the future? And what do you need to orchestrate all the data? These are the clusters of the market that matters. They are the ones we are pressuring and they are the ones-- >> And you could be building technology-- 100% agree with you, I would also add, by the way, I agree with you 100%, and I would even amplify it by saying you could be building something new, like a server, chips, silicon security, that has no category. So how does that relate into things-- (laughing) >> Well, Synergy is the category. >> Dave: Right. >> You know, it's-- >> 'Cause it's horizontally scalable, so again, you could be number one, two, or three by the old categories, but be wholistically number one in the market. >> So, I think it's more, you know, it's more categories of business outcomes. >> John: Yeah. >> Like, specialized high performance, you know, flexibility, agility of a private cloud. I think that's, you know, so, if you make a parallel with the car industry, you can say is the market, like, diesel engine, or gas engine, or electric engine, or is it like sport cars, SUVs, or whatever. I want us to look at SUVs and sport cars, how do we do the best SUV? How do we do the best sports car? Versus, you know-- >> John: The components, and do how you have-- >> This technical view of it's a rack or it's a tower. >> Yeah. >> And how do you add the most value for customers-- >> Yeah. >> That is profitable for shareholders? >> At the end of the day, when we have our argument in our office about this on the research side, we say, "Look, at the end of the day, "let's identify some of these new catego-- and try 'em, not measurement points, but customers and revenue can't lie. If you have customers, here it is, number of customers. >> And so, the problem then is to measure it. Once you have defined what is right metrics, can you measure it? >> John: Right. >> And so, unfortunately, the analyst today cannot measure the market where it has evolved. So we are still looking at rack and towers, and so on, and I think this is wrong, the wrong view. >> Okay, so, talk about the hot thing that we like is the Root of Trust product, the silicon thing that's called the Root of Trust, you know, with the firmware thing. This seems to be getting a lot of buzz to show. It's innovation, we had some independent testers on with your guys, and the Gen10, this is pretty impressive. Thoughts on, is this the kind of direction you continue to go with, what's your thoughts on this security-- >> Well, we think security's super important and, you know, you open the newspaper or the TV today, and you see what's happening, it's quite amazing, including today, what's happening today, here in the US. So, it's incidental the we come in just today with our new generation of compute, but it's taken two years of interviews with customers to really understand what's most important to them. And the risk of cyber threat has turned enormous, and I think that you have been interviewing experts from the FBI, and so on-- >> John: Yeah, right. >> During this session, who came here and help us to build this solution. And I think we're coming at the right time with the right solution that will take a few years to our competitors to try to match that, and then we'll go in this direction because that's the only way technically you can do it. >> John: Yeah. >> It's at the silicon level, so you basically have unique encoding on your server in silicon, and the firmware always, you know, compares itself throughout the whole life cycle of the server, even before the server is finally built through this Root of Trust. I think we've done this extremely well, I'm very, very proud of our ingenious. >> And it's been validated against the The NIST, NIST Securities Team, and so, congratulations on that. >> Alain: And these are the most stringent startups in the industry, right? >> It's pretty impressive, I mean, this has been a trend that we've been seeing, the silicon, the silicon angle, no pun intended. But it's interesting, and always, security's come up in the past, people want that. And with IoT, the support, the attack vectors can be sealed up pretty well-- >> And so are our Edgeline products, they have IDOL 5, and so, they will also have access to this technology. >> Great innovation, thanks for coming on theCUBE, really appreciate you share the insight. I'll give you a final word here. Share with the audience something you think they should know about HPE right now that they may not know about, I know the messaging's pretty simple, you got the nice messaging, but going beyond the messaging, what would you like to share with the audience about your group and HPE's innovation coming out of Discover 2017? >> You feel the buzz here, you can see, I think we have never been in such a focused and clear position, we exactly know the businesses we are pressuring, the Hybrid IT make it simpler, and the edge, and the service to make it happen. We are just crystal clear. But when you put the three together, you get to this dimension of intelligent distributed computing, and this is a market that we will lead in the future. Also, we are such a strong and stable company. We will have over $12 billion of cash net in our balance sheet by the end of next month. And this puts us in a position to continue to double down on these bets we have made for the future of the market. So we are very, very confident that we are in a great spot, and frankly, it's great now because it feels like we are starting to be a destination. The last 18 months, we separated from some of our legacy friends, and now, not only are we on our own, but we have a clear strategy moving forward. We are proving that we are implementing it with the six acquisitions that we have made over the last few months, and more in the pipeline, continuing to deliver the capability to integrate these acquisitions, and the capability to continue to motivate our customers to be with us. >> And the spotlight is on you guys, we'll be tracking it, thanks for coming on theCUBE, really appreciate it, Senior Vice President, General Manager of the Data Center Infrastructure Group, sharing his opinion here on what's happening and where's it going in the future for HPE. We'll be back with more live coverage with theCUBE, here in Las Vegas after the short break. I'm John Furrier with Dave Vellante, we'll be right back, stay with us. (light techno music)

>> Announcer: Live from Madrid, Spain, it's The Cube covering HPE Discover Madrid 2017. Brought to you by: Hewlett Packard Enterprise. >> Welcome back to HPE Discover, 2017 in Madrid. This is The Cube, the leader in live tech coverage, my name is Dave Vellante, I'm here to rap with my co-host, Peter Burris. >> Hey, Dave. >> Dave: Good couple a days. >> Oh, you know what I just discovered. I discovered The Cube is the antidote to jet lag. (laughs) >> That's right, when you get interesting people on. >> Oh, man. >> It pumps you up. >> Totally. Just unbelievable, exciting and it's all framed by... Well let's start where we talked about yesterday, we proposed that increasing what we're seeing in the industry is the new model of computing being established by Amazon and then the other poll, where it was known, we know that it's not all gonna be one cloud, it's not all gonna be a central cloud model, or essentialize cloud model. There's gonna be other places where data's gonna need to be processed. >> Dave: Well, that's what we believe. >> That's what we believe, and... There's physics behind that statement. There's legal regulations about data residency, behind that statement. But, we didn't know who was gonna step up and lead that other side and it's nice to see this conference indicate that HPE is in a position to help demonstrate, or help show the industry how cloud truly can go from centralized down to the edge. >> Yeah, and I think as I said a number of times, the strategy's