(upbeat music) >> Welcome back to HPE Discover 2021, the virtual version. My name is Dave Vellante, and you're watching theCUBE. As the saying goes, follow the money. And with me to talk about HPE Financial Services and the value that it can bring to customers are two great guests, Brad, Shapiro's VP and managing director of the Enterprise Business at HPE Financial Services. And Paul Sheeran is Managing Director of Worldwide Channel and SMB for HPE Financial Services. Gents, welcome to theCUBE. Come on in. >> Thanks Dave, we really appreciate you having us. >> Hi, Dave. >> So Brad, why don't you start us off? Give us the rundown on HPE Financial Services. What's the scope of your services? Should we think of you as a bank? And maybe you could talk about some of the things that you do beyond financing. >> Yeah, that sounds great. So look, we are so much more than banking. Our mission is to create investment capacity to help customers accelerate their transformation. And maybe you could think of us as kind of like a two-in-one partner. We're part-CIO, part-CFO. We kind of refer to ourselves as the CIFO, if you will. And we've got an expertise in a number of different areas. Of course, we'll start with financial. And yes, we offer financial services, and we do an awful lot of financial solutioning. In our portfolio, it's over 13 billion of assets that have been financed. So that is a core competency for us. But we're more than that. We focus also on the technology side of things. And we have expertise in asset management. And we deal with multiple generations of technologies and all major manufacturers as well, not just HPE, but we understand technology and all different types, all different ages of technology. And lastly, we play a pretty big role around sustainability. HPE takes a leadership position when it comes to sustainability. And a lot of our capabilities around the circular economy and putting assets back into reuse play an important role in not only helping customers financially, but helping them meet their sustainability goals. >> I want to come back and ask you more about that, but Paul, I wonder... First of all, I like the CIFO. That's a great, little nomenclature. But Paul, if you're a small business, the CEO is also sometimes the CIO, is sometimes the CFO, a lot of hats. So maybe you could talk about the role that you guys play for SMBs and also channel partners. Channel's a whole different ball game. They want to make margin, they want to grow their business. So maybe you could discuss some of the differences in that channel. >> Yeah. Sure, Dave. Well, starting with the SMB customer is really critical part of our portfolio. As you said, they cover all the roles, so the CIO, CFO. And their budgets can be tight. And especially given the last 18 months, if you read some of the data out there, the budgets are really constrained, especially for the SMB customer. So we try and do, and what our mission is, is what we call creating investment capacity, giving budgets a boost, bringing that vitality to the SMB customer base, to all our customers, but especially SMB customers to help them be able to invest in their digital transformations going forward. So crucial now that all our customers are able to continue to invest in technology. And the pandemic clearly brought it home how important having a digital capability it is. So SMB budgets are tight, and what we try and do is give them that boost, give them that vitality to actually continue to advance ahead and make the right investments for the future. And then from the partners, we actually do a four and a half thousand partners around the world. As you said, partners, they're also not only looking for financial solutions, but how do we differentiate ourselves is to try and help that partner move to a digital platform. We have invested heavily in our digital tools over the last couple of years. So in terms of offering solutions, it can be literally zero touch, low touch so the partner community can plug into our platforms. We also help them on that journey as a service. So technology is moving to as a service. People want to consume technology as a service like they do in the rest of their lives. It's all about subscription. And partners need help to be able to move to another service way. Hopefully GreenLake is the answer. So we support HPE GreenLake's offering. But there's different parts along the way for partners that we look to help them. And last but not least is helping them about asset management. As Brad said, it's all about the assets and understanding how those assets are managed. And helping the partners, having a relevant conversation with their customers as to how best to put in an asset management strategy for their customers. So three areas that we look to differentiate ourselves, Dave. >> We got a lot to talk about. So I want to come back and talk about as a service as well. But Brad, I want to go back to sustainability. So is it just the right thing to do? What's the financial case? Is it good business as well, and where do you fit? >> Yeah, so we believe that sustainability is good for the environment, obviously, but it's also good for business. And when you think about what we bring to the table and those assets back into reuse. So we handle between three and four million assets a year, and over 90% of those, we put back into reuse, with about 10% going into recycling. Putting those back into reuse, the customer that has those assets, we can monetize those assets and help accelerate transformation. So we monetize the asset, and we fund that transition in that transformation so we can really help customers get more budget than they were expecting by leveraging what they would deem to be end-of-life assets, but we find another home for those assets. So it definitely helps customers accelerate the transformation, while being good for the world, good for the environment. >> And that's true, Paul, for SMBs, just maybe on a smaller scale, and definitely makes sense for the channel, right? >> Absolutely. Absolutely. Sustainability now is key. Certainly key for our channel partners is moving from a nice-to-have to a must-have. So absolutely, totally agree. >> Yeah. And it's almost like gain sharing. I mean, sometimes we sell used equipment on eBay. It helps fund future business or future transformation. So let's get into the transformations. Everybody talks about digital transformation. Coming into the pandemic, everybody talked about it, but there was a lot of complacency. We've all seen the wrecking ball and the acceleration we talk about all the time, but what role does HPE Financial Services, and do you have any specific solutions that support digital transformations? Any examples there? Maybe Brad, you could start it off. >> Yeah. Yeah. So I'll start off, and then Paul, feel free to jump in. Look Dave, what I would say is the pandemic taught us that every company is a technology company. And where HPFS comes in is we're looking to provide the investment capacity, which is the lifeblood of a company's digital roadmap. So if you don't have the investment capacity, there is no transformation. So when something like the pandemic comes up, and you can't budget for a pandemic, and revenues are down and budgets are getting squeezed, you really need a partner to help you with that. How do you uncover that investment capacity? So we we've talked to lots of customers. We've also done some research, and the ESG group and analysts basically found that 73% of organizations, not surprisingly, either delayed or canceled projects around IT transformation because of all the uncertainty. So what we're looking to do is leverage all of our capabilities in a timely fashion. Last year, we announced the idea of payment holidays and deferred payments so you could keep your transformation going and not have to pay for it for a full year. And now we look at it as we're coming out of the pandemic. And what we're looking to help customers with is one, help them transition their existing infrastructure into a modernized consumption model like GreenLake. Also looking to accelerate the velocity of the transformation programs by leveraging our capabilities around asset upcycling, as well as our accelerated migration program. And last, looking at our existing customers really doing some financial engineering with them, so they can stretch their budgets more and expand the budget to be able to handle new projects. >> Yeah, I mean, Paul, I think Brad nailed it. You're right, their transformations are strategic. They had to fund VDI initiatives or endpoint security or find some cash to buy laptops to support people at home. People were pulling out their servers and sticking them in their trunk and driving to their home because they couldn't get laptops for awhile. And so what are you seeing now, Paul, particularly in the channel. And of course, again, SMBs were squeezed. Maybe they don't have the liquidity that some of these large public companies have. A lot of people just shored up their balance sheets during the pandemic. Maybe the SMB doesn't have as much advantage to do that. But what are you seeing in regard to the sort of bounce back of spend in more strategic areas like transformation? >> Well, I think what we're seeing right now and what we're hearing, especially for SMB customer, is cash is king. It's all about cash preservation. It's about making sure that... You'll hear some studies where some SMB customers only have three or four months left of cash in their kitty to keep their businesses running. So that is really top of mind now. Would they have to invest? If they don't want invest, they're going to be dead in the water to stay ahead of the competition. So what we're looking to do is really help those customers preserve that cash and reach and look for different ways about how to boost their budget. There's actually nothing better than an example. Brad laid out very nicely in terms of what we can do. Bringing it to life, not so much an SMB customer, but there is UNAD. And UNAD is a university in Columbia based in Bogota. And their mission is very simple, it's all about excellence and learning. But as they went into the pandemic, they needed to invest in their distance learning platforms to really help their students. And like most businesses, cash and budget was being squeezed. Revenues were tight. So it would've been very easy to postpone that investment. Well, what we did with UNAD and working with UNAD under IT team was firstly to understand their existing IT estate and really see what assets are being utilized, what are not being utilized, what assets have reached or ended their useful life. And you'd be amazed. And it's not just the data center, we can work right across their whole estate. So as well as the data center, we look at the PCs. To your point, David, we look at even their print estate. And we identified many, many assets that were being underutilized and other assets that were end of life. So we were able to take those assets back and actually release value and boosts UNAD's budget. And some of those assets could not. They had no value. And sustainability was top of their agenda as well. As you'd imagine, the university wanted to lead and show their students that sustainability is key. So we were able to take those assets back and actually recycle them in a very environmentally sound way. So that was the first step to actually inject some cash into their budgets. The next step then was to look at their existing financial contracts that they had in place where maybe some of their banks and actually restructured those contracts to actually give them additional capacity to invest right now in technology. And I'm delighted to say they partnered with the HPE team, I mean, Aruba, to actually continue their five-year roadmap and actually improved their distance learning platforms. So I just thought that was a really good example right now and in the current climate as to show when we work together with our customers, what's actually possible. >> So let's talk a little bit more about GreenLake. I mean, for decades, I mean, even if I go back to the '80s, I saw financial instruments to sort of rent essentially, but it's different. GreenLake, HPE, has pivoted its entire company to as a service. And I want to understand better what role HPE Financial Services plays in making that transition. It's obviously a crucial part of the financing piece, but Brad, maybe you could tell us a little bit more there. >> Yeah, sure. And I think the great thing about GreenLake is it's more than just a consumption model, it's really providing that cloud experience, on-prem, and being able for customers to really manage a hybrid cloud experience. But where HPEFS plays a role, again, it's around our knowledge and ability around assets. So we are underneath GreenLake, doing financial engineering, managing the assets. But the biggest thing, when you think about how does a customer transition? If they're in a traditional cash purchase paradigm, the cost