(upbeat music) >> Announcer: Live from the Javits Center in New York City. It's the Cube. Covering Inforum 2017. Brought to by Infor. >> Welcome back to the cube's coverage of Inforum here at the Javits center in New York City. I'm your host Rebecca Knight along with my co-host Dave Vellante, and Jim Kobielus who is the lead analyst for Wikibon in AI. So guys we're wrapping up day one of this conference. What do we think? What did we learn? Jim you've been, we've been here at the desk, interviewing people, and we've certainly learned a lot from them, but you've been out there talking to people, and off the record I should say. >> Yeah. >> So give us. >> I'm going to name names. >> Yes. >> If I may, I want to clarify something. >> Yeah, okay, sorry. >> I said this morning that the implied valuation was like three point seven, three point eight billion. >> Rebecca: Okay. >> Charles Phillips indicated to us off camera actually it was more like 10 and a half billion. >> Yeah, yeah. >> But I still can't make the math work. So I'm working on that. >> Okay. >> I suspect what's happened, was that a pre debt number. Remember they have a lot of debt. >> Yes. >> So I will figure it out, find out, and report back, okay. >> You do. >> So I just wanted to clarify that. >> Run those numbers okay. >> I'll call George. >> Kay, right, but Jim back to you. What do think is the biggest impression you have of the day in terms of where Infor is? >> Yeah, I've had the better part of this day to absorb the Coleman announcement which of course, ya know AI is one my core focus areas at Wikibon, and it really seems to me that, well Infor's direct competitors are the ERP space of all in cloud it's SAP, it's Oracle, it's Microsoft. They all have AI investments strategies going for in their ERP portfolios. So I was going back, and doing my own research today, just to get my head around where does Coleman put Infor in the race, cause it's a very competitive race. I referred to it this morning maybe a little bit extremely as a war of attrition, but what I think is that Coleman represents a milestone in the development of the ERP cloud, ERP market. Where with SAP, Oracle, and Microsoft, they're all going deep on AI and ERP, but none of them has the comprehensive framework or strategy to AI enable their suites for human augmentation, ya know, natural language processing, conversational UI's, Ya know, recommenders in line to the whole experience of ya know inventory management, and so forth. What infor has done with Coleman is laid out a, more than just a framework and a strategy, but they've got a lot of other assets behind the whole AI first strategy, that I think will put in them in good steady terms of innovating within their portfolio going forward. One of which is they've got this substantial infusion of capital from coke industries of course, and coke is very much as we've heard today at this show very much behind where the infor team under Charles is going with AI enabling everything, but also the Burst team is now on board with it, and the acquisition closed last month Brad Peters spoke this morning, and of course he spoke yesterday at the analyst pre-brief, and so David and I have more than 24 hours to absorb, what they're saying about where Burst fits into this. Burst has AI assets all ready. That, ya know Infor is very much committed to converging the best of what Burst has with where Coleman is going throughout their portfolio. What Infor announced this morning is all of that. Plus the fact that they've already got some Colemanize it's a term I'm using, applications in their current portfolio. So it's not just a future statement of direction. It's all that they've already done. Significant development and productization of Coleman, and they've also announced a commitment Infor with in the coming year, to bring, to introduce Coleman features throughout each of the industry vertical suite, cloud suites, like I said, human augmentation, plus automation, plus assistants, that are ya know, chat bots sort of inline. In other words, Infor has a far more ambitious and I think, potentially revolutionary strategy to really make ERP, to take ERP away from the legacy of protecters that have all been based on deterministic business rules, that a thicket, a rickety thicket of business rules that need to be maintained. Bringing it closer to the future of cognitive applications, where the logic will be in predictive, and deterministic, predictive, data driven algorithms that are continually learning, continually adapting, continually optimizing all interactions and transactions that's the statement of direction that I think that Infor is on the path to making it happen in the next couple of years in a way that will probably force SAP, Oracle, Microsoft to step up their game, and bring their cognitive or AI strategies in portfolios. >> So I want to talk some more about the horse in the track, but I want to still understand what it is. >> Jim: Yes. >> So the competitors are going to say is oh. It's Alexa. Okay, okay it is partially. >> Jim: Yeah sure. It's very reductive that's their job to reduce. >> Yeah you're right, you've lived that world for a while. Actually that was not your job, so. >> If you don't understand technology, you're just some very smart guy who talks a good talk. >> Yeah, okay. >> So, yeah. >> So, okay, so what we heard yesterday in the analyst meeting, and maybe you found this out today, was is conversational UX. >> Yes. >> It's chat wired into the APIs, and that's table stakes. It augments, it automates, an example is early payments versus by cash on hand. Should I take the early payment deal, and take the discount, or, and so it helps decide those