coming into focus, you could debate it. You could say, "well, splitting it up was the wrong thing to do. "They lost their supply chain." But, Meg's argument, and then Antonio's argument always was, "look, we're gonna be more focused, "it's gonna allow us to do "a better job for our customers. "Yes, we're gonna be service's lead." They didn't say this. "Our margines are gonna be lower, "you don't have software anymore, "but that's okay, we can learn how to make money at that." And you know, the old HPE went through a similar transition. Kinda, got out of the HPEX business and got out of building it's own OS, and relying more on Microsoft and Intel and it made a lot of money. In those days. >> Peter: It did well. >> Did very well. It didn't invest under the herd regime the way it could have or should have and that hurt and then it spun out and made a lot of missteps but... Meg, to her credit, didn't make a lot of missteps. There was the initial entrance into the public cloud, they pulled back fast, they failed fast on that, good. Yeah, maybe there was some organizational issues early on but in general, the acquisitions have been solid, the strategy... >> And well integrated. >> And well integrated, absolutely. >> Peter: They've gotten value out of 'em. >> The strategies has been... I think clear internally, it wasn't always clear externally but they stayed calm about that, they didn't freak out about that. Helped that the stock price was going up a little bit, 'cause it was pretty depressed for a while. >> And shareholders weren't incontestable like they were for many years. >> That's right, and so, that gave them a little bit of time to bring it all together... It's finally here and I think Meg is stepping down at absolutely the right time. >> Or at a... She's stepping down at a good time, she's leaving a company that is much stronger than it was when she took it over. >> And that's what you want, one of the things I'm personally proud of when I left IDC it was in really good shape when I left, it wasn't a mess that I handed to somebody else. Had a lot of messes and IDC that I turned around as you well know. So, I think, I feel as though the company's in good shape and good hands. And, again, I think the... I don't know if you're a stock analyst or if you're pounding the table saying "buy this stock." 'Cause it is a relatively low margin business and there's a lot of competition, there's knife fights out there, it's not a high growth business, but on the flip side, it's clean, it throws off a lot of cash, they got a decent balance sheet and the customers love 'em. >> And that's the most important thing, it's the customers. Look, I... Disclosure, I actually did a significant consulting stint, here at HPE, right around the time of the compact acquisition and I saw what happened and for many years, the senior manager and team of HPE behaved as though they presumed that scale was it's own reward. If we get bigger, we'll find efficiencies, we'll find opportunities. Just being big, is the objective and I think that they have wandered in the desert trying to find those opportunities, that were the consequence of just being big and they never materialized. >> They weren't there. >> They never... It was like mirages on the horizon, they never materialized and I think if there's anything to your point that Meg has successfully done, is she's gotten the company to say, "don't chase the mirages, chase the customer. "Let's come back to what made HPE great for so long." And the idea that, if we stay focused on the customer and focus on technology, we can put them together in unique and interesting ways that will bind us to what customers are doing. And if you take a look at this event and the new messaging, and the things that they're focusing on it feels like, to me, that HPE is no longer wandering in the desert. You and I are smart guys, we are... Typically we can look at a company and we can see whether or not they know what they're doing and when you said, "well, you know what. "Maybe they had it all figured out inside, "and the rest of us couldn't see it." No, that's not the case. It was not figured out inside and that's what we saw but under Meg, it has become increasingly more figured out and the consequence of that... And it's been very, very plan full. She first was figured out and then she told Wall Street and Wall Street was happy with the numbers, and then she figured out and she started talking to customers when customers were there and now she's figuring it out, she's telling a broader market place. >> Well, and when she stopped by- >> And Antonio's got a great big story to tell. >> And both of those guys stopped by to see us. Meg spent 10 minutes with us, we were chatting here on the open mics and she was very good. Meg, one on one situation, in a small crowd is phenomenal. I've always said that about Meg. Not the greatest presence on stage, not a super dynamic speaker, she's not a Steve Jobs, obviously nobody is, but... But, man, is she credible in a one on one situation. One of the things she said to us was, "Y'know, we kinda got lucky..." My words, "with Aruba, we bought him "because we thought we could compete with "Cisco better, we bought him obviously "because it was a great business, a growth business," and boom all of a sudden, this intelligent edge thing hit. You sprinkle in a little Dr. Tom Bradicich and boom, off you go and you've got not only a great business, you got something that is becoming increasingly strategic for organizations. Great example, I mean the nimble acquisition. We heard, yesterday, Bill Philbin talking about, "well, when we got nimble-" was it Bill Philbin, no it was somebody else today it was... Alain Andreoli. He said, "we picked up nimble 'cause it was a great "flash company, but then we saw this inside thing, "we said, wow, we can spread this thing "across our entire portfolio." That's where- >> And the example he gave was: in six months, it's not running on... >> On three par and then it's gonna run... His goal, he says, "I'm not committing to this, "but my goal is by the end of the next year "it's gonna be running across the entire "server and storage and networking line." That would be a major accomplishment. If in fact, we'll see how much of this stuff is actually impactful to the business, how much it can actually save money you know, anticipate failures, I don't know. We'll see, it's AI, it's a perfect application. You guys have written a lot on the Wikibon team about AI for ITOM. >> Oh yeah, look... >> Dave: And this is a good example. >> I'm not the kinda guy, as you know, that gets all excited about technology for technology's sake. I like thinking about technology and how it's gonna be applied, more problems are gonna be solved and so as we, in Wikibon, started running around and getting all excited about AI, my challenge to the guys was: Well, show me the two concrete cases, where it's gonna have a material business impact and one of the most important cases is, it's got a material business impact and how IT runs itself because you cannot... IT cannot reduce the number of people it's got and take on these increasingly complex application, problems, and portfolios unless they get a lot of help and the best, most likely source of that help is by bringing a lot of these new AI technologies that are capable of taking concrete, real time action in response to what's happening within the infrastructure and the applications at any given time. >> Yeah, now... Couple other things, just observations. Ana Pinczuk came on, great leader, woman in tech, big proponent of advancing women's causes, especially in tech. She had mixed feelings about Meg stepping down, obviously you have a woman leader, I thought her comments there were... Were quite interesting, but she said, "But I am up for the challenge "to continue the mission." Which leads me