of change and figuring out how to move into a new type of paradigm and new consumption model can be daunting. So HPFS works closely with our GreenLake team and the customer, and we can take those existing assets and look to accelerate the migration into a GreenLake. A great example of that, a public sector customer, Kern County, they were in that cash paradigm, they had lots of assets. Like most entities, they were under pressure from a budget perspective. Tax revenues were down for a couple years in a row. So not only did moving to a GreenLake model provide some cost savings, and cost savings are important, but it also allowed them to deliver the services they needed to their constituents because they had that pay for use type of flexibility. They didn't have a long delay in procuring and provisioning equipment when they needed to roll something out. And again, once again, HPFS was able to monetize their existing assets, roll those into a GreenLake solution and help self-fund that transformation and really accelerate it to get from that cash paradigm model to a new GreenLake consumption model. >> Paul, what about the channel? I mean, on the one hand, I could see the channels loving GreenLake because there's a lot of services involved, and it's sort of an ongoing drip of cash as opposed to the sort of big hit. But on the other hand, it's the ongoing drip of cash as opposed to the big hit. What's the conversations like with the channel? How is that going? I mean, clearly it's the future, but how do they see it? >> I wouldn't say a drip of cash. We would call it an in-use revenue where it's very predictable, which is actually also a good thing, rather than a sort of a one-and-done solution. So clearly, GreenLake is very important to our channel partners, and we're seeing some really good adoption across the world. Again, we underpin that. The other thing to say is a lot of channel partners, as you likely say, want as sell services and become service providers. And what we also do is support not just the data center, but also workplace and print. And what you'll see on the printing side for many, many years, the print partners have been selling a contractual type of model. But a lot of partners now are moving all of their core portfolio into as a service. And there's different parts. It's nearly a cash to as a service journey, and there's different parts of that ladder on the way. And we will look to help our partners get along that ladder and hopefully position GreenLake. But there's also more simpler solutions like subscription that we can position on that journey. So it's really helping that partner get the confidence and the financial wherewithal and the infrastructure to get on the as a service journey. >> How about solutions? I mean, you guys have had some recent announcements. Maybe Brad, you can take us through sort of what the highlights of those were. >> Sure. So yeah, the first announcement was really the example I just provided, which was how do we transition customers to GreenLake? So again, that's a really important step for many customers, and something that we can help them with is moving from that existing paradigm to GreenLake. The second is really helping customers create velocity to move their transformation programs faster. And we do that in a number of ways, but again, all around the asset in our asset management expertise, whether we look to put those assets back into reuse in their facility, or if we look to monetize those assets and put them into reuse with a different customer. Really, it's all around how do we accelerate the customers transformation as we come out of a pandemic. And then lastly, the offering is really focused on how can we help the customer look at existing budget and really financially engineer where they're spending their money to create new pools of budget and cash so they can fund new projects. So it's interesting because when I look at the customers that we're doing these things with, it really spans every industry. So we're dealing with financial services and insurance companies, communications and broadcasting, travel and hospitality, you name it, manufacturing. So the interesting thing is, while sometimes you come out with solutions that are very industry-specific, I think our circumstances today really span lots of industries, both in the commercial and the public sector. And we're finding that these offers are really relevant right now for customers. >> Let's zoom out for a bit. And Brad, let's start with you, and then Paul, I want to get your unique perspectives from the standpoint of SMB in the channel. Summarize your overall strategy in that context. And then I'm interested in, how important do you feel the HPE Financial Services is with regards... And of course, you guys are biased, but that's okay, I want to hear your bias view. How important is it in the grand scheme of actually doing business with HPE. And I'm interested in in why HPE and how much of a competitive advantage you bring relative to some of your major competitors. >> Yeah, sure. So look, the strategy, in my mind, I'll start with HPFS, it's really making sure that we're working closely with our customers, understanding their needs from a business perspective and what business outcomes they're trying to achieve and then marrying both the financial planning and the technology planning to help those customers deliver and achieve those business outcomes. Doing that, also in a way that is sustainable and is good for the environment and helps customers achieve their sustainability initiatives. So kind of marrying that financial technology and sustainability portion of it. From my perspective, I think HPE is a fantastic partner. One, we've been at GreenLake for quite a while, and it continues to evolve. The experiences that we can provide customers now are significantly advanced from when flex capacity came out years and years and years ago. So I really think if a customer took a look at GreenLake a few years ago, you need to keep looking at it because it really has evolved, really creates a unique experience. But I think it's the combination of our technology. We have great technology in our portfolio. We have a fantastic model in GreenLake, and then we have all of the financial engineering expertise around assets and lifecycles and how to get the most out of your IT investment. And we are a partner. If you have sustainability initiatives, I mean, HPE talks the talk, we walk the walk. We do all of this for ourselves, and then we bring those practices out and share best practices with customers. So I really think it's a great time to partner with HP if you're a customer. >> Right, thank you for that, Brad. Paul, what would you add for your constituents? >> Brad, said it beautifully. So just a couple of points I'd add in. From a partner perspective, we are actually in every corner of the world. So we have that global footprint. And then as you see, consolidation in the market, that's very important, not only for our customers, but also for our partners, more and more solutions are going cross border and involve different regions. And we look to make sure that we're globally consistent in how we work with our partners and work with our customers. And the final thing I'd say is we get very excited about supporting our HPE colleagues. But from a channel perspective, we actually also support HPI, HP Inc. You will recall, before separation, that the companies did. So we also support the workplace and print environments, plus third party vendors, which again, is important for the channel community. Why do you need a one-stop shell? And where you'll often have a mixed technology and the solution. So we're there for that as well and always have been. And I think the partner community love our consistency there >> It's a nice arrow when you quiver. And of course we've seen laptop demand explode. And it looks like it's going to sustain for a while here. It's hard to predict, but Paul, still with you, tell us, thinking about the future, what's getting you jazzed up? >> Well, I said we have a global footprint, and every country is in a different place right now. As we sort of come out of the pandemic, some countries are still in the midst of it. But what gets me jazzed up and what gets me excited is the sense of optimism. I think we're sort of figured out how to navigate our way out of this pandemic and the current environment. And customers all recognize the need to invest in technology. Technology is the way forward. So that means having the capacity, investment capacity, the investment vitality, to make that investment. So what gets me excited is what we do is important and we're there to help. >> Great. Thank you. And then Brad, two-part question for you to bring us home. So what are you excited about, and what do you got going at Discover? >> So in terms of my excitement, I think Paul said it well, every company is a technology company. And when we see that everybody is going through a digital transformation, quite frankly, we at HPEFS are going through our own digital transformation. Paul mentioned earlier about Technomics. We have omni-channel ways of engaging with us that are consistent. We're looking at our customer and partner experience and continuing to improve those. So we're not resting on our laurels in what we've done in the past, we continue to change, to modernize, to create new and better ways of doing business with our customer base. So the exciting part, for me, is that change that comes with innovation and technology. And I just think HPE is a great place to be right now with all of that innovation going on. So you asked about Discover. So we're really excited. We've got a spotlight with Irv Rothman focused on investment agility and key to growth and regeneration. So that's really exciting. We have a few breakouts, making technology a force for good, getting back on track that create the investment vitality to take on the world and investment strategies to accelerate innovation in a disruptive world. So really excited about that. And then last, we've got some demos. We have a live interactive demo on our technology renewal center, as well as some on-demand demos of those renewal centers as well. So we've got a lot going on at Discover, and we're really excited about it. >> Great. Gentlemen, thank you for that. So I mean, look, cost of capital is low, but to have a technology partner with you that's also has financial expertise, that, to me, is a killer combination. Guys, thanks so much for coming on theCUBE. I really appreciate your time. >> Dave, thanks for having us. >> Thanks, Dave. >> All right, and thank you for watching theCUBE's continuous coverage of HPE Discover 2021, the virtual edition. Keep it right there for more great content. (upbeat music)

(upbeat music) >> Welcome back to HPE Discover 2021, the virtual version. My name is Dave Vellante, and you're watching theCUBE. As the saying goes, follow the money. And with me to talk about HPE Financial Services and the value that it can bring to customers are two great guests, Brad, Shapiro's VP and managing director of the Enterprise Business at HPE Financial Services. And Paul Sheeran is Managing Director of Worldwide Channel and SMB for HPE Financial Services. Gents, welcome to theCUBE. Come on in. >> Thanks Dave, we really appreciate you having us. >> Hi, Dave. >> So Brad, why don't you start us off? Give us the rundown on HPE Financial Services. What's the scope of your services? Should we think of you as a bank? And maybe you could talk about some of the things that you do beyond financing. >> Yeah, that sounds great. So look, we are so much more than banking. Our mission is to create investment capacity to help customers accelerate their transformation. And maybe you could think of us as kind of like a two-in-one partner. We're part-CIO, part-CFO. We kind of refer to ourselves as the CIFO, if you will. And we've got an expertise in a number of different areas. Of course, we'll start with financial. And yes, we offer financial services, and we do an awful lot of financial solutioning. In our portfolio, it's over 13 billion of assets that have been financed. So that is a core competency for us. But we're more than that. We focus also on the technology side of things. And we have expertise in asset management. And we deal with multiple generations of technologies and all major manufacturers as well, not just HPE, but we understand technology and all different types, all different ages of technology. And lastly, we play a pretty big role around sustainability. HPE takes a leadership position when it comes to sustainability. And a lot of our capabilities around the circular economy and putting assets back into reuse play an important role in not only helping customers financially, but helping them meet their sustainability goals. >> I want to come back and ask you more about that, but Paul, I wonder... First of all, I like the CIFO. That's a great, little nomenclature. But Paul, if you're a small business, the