decisions, and which can, if you have a lot of volume could be complex, and it advises it uncovers insights. Now what I don't know is how much of the IP is ya know, We'em defense essentially from Amazon, and how much is actual Infor IP, ya know. >> Good question, good question, whether it's all organically developed so far, or whether they've sourced it from partners, is an open issue. >> Question for Duncan Demarro. >> Duncan Demarra, exactly. >> Okay, so who are the horses in the track. I mean obviously there's Google, there's Amazon, there's I guess Facebook, even though they're not competing in the enterprise, there's IMB Watson, and then you mentioned Oracle, and SAP. >> Well, here's the thing. You named at least one of those solution providers, IBM for example, provides obviously a really sophisticated, cognitive AI suite under Watson that is not imbedded however, within an ERP application suite from that vendor. >> No it's purpose built for whatever. >> It's purpose built for stand alone deployment into all manner of applications. What Infor is not doing with Coleman, and they make that very clear, they're not building a stand alone AI platform. >> Which strategy do you like better. >> Do I like? They're both valid strategies. First of all, Infor is very much a sass vendor, going forward in that they don't they haven't given any indications of going into past. I mean that's why they've partnered with Amazon, for example. So it's clear for a sass vendor like Infor going forward to do what they've done which is that they're not going to allow their customers apparently to decouple the Coleman infrastructure from everything else that ya know, Infor makes money on. >> Which for them is the right strategy. >> Yeah, that's the right strategy for them, and I'm not saying it's a bad strategy for anybody who wants to be in Infor's market. >> So what is in Oracle, or in a SAP, or for that matter, a work day do, I mean service now made some AI announcements at their knowledge event. So they're spending money on that. I think that was organic IP, or I don't know maybe they're open swamps AI compenents. >> Sure, sure, A they need to have a cloud data platform that provides the data upon which to build and train the algorithm. Clearly Infor has cast a slot with AWS, ya know, SAP, Microsoft, Orcale, IBM they all have their own cloud platform. So >> And GT Nexus plays into that data corpus or? >> Yeah, cause GT Nexus is very much a commerce network, ya know, and there is EDI for this century, that is a continual free flowing, ever replenishing, pool of data. Upon which to build and train. >> Okay, but I interrupted you. You said number one, you need the cloud platform with data. >> Ya need the conversational UI, you know, the user reductive term chat bots, ya know, digital assistant. You need that technology, and it ya know, it's very much a technology in the works, its' not like. Everybody's building chat bots, doesn't mean that every customer is using them, or that they perform well, but chat bots are at the very heart of a new generation of application development conversational interfaces. Which is why Wikibon, why are are doing a study, on the art of building, and training, and tuning chat bots. Cause they are so fundamental to the UX of every product category in the cloud. >> Rebecca: And only getting more so. >> IOT, right, desk top applications. Everything's going with , moving towards more of a conversational interface, ya know. For starters, so you need a big data cloud platform. You need a chat bot framework, for building and ya know, the engagement, and ya know, the UI and all of that. You need obviously, machine learning, and deep learning capabilities. Ya know, open source. We are looking at a completely open source stack in the middle there for all the data. Ya know, you need obviously things like tenserflow for deep learning. Which is becoming the standard there. Things like Spark, ya know, for machine learning, streaming analytics and so forth. You need all that plumbing to make it happen, but you need in terms of ERP of course, you need business applications, and you need to have a business application stacked to infuse with this capability, and there's only a hardcore of really dominant vendors in that space. >> But the precious commodity seems to be data. >> Yeah. >> Right. >> Precious commodity is data both to build the algorithms, and an ongoing basis to train them. Ya see, the thing is training is just as important as building the algorithms cause training makes all the difference in the world between whether a predictive analytics, ya know ML algorithm actually predicts what it's supposed to predict or doesn't. So without continual retraining of the algorithms, they'll lose their ability to do predictions, and classifications and pattern recognitions. So, ya know, the vendors in the cloud arena who are in a good place are the Googles and the Facebooks, and others who generate this data organically as part of their services. Google's got YouTube, and YouTube is mother load of video and audio and so forth for training all the video analytics, all the speech recognition, everything else that you might want to do, but also very much, ya know, you look at natural language processing, ya know, text data, social media data. I mean everybody is tapping into the social media fire hose to tune all the NLP, ongoing. That's very, very important. So the vendor that can assemble a complete solution portfolio that provides all the data, and also very much this something people often overlook, training the data involves increasingly labeling the data, and labeling needs a hardcore of resources increasingly crowdsource to do that training. That's