to Antonio. Antonio is outwardly a humble guy, he may have a big ego I don't know, he's been on The Cube a number of times, but he certainly doesn't come across as a guy who's looking to get credit. He's a quiet but very competent leader, he knows the business very well. Really interesting to see what his relationship- >> Peter: Homegrown. >> Homegrown, which is 22 years at HPE, technology background, not a U.S... Born individual, now living in the U.S. obviously. But, somebody with international experience which is always been an attribute that's valued at HPE. Gonna be interesting to see what his relationship is with Wall Street. Will he be sort of a quiet leader that lets the CFO take front and center, which would be fine. Or will he slowly sort of advance, he's not been sitting on the earnings calls. I'm interested to see how he handles it, or he may just say, "you know what, "I'm gonna go execute in the business "and let the results speak for themselves." So, I'm kind of curious as to how that all... All plays out. It's a big job, it's a big role as you pointed out with me the other day. Big role for him, big job for him. Serious opportunities to make a mark in the industry. >> Again, and you raise a really great point. Meg had a very good reputation on Wall Street, the knock on her when she came on, was she didn't know customers. Antonio's got a great reputation with customers, you're asking the question: is he gonna get to know Wall Street? A great CEO has to be able to take care of customers and owners He seems very... Look, this is a, this whole simplification of how they're gonna bring cloud technologies to where their data's gonna require is apparently, based on what we heard, in large part Antonio's brain child. He conceived it, he invested in it, he nurtured it, he took risks for it, he put some skin in the game and now it's coming to fruition, that's great, and he's got customers lining up behind it. We'll see, this is another place where we'll see, but I don't think that there's... There's no reason to suspect, just looking at Antonio's track record, why Wall Street would abandon him. On the contrary, there's reasons to suspect that he will also be able to develop that set of skills that Wall Street needs to do their job. But, clearly this is a guy that's gonna turn on a lot of customers. >> Yeah, and as I say, it's gonna be interesting to see what his relationship, like look at a guy like Frank Slootman, who had a great relationship with Wall Street, everybody loved him 'cause he just performed but he's a hard-driving, in your face kinda guy, who developed close relationships with the street. It's gonna be, as they say, I gotta watch that, to see how Antonio interacts with them. I think it's important to have a relationship with... >> Peter: With your ownership, yeah it usually is. >> And I think that's the one big question mark here is, where has his presence been there but so we'll watch and I'm confident he'll step up to that. Okay. Let's see, The Cube... Next week? Cube-con? >> Peter: Yeah. >> Next week in Austin. Right, so development. You'll see The Cube expanding way beyond it's original infrastructure route, so obviously HPE Discover, big infrastructure show. But we're at Amazon Reinvent this week, it's our big cloud show. We obviously... All the IBM shows are being consolidated into one show called Think. This year The Cube will be there. But CES is gonna be January, we were there last year, likely be there again. Cisco live is on the radar, we're gonna be at Cisco live I think both in Barcelona and most likely in the states this year, so that's another big thing. A lot of developer shows, Docckercon, Kubecon, working with the Linux Foundation, developers are really the lynch pin, developers in cloud. Really big areas of growth. IOT, some IOT conferences that we're gonna be doin' this year. Obviously, our big data heritage we still do a lot of work there, so. It's been an unbelievable year, I think a 125 shows for The Cube. TheCube.net, new website, our new clipper tool, you see the clips that come out, so. A lot of innovation comin' out of Siliconangle Media, check out Siliconangle.com. Peter, the work that your team is doing on the Wikibon side, Wikibon.com. Unbelievable amounts of research that you guys are crackin' out. Digital business, AI, AI for ITOM stuff that we talked about, we still do some stuff in infrastructure, true private cloud. >> New computing architectures, memory based computer architectures. >> So, fantastic work there and... Yeah, so we're looking forward to another great year. Thanks everybody for these last two days, thanks to the crew, great job. Everybody at home. We're out. Dave Vellante for Peter Buriss from Madrid. Thanks for watching. (upbeat music)

>> Announcer: Live from Las Vegas, it's The Cube, covering HPE Discover 2017. Brought to you by Hewlett Packard Enterprise. >> Welcome back everyone. Live here in Las Vegas is SiliconANGLE's CUBE, our flight ship program. We go out to the event ... I'm John Furrier, My co-host David Vellante. Been watching 3 days of wall to wall exclusive coverage of Hewlett Packard Enterprise Discover 2017. Our seventh year covering HP Discover, now called HPE Discover. Dave, we've covered them all. Now we're doing some European versions. I missed the last one in London, but you were there. But you and I have covered HP Discover, Now HPE Discover, for now our 7th year. Interesting times as they say. >> Dave: I'll say. >> We live in interesting times. HP's been getting hammered. Certainly the competitions been slamming them, The press has not been kind to them, People think they're irrelevant. Wall Street just slammed them, so Jim Cramer on CNBC, really taking Meg to task, But we always come back and we feel differently when we're actually at the event. When you actually talk to the people in the company. They got a lot of cash on the books. They've got a lot of customers. They got technology. They're doing the vendor R&D that you guys have pointed out in your recent, ground-breaking, true private cloud research market sizing you put out there. Astonishing change. And I think, my gut is, yeah, certainly HP's had some changes in corporate development, but the reality is that they now have set that up and the market is exploding. It's got the cloud market that's coming on premise. The private cloud business is taking off. >> Yeah, you know, John, we have documented this over the last seven years, and it's like the Band-Aid is coming off slowly, and it finally feels like this Discover (ripping noise) is finally almost there, right? Because you remember the split, and then the spin merge, and then the software business, okay. This has been the cleanest Hewlett-Packard Enterprise Discover that we've been to. There wasn't a lot of noise about software, they had a little separate event going on. Not a lot of talk about the spin merge, a lot of talk about Pointnext, I think that's good, I like their branding. >> It's like they cleaned up all the rooms in the house, and the outside's got a new fresh coat of paint. I got to say, last year- noticeably, the branding, which we were kind of originally critical on two and a half, three years ago; the show was beautiful, the branding's amazing this year, again, they're going to that next level, you're starting to see the clean messaging, it's as if the ship has been kind of re-readied. And we said that last year, but to be fair, we did say last year that they got to prove it to you, They got to show the results. And we were talking with Alain, who runs their data center infrastructure group, he agrees; the metrics that all the other analyst firms are using out there are irrelevant, and he believes that new metrics have to be redefined. This to me is the biggest story of this show, is that HP is eyeing a new sea change and I don't think people understand