CEO is also sometimes the CIO, is sometimes the CFO, a lot of hats. So maybe you could talk about the role that you guys play for SMBs and also channel partners. Channel's a whole different ball game. They want to make margin, they want to grow their business. So maybe you could discuss some of the differences in that channel. >> Yeah. Sure, Dave. Well, starting with the SMB customer is really critical part of our portfolio. As you said, they cover all the roles, so the CIO, CFO. And their budgets can be tight. And especially given the last 18 months, if you read some of the data out there, the budgets are really constrained, especially for the SMBs customer. So we try and do, and what our mission is, is what we call creating investment capacity, giving budgets a boost, bringing that vitality to the SMB customer base, to all our customers, but especially SMB customers to help them be able to invest in their digital transformations going forward. So crucial now that all our customers are able to continue to invest in technology. And the pandemic clearly brought at home how important having a digital capability it is. So SMB budgets are tight, and what we try and do is give them that boost, give them that vitality to actually continue to advance ahead and make the right investments for the future. And then from the partners, we actually do a four and a half thousand partners around the world. As you said, partners, they're also not only looking for financial solutions, but how do we differentiate ourselves is to try and help that partner move to a digital platform. We have invested heavily in our digital tools over the last couple of years. So in terms of offering solutions, it can be literally zero touch, low touch so the partner community can plug into our platforms. We also help them on that journey as a service. So technology is moving to as a service. People want to consume technology as a service like they do in the rest of their lives. It's all about subscription. And partners need help to be able to move to another service way. Hopefully GreenLake is the answer. So we support HPE GreenLake's offering. But there's different parts along the way for partners that we look to help them. And last but not least is helping them about asset management. As Brad said, it's all about the assets and understanding how those assets are managed. And helping the partners, having a relevant conversation with their customers as to how best to put in an asset management strategy for their customers. So three areas that we look to differentiate ourselves, Dave. >> We got a lot to talk about. So I want to come back and talk about as a service as well. But Brad, I want to go back to sustainability. So is it just the right thing to do? What's the financial case? Is it good business as well, and where do you fit? >> Yeah, so we believe that sustainability is good for the environment, obviously, but it's also good for business. And when you think about what we bring to the table and those assets back into reuse. So we handle between three and four million assets a year, and over 90% of those, we put back into reuse, with about 10% going into recycling. Putting those back into reuse, the customer that has those assets, we can monetize those assets and help accelerate transformation. So we monetize the asset, and we fund that transition in that transformation so we can really help customers get more budget than they were expecting by leveraging what they would deem to be end-of-life assets, but we find another home for those assets. So it definitely helps customers accelerate the transformation, while being good for the world, good for the environment. >> And that's true, Paul, for SMBs, just maybe on a smaller scale, and definitely makes sense for the channel, right? >> Absolutely. Absolutely. Sustainability now is key. Certainly key for our channel partners is moving from a nice-to-have to a must-have. So absolutely, totally agree. >> Yeah. And it's almost like gain sharing. I mean, sometimes we sell used equipment on eBay. It helps fund future business or future transformation. So let's get into the transformations. Everybody talks about digital transformation. Coming into the pandemic, everybody talked about it, but there was a lot of complacency. We've all seen the wrecking ball and the acceleration we talk about all the time, but what role does HPE Financial Services, and do you have any specific solutions that support digital transformations? Any examples there? Maybe Brad, you could start it off. >> Yeah. Yeah. So I'll start off, and then Paul, feel free to jump in. Look Dave, what I would say is the pandemic taught us that every company is a technology company. And where HPFS comes in is we're looking to provide the investment capacity, which is the lifeblood of a company's digital roadmap. So if you don't have the investment capacity, there is no transformation. So when something like the pandemic comes up, and you can't budget for a pandemic, and revenues are down and budgets are getting squeezed, you really need a partner to help you with that. How do you uncover that investment capacity? So we we've talked to lots of customers. We've also done some research, and the ESG group and analysts basically found that 73% of organizations, not surprisingly, either delayed or canceled projects around IT transformation because of all the uncertainty. So what we're looking to do is leverage all of our capabilities in a timely fashion. Last year, we announced the idea of payment holidays and deferred payments so you could keep your transformation going and not have to pay for it for a full year. And now we look at it as we're coming out of the pandemic. And what we're looking to help customers with is one, help them transition their existing infrastructure into a modernized consumption model like GreenLake. Also looking to accelerate the velocity of the transformation programs by leveraging our capabilities around asset upcycling, as well as our accelerated migration program. And last, looking at our existing customers really doing some financial engineering with them, so they can stretch their budgets more and expand the budget to be able to handle new projects. >> Yeah, I mean, Paul, I think Brad nailed it. You're right, their transformations are strategic. They had to fund VDI initiatives or endpoint security or find some cash to buy laptops to support people at home. People were pulling out their servers and sticking them in their trunk and driving to their home because they couldn't get laptops for awhile. And so what are you seeing now, Paul, particularly in the channel. And of course, again, SMBs were squeezed. Maybe they don't have the liquidity that some of these large public companies have. A lot of people just shored up their balance sheets during the pandemic. Maybe the SMB doesn't have as much advantage to do that. But what are you seeing in regard to the sort of bounce back of spend in more strategic areas like transformation? >> Well, I think what we're seeing right now and what we're hearing, especially for SMB customer, is cash is king. It's all about cash preservation. It's about making sure that... You'll hear some studies where some SMB customers only have three or four months left of cash in their kitty to keep their businesses running. So that is really top of mind now. Would they have to invest? If they don't want invest, they're going to be dead in the water to stay ahead of the competition. So what we're looking to do is really help those customers preserve that cash and reach and look for different ways about how to boost their budget. There's actually nothing better than an example. Brad laid out very nicely in terms of what we can do. Bringing it to life, not so much an SMB customer, but there is UNAD. And UNAD is a university in Columbia based in Bogota. And their mission is very simple, it's all about excellence and learning. But as they went into the pandemic, they needed to invest in their distance learning platforms to really help their students. And like most businesses, cash and budget was being squeezed. Revenues were tight. So it would've been very easy to postpone that investment. Well, what we did with UNAD and working with UNAD under IT team was firstly to understand their existing IT estate and really see what assets are being utilized, what are not being utilized, what assets have reached or ended their useful life. And you'd be amazed. And it's not just the data center, we can work right across their whole estate. So as well as the data center, we look at the PCs. To your point, David, we look at even their print estate. And we identified many, many assets that were being underutilized and other assets that were end of life. So we were able to take those assets back and actually release value and boosts UNAD's budget. And some of those assets could not. They had no value. And sustainability was top of their agenda as well. As you'd imagine, the university wanted to lead and show their students that sustainability is key. So we were able to take those assets back and actually recycle them in a very environmentally sound way. So that was the first step to actually inject some cash into their budgets. The next step then was to look at their existing financial contracts that they had in place where maybe some of their banks and actually restructured those contracts to actually give them additional capacity to invest right now in technology. And I'm delighted to say they partnered with the HPE team, I mean, Aruba, to actually continue their five-year roadmap and actually improved their distance learning platforms. So I just thought that was a really good example right now and in the current climate as to show when we work together with our customers, what's actually possible. >> So let's talk a little bit more about GreenLake. I mean, for decades, I mean, even if I go back to the '80s, I saw financial instruments to sort of rent essentially, but it's different. GreenLake, HPE, has pivoted its entire company to as a service. And I want to understand better what role HPE Financial Services plays in making that transition. It's obviously a crucial part of the financing piece, but Brad, maybe you could tell us a little bit more there. >> Yeah, sure. And I think the great thing about GreenLake is it's more than just a consumption model, it's really providing that cloud experience, on-prem, and being able for customers to really manage a hybrid cloud experience. But where HPEFS plays a role, again, it's around our knowledge and ability around assets. So we are underneath GreenLake, doing financial engineering, managing the assets. But the biggest thing, when you think about how does a customer transition? If they're in a traditional cash purchase paradigm, the cost of change and figuring out how to move into a new type of paradigm and new consumption model can be daunting. So HPFS works closely with our GreenLake team and the customer, and we can take those existing assets and look to accelerate the migration into a GreenLake. A great example of that, a public sector customer, Kern County, they were in that cash paradigm, they had lots of assets. Like most entities, they were under pressure from a budget perspective. Tax revenues were down for a couple years in a row. So not only did moving to a GreenLake model provide some cost savings, and cost savings are important, but it also allowed them to deliver the services they needed to their constituents because they had that pay for use type of flexibility. They didn't have a long delay in procuring and provisioning equipment when they needed to roll something out. And again, once again, HPFS was able to monetize their existing assets, roll those into a GreenLake solution and help self-fund that transformation and really accelerate it to get from that cash paradigm model to a new GreenLake consumption model. >> Paul, what about the channel? I mean, on the one hand, I could see the channels loving GreenLake because there's a lot of services involved, and it's sort of an ongoing drip of cash as opposed to the sort of big hit. But on the other hand, it's the ongoing drip of cash as opposed to the big hit. What's the conversations like with the channel? How is that going? I mean, clearly it's the future, but how do they see it? >> I wouldn't say a drip of cash. We would call it an in-use revenue where it's very predictable, which is actually also a good thing, rather than a sort of a one-and-done solution. So clearly, GreenLake is very important to our channel partners, and we're seeing some really good adoption across the world. Again, we underpin that. The other thing to say is a lot of channel partners, as you likely say, want as sell services and become service providers. And what we also do is support not just the data center, but also workplace and print. And what you'll see on the printing side for many, many years, the print partners have been selling a contractual type of model. But a lot of partners now are moving all