why companies like Crowd Flower, and Mighty AI, and of course Amazon with mechanical terf are becoming evermore important. They are the go to solution providers in the cloud for training these algorithms to keep them fit for purpose. >> Mmm, alright Rebecca, what are your thoughts as a sort of newbie to Infor. >> I'm a newbie yes, and well to be honest, yes I'm a newbie, and I have only an inch wide, an inch deep understanding of the technology, but one thing that has really resonated with me. >> You fake it really well. >> Well, thank you, I appreciate that, thank you. That I've really taken away from this is the difficulties of implementing this stuff, and this what you hear time and time again. Is that the technology is tough, but it's the change management piece that is what trips up these companies because of personalities who are resistant to it, and just the entrenched ways of doing things. It is so hard. >> Yes, change management, yes I agree, there's so many moving parts in these stacks, it's incredible. >> Rebecca: Yeah. >> If you we just focus on the moving parts that represent the business logic that's driving all of this AI, that's a governance mess in it's own right. Because what you're governing, I mean version controls and so forth, are both traditional business rules that drive all of these applications, application code, plus all of these predictive algorithms, model governance, and so forth, and so on. I mean just making sure that all of that is, you're controlling versions of that. You've got stewards, who are managing the quality of all that. Then it moves in lock step with each other so. >> Rebecca: Exactly. >> So when you change the underlying coding of a chat bot, for example, you're also making sure to continue to refresh and train, and verify that the algorithms that were built along with that code are doing their job, so forth. I'm just giving sort of this meta data, and all of that other stuff that needs to be managed in a unified way within, what I call, a business logic governance framework for cloud data driven applications like AI. >> And in companies that are so big, and where people are so disparately located, these are the biggest challenges that companies are facing. >> Yeah, you're going to get your data scientists in lets say China to build the deep learning algorithms, probably to train them, your probably going to get coders in Poland, or in Uruguay or somewhere else to build the code, and over time, there'll be different pockets of development all around the world, collaborating within a unified like dev ops environment for data science. Another focus for us by the way, dev ops for data science, over time these applications like any application, it'll be year after year, after year of change and change. The people who are building and tuning and tweaking This stuff now probably weren't the people five years ago, as this stuff gets older, who built the original. So you're going to need to manage the end to end life cycle, ya know like documentation, and change control, and all that. It's a dev ops challenge ongoing within a broader development initiative to keep this stuff from flying apart from the sheer complexity. >> Rebecca: Yes. >> So, just I don't Jim, if you can help me answer this, this might be more of a foyer sort of issue, but when we heard from the analyst meeting yesterday, Soma, their chief technical guy, who's been on the Cube before in New Orleans, very sharp dude, Two things that stood out. Remember that architecture slide, they showed? They showed a slide of the XI and the architecture, and obviously they're building on AWS cloud. So their greatest strengths are in my view, any way the achilles heel is here, and one is edge. Let's talk about edge. So edge to cloud. >> Jim : Yes. >> Very expensive to move data into the cloud, and that's where ya know, we heard today that all the analysis is going to be done, we know that, but you're really only going to be moving the needles, presumably, into the cloud. The haystacks going to stay at the edge, and the processing going to be done at the edge, it's going to be interesting to see how Amazon plays there. We've seen Amazon make some moves to the edge with snowball, and greenfield and things like that, and but it just seems that analytics are going to happen at the edge, otherwise it's going to be too expensive. The economic model doesn't favor edge to cloud. One sort of caveat. The second was the complexity of the data pipeline. So we saw a lot of AWS in that slide yesterday. I mean I wrote down dynamo DB, kineses, S3 redshift, I'm sure there's some EC2. These are all discreet sort of one trick pony platforms with a proprietary API, and that data pipeline is going to get very, very complex. >> Flywheel platforms I think when you were talking to Charles Phillips. >> But when you talk to Andy Jasse, he says look we want to have access to primitive access to those APIs. Cause we don't know what the markets going to do. So we have to have control. It's all about control, but that said, it's this burgeoning collection of at least 10 to 15 data services. So the end to end, the question I have is Oracle threw down the gauntlet in cloud. They said they'll be able to service any user request in a 150 milliseconds. What is the end to end performance going to be as that data pipeline gets more robust, and more complicated. I don't know the answer to that, but I think it's something to watch. Can you deliver that in under 150 milliseconds, can Oracle even do that, who knows? >> Well, you can if you deliver more of the actual logic, ya know, machine learning and code to the edge, I mean close the user, close to the point of decision, yes. Keep