it. That's my personal opinion. >> I think you're right, I mean, the narrative on HP is, oh, they're just a hardware company, hardware's dying, what are they doing, et cetera. Well the reality is, people have been telling me the hardware business is dying since I've been in the business. The good trend for them is, the hardware business is consolidating. Of course, the tough news is, a lot of it's going to the public cloud. But as you've been pointing out all week, there's plenty of growth, on prem, in what we call the true private cloud. >> That's the biggest discussion of the show here, is the impact of the Wikibon research, the true private cloud report that you guys put out, I want to spend some time with you on that and ask you some really pointed questions. What is the true private cloud report that Wikibon put out, and what does it mean, why are people talking about this research so much here? >> So three years ago, the team at Wikibon started to quantify this notion of private cloud, and we looked at it and said, ah, this is cloud-washing. Really this is just virtualization. What we really want to see is, on prem, mimicking,to a substantial degree, the public cloud. Orchestration, certainly, >> Agility, >> Management, agility, pay-as-you-go, those types of things. Okay, so, the genesis of the market move is something that we heard from Alan Nance, our friend, several years ago at the Vertica user conference. He said- he was, at the time, CIO of Philips- he said, "my CEO said 75% of our spend in infrastructure "is non-differentiated, so we're going to eliminate it, "and everything we're going to do is going to be as a service." That was three years ago. So, massive change, and Philips went out to all of its suppliers and said, this is what were doing, if you can't do business with us this way, you're out. And remember, we wrote a bunch of stuff about it, and Alain came back, okay. So they were one of the early folks making that move. Everybody is now doing that. So what's happening is, there's going to be $150 billion that is going to vaporize out of non-differentiated heavy lifting. And it's going to go in two places: it's going to go into the public cloud, and it's going to go to what we call true private cloud, and that true private cloud business is going to grow to be about $250 billion within the next 10 years, okay? So that's a long term market forecast. >> So the addressable market for true private cloud is what, 260, or 250 plus- >> 250, just under $250 billion. Which is growing faster than infrastructure as a service, public cloud, and it will ultimately, we believe, be larger than that IAAS business. Not as large as SASS, that's going to be the biggest public cloud market, but it's a huge opportunity for companies, and it's a land grab, and it's a dogfight. >> So, I want you to explain this, 'cause I think this is important, and it took me a couple minutes to click on this. You had mentioned that- there's a point in your slide on that deck, the size of the market is huge, it's $250 billion, that's a lot of cash. But the TAM component of labor costs, now, this is the big fear, everyone thinks, "oh, my job is going away, AIs and auto ate my job away", but yet you're saying $150 billion of cash costs are going to shift. >> To where? >> Absolutely. Okay, so a couple of things. What is going to shift? Today, there's so much IT labor spent on provisioning servers, provisioning storage, tuning systems, tuning databases, all this stuff that can be now hyper-automated, as the CEO of Wipro said, so that's happening today, as we speak. So, vendor R&D, i.e., R&D money that goes into appliances, boxes, new systems, new software, is going to replace and automate out those non-differentiated tasks. So if your job is provisioning LUNs, you really want to re-skill. >> So what's that mean for the customer in HP, and why is that important to this show, why are people talking about this report, what's the relevance? >> Because everybody's talking about their digital transformation. And how do you fund a digital transformation, right? You've got to spend all this money to become a digital, data driven company. Well, where do I get that money? >> John: Real cash involved, basically. >> Yeah, there's cash involved, so how do I do that? Well, I have to shift away from things that aren't driving value for my business, and eliminate that, and put the resources in things that are driving value. Application development, new development paradigms, digital transformations, new partnerships, and that's where the money's going. And so again, if you're an IT infrastructure patch management pro, you either have to re-skill, or you're going to be out of a job. >> Did you see Kate Swanborg light up when we talked about the private cloud, 'cause that's exactly what was her point. >> Yeah, well they're seeing it at DreamWorks, because essentially what they're doing, they're changing the game in animation. My prediction is, they're going to be able to pump out many more movies within a year now, and that's going to make them more competitive. I think that's part of the reason why she didn't want to dig too deep into what they're doing, 'cause I think they see it as a competitive advantage. >> Yeah, and she did tease a little bit out by saying that the creative people are so much more productive, she mentioned the dragon. Alright, other impact: Wall Street. We see a lot of analysts kind of taking HP to town. We know the competition, we talked to Michael Dell, he came on The Cube; Meg stopped by but she did not come in, that's notable for the folks out there, Michael certainly sits down with us; Michael says, "hey, I got plenty of cash", when I bring up the debt thing, he thinks bigger is better, HP thinks smaller and nimbler is better- >> This is going to be really interesting- >> Your thoughts on that as we move forward? >> Look, there's two, sort of, bromides, right, with Wall Street. First disappointment is never the last; uh oh, that would be bad news for HP, but Meg said, "we have bottomed in terms of margins, margins will improve." And a big thing's going to happen next month, HP's gets the cash from the spin merges, right, that's going to happen, and that's a big deal because their balance sheet- they're going to have $12 billion in cash on the balance sheet, which will match their debt, and they're going to start to be acquisitive. Dell EMC can't be acquisitive right now. They got to retire that debt and delever. >> We saw SimpliVity and Nimble, front and center, a lot of good success with the software there. >> Yep, so this will be really interesting to see, is this the last disappointment, is this a buying opportunity? >> Yeah, we're going to watch it, and- >> So if I had to bet, if I had to bet I'd say it is a buying opportunity, based on what I'm seeing here. It's much cleaner, leaner, and they've also restructured the sales organization to a great extent, so hopefully the execution's going to be better. >> Well, I'm not that generous, I think I want to see more results, I think- >> I know, but if you see more results, you're going to miss the upturn. (laughs) >> Well the question, to me, is- I do believe that they have an advantage with the true private cloud report you guys put out, I think that validates the shift of spend in IT, which validates the fact that it's growing, not shrinking, and yes, people might not be buying boxes but they're going to be buying IT. >> And the big thing is, well you know, John, the street right now wants growth. That's why Amazon can make no money and still crank, right? But if HPE can eke out any growth and start throwing off cash again, I think the stock is going to do just fine. >> Other notable things; obviously, the outsource business is gone, Pointnext is the solution, we had Ana on from Pointnext, she was the leader; other notable thing is the