of their core portfolio into as a service. And there's different parts. It's nearly a cash to as a service journey, and there's different parts of that ladder on the way. And we will look to help our partners get along that ladder and hopefully position GreenLake. But there's also more simpler solutions like subscription that we can position on that journey. So it's really helping that partner get the confidence and the financial wherewithal and the infrastructure to get on the as a service journey. >> How about solutions? I mean, you guys have had some recent announcements. Maybe Brad, you can take us through sort of what the highlights of those were. >> Sure. So yeah, the first announcement was really the example I just provided, which was how do we transition customers to GreenLake? So again, that's a really important step for many customers, and something that we can help them with is moving from that existing paradigm to GreenLake. The second is really helping customers create velocity to move their transformation programs faster. And we do that in a number of ways, but again, all around the asset in our asset management expertise, whether we look to put those assets back into reuse in their facility, or if we look to monetize those assets and put them into reuse with a different customer. Really, it's all around how do we accelerate the customers transformation as we come out of a pandemic. And then lastly, the offering is really focused on how can we help the customer look at existing budget and really financially engineer where they're spending their money to create new pools of budget and cash so they can fund new projects. So it's interesting because when I look at the customers that we're doing these things with, it really spans every industry. So we're dealing with financial services and insurance companies, communications and broadcasting, travel and hospitality, you name it, manufacturing. So the interesting thing is, while sometimes you come out with solutions that are very industry-specific, I think our circumstances today really span lots of industries, both in the commercial and the public sector. And we're finding that these offers are really relevant right now for customers. >> Let's zoom out for a bit. And Brad, let's start with you, and then Paul, I want to get your unique perspectives from the standpoint of SMB in the channel. Summarize your overall strategy in that context. And then I'm interested in, how important do you feel the HPE Financial Services is with regards... And of course, you guys are biased, but that's okay, I want to hear your bias view. How important is it in the grand scheme of actually doing business with HPE. And I'm interested in in why HPE and how much of a competitive advantage you bring relative to some of your major competitors. >> Yeah, sure. So look, the strategy, in my mind, I'll start with HPFS, it's really making sure that we're working closely with our customers, understanding their needs from a business perspective and what business outcomes they're trying to achieve and then marrying both the financial planning and the technology planning to help those customers deliver and achieve those business outcomes. Doing that, also in a way that is sustainable and is good for the environment and helps customers achieve their sustainability initiatives. So kind of marrying that financial technology and sustainability portion of it. From my perspective, I think HPE is a fantastic partner. One, we've been at GreenLake for quite a while, and it continues to evolve. The experiences that we can provide customers now are significantly advanced from when flex capacity came out years and years and years ago. So I really think if a customer took a look at GreenLake a few years ago, you need to keep looking at it because it really has evolved, really creates a unique experience. But I think it's the combination of our technology. We have great technology in our portfolio. We have a fantastic model in GreenLake, and then we have all of the financial engineering expertise around assets and lifecycles and how to get the most out of your IT investment. And we are a partner. If you have sustainability initiatives, I mean, HPE talks the talk, we walk the walk. We do all of this for ourselves, and then we bring those practices out and share best practices with customers. So I really think it's a great time to partner with HP if you're a customer. >> Right, thank you for that, Brad. Paul, what would you add for your constituents? >> Brad, said it beautifully. So just a couple of points I'd add in. From a partner perspective, we are actually in every corner of the world. So we have that global footprint. And then as you see, consolidation in the market, that's very important, not only for our customers, but also for our partners, more and more solutions are going cross border and involve different regions. And we look to make sure that we're globally consistent in how we work with our partners and work with our customers. And the final thing I'd say is we get very excited about supporting our HPE colleagues. But from a channel perspective, we actually also support HPI, HP Inc. You will recall, before separation, that the companies did. So we also support the workplace and print environments, plus third party vendors, which again, is important for the channel community. Why do you need a one-stop shell? And where you'll often have a mixed technology and the solution. So we're there for that as well and always have been. And I think the partner community love our consistency there >> It's a nice arrow when you quiver. And of course we've seen laptop demand explode. And it looks like it's going to sustain for a while here. It's hard to predict, but Paul, still with you, tell us, thinking about the future, what's getting you jazzed up? >> Well, I said we have a global footprint, and every country is in a different place right now. As we sort of come out of the pandemic, some countries are still in the midst of it. But what gets me jazzed up and what gets me excited is the sense of optimism. I think we're sort of figured out how to navigate our way out of this pandemic and the current environment. And customers all recognize the need to invest in technology. Technology is the way forward. So that means having the capacity, investment capacity, the investment vitality, to make that investment. So what gets me excited is what we do is important and we're there to help. >> Great. Thank you. And then Brad, two-part question for you to bring us home. So what are you excited about, and what do you got going at Discover? >> So in terms of my excitement, I think Paul said it well, every company is a technology company. And when we see that everybody is going through a digital transformation, quite frankly, we at HPEFS are going through our own digital transformation. Paul mentioned earlier about Technomics. We have omni-channel ways of engaging with us that are consistent. We're looking at our customer and partner experience and continuing to improve those. So we're not resting on our laurels in what we've done in the past, we continue to change, to modernize, to create new and better ways of doing business with our customer base. So the exciting part, for me, is that change that comes with innovation and technology. And I just think HPE is a great place to be right now with all of that innovation going on. So you asked about Discover. So we're really excited. We've got a spotlight with Irv Rothman focused on investment agility and key to growth and regeneration. So that's really exciting. We have a few breakouts, making technology a force for good, getting back on track that create the investment vitality to take on the world and investment strategies to accelerate innovation in a disruptive world. So really excited about that. And then last, we've got some demos. We have a live interactive demo on our technology renewal center, as well as some on-demand demos of those renewal centers as well. So we've got a lot going on at Discover, and we're really excited about it. >> Great. Gentlemen, thank you for that. So I mean, look, cost of capital is low, but to have a technology partner with you that's also has financial expertise, that, to me, is a killer combination. Guys, thanks so much for coming on theCUBE. I really appreciate your time. >> Dave, thanks for having us. >> Thanks, Dave. >> All right, and thank you for watching theCUBE's continuous coverage of HPE Discover 2021, the virtual edition. Keep it right there for more great content. (upbeat music)

>> from Austin, Texas. It's Theo Cube, covering your storage. Accelerate 2019. Brought to you by pure storage. >> Howdy, y'all Welcome back to the cubes. Coverage of Day one of pure accelerate 19 from Austin, Texas. I'm Lisa Martin. My co host is Day Volonte. We got a couple of gentlemen here chatting with us. Next, we've got one of our alumni. Mike Bundy's back head of Cisco Worldwide alliances for appear. Mike. Welcome back. >> Thank you. >> Sporting the very dapper >> It's not ours today, but it's enough. >> I like it. Very subtle on we've got Andrew Tenant joining us for the first time Senior manager Worldwide sales at Cisco Andrew, Welcome to the Cube. >> Thanks for having us. >> So we know we've had lots of conversations with Cisco and Cure Isis. Go live. Just a few months ago, Mike was on with this bright orange blazer. You guys have been partners for about four years now, Mike, let's start with you and talk about the evolution of that partnership from Bogota Market. A field A sales perspective, right? Overall partnership. How are things going? >> Well, things were great from a mo mentum perspective. We're we're on track to eclipse You know, I'm not supposed talk about a lot of numbers, but in the next year we will eclipse together a billion dollar run rate >> with partnership, which is tremendous milestone >> in a 4 to 5 year regulations. So things were, well, you know, it started from the field and what customers were requiring. And now, in the last, um, year, we've we've added about six new CDs were up to 22 we have three in the queue between now and the calendar year. So in terms of the growth, the product development and momentum, it's it's tremendous. And what we'll talk about today will be kind of one of the next generations and errors that that will hit on regarding this. >> And you guys were also we had a conversation a little bit ago with with Nathan Hall. Really, this partnership with Cisco and Pure is now getting started in the field, as you were talking about, but it's all the way down into the engineering level in terms of being very pervasive throughout. You guys have really achieve that. Yes, >> Yeah, top to bottom, right From From that field, engagement began. It was watching our customers embrace purest innovation. Right? And everywhere you turned pure was showing up, and it was it was really the field. Say, Hey, we got to get on board with this. And Tim Shanahan, who's part of our correctional organization on the descent aside, said, Hey, this is a big deal. We need to get in front of this thing. So that's really you. Mention where it started. And now we're doing everything from integrating products, right, integrating management tools to try to bring that together for our customers. And it's It's an awesome partnership. >> Absolutely. So where's the product focus. Where do we start? >> Yes, so you joked, right? Fibre channel. I think I remember Fibre Channel from many years ago. It Cisco, and then you look back and suddenly it's not dead, right? The truth is, five channels the best protocol for mission critical storage traffic that's ever been built. It's probably best critical out there for that. It's not sexy, though, right, so we can't took our eye off the ball at Cisco. But as we now develop these next generation storage technologies, there's never been a more important time to bring that switching fabric into play right It's absolutely critical that we have the right tools to accomplish what our customers trying to deliver from applications standpoint. So the agility, the visibility, just the overall performance is more important today. That was back in sort of that the heyday of fibre channel, if you will. Right? So the partnership that we're working on right now is making sure that we're we're maximizing the outcome of these investments. Custer's making with all of yours storage offerings, leveraging a sand infrastructure that's compatible with it and really gonna make it sing. >> And you're right and you go back 10 plus years and it was a vice scuzzy was coming in, but had some f f C bigots is that I will never hang on to win the NFC. Oh, we now you got N v m e over fabric. We'll talk about that. But so from pure perspective, you have always had to pay attention to that segment of the market. Guys went hard after the high end. Of'em sees business, which was heavy fiber channel, absolutely early days. >> Yeah, I mean four out of five of our razor attached fibre channel to a customer's environment. It is core to what we do. And we're excited about the resell opportunity that we just started with pure because, you know, Andrew and I joke last week, but we put pen to paper in terms of we believe our our introduction of this is a re silk and help them grow their sand business by 35 40%. And that's the kind of disruption that we're seeing with our A raise in the market. And we think because of how we're evolving customers to modernize those networks, that we can drag the Sisko Fibre Channel business right along with it. >> This is a sorry Mike. This is a re sell pure reselling wth the MDS product line. How is you the pure Channel? Responding to this news? >> They love it because it's it's a new buying center, you know that they're getting to talk to Ah, and it helps us, you know, establish Maur, you know, understanding the customers, whole business, not just from a storage perspective. So >> So how was envy? Emmy changing landscape? What do you guys seeing there? I mean, you guys, I think the first another first Charlie didn't mention it today on stage, So money first. It's hard to keep track of. But how is that affecting? You know what's going on in the field? >> Yeah. So I mean, again, it's the timing of this generational shift to next. Gen. Sarge, envy me being probably the most critical of that. If we look at what happened with all flash A raise, for example, all of those ended up on critical mission critical workloads and all ended up on fibre Channel 80. 