in mind that the term pipeline is ambiguous here. One one hand, it refers, in many people's minds to the late ya know, the end to end path of a packet for example, from source to target application, but in the context of development or dev ops it refers to the end to end life cycle of a given asset, ya know, code or machine learning, modeling and so forth. In context of data science in the pipeline for data science much of the training the whole notion of training, and machine learning models, say for predictive analysis that doesn't happen in real time in line to actual executing, that happens, Ya know, it happens, but it doesn't need it's not inline in a critical path of the performance of the application much of that will stay in the cloud cause that's massively parallel processing, of ya know, of tensorflow, graphs and so forth. Doesn't need to happen in real time. What needs to happen in real time is that the algorithms like tensorflow that are trained will be pushed to the edge, and they'll execute in increasingly nanoscopic platforms like your smartphone and like smart sensors imbedded in your smart car and so forth. So the most of the application logic, probabilistic ya know, machine learning, will execute at the edge. More of the pipeline functions like model building, model training and so forth, data ingest, and data discovery. That will not happen in real time, but it'll happen in the cloud. It need not happen in the edge. >> Kind of geeky topics, but still one that I wanted to just sort of bring up, and riff on a little bit, but let's bring it back up, and back into sort of. >> And this is the thing there's going to be a lot more to talk about. >> Geeking out Rebecca, we apologize. >> You do indeed, it's okay, it's okay. >> Dave indulges me. >> No, you love it too. >> Of course, no I learn every time I try to describe these things, and get smart people like Jim to help unpack it, and so. >> And we'll do more unpacking tomorrow at two day of Inforum 2017. Well, we will all return. Jim Kobielus, Dave Vellante, I'm Rebecca Knight. We will see you back here tomorrow for day two. (upbeat music)

>> Announcer: Live from Las Vegas, it's the Cube, covering Dell EMC World 2017. Brought to you by Dell EMC. >> Hello everyone, welcome to the Cube special coverage of Dell EMC World 2017. This is the Cube Silicon Angle's flagship program where we go out to the events and extract the signal from the noise. This is our eighth year of covering EMC World, but now called Dell EMC World. I'm John Furrier, your co-host on our set one and with my co-host Paul Gillin this week as well as Kieth Townshend and John Walls and Rebecca Knight on set two. Double barrel shotgun of content here at Dell EMC World with you. Thanks for joining us for three days of wall to wall coverage. Paul, so much to talk about here this week. Digital transformation, little bit boring theme, it's being played out in real time. But this is a historic moment because one, the Cube started at EMC World in 2010, eight years ago. But, this is the first official EMC World where it's Dell EMC World, kind of a mini event in Austin, but since Michael Dell took over, or I'm sorry, merger of equals, a combination. >> Paul: Combination, as they call it. >> (chuckling) Combination. This is the first instantiation of EMC World as Dell EMC World. Jeremy Burton's now the CMO of Dell Technologies which is the holding company for all the companies. It's the same EMC World flair, now the integrated content. Notable absent Cube alumni and executives from EMC. We'll talk about that in the EMC Mafia segment shortly, but (chuckling) your thoughts because now Michael Dell's puttin' the rubber to the road. Kind of nothing earth shattering in his keynote, but certainly private company, all guns blaring, smiling and dialing, he's got the swagger on stage. >> Well, Michael is nothing if not an optimist. He's always good at seeing a brighter future, and at his keynote this morning, as you said it was blissfully free of content, but it did talk a lot about digital transformation which is of course the buzzword of the year in the IT industry. Little surprised that Dell adopted the same buzzword that HP and Cisco and all these other big companies are adopting. What happened in the keynote is less interesting than how the mood changes here, and this is the coming out party for Dell EMC. Yeah, there was a conference last October, a month after the merger, but this is really, things have finally settled out, now six months later and it's a chance for customers and for the partners to get a sense of how well this is all working out. >> And one of the things I'm watching is how the story's unfolding 'cause now you're starting to see the big companies, certainly in the consolidation side of the business market of infrastructure and data center and enterprise IT, it's a consolidating mature market. It is transforming, there is a cloud story requirement, there are new software requirements, software defined data center, as well as new growth opportunities, so what I'm looking at is what is the story? What is Michael packaging and how does that compare to the competition? We're going to hear from HPE at HPE Discover coming up, the Cube will be covering that for the seventh consecutive year. We're seeing Amazon's story playing out in real time. Oracle's story, everyone's got their story. And it's certainly digital transformation but what's interesting is Michael's got the packaging. He's packaging it up, your thoughts. >> And Michael kind of dissed the cloud this morning, actually in his presentation. He said, you can't have a successful business, or your business is not going to grow as quickly if you're 