absence of Chris Hsu with Micro Focus, we had a chance to ... saw him at the Foundation Room at the Mandalay Bay the other night, had a great conversation. Apparently, they're not included in HPE Discover because they're a separate company. They're apparently doing really well. >> Well Micro Focus is killing it, right? I mean, their stock price increased faster than Facebook last year (laughs) so, that's an interesting play. I think it's a new private equity play, John. You know, the private equity play used to be, suck as much cash out and then leave the carcass. I think the new private equity play is, invest, and then take it to market again, and try to get that value from the market, so increase the value. >> I think you're onto something, and this is why I've always been complimentary of HP's corporate governance game, because I think that private equity is all about taking things private, and being nimble, and then going public again, so- >> And Micro Focus, in my opinion, picked up those assets for short money. >> Yeah; well, HP owns a big part of the company, so- >> Yeah, of course, but that's why they did the deal, it's short money, and they wanted the cash, and that's why they had to put the security piece in there. >> Alright- Dave Vellante, I'm John Furrier here breaking it down, ending our three days of exclusive coverage, at HPE 2017. Look for us at Madrid, the show there; I won't be there, Dave will be there; and again, HPE Discover, enjoy the rest of the conference, thanks for watching; this is The Cube out, thanks to the team and everyone here for a great job, see you next time.

>> Good Live from Las Vegas. It's the cute covering knowledge sixteen Brought to you by service. Now carry your host David, Dante and Jeffrey. >> Oh, >> welcome back to knowledge. Sixteen everybody, this is the cubicle wall to wall coverage. We got the events. We extract the signal from the noise. This is Day one for us will be going Three days of knowledge extraction from knowledge. Sixteen. Ray Wong is here. He's the founder and principal analyst and chairman of Consolation Research. Up and coming Smoking Hot research company. Ray, Always a pleasure to see you. Thanks for coming >> on. Excited to be here, man. It's been a world one week of events, so >> I'LL say So you were You were down. It's Sapphire, right? You were over it on Tampa Amplify And >> I'm Austin s Wait after this race, a >> normal week for you >> It's a normal week for all of us. >> So impressed You were telling us off camera that you were at one of the earlier knowledge events down in San Diego. So you've got a lot of experience with this company, >> you know, it was in a tent. It was outside they had detected. I think it's like a park. I'm not even sure what it was. I just But remember, there's one one hundred fifty people next. There's like five hundred people. Three years later, it's pretty wild. >> So they've come out of the blue and really, you know, escalated a lot of momentum. The latest billion dollar software company with a plan to get to four billion. So stepping back a second just looking at the software landscape, one has to be impressed with the progress that service now is made. What's your take on the industry and service now in particular? >> Well, I think what people don't understand this service now is a platform, right? There's a business model platform or the way that we used to look at paga or the way we used to look at a lot of those companies that were actually sit in the middle. That orchestration what's changes? Because everything's in the cloud. What we now have the ability to abstract orchestrating doing away that we've never seen before, right so you can take specific business problems. Take the heart of what's actually happened on the idle piece. Use it to not just manage the process, but also do the analytics and the monitoring. So when we get the things like Coyote coyotes really about having a set of smart services and being well. To put that in the construct is a lot of the opportunity that we see going forward >> so high. So I said three years ago in the Cube after I saw the platform capabilities and said, Wow, this is a collision course with sales force Investor's Business Daily wrote a article today. Collision course of sales for so glad they caught up with Theo. But But, I mean, it's you could kind of see it coming together. And now you Frank lays out this vision this morning. Have you got the AARP estate, the C R M estate and tea or a service management Rather kind of bridging those two. How do you see it? >> No, we definitely see this as a platform play. Now here's what's interesting is the lots of the developments, and you see this all the time has been happening in the APP to have side of the House package. APS have kind of been at a standstill for innovation compared to what's going on on the customs side. And so every so often we see that flip on platforms. This is the beginning of that flip, more than one person said. I it is going to be the end of the affair, right, because we're going to put all the intelligence into the interaction. You don't have to go to the specific app. No. And the fact is, what becomes important is the ability, the orchestration, the intelligence, the recommendation and what you want to build to get to the part where I'm making the right set of recommendations to augment the next set of processes. That's what gets really powerful and these platforms that are emerging on, What's the next set of clouds? That's going to be where we're going to see a lot of this advancement. >> So the FBI essentially becomes the product. Is that kind of? >> It's the orchestration of the AP eyes, the way the context was delivered against those AP eyes and more importantly, how we actually pulled together those journeys, like a couple things that we talk about time mass personalization of scale, lots of context, right, so rolls relationship, identity weather, location, time, all important, Then choose your own adventure journeys the ability to actually abstract different processes from different places and bring them together, and the more importantly, we call intention driven design, which is. I'm gonna give you three or four choices. Learn over time. Take that machine learning. Then apply that the next set of recommendations and then start building against that. And that power sits on the network. That power sits in these new platforms. >> So you're here speaking to the service now customers about customer experience, right? It's something we hear a lot about. Your an expert in that in that space. What did you say? What was the reaction? What was the feedback? >> Well, I think the important thing is we're seeing new business models and you hear me say this before it's we're in a post sale on demand, attention, economy. And what that means is everything after the sale is what's happening right now. That's the service. That's the experience. Peace. The on demand pieces were accessing smaller, smaller slices of a product. Maybe not even a product, a service, maybe not even a service, and incite maybe not even insight and experience. And then, more importantly, it's an attention to come. If you're not capturing my time and attention, which is mind share, or if you're not saving me time and money, I don't care. And That's what we're in. We're in. These business moms are built around. This is interesting. Came out of the Oracle Marketing cloud shows Well, same thing. Just smaller and smaller slices of attention based on the way you interact with all the other applications you have. You don't have time to give somebody the big story. You've got to get him when you can. They could be standing in line. They look at their phones, are in the middle of their kids, switching innings at the baseball game. And you got to get in that little tiny video that in between time is so important