85% of those end up on that legacy technology because it was so capable of getting the job done. Envy me is gonna take us another leap forward so customers will be challenged toe have something that lives both in the what they have today and bridges them to that future proof state. Right? So it's absolutely critical that you have tools that are gonna let you adopt envy me as it makes sense on carry it operationally alongside the same modality that you had for those workloads in the past, right? That's the key. Is that the folks we're gonna own this stuff going forward to the ones who own it now, right? Just with maybe older technology >> and the business impact is what you could do more with less performance, lower costs, more >> last performance, visibility right so you can help. Troubleshoot way had a situation not that long ago where a customer had Honore, not it was a competitive ray, right? It was getting hammered and it was locking up. And when they looked at the the forensics coming off, the rate said they had 4000 I ops off of that array. A very nominal amount. It should have been the problem. It shifted the focus elsewhere. Well, using some of the telemetry built into the MPs platform, it was obvious that there were 25,000 I ops hitting that array because VM, where was doing a lot of command control traffic to the array. So having that visibility at the's scales and speeds, if you don't know what you're doing, you can't see what's going on. You could be flying blind and struggling and everybody loses there. So >> you know we're excited about this because we don't want to bring our rays into an environment that's not suited for high end performance and reliability, cause that's what we've kind of made our brand on when it comes to customer networks, especially with the X 60 and nineties that we launched the year ago. They're all envy me ready. So we want to make sure that, as we did, ploy that that the entire infrastructure's ready and Cisco, in my opinion, has the best. Every product is 64 gig capable. It's envy me today. And so we're ready, you know, envy me, you know, in the end, if you will. So when when the host are ready to take advantage of this full network and full storage system, we're ready. Um, an Andrew also mentioned analytics. So, you know, >> we we >> extract ourselves on the analytics capabilities of our system as it works today with after one and so that allows us to, you know, very quickly using machine learning solve most of our customers problems. In fact, we open about 85% of our own customers tak cases for them because we predict when things were going to get rough and bumpy. So as we extend and bridge that together with what Cisco has and their Sandwich Analytics capability, it's gonna make the experience way different than it would be on a competitive sand fabric and a competitive storage array, whether it's flash or not. So that's that's what we're doing together, which makes fiber Channel better and more unique than it has been in the past. >> In terms of adoption. You mentioned when the host guys already, What's the blocker? There's just silicon. Is it just, >> you know, you could You could take Cisco's example. You know, they're they're looking at the new memory technology. And how do they apply that to the interface adapter? And how do you handle that situation? So, you know, as they evolve their next platform, it will be pervasive in that. And I'm sure that the other you know, host providers are gonna be doing >> standards standards. Low hanging fruit was envy me over converge Ethernet, right, because that was kind of the first place to start. But reality is weaken were the only vendor who can provide both of those in the Cisco side. Right. So we have the same tooling on the same, actually administrative tooling on on either. Right. So that's ah, terrific. >> And it's not just the infrastructure from the hostess, the operating system as well. So you know Lennox can take advantage of it in a different way. So, you know, we're seeing most of our deployments today, our fibre channel over Ethernet, because the the customer base that air deploying that are purely a Linux based environment. So they're able to do that. So, as you know, not all of our enterprising and commercial customers run that environment. So it's It's a little bit of the technology. It's a little bit of the Intel cycle. It's a little bit of the operating system, but the point is, we're ready. And there's a long, long road map. You know, for customers if we go this route, >> when should customers start thinking about this terms >> immediately? Right? Ultimately, it's not a question of if it's a question of when, but if they're, if they're getting things ready now, if you're making investment today, you can make an investment today that accommodates what you're doing today. Like back in the day. If we were selling a storage platform, the sandwich is sort of this necessary thing behind the scenes. That wasn't necessarily you could actually let it sit there for a couple of generations of the storage it was supporting. That's no longer going to be the case right, because, quite simply, the evolution on the storage front. And it's so much faster that you need to make sure the thing you're plugging it into. That's a simple question for any customer there. What'd you plugging this into right? Because at the end of the day, if it's just that that old san you have sitting around it may or may not be capable. Regardless of Endor, right, it's it's gonna actually diminished value you get in the time value of that investment you've made in this incredible platform. >> So where are you having these customer conversations that we talk about the joint go to market in the field? You know, it's It's not just about fibre channel and speed and storage, these air business critical work loads that are being protected and run and access to be able to extract all these insights. When you're talking with customers, where are you? You're not at the storage. I've been level. I imagine this is a much more business intensive conversation. It's a >> great question. Go ahead. >> So I think you know people that are driving the cloud platform strategy for the infrastructure. They obviously need to understand how. How does this work in a hybrid cloud or multi cloud environment? Then you've got, you know, the people that are developing the mission Mission critical business APS. Whether that's you know, Oracle s a p et cetera, et cetera. But it's also the non traditional business APS that are coming to play things that leverage stores that are file or object oriented, or kubernetes or things like that. It's so you're having discussions with the teams that are deploying the apse for the business and that will drive and dictate the requirements. Is that you know, we're trying to help the infrastructure on the cloud infrastructure teams adapt to >> multi cloud piece gets interesting here, right? Because us now talk about building massively scalable distributed systems, and you're not gonna be able to You don't want to necessarily ship all your data around, but you want to ship the metadata and be smart enough to know where the data is so you can go ship to compute right to the data, right? And I >> think that that's another interesting thing. And a positive aspect of leveraging some things we've already done with Cisco is you know they have the concept of a C I anywhere. No, you know, just like we're doing with Cloud Block store of extending that storage capability into the cloud. Cisco has done the same with a C I. So it's not just it's not sure, making sure the workload in the data payload our mobile, but also the application. And that's, you know, yes, that that may not be the case today for Fibre Channel, but the technology is there if the customer demands it. So that's 60% of Cisco's revenue in the data center comes from his networking core. That's what we're more excited about. The next generation's partnership is we feel like we've done a good job and built momentum with the computer part of their business, and I think as we evolve into this part of the business, it's gonna It's gonna be better for customers. In the end, >> it's either today, customers gonna spend more time operating this than anything, right, and really, that's all about visibility. Meantime, the resolution just how quickly they can make sure that those this thing's running and and as proactively get in front of congestion and issues at a time if they can. So it's Ah, it's a complimentary hardware software problem solved. You have to be able to do things at extremely high rates of speed with visibility I've never seen before. So analytics built into a six incredibly important stuff to get that streaming right out of the chip so you could tell what's going on at any level of the stack. Where is Like I said today, we've seen many cases now where their challenges in the network and in the sand and on the array and everyone's blind to it because our >> engineers love it because the monitoring and the scoping capability that were required, a lot of sand fabrics to deploy would require extra tools. Extra tap kits Cisco has at built in the A six so literally. It's just enable that with software. And you can do all the diagnostics you ever wanted to do at the at the wire and the fiber level, >> as opposed to a discreet probe. Exactly a disruptive drives the >> costs way out. The complexity reduces risk troubleshooting floor space, you know, the whole you know >> that's big time >> based. So today there's an issue. Last night Hey, Mike, what happened last night? I know. Let me know. That happens again. That's pretty much the ticket Close, right? We could actually go back in time now kind of a DVR and actually see now for the first time in a sand fabric what's actually happening and go back and reconstruct it to figure out how we proactively prevent it going on from the next time. So >> so, Mike, Last question. We're out of time. But last question for you. Everybody says future proof. Pardon? Everybody says future proved how are is pure delivering that with Cisco. What is it gonna mean to that business leader that I have an infrastructure in place that will truly be the food? Your proof? >> Good question. So you know, it's evergreen is the term that pure uses for you know what we do. So you never buy the same storage twice, right? And if you look at the platform that Cisco has for MDS, it is clearly capable to 400 gig capability. And today most networks are purchased for 30 to get capable with 16 gig optics, so they have 32 64. There's a long way to go here so the platform and their innovation will continue this to be, you know, a future proof network that marries up with our evergreen story. So we were excited We wouldn't get in this relationship if we felt that it was not gonna provide the same level of benefits and standard that we have for our own customers. So >> correct. Mike Andrew. Thank you for joining David me on the Q. But way. Look forward to hearing what happens in your five of the pure Cisco relationship. I know. We'll probably stay tuned. I know we'll see you again. Thank you for your time. Thanks for David. Dante. I Lisa Martin. You're watching the cue from pure accelerate 19.