100% cloud based. He was very much making a pitch for data center infrastructure. Really not surprising coming from Michael. One thing that will be a sub-theme here I think is how this merger is working out, and as we wrote on Silicon Angle this week, if you go back to the history of big mega mergers, particularly in the hardware industry, going back to Burroughs Sperry, DEC Compaq, HP Compaq, Wellfleet Synoptics and NCR AT&T. I mean, it goes on and on and on. Pretty much all disasters, and we really haven't seen a merger anywhere near this scale between two IT companies that has worked well. All indications are now that they're doing the right things, they even have some people on board with Dell EMC who went through some of those mergers. But it's going to be interesting to see how they break a pattern that has been decidedly negative. >> Great point, I loved your post by the way, and I would add that interesting observation, at least from my perspective is, as we sit down with these billionaires and interview them one-on-one on the Cube is, you look at Amazon, Andy Jasse and Jeff Bezos, Bezos in particular. Larry Ellison and Michael Dell, you have essentially captains of industry at the helm. Michael Dell is no spring chicken, but he's also not over the hill either, he's 51 years old. >> Paul: He's a kid relative to most leaders in this industry. >> You know, you hear Jeff Bezos talk and I was watching his talk in DC just this week, he's saying we're taking the long view. If you look at Amazon.com's CEO, Bezos, look at Michael Dell, look at what Ellison's doing, they're all playing the long game card. Now I don't know if that's a hedge against we don't have our story right, or give us more time to bake out our stuff, but I think what's different about Dell Technologies is, Michael's 33 years into the business, one trillion dollars later in sales and he's young, so I think that is a wild card. Ellison's still running the show, Bezos is still running the show, Dell's certainly running the show. I think the wild card on this is the fact that you got a strong founder, and a privately held company. >> And Ellison, it's questionable how long Ellison will be able to run the show, I mean he is over 70 at this point. Dell certainly will be around for a long time. You have to take a long term strategy. If you're not Amazon, you have to take a long term strategy 'cause what other choice do you have? You've lost in the short term, so it's not surprising to hear these guys going that way. I'll be interested to hear from Michael and from his team about the cloud and how they really design and differentiate its strategy. I think IBM has staked its position in cloud out pretty well. Even HPE has got a differentiated position. HPE of course has the configurable hardware, that's a point that Dell I think has to come back on, and the big question is software. John, as you pointed out the other day, VMware is worth more than HPE, by a substantial margin at this point. They've got this huge asset in VMware, not to mention Virtuestream and Pivotal and the other good software assets they acquired. What are they going to do with them? Are they just going to let 'em go free like Michael has done in the past, or are they going to try to mold these into some kind of coordinated whole? >> Well, great point one is on the HPE valuation thing market cap, VMware's actually worth more on market cap and public markets than HPE. Interesting, but not significant in my mind yet, but it does point to the fact that Michael Dell's rhetoric on stage today, he didn't take any shots at HP. Last year he took a big shot at HPE. It's been his rival from day one. I used to work at HP when he was just a mail order company selling white boxes and then he grew that business, obviously the rest is history, but no shot at HP because VMware has to work with HP. Right, (chuckling) so that's interesting. Two is, on the software side, Dell is a hardware company, let's face it. But they have more software now than they've ever had before so that is a good point, we're going to be getting into this date software defined data center to find out how much they actually have. A couple core themes that I see already popping out of the keynote, one, Pivotal. Pivotal and Cloud Foundry's instrumental in the keynotes. NSX was mentioned, Pat Gelsinger's going to be on tomorrow. NSX is VMware's secret play. If you look at what NSX is doing with the Amazon public cloud deal that they did recently this year, NSX could be the real lever in that intellectual property, that lock in, that kind of differentiation. The cloud is not a place, it's a way of doing IT is another message we heard all day today. To me, and your point about bashing cloud, I actually think that's a stake in the ground to kind of hold the line, because they have no cloud strategy. Now, their cloud strategy is kind of hand waiving right now with multi-cloud, which I buy, but multi-cloud is still a fantasy in my mind. Latencies are too low, there just isn't the kind of plumbing yet in place on the clouds for multi-cloud, but certainly hybrid-cloud I think will be multi-cloud roll, so those are the key things and then I'm going to ask Michael directly. You blew 60 billion dollars on this deal. Is there any cash left for M&A? >> Paul: Acquisitions, yeah. >> M&A right now is hot market, you can do some nice tuck ins, fill in the white spaces on the products. Get those software assets and really start cobbling together a growth strategy. There's no doubt in my mind, Paul, that they're going to win the mature, classic business school move of consolidated market. Own the consolidated market, and try to get a growth strategy. To me, that's going