because you don't close there. You lose him, right? And it's not for something really big. It's move them along the needle down. The journal. Correct. >> What do you make of this, Dave? Dave Wright was just not talking about the new state of work. IBM has been talking about a new way to work in. He is kind of running the collaboration, you know, group. Now you you talk about millennials and how they work. What are you seeing in state of work? >> Well, a lot of the research we're looking on the future of work is by one of my colleagues, Alain Le Pastilles, and what he's been really looking as this shift in terms of conversations as a service. He's been looking at the shift in terms of intelligent collaboration. Right, and all this stuff is actually leading the point where we're actually using technology to augment ability. Teo do decisions had a lot more automation than we had him before. But then cognitive assistance pop up right and they help make a smarter. And they learned from our different our actions and all that's starting to come into the workplace, which is exciting and a little bit creepy and scary at the same time. >> So what's the What's the What's new with Constellation? You guys are growing. Bring it on. New analyst Cranking out Want to research? Your event keeps growing? Give us the update on Constellation. >> You know, I think the big thing is this digital transformation story we've been talking about for the last five to six years is huge. The next set is really not about transformation. It's about finding growth in times where there is no growth. That's where we're going to talk about the next five years at our conference. Really? Talking about what are those factors, right? We gotta jump start growth. Global GDP is growing two to three percent at best. Every company has a target of like five to ten. Someone's gonna lose, and it's gonna be very interesting. >> So you think that growth is going to come through productivity improvements or investments in technology? Actually, Dr sort of new productivity levels were taking away from >> someone else. I think we're taking me for someone else. That's what I'm really scared about, that they're smart growth that's sustainable and helps people with the jobs and the job transitions. And there's what we've been doing, which a lot of destructive Cross, which is actually limiting all of the jobs and actually making it harder to grow in the long run. >> Well, so yeah, we've talked about this on the Cuba lot machines replacing humans, which they've always replaced humans. But it seems to be now happening at the cognitive level. That's scary. I know you guys to the valley, wags. You know the seasonal nervous right now, You guys, you more sanguine? Then the VCs air >> well with these three big areas where we see a lot of investment. Deep learning happens to be one of them, right? We see a lot of medicine going off. Some of the smartest people I know are all focused and on deep learning. Very interesting thing. If you look at that university, California, Irvine there's a whole department around. This artificial intelligence that just lifted itself up became a private corporation. So there's very unfeeling things there. There's nanotech, which is also some erasers, things on the material science piece that's also playing a big role. And then, of course, there's stem cells in the biotech piece. Those three things are converging, and you know it's more than just building out the Star Trek roadmap that Apple's been doing. It's a lot bigger than that. There's some big societal shift that are happening. >> What, what's next for you? You say you're heading Teo. That's sweet, but we're So we work. We find Ray Juan. I'm >> off this sweet world, Max. There's a monetary it next week. There's a whole bunch of other events picking up in June as well as you. You're going to be at them, but I think we do our retreat every year at the end of the year. May June, we're going to be at Stanford, the faculty club. All the constellation folks get together on. Then we go back out into the field and it's a crazy summer as well. I don't know when this stops making, so yeah, you could always find him on Twitter That that's but I looked for you guys when I'm where you're at is where the events are. >> Well, hopefully our past will continue to cross. We love having you in the Cube was a great guests. Really appreciate your time. Thanks for coming on. >> You know, Thanks for having have a >> great conference. All right. They've travelled, right, everybody. We'LL be back after this short break. This's the Cube or live from knowledge. Sixteen, right? >> Service now is the

extracting the signal from the noise it's the cube covering vmworld 2015 brought to you by vmware and its ecosystem sponsors now your host John furrier and Dave vellante okay welcome back everyone we are here live in San Francisco for vmworld 2015 SiliconANGLE media's the cube star flagship program we go out to the event and extract the students from noise i'm john furry the founders looking angle to of my coast and partner david lonte co-founder Wikibon calm slipping angles research are my next guess is sanjay poonen executive vice president general manager of vmware's end-user computing great to see you again welcome back to the cube John's pleasure to be here but I got to say one thing I'm waiting for the day when you have the tie and dave has the non-tidal I mean seriously you gotta quit that purple tile no I'm just getting a pleasure to be on your show I happy to wear tie but people would know it's phony baloney but I'm happy cape looks good d looks good in the neck but I'm California gotta be chillax a little bit here are you relaxed you feeling good I'm feeling great okay so you get a big body through your anniversary at vm work this month Wow excited to be here at the show so choice so give us the state of the union au CSAP to vmware now two years air wash huge acquisition we saw your an event you had here in San Francisco with all the top customers you have big name box big time player is working with you guys cloud needs a theme that you guys are really driving hard what's this all about where are we right now in your group and user computing is all the rage developer attraction and DevOps kind of connects the dots where are we with this yeah no I think it's been a fabulous two years we've hired a fantastic team I talked about this in my last show your some of the new people that joined us summative on Bob Jules no awasum were some of the people we promoted from within kit Kohlberg Eric Freiburg and then many of the people in the field we really really put together I think the best end-user computing team in the industry bar none it always starts to the people you know my people values where it's all started secondly we really started to innovate on product that differentiates us from the competition and made the bold move and mobile because mobile is the new desktop we joked internally that you could end user computing without a strategy you got that Josh yes yeah you know so that's in essence what we've done to be invisible and taking up the complexities away that's really the key will you yeah absolutely and making yourself relevant to where the world is going in this digitization of the workplace so we see this as a phenomenal opportunity for us to become the de facto brand in a Switzerland set of proposition you've got apple iOS you've got google android about windows microsoft OS 10 VMware's propositions via Switzerland type of company that can manage and secure all of those devices in very transparent fashion then lead and lead with that mobile story right I mean isn't that part of it yeah no absolutely mobile is the new desktop so it does become the key outcome the people are looking for and our proposition that we talked about last year working at the speed of life