(electronic dance music) (Intel Jingle) (ethereal electronic dance music) ♪ Okay ♪ (upbeat techno dance music) ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh oh ♪ ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh oh ♪ ♪ Take it back take it back ♪ ♪ Take it back ♪ ♪ Take it back take it back ♪ ♪ Take it back ♪ ♪ Take it back take it back ♪ ♪ Yeah everybody get loose yeah ♪ ♪ Yeah ♪ ♪ Ye-yeah yeah ♪ ♪ Yeah yeah ♪ ♪ Everybody everybody yeah ♪ ♪ Whoo whoo ♪ ♪ Whoo whoo ♪ ♪ Whoo yeah ♪ ♪ Everybody get loose whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ >> As a courtesy to the presenters and those around you, please silence all mobile devices, thank you. (electronic dance music) ♪ Everybody get loose ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ (upbeat salsa music) ♪ Ha ha ha ♪ ♪ Ah ♪ ♪ Ha ha ha ♪ ♪ So happy ♪ ♪ Whoo whoo ♪ (female singer scatting) >> Ladies and gentlemen, please take your seats. Our program will begin momentarily. ♪ Hey ♪ (female singer scatting) (male singer scatting) ♪ Hey ♪ ♪ Whoo ♪ (female singer scatting) (electronic dance music) ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ Red don't go ♪ ♪ All hands are in don't go ♪ ♪ In don't go ♪ ♪ Oh red go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are red don't go ♪ ♪ All hands are in red red red red ♪ ♪ All hands are in don't go ♪ ♪ All hands are in red go ♪ >> Ladies and gentlemen, there are available seats. Towards house left, house left there are available seats. If you are please standing, we ask that you please take an available seat. We will begin momentarily, thank you. ♪ Let go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ (upbeat electronic dance music) ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ I live ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Hey ♪ ♪ Yeah ♪ ♪ Oh ♪ ♪ Ah ♪ ♪ Ah ah ah ah ah ah ♪ ♪ Just make me ♪ ♪ Just make me ♪ (bouncy techno music) >> Ladies and gentlemen, once again we ask that you please take the available seats to your left, house left, there are many available seats. If you are standing, please make your way there. The program will begin momentarily, thank you. Good morning! This is Lenovo Transform 2.0! (keyboard clicks) >> Progress. Why do we always talk about it in the future? When will it finally get here? We don't progress when it's ready for us. We need it when we're ready, and we're ready now. Our hospitals and their patients need it now, our businesses and their customers need it now, our cities and their citizens need it now. To deliver intelligent transformation, we need to build it into the products and solutions we make every day. At Lenovo, we're designing the systems to fight disease, power businesses, and help you reach more customers, end-to-end security solutions to protect your data and your companies reputation. We're making IT departments more agile and cost efficient. We're revolutionizing how kids learn with VR. We're designing smart devices and software that transform the way you collaborate, because technology shouldn't just power industries, it should power people. While everybody else is talking about tomorrow, we'll keep building today, because the progress we need can't wait for the future. >> Please welcome to the stage Lenovo's Rod Lappen! (electronic dance music) (audience applauding) >> Alright. Good morning everyone! >> Good morning. >> Ooh, that was pretty good actually, I'll give it one more shot. Good morning everyone! >> Good morning! >> Oh, that's much better! Hope everyone's had a great morning. Welcome very much to the second Lenovo Transform event here in New York. I think when I got up just now on the steps I realized there's probably one thing in common all of us have in this room including myself which is, absolutely no one has a clue what I'm going to say today. So, I'm hoping very much that we get through this thing very quickly and crisply. I love this town, love New York, and you're going to hear us talk a little bit about New York as we get through here, but just before we get started I'm going to ask anyone who's standing up the back, there are plenty of seats down here, and down here on the right hand side, I think he called it house left is the professional way of calling it, but these steps to my right, your left, get up here, let's get you all seated down so that you can actually sit down during the keynote session for us. Last year we had our very first Lenovo Transform. We had about 400 people. It was here in New York, fantastic event, today, over 1,000 people. We have over 62 different technology demonstrations and about 15 breakout sessions, which I'll talk you through a little bit later on as well, so it's a much bigger event. Next year we're definitely going to be shooting for over 2,000 people as Lenovo really transforms and starts to address a lot of the technology that our commercial customers are really looking for. We were however hampered last year by a storm, I don't know if those of you who were with us last year will remember, we had a storm on the evening before Transform last year in New York, and obviously the day that it actually occurred, and we had lots of logistics. Our media people from AMIA were coming in. They took the, the plane was circling around New York for a long time, and Kamran Amini, our General Manager of our Data Center Infrastructure Group, probably one of our largest groups in the Lenovo DCG business, took 17 hours to get from Raleigh, North Carolina to New York, 17 hours, I think it takes seven or eight hours to drive. Took him 17 hours by plane to get here. And then of course this year, we have Florence. And so, obviously the hurricane Florence down there in the Carolinas right now, we tried to help, but still Kamran has made it today. Unfortunately, very tragically, we were hoping he wouldn't, but he's here today to do a big presentation a little bit later on as well. However, I do want to say, obviously, Florence is a very serious tragedy and we have to take it very serious. We got, our headquarters is in Raleigh, North Carolina. While it looks like the hurricane is just missing it's heading a little bit southeast, all of our thoughts and prayers and well wishes are obviously with everyone in the Carolinas on behalf of Lenovo, everyone at our headquarters, everyone throughout the Carolinas, we want to make sure everyone stays safe and out of harm's way. We have a great mixture today in the crowd of all customers, partners, industry analysts, media, as well as our financial analysts from all around the world. There's over 30 countries represented here and people who are here to listen to both YY, Kirk, and Christian Teismann speak today. And so, it's going to be a really really exciting day, and I really appreciate everyone coming in from all around the world. So, a big round of applause for everyone whose come in. (audience applauding) We have a great agenda for you today, and it starts obviously a very consistent format which worked very successful for us last year, and that's obviously our keynote. You'll hear from YY, our CEO, talk a little bit about the vision he has in the industry and how he sees Lenovo's turned the corner and really driving some great strategy to address our customer's needs. Kirk Skaugen, our Executive Vice President of DCG, will be up talking about how we've transformed the DCG business and once again are hitting record growth ratios for our DCG business. And then you'll hear from Christian Teismann, our SVP and General Manager for our commercial business, get up and talk about everything that's going on in our IDG business. There's really exciting stuff going on there and obviously ThinkPad being the cornerstone of that I'm sure he's going to talk to us about a couple surprises in that space as well. Then we've got some great breakout sessions, I mentioned before, 15 breakout sessions, so while this keynote section goes until about 11:30, once we get through that, please go over and explore, and have a look at all of the breakout sessions. We have all of our subject matter experts from both our PC, NBG, and our DCG businesses out to showcase what we're doing as an organization to better address your needs. And then obviously we have the technology pieces that I've also spoken about, 62 different technology displays there arranged from everything IoT, 5G, NFV, everything that's really cool and hot in the industry right now is going to be on display up there, and I really encourage all of you to get up there. So, I'm going to have a quick video to show you from some of the setup yesterday on a couple of the 62 technology displays we've got on up on stage. Okay let's go, so we've got a demonstrations to show you today, one of the greats one here is the one we've done with NC State, a high-performance computing artificial intelligence demonstration of fresh produce. It's about modeling the population growth of the planet, and how we're going to supply water and food as we go forward. Whoo. Oh, that is not an apple. Okay. (woman laughs) Second one over here is really, hey Jonas, how are you? Is really around virtual reality, and how we look at one of the most amazing sites we've got, as an install on our high-performance computing practice here globally. And you can see, obviously, that this is the Barcelona supercomputer, and, where else in New York can you get access to being able to see something like that so easily? Only here at Lenovo Transform. Whoo, okay. (audience applauding) So there's two examples of some of the technology. We're really encouraging everyone in the room after the keynote to flow into that space and really get engaged, and interact with a lot of the technology we've got up there. It seems I need to also do something about my fashion, I've just realized I've worn a vest two days in a row, so I've got to work on that as well. Alright so listen, the last thing on the agenda, we've gone through the breakout sessions and the demo, tonight at four o'clock, there's about 400 of you registered to be on the cruise boat with us, the doors will open behind me. the boat is literally at the pier right behind us. You need to make sure you're on the boat for 4:00 p.m. this evening. Outside of that, I want everyone to have a great time today, really enjoy the experience, make it as experiential as you possibly can, get out there and really get in and touch the technology. There's some really cool AI displays up there for us all to get involved in as well. So ladies and gentlemen, without further adieu, it gives me great pleasure to introduce to you a lover of tennis, as some of you would've heard last year at Lenovo Transform, as well as a lover of technology, Lenovo, and of course, New York City. I am obviously very pleasured to introduce to you Yang Yuanqing, our CEO, as we like to call him, YY. (audience applauding) (upbeat funky music) >> Good morning, everyone. >> Good morning. >> Thank you Rod for that introduction. Welcome to New York City. So, this is the second year in a row we host our Transform event here, because New York is indeed one of the most transformative cities in the world. Last year on this stage, I spoke about the Fourth Industrial Revolution, and our vision around the intelligent transformation, how it would fundamentally change the nature of business and the customer relationships. And why preparing for this transformation is the key for the future of our company. And in the last year I can assure you, we were being very busy doing just that, from searching and bringing global talents around the world to the way we think about every product and every investment we make. I was here in New York just a month ago to announce our fiscal year Q1 earnings, which was a good day for us. I think now the world believes it when we say Lenovo has truly turned the corner to a new phase of growth and a new phase of acceleration in executing the transformation strategy. That's clear to me is that the last few years of a purposeful disruption at Lenovo have led us to a point where we can now claim leadership of the coming intelligent transformation. People often asked me, what is the intelligent transformation? I was saying this way. This is the unlimited potential of the Fourth Industrial Revolution driven by artificial intelligence being realized, ordering a pizza through our speaker, and locking the door with a look, letting your car drive itself back to your home. This indeed reflect the power of AI, but it just the surface of it. The true impact of AI will not only make our homes smarter and offices more efficient, but we are also completely transformed every value chip in every industry. However, to realize these amazing possibilities, we will need a structure built around the key components, and one that touches every part of all our lives. First of all, explosions in new technology always lead to new structures. This has happened many times before. In the early 20th century, thousands of companies provided a telephone service. City streets across the US looked like this, and now bundles of a microscopic fiber running from city to city bring the world closer together. Here's what a driving was like in the US, up until 1950s. Good luck finding your way. (audience laughs) And today, millions of vehicles are organized and routed daily, making the world more efficient. Structure is