to be the big question. What is Dell Technologies and Dell EMC's growth strategy? >> And you would have to think it's either through M&A, perhaps an acquisition of HPE if the valuation continues to go down. Or it's in software It's a good point you made about VMware. Vmware also has a strategic alliance with IBM, so if you're Michael Dell, it's hard to give a compelling keynote speech these days because you can't really offend anybody. His companies now are in cahoots with all these other firms, and of course dissing the cloud is even dangerous because Cloud Foundry is such a critical part of the Pivotal strategy. I think it's an important point, you've got a company that is almost trying to reassemble the old IBM, the old IBM of the '80s which dominated every segment that was important Dell is almost doing that now, I mean the only piece they really don't have is networking. To make a big play, to become the mongo IT company in the world, can they raise the kind of funds for that? >> Yeah, and we're also going to talk about the cloud transition as well as what I'm calling the EMC mafia, folks that have been on the Cube and big executives at EMC. We'll get to that in a minute, but I just want to talk about that cloud play, because you're right, the growth strategy has to come from software. I just don't see the cloud growth yet for these guys, although Michael, in the hallway, conversations are growth in the cloud is doing really well for EMC, not sure. But on the growth strategy, Pivotal, Boo-Mee, Vmware, Virtuestream, and Software Converge Infrastructure are interesting plays, so I think that's where we have to look here. I still think there's a lot of holes in the product line. To me that's important. Now, trends so far, and what we're expecting to hear at the show is, some of my notes Paul, I'll share with you, and get your reaction on. All flash arrays are going to be big, continuing to grow that. Hyperconverge VX rail, we heard that on stage today, claiming to be number one. Power edge 14G. Again, back to speeds and feeds, (chuckling) you know. Storage. Storage is the bread and butter of EMC and now Dell EMC I still think is going to be a real critical beachhead that they going to continue to expand, storage is not going away. Obviously the ice lawn all flash is coming out, and then SSD's, data protection in the cloud. You're starting to see them going where their roots are. Cloud stuff is coming out of the data domain, kind of their core storage first, make sense strategy wise, while they buy their time to fill in the cloud. >> Well, it's a good point about storage. They have a comfortable lead in storage. According to the latest IDC figures, they're a good 15 points ahead of their next biggest competitor. They have a comfortable lead in the hyper converge infrastructure. Four different product lines in that area. These are beachheads that they have to shore up. They have to be sure that their market share doesn't erode in those areas. The question is where does the growth come from? You look at a company that's going through a very similar transition right now, Cisco, which has finally really bought in to software defined networking and is remaking its company around it. That company is having to change the whole culture in response to a technology trend. Now the same thing's going on in the data center. Everything's being remade as virtualized and Vmware is at the center of that, so Michael Dell has the asset to be able to lead that conversion, but are they psychologically going to get there? >> Great point. One, I would agree with you that the whole Cisco example proves the same channel that Dell EMC is. Can they move up the stack? In this case, they're hardware guys, can they add software. Cisco, they're transforming themselves to be more cloud native. The classic move's happening. Cisco have been trying to move up the stack for over a generation. They're plumbing guys, they're networking guys. These guys are hardware guys. Can they get the DNA to truly become software providers, not in the sense of selling software, just providing a software fabric that's going to be the key differentiators, because digital transformation is about IT transformation. That is certainly the reality, what we're seeing when you start to peel back the onions. And that to me is going to be the big discussion because as David Gooldun said on stage, apps provide the value. As the enterprises build more apps, you got to have a platform, you got to have a cohesive horizontal end to end software fabric, and the question is, do they have it? >> Well, they certainly have the foundation for it, I mean they have Pivotal, there's a whole developer community around Pivotal. Dell itself doesn't have a developer community, nor does EMC but they have elements of that to build upon. The interesting thing about the conversion to software, about software defined infrastructure, is that it requires thinking from an application perspective and that's not something hardware companies have ever been inclined to do. So, how does Michael Dell make that transition, has he made it himself, is there other leadership he's going to have to bring in who are going to make it for him? The whole leadership of the Dell EMC company right now is ex-Dell and EMC people, it's hardware guys. >> I'm going to put pressure on Dell, the question on software. But you wrote a two part series on SiliconAngle.com, worth checking out, getting a lot of viral buzz around open source and the value of open source, because if you look at say Cisco for instance, what they're doing with the cloud native strategy, they have actually pivoted and Chuck Robbins, the CEO has acknowledged, actually re-tweeted