being able to go all the way from desktop to Tesla many of those things are really starting to resonate now as we talked to CIOs and so you know 10 at 2010 when we first did the cube six years ago Palmer its laid out the whole manifesto and user computing had a lot of disparate parts some of gods and have left explain to the folks out there and clarify the positioning of end-user computing visa V all the turmoil in the marketplace with customers cloud has got obviously hybrid cloud people I try to get their arms around that virtualization a lot of plumbing going on with SD and Isis and growth there a lot of stuff going on underneath your layer that's going to affect you how do you manage that clarify the positioning and then talk about how you respond to the growth that's going to come out of underneath you and the infrastructure yeah I think Paul Maritz had it right down he's one of the visionaries of our time and as he talked in 2010 that was around the time we actually coined the term workspaces the inwards 12 companies had coined the term mobile workspace and now many of those technologies are coming to bear so much of the demos that Paul actually noah was here at the time Steve Herod showed you know I'm actually sort of sitting on the shoulders of many of those giants in terms of driving this so the time has come now where the desktop virtualization market now is less costly and less complex so we've taken cost and complexity out and that's why now we're taking market share from Citrix and other players in that market in the mobile place we weren't moving fast enough we acquire the leader AirWatch in mobile security and we've now created an ecosystem out of that of the leading application providers that are all partnering at a Salesforce workday Adobe SI p everyone in the app space the telco providers players like a TMT vodafone singtel partnering with us and then the security players like palo alto networks of all embraced AirWatch and then we actually created some blue technologies that really bring the desktop and the mobile together like identity management identity as a service is becoming one of those very critical like critical items that's a life blood that ties desktop and mobile together because you're your device now becomes your second factor of authentication right you can use your fingerprint or retina scan all of these now really coming in a mature fashion so we're seeing huge growth out of particularly AirWatch side I think sixty percent last last quarter path to profitability I believe in 2016 no Pat's talking about it Carl's talking about at jonathan's talking about Joe Tucci's talk of everybody's talking about your business so what's driving that growth you just talked about that ecosystem that's got to be a lot of the leverage but maybe help us unpack deck wrote a little bit I think it has been and I'm biased so obviously next to VMware being acquired by emc one of the best acquisitions of modern you know last 18 months in enterprise software we were diligent just the same way EMC a treated VMware to be somewhat separate and independent we kept AirWatch fairly dependent for the first six months and gradually began the integration because there was a motion that Alain de Biron John Marshall had in the context the way they ran their what's that we did not want to break and then over time in the second half of last year in the first half of this year we began to get two parts of VMware that we do well in to play the value side of big deals so we start to participate in elas now where larger conversations with customers the big accounts the volume site are the transaction partners our channel partners 75,000 partners of VMware now have an opportunity to take this mobile solution as a door-opener the CIO but remember now we're bringing together horizon on the desktop site air watching the mobile side with glue types of technologies like identity so the proposition just got like one plus one equals like 111 and that's a huge often you mentioned he'll I mean huge year renewal year in 2016 so that's going to be a tailwind it cloud-based solution around one of the reasons with why I watch it was there with a leader in cloud-based mobile John and Alan were very smart and creating a cloud-based solution not to say that they can't deploy on premise but its cloud first so think Salesforce in a world where everyone else looks like a siebel so we were very astute basically saying we want to look at a way by which the subscription revenue starts to become a flywheel yeah so I want to ask you about business mobility that's a theme that you guys have been big big on your ace application configuration I think it's called or yeah happy creating for the enterprise you had Salesforce box cisco workday and a bunch of other partners showing nsx identity the hard stuff the stuff that you will think about i was there at the event and I want you to compare that visa V some news at hit today with apple and cisco partnering on iOS traffic and prioritizing traffic for iOS apps on cisco hardware yeah which is essentially deep packet inspection looking at the routes and giving them a fast lane if you will that seems to be the trend this consumerization where new Apple examples saying okay differentiate with apple stuff versus Android are the business people thinking about that that way are we looking at nsx innovating under the hood explain the consumerization of business mobility why that's relevant and how hard it is when some things that you guys are doing we coined the term john consumer simple meets and a prize secure and you hear about that more tomorrow in my keynote which i encourage all your viewers to come to tomorrow the clock at nine o'clock there's some very special in huge news hint at and little bit but let's bring that together because who is one of the best at consumers simplicity today Apple okay and we basically are Google and much of what they do too but we took basically a strong partnership with apple and dialed it further and and his apples talked about publicly they have a group of enterprise partners where one among a very few 30 40 50 that they're working with in the EMM space and we investigated meaning enterprise mobile manager okay guy and as we we did that we also then looked at all the apps players that were very key to this mobile cloud ecosystem box you know native people exactly these are folks who are building a cloud-based mobile set of applications and we signed all of them up to this need of integration called app config with enterprise that the device operating system vendors like Apple and Google and us invented now what's happening is you're starting to see that ecosystem getting stronger so actually it's awesome because the apps that were announced today in the cisco apple announcement were WebEx spark the same applications i build laughs and fig yes for so we actually copying you guys well no they actually joining the ecosystem so i think it's awesome when you have an IBM in the ecosystem of vmware in the ecosystem now is cisco on the ecosystem it's amazing there you know there's lots of players we partner with SI PE last you're gonna see us doing more with them so our goal is to ensure that the lead players whether it's an applications world whether it's the networking world what's the security world start plugging into appropriate platform I remember the proposition of vmware though is to be Switzerland so we have to build strong relationships with apple with Google and Microsoft Windows 10 because they're all viable ecosystems in the post-pc world well of course you want to be neutral because you want to have you know rising tide as you said but your announcement also highlighted box docusign was in their AT&T you talk about some cool things I can split outspent reports by having an iphone so the rant random example but the but it highlights a new way of doing things right but i thought i asked her the question those are cloud native companies mean box workday mean they were born in the cloud if you will but what about the enterprises that aren't they have a lot of legacy that's a problem right so it's not easy to be cloud- talk about the challenges there and the opportunities how you guys are addressed i love that word because the each side of that coin is a challenging the opportunity so when we go to traditional enterprises they have client server applications or all browser applications that they want us to real deployment and you'll hear my keynote tomorrow a very key phrase any application on any device so you've got a client-server application and old browser application or native mobile app we can deliver into any device you pick your device you've got a traditional windows laptop at in client a mac OS and Android and iOS or a tesla with running some kind of you know maybe android inside it we can deploy those applications on any device and that requires the combination the technology we have from a horizon and AirWatch so what do we do in those traditional applications we virtualize them we can either virtualize the desktop or the app and deploy them onto at incline we think john the future is thin client computing where you know your glass that you present on is going to be like the glass the Corning makes us projectable and this phone becomes your remote control into your entire life so I love this conversation because there's so much talk in this business Gardner has bimodal IT IDC has the third platform and and but what you just described is doesn't doesn't say old stuff over here and new stuff over there it says extend the client-server apps the 19-year old legacy apps and allow them to participate in this cloud native cloud native doesn't mean throw away the old stuff and start with a blank piece of paper I wonder if you could first of all do you agree with that and what if you could talk about that as a strategy it's a very important strategy because if you are a new company like an uber or Netflix you don't have legacy infrastructure you can start completely new on a cloud native all cloud apps but for the majority of global 2000 companies they have existing applications client-server primarily some running in all browsers ie8 ie9 and you've got to bring those apps to the new world so we see the world moving clearly to mobile and html5 long term but there's still going to be many of those applications 3d applications for example you go to many of our large manufacturing customers they've got jet engine parts or parts of various different manufacturing processes that are still not yet html5 or mobile apps so bringing those old world of apps to a Chromebook or to an iOS device is something we can magically do but for these native mobile apps you want to make it one touch so the benefit of what we had with app configures now with one-touch secured by air watch you can now automatically get access to Salesforce or DocuSign or box this is the best of both worlds for the new apps single touch easy seamless access those apps for the old world world of apps you can seamlessly virtualize them in other words abstract them and then send them over to the ecosystem is critical in all of this and and a lot of times we see this trend toward vertical integration we watch what Oracle's do and you see what Amazon's doing the e così i'm hearing the ecosystem is still vital to your strategy absolutely and the ecosystem takes various different forms the device operating system players the system integrators the security players people like Paul all tanks and then in this world apps players are really really important I talked last year about SI p we had many new apps in that and you know just a small little hint tomorrow at nine o'clock you're going to see a major ecosystem player on stage with us never in the history of the world I don't want to blow the cat out of the bag and I want every one of your viewers gonna be big my lap gonna be huge so you got to come there okay so ecosystem just real quick profitable good economics people making money how's that economics work yeah you know via MERS all about ecosystem right you go to the show floor and vmworld has got thousands including companies that compete with us what you got to do is ensure that you're open and you allow even competitors to integrate with you ok I've got competitors that I compete with in my part of the business they've got to integrate with vsphere vice versa I've got to make sure that I can play in a heterogeneous world with a variety of companies that might compete in the STD sea world and part of the magic of doing this is to ensure that the ecosystem is proliferating but you have some platform player that's what's made vm VMware successful 600,000 greatest infrastructure company balls out I have box again to wrap here so I have a final question then I have a final final question because I need to get two questions in first api api f occasion as a term that we've been kicking around the openstack cloud community coined by google's Craig mcluckie on the cube it's been kicking around but API making your api's available if you overdo it you could cause some problems but you're mentioning interacting with of all these apps your take on that and the second final final question is how do you view DevOps do you care you're looking down at it saying go faster or you're agnostic what are you guys doing specifically around this API ification trend yeah i mean the devops in particular they're both of a related questions let me cover them in sort of a quick sequence everything that we should do as a platform you're a platform if you create a service-oriented architecture that allows others to plug into you so when we talk about app config for the enterprise part of what we did was created an API set with the device operating system players like Apple Google is an open it's an open standard that all EMS can can embrace and now then we natively integrate sales force or workday or essay p into that so the api's are absolutely important in every layer of vmware whether it's the desktop side was the mobile side with its SDDC we live by those principle as a platform company no doubt then as you think about DevOps there's aspects of now the management complexity in the cloud world that needs rethought because this isn't systems management the old way in which the client-server were looked at it DevOps really has a very key way which you can go from tested Evra production where you've got multiple clouds you've got federated clouds and we've got to make sure and this is something that we use internally a lot of our AirWatch solutions that are deployed because they're cloud first have DevOps built into them build an integration built between AirWatch and the management tools of vmware their customers who asked us to integrate in the service now this whole management platform the next generation mobile cloud management platform is going to have DevOps at the key at the heart of it and we think that's a huge opportunity for VMware and for our ecosystem so yes or no question senior management's behind DevOps we are absolutely behind everything that drives in the ecosystem DevOps is one key part of it but there are many other aspects this is one key part where the management platform is going and we're very very committed to making that I know you got to run to your meeting thanks so much Sanjay put in the general man and your EVP of then use a computer big announcement tomorrow watch his keynote tomorrow at 9am I nair on SiliconANGLE TV the cube is going to be covering all the keynotes then keep watching we'll be right back more with live coverage from San Francisco vmworld 2015 this is the cube with John fair and Dave vellante we'll be right back thanks John