vital, from fiber cables and the interstate highways, to our cells bounded together to create humans. Thankfully the structure for intelligent transformation has emerged, and it is just as revolutionary. What does this new structure look like? We believe there are three key building blocks, data, computing power, and algorithms. Ever wondered what is it behind intelligent transformation? What is fueling this miracle of human possibility? Data. As the Internet becomes ubiquitous, not only PCs, mobile phones, have come online and been generating data. Today it is the cameras in this room, the climate controls in our offices, or the smart displays in our kitchens at home. The number of smart devices worldwide will reach over 20 billion in 2020, more than double the number in 2017. These devices and the sensors are connected and generating massive amount of data. By 2020, the amount of data generated will be 57 times more than all the grains of sand on Earth. This data will not only make devices smarter, but will also fuel the intelligence of our homes, offices, and entire industries. Then we need engines to turn the fuel into power, and the engine is actually the computing power. Last but not least the advanced algorithms combined with Big Data technology and industry know how will form vertical industrial intelligence and produce valuable insights for every value chain in every industry. When these three building blocks all come together, it will change the world. At Lenovo, we have each of these elements of intelligent transformations in a single place. We have built our business around the new structure of intelligent transformation, especially with mobile and the data center now firmly part of our business. I'm often asked why did you acquire these businesses? Why has a Lenovo gone into so many fields? People ask the same questions of the companies that become the leaders of the information technology revolution, or the third industrial transformation. They were the companies that saw the future and what the future required, and I believe Lenovo is the company today. From largest portfolio of devices in the world, leadership in the data center field, to the algorithm-powered intelligent vertical solutions, and not to mention the strong partnership Lenovo has built over decades. We are the only company that can unify all these essential assets and deliver end to end solutions. Let's look at each part. We now understand the important importance data plays as fuel in intelligent transformation. Hundreds of billions of devices and smart IoTs in the world are generating better and powering the intelligence. Who makes these devices in large volume and variety? Who puts these devices into people's home, offices, manufacturing lines, and in their hands? Lenovo definitely has the front row seats here. We are number one in PCs and tablets. We also produces smart phones, smart speakers, smart displays. AR/VR headsets, as well as commercial IoTs. All of these smart devices, or smart IoTs are linked to each other and to the cloud. In fact, we have more than 20 manufacturing facilities in China, US, Brazil, Japan, India, Mexico, Germany, and more, producing various devices around the clock. We actually make four devices every second, and 37 motherboards every minute. So, this factory located in my hometown, Hu-fi, China, is actually the largest laptop factory in the world, with more than three million square feet. So, this is as big as 42 soccer fields. Our scale and the larger portfolio of devices gives us access to massive amount of data, which very few companies can say. So, why is the ability to scale so critical? Let's look again at our example from before. The early days of telephone, dozens of service providers but only a few companies could survive consolidation and become the leader. The same was true for the third Industrial Revolution. Only a few companies could scale, only a few could survive to lead. Now the building blocks of the next revolution are locking into place. The (mumbles) will go to those who can operate at the scale. So, who could foresee the total integration of cloud, network, and the device, need to deliver intelligent transformation. Lenovo is that company. We are ready to scale. Next, our computing power. Computing power is provided in two ways. On one hand, the modern supercomputers are providing the brute force to quickly analyze the massive data like never before. On the other hand the cloud computing data centers with the server storage networking capabilities, and any computing IoT's, gateways, and miniservers are making computing available everywhere. Did you know, Lenovo is number one provider of super computers worldwide? 170 of the top 500 supercomputers, run on Lenovo. We hold 89 World Records in key workloads. We are number one in x86 server reliability for five years running, according to ITIC. a respected provider of industry research. We are also the fastest growing provider of hyperscale public cloud, hyper-converged and aggressively growing in edge computing. cur-ges target, we are expand on this point soon. And finally to run these individual nodes into our symphony, we must transform the data and utilize the computing power with advanced algorithms. Manufactured, industry maintenance, healthcare, education, retail, and more, so many industries are on the edge of intelligent transformation to improve efficiency and provide the better products and services. We are creating advanced algorithms and the big data tools combined with industry know-how to provide intelligent vertical solutions for several industries. In fact, we studied at Lenovo first. Our IT and research teams partnered with our global supply chain to develop an AI that improved our demand forecasting accuracy. Beyond managing our own supply chain we have offered our deep learning supply focused solution to other manufacturing companies to improve their efficiency. In the best case, we have improved the demand, focused the accuracy by 30 points to nearly 90 percent, for Baosteel, the largest of steel manufacturer in China, covering the world as well. Led by Lenovo research, we launched the industry-leading commercial ready AR headset, DaystAR, partnering with companies like the ones in this room. This technology is being used to revolutionize the way companies service utility, and even our jet engines. Using our workstations, servers, and award-winning imaging processing algorithms, we have partnered with hospitals to process complex CT scan data in minutes. So, this enable the doctors to more successfully detect the tumors, and it increases the success rate of cancer diagnosis all around the world. We are also piloting our smart IoT driven warehouse solution with one of the world's largest retail companies to greatly improve the efficiency. So, the opportunities are endless. This is where Lenovo will truly shine. When we combine the industry know-how of our customers with our end-to-end technology offerings, our intelligent vertical solutions like this are growing, which Kirk and Christian will share more. Now, what will drive this transformation even faster? The speed at which our networks operate, specifically 5G. You may know that Lenovo just launched the first-ever 5G smartphone, our Moto Z3, with the new 5G Moto model. We are partnering with multiple major network providers like Verizon, China Mobile. With the 5G model scheduled to ship early next year, we will be the first company to provide a 5G mobile experience to any users, customers. This is amazing innovation. You don't have to buy a new phone, just the 5G clip on. What can I say, except wow. (audience laughs) 5G is 10 times the fast faster than 4G. Its download speed will transform how people engage with the world, driverless car, new types of smart wearables, gaming, home security, industrial intelligence, all will be transformed. Finally, accelerating with partners, as ready as we are at Lenovo, we need partners to unlock our full potential, partners here to create with us the edge of the intelligent transformation. The opportunities of intelligent transformation are too profound, the scale is too vast. No company can drive it alone fully. We are eager to collaborate with all partners that can help bring our vision to life. We are dedicated to open partnerships, dedicated to cross-border collaboration, unify the standards, share the advantage, and market the synergies. We partner with the biggest names in the industry, Intel, Microsoft, AMD, Qualcomm, Google, Amazon, and Disney. We also find and partner with the smaller innovators as well. We're building the ultimate partner experience, open, shared, collaborative, diverse. So, everything is in place for intelligent transformation on a global scale. Smart devices are everywhere, the infrastructure is in place, networks are accelerating, and the industries demand to be more intelligent, and Lenovo is at the center of it all. We are helping to drive change with the hundreds of companies, companies just like yours, every day. We are your partner for intelligent transformation. Transformation never stops. This is what you will hear from Kirk, including details about Lenovo NetApp global partnership we just announced this morning. We've made the investments in every single aspect of the technology. We have the end-to-end resources to meet your end-to-end needs. As you attend the breakout session this afternoon, I hope you see for yourself how much Lenovo has transformed as a company this past year, and how we truly are delivering a future of intelligent transformation. Now, let me invite to the stage Kirk Skaugen, our president of Data Center growth to tell you about the exciting transformation happening in the global Data C enter market. Thank you. (audience applauding) (upbeat music) >> Well, good morning. >> Good morning. >> Good morning! >> Good morning! >> Excellent, well, I'm pleased to be here this morning to talk about how we're transforming the Data Center and taking you as our customers through your own intelligent transformation journey. Last year I stood up here at Transform 1.0, and we were proud to announce the largest Data Center portfolio in Lenovo's history, so I thought I'd start today and talk about the portfolio and the progress that we've made over the last year, and the strategies that we have going forward in phase 2.0 of Lenovo's transformation to be one of the largest data center companies in the world. We had an audacious vision that we talked about last year, and that is to be the most trusted data center provider in the world, empowering customers through the new IT, intelligent transformation. And now as the world's largest supercomputer provider, giving something back to humanity, is very important this week with the hurricanes now hitting North Carolina's coast, but we take this most trusted aspect very seriously, whether it's delivering the highest quality products on time to you as customers with the highest levels of security, or whether it's how we partner with our channel partners and our suppliers each and every day. You know we're in a unique world where we're going from hundreds of millions of PCs, and then over the next 25 years to hundred billions of connected devices, so each and every one of you is going through this intelligent transformation journey, and in many aspects were very early in that cycle. And we're going to talk today about our role as the largest supercomputer provider, and how we're solving humanity's greatest challenges. Last year we talked about two special milestones, the 25th anniversary of ThinkPad, but also the 25th anniversary of Lenovo with our IBM heritage in x86 computing. I joined the workforce in 1992 out of college, and the IBM first personal server was launching at the same time with an OS2 operating system and a free mouse when you bought the server as a marketing campaign. (audience laughing) But what I want to be very clear today, is that the innovation engine is alive and well at Lenovo, and it's really built on the culture that we're building as a company. All of these awards at the bottom are things that we earned over the last year at Lenovo. As a Fortune now 240 company, larger than companies like Nike, or AMEX, or Coca-Cola. The one I'm probably most proud of is Forbes first list of the top 2,000 globally regarded companies. This was something where 15,000 respondents in 60 countries voted based on ethics, trustworthiness, social conduct, company as an employer, and the overall company performance, and Lenovo was ranked number 27 of 2000 companies by our peer group, but we also now one of-- (audience applauding) But we also got a perfect score in the LGBTQ Equality Index, exemplifying the diversity internally. We're number 82 in the top working companies for mothers, top working companies for fathers, top 100 companies for sustainability. If you saw that factory, it's filled with solar panels on the top of that. And now again, one of the top global brands in the world. So, innovation is built on a