one of my tweets the other day, with as we were talking about this new program called DevNet Create. They're taking the developer program from Cisco and moving it into an open community model, which basically is the toe in the water for saying, we have to figure out open source. All the critical, big vendors that are transforming from called the old guard, as Amazon calls 'em, Amazon Web Services, Andy Jasse. Dell's an old guard guy, but still young, but they got to get to open source. What are you finding is the success parameters there because you got to play in the open source, be a contributing member. Again, back to the DNA of the culture, and two, there's real value there. >> Well, there's no question that open source has won when it comes to infrastructure. I mean, the biggest IT companies in the world which are Google and Facebook, are both built on open source platforms. Game over. This is where IT infrastructure is headed. Cisco, interesting case because they are an infrastructure company, and they are being eroded, their traditional market is being eroded by open source, they've chosen to embrace it through their developer community. Cisco is one company I would never bet against. They're such a great company. If anyone's going to make the transition, they will. Open source is still an infrastructure play. I don't see open source in the applications area being a major driver, but Dell is an infrastructure company, so you have to assume that everything they're doing in managing, in securing storage and servers is going to be under pressure from open source at some point. They have to embrace that as Cisco is doing. >> Paul, we had thought leader chat with some experts on our digital panel, software crowd chat, everyone knows crowdchat.net, check it out. And comment and conversation was taking place among the influential folks saying, what is a software company? You go back to the web, shrink wrapped, download software, to now fully SAS based and Saas now platform, what is a software company? So, the question was, is Facebook a software company? Or are they an app company? Which begs the question, you have to be a software company, but it's not the classic software company category, business model. You need software (chuckling) to run stuff, so you can be a hardware guy, like Michael Dell, and have Dell Technologies. You can be a network company like Cisco, but you've got to be a software company in the new way. >> Well, I spoke to a Forester analyst in writing that piece on open source who had a great point, he said Facebook and Google are two big successful software companies, neither of which makes. >> Any money. >> Any money, a little bit in Google's case licensing software. They created business models that have nothing to do with the traditional software model, but that have leveraged their expertise in the software that they've developed. And maybe that is the business model, ultimately the business model is building software in order to do something else with it that customers will pay for. >> I think you're on to something. I think your post illuminates that. I think that this is going to be one of those things where in the history books of the tech generation, as we're on our whatever wave of open source generation, this is it, it's not about the business model of the software, it's how the software's being used in the business model of the transformation. That is really really key. Paul, I want to just talk about, really quickly about my observation at EMC. A little bit of editorial moment here. Because, Dell took over. Dell EMC. We've interviewed now eight years, pretty much all the executives at EMC over the years, but there's an EMC mafia developing. There's a lot of people who have left EMC, that we know, we're friends with. Guy Churchwood, CJ DeSai, Josh Conn, Rich DePellatano, Brian Gallagher, BJ Jenkins, Sanjay Murchandani, and many more have left because of the consolidation. Certainly you can't, EMC's going to get consolidated down, but no major layoffs but still enough that some eagles have flown from the nest, as they say and are running other companies. So you have this EMC culture out there of very sales oriented, very customer centric, now running other companies, and I want to give a shout out to all those EMC alumni and mafia out there. Good luck on your new ventures, but the impact here to Dell is a mashup of the two cultures. What's your observation, what's your reaction of that. Have you heard anything? I have some thoughts, but I want to get your reaction because okay, some eagles fly away, you still got the worker bees inside EMC, and now Dell coming together. Thoughts on the culture clash. >> Well, I live in Boston, and so I've been through the acquisition of Prime Computer, through EMC acquiring Data General, through the DEC acquisition by Compaq. All of which were disasters, and all of which where the cultural issues were much bigger than the technology issues. So, I think that that is something that Dell has to be front and center for Michael Dell, is how do you mash up these two cultures. As you pointed out, EMC, very aggressive, take no prisoners, enterprise-oriented sales force. Their sales people make a lot of money. I used to live in a neighborhood where everyone was EMC salespeople. >> John: Buying new houses. >> They were making a million dollars a year. And you've got Dell with its direct model, with its channeled model, and without a particularly strong roots in enterprise sales force and how do you coordinate those. It's not surprising to see people leaving. Of course, in the early days after an acquisition, choices get made, people get promoted and moved in new positions. Those who lose out tend to leave the company. But, I think the sales issue would be something to delve into too. Does Dell want to adopt EMC's sales style, or the other way around? Or is there some way that they can live both in harmony? >> You know, I follow a lot of companies in Silicon Valley as well, I'm out there on the west coast, left coast, as they say. Where all the crazy ones are, as they say. But I got to say, there's been some shrinkage on EMC, but for the most part, I haven't really heard any really negative horror stories. Actually, it's been going pretty well, and I think you bring up an issue of effectiveness with the sales folks. Dell's an efficiency guy, right so you got effectiveness and efficiency coming together. But I think they've handled it well. I really haven't heard any real horror stories. Again, I think that has to do with the founder being actively involved, they're a private company, so they have some room. And I think they've invested in making that happen, so I think generally, props to EMC folks and for the Dell folks on the acquisition. Still not clear the woods yet, it's going to surely be in the products and the revenue, but for the most part, we're going to unpack that. So Paul. >> But you can't, I just wanted to jump in just quickly. You can't minimize customer touch, and EMC was always a high touch company. Outstanding service, they put people on a plane in the middle of the night, charter a private jet in the middle of the night to get someone on site at a customer to fix a problem. As you mentioned, Dell is an efficiency company. That's not a very efficient way to operate. Can they absorb the best of EMC and the best of Dell at the same time? >> Yeah, well we'll certainly tell, I mean they got a lot of competition, Michael Dell saying on stage. (mumbling) startups, essentially what's he's saying is Amazon, there in my opinion, although that's not probly what he really meant but that's my interpretation. But I'm expecting to see the same old EMC world with a twist, and that is, we're doin' good, the messaging's out there, we're going to see how the products compare vis a vis the competition. I'm interested in Vmware piece. Paul, what are you looking forward to? >> I'm looking forward to hearing how this is all going, how this company is culturally, what kind of a cultural chimera they're putting together here that's going to make sense, that the market is going to understand. I also want to hear how they're going to differentiate in cloud, internet of things, we just heard a little bit about that this morning. That's something where I think you're seeing Cisco. The way Cisco's dealing with the cloud these days is to say, don't worry about it, it's all going IOT. It's all going to distributed intelligent devices, the cloud is already history, is what they're saying. So, does Dell have a similar differentiated position on that. I'm least interested in hearing about the new products because it's speeds and feeds. But really, how is this company going to dominate an industry, how is it going to get over some of the speed bumps that we've been talking about for the last 20 minutes that have foiled so many merger attempts in the past. >> One of the tell signs that I look at a conference when I see a lot of AI washing. The good news is, there's not a lot of AI being talked about here, 'cause usually that's just lipstick on the pig, as they say. Except for the case of Google and Amazon Web Services, they do have some AI story, with some real products to back it up. For the most part, you're not seeing EMC glob on the whole machine learning, rah rah. They did talk about it but it wasn't like a big theme. I think they really talked about the packaging of the value. Of the brands together, comments around costs for public cloud, nice little ding there. I'm going to dig into the story. I'm going to really test the story, and I'm going to look at the customer traction. I really want to see who they have on stage, I really want to hear who's really going down the road, how that growth strategy, 'cause I think they're going to win the data consolidation market pretty handily, and the question between HPE and Dell, for instance, 'cause that's really to me the two big horses on the track. Who's going to win the growth. Who's going to be able to lock in their beachhead on the core market, traditional market, and have access to the growth of what cloud will bring and IOT and among other things. >> I think at this point, HP has a better story in that area with their configurable infrastructure, with their pay as you go on site model, really interesting models. I was at HP World in Europe in December, and I came away from that feeling like these guys have some unique talking points here. At least they have a strategy that I think I understand and that is different. Dell is still working through this huge merger and that's a big catch. >> Bottom line is, Dave Donatelli, who's an executive at Oracle told me, he also was an EMC executive, and HPE. The business of provisioning servers and storage (laughing) is not going to be the growth strategy. Now, it might be a component of the overall business model, like software, but ultimately, that business is in decline, and that's a fact. Okay, this is the Cube, bringing you all the coverage of the kickoff from day one at Dell EMC World 2017. Our eighth year, three days of wall to wall coverage. We have two sets, the blue set and the white set. Go to SiliconAngle.tv to find the coverage, also go on Twitter, follow us on the Cube, I'm John Furrier with Paul Gillin, kickin' off Dell EMC World 2017, back with more, stay with us after this short break. (atmospheric instrumental music)