customer foundation of trust. We also said last year that we'd be crossing an amazing milestone. So we did, over the last 12 months ship our 20 millionth x86 server. So, thank you very much to our customers for this milestone. (audience applauding) So, let me recap some of the transformation elements that have happened over the last year. Last year I talked about a lot of brand confusion, because we had the ThinkServer brand from the legacy Lenovo, the System x, from IBM, we had acquired a number of networking companies, like BLADE Network Technologies, et cetera, et cetera. Over the last year we've been ramping based on two brand structures, ThinkAgile for next generation IT, and all of our software-defined infrastructure products and ThinkSystem as the world's highest performance, highest reliable x86 server brand, but for servers, for storage, and for networking. We have transformed every single aspect of the customer experience. A year and a half ago, we had four different global channel programs around the world. Typically we're about twice the mix to our channel partners of any of our competitors, so this was really important to fix. We now have a single global Channel program, and have technically certified over 11,000 partners to be technical experts on our product line to deliver better solutions to our customer base. Gardner recently recognized Lenovo as the 26th ranked supply chain in the world. And, that's a pretty big honor, when you're up there with Amazon and Walmart and others, but in tech, we now are in the top five supply chains. You saw the factory network from YY, and today we'll be talking about product shipping in more than 160 countries, and I know there's people here that I've met already this morning, from India, from South Africa, from Brazil and China. We announced new Premier Support services, enabling you to go directly to local language support in nine languages in 49 countries in the world, going directly to a native speaker level three support engineer. And today we have more than 10,000 support specialists supporting our products in over 160 countries. We've delivered three times the number of engineered solutions to deliver a solutions orientation, whether it's on HANA, or SQL Server, or Oracle, et cetera, and we've completely reengaged our system integrator channel. Last year we had the CIO of DXE on stage, and here we're talking about more than 175 percent growth through our system integrator channel in the last year alone as we've brought that back and really built strong relationships there. So, thank you very much for amazing work here on the customer experience. (audience applauding) We also transformed our leadership. We thought it was extremely important with a focus on diversity, to have diverse talent from the legacy IBM, the legacy Lenovo, but also outside the industry. We made about 19 executive changes in the DCG group. This is the most senior leadership team within DCG, all which are newly on board, either from our outside competitors mainly over the last year. About 50 percent of our executives were now hired internally, 50 percent externally, and 31 percent of those new executives are diverse, representing the diversity of our global customer base and gender. So welcome, and most of them you're going to be able to meet over here in the breakout sessions later today. (audience applauding) But some things haven't changed, they're just keeping getting better within Lenovo. So, last year I got up and said we were committed with the new ThinkSystem brand to be a world performance leader. You're going to see that we're sponsoring Ducati for MotoGP. You saw the Ferrari out there with Formula One. That's not a surprise. We want the Lenovo ThinkSystem and ThinkAgile brands to be synonymous with world record performance. So in the last year we've gone from 39 to 89 world records, and partners like Intel would tell you, we now have four times the number of world record workloads on Lenovo hardware than any other server company on the planet today, with more than 89 world records across HPC, Java, database, transaction processing, et cetera. And we're proud to have just brought on Doug Fisher from Intel Corporation who had about 10-17,000 people on any given year working for him in workload optimizations across all of our software. It's just another testament to the leadership team we're bringing in to keep focusing on world-class performance software and solutions. We also per ITIC, are the number one now in x86 server reliability five years running. So, this is a survey where CIOs are in a blind survey asked to submit their reliability of their uptime on their x86 server equipment over the last 365 days. And you can see from 2016 to 2017 the downtime, there was over four hours as noted by the 750 CXOs in more than 20 countries is about one percent for the Lenovo products, and is getting worse generation from generation as we went from Broadwell to Pearlie. So we're taking our reliability, which was really paramount in the IBM System X heritage, and ensuring that we don't just recognize high performance but we recognize the highest level of reliability for mission-critical workloads. And what that translates into is that we at once again have been ranked number one in customer satisfaction from you our customers in 19 of 22 attributes, in North America in 18 of 22. This is a survey by TVR across hundreds of customers of us and our top competitors. This is the ninth consecutive study that we've been ranked number one in customer satisfaction, so we're taking this extremely seriously, and in fact YY now has increased the compensation of every single Lenovo employee. Up to 40 percent of their compensation bonus this year is going to be based on customer metrics like quality, order to ship, and things of this nature. So, we're really putting every employee focused on customer centricity this year. So, the summary on Transform 1.0 is that every aspect of what you knew about Lenovo's data center group has transformed, from the culture to the branding to dedicated sales and marketing, supply chain and quality groups, to a worldwide channel program and certifications, to new system integrator relationships, and to the new leadership team. So, rather than me just talk about it, I thought I'd share a quick video about what we've done over the last year, if you could run the video please. Turn around for a second. (epic music) (audience applauds) Okay. So, thank you to all our customers that allowed us to publicly display their logos in that video. So, what that means for you as investors, and for the investor community out there is, that our customers have responded, that this year Gardner just published that we are the fastest growing server company in the top 10, with 39 percent growth quarter-on-quarter, and 49 percent growth year-on-year. If you look at the progress we've made since the transformation the last three quarters publicly, we've grown 17 percent, then 44 percent, then 68 percent year on year in revenue, and I can tell you this quarter I'm as confident as ever in the financials around the DCG group, and it hasn't been in one area. You're going to see breakout sessions from hyperscale, software-defined, and flash, which are all growing more than a 100 percent year-on-year, supercomputing which we'll talk about shortly, now number one, and then ultimately from profitability, delivering five consecutive quarters of pre-tax profit increase, so I think, thank you very much to the customer base who's been working with us through this transformation journey. So, you're here to really hear what's next on 2.0, and that's what I'm excited to talk about today. Last year I came up with an audacious goal that we would become the largest supercomputer company on the planet by 2020, and this graph represents since the acquisition of the IBM System x business how far we were behind being the number one supercomputer. When we started we were 182 positions behind, even with the acquisition for example of SGI from HP, we've now accomplished our goal actually two years ahead of time. We're now the largest supercomputer company in the world. About one in every four supercomputers, 117 on the list, are now Lenovo computers, and you saw in the video where the universities are said, but I think what I'm most proud of is when your customers rank you as the best. So the awards at the bottom here, are actually Readers Choice from the last International Supercomputing Show where the scientific researchers on these computers ranked their vendors, and we were actually rated the number one server technology in supercomputing with our ThinkSystem SD530, and the number one storage technology with our ThinkSystem DSS-G, but more importantly what we're doing with the technology. You're going to see we won best in life sciences, best in data analytics, and best in collaboration as well, so you're going to see all of that in our breakout sessions. As you saw in the video now, 17 of the top 25 research institutions in the world are now running Lenovo supercomputers. And again coming from Raleigh and watching that hurricane come across the Atlantic, there are eight supercomputers crunching all of those models you see from Germany to Malaysia to Canada, and we're happy to have a SciNet from University of Toronto here with us in our breakout session to talk about what they're doing on climate modeling as well. But we're not stopping there. We just announced our new Neptune warm water cooling technology, which won the International Supercomputing Vendor Showdown, the first time we've won that best of show in 25 years, and we've now installed this. We're building out LRZ in Germany, the first ever warm water cooling in Peking University, at the India Space Propulsion Laboratory, at the Malaysian Weather and Meteorological Society, at Uninett, at the largest supercomputer in Norway, T-Systems, University of Birmingham. This is truly amazing technology where we're actually using water to cool the machine to deliver a significantly more energy-efficient computer. Super important, when we're looking at global warming and some of the electric bills can be millions of dollars just for one computer, and could actually power a small city just with the technology from the computer. We've built AI centers now in Morrisville, Stuttgart, Taipei, and Beijing, where customers can bring their AI workloads in with experts from Intel, from Nvidia, from our FPGA partners, to work on their workloads, and how they can best implement artificial intelligence. And we also this year launched LICO which is Lenovo Intelligent Compute Orchestrator software, and it's a software solution that simplifies the management and use of distributed clusters in both HPC and AI model development. So, what it enables you to do is take a single cluster, and run both HPC and AI workloads on it simultaneously, delivering better TCO for your environment, so check out LICO as well. A lot of the customers here and Wall Street are very excited and using it already. And we talked about solving humanity's greatest challenges. In the breakout session, you're going to have a virtual reality experience where you're going to be able to walk through what as was just ranked the world's most beautiful data center, the Barcelona Supercomputer. So, you can actually walk through one of the largest supercomputers in the world from Barcelona. You can see the work we're doing with NC State where we're going to have to grow the food supply of the world by 50 percent, and there's not enough fresh water in the world in the right places to actually make all those crops grow between now and 2055, so you're going to see the progression of how they're mapping the entire globe and the water around the world, how to build out the crop population over time using AI. You're going to see our work with Vestas is this largest supercomputer provider in the wind turbine areas, how they're working on wind energy, and then with University College London, how they're working on some of the toughest particle physics calculations in the world. So again, lots of opportunity here. Take advantage of it in the breakout sessions. Okay, let me transition to hyperscale. So in hyperscale now, we have completely transformed our business model. We are now powering six of the top 10 hyperscalers in the world, which is a significant difference from where we were two years ago. And the reason we're doing that, is we've coined a term called ODM+. We believe that hyperscalers want more procurement power than an ODM, and Lenovo is doing about $18 billion of procurement a year. They want a broader global supply chain that they can get from a local system integrator. We're more than 160 countries around the world, but they want the same world-class quality and reliability like they get from an MNC. So, what we're doing now is instead of just taking off the shelf motherboards from somewhere, we're starting with a blank sheet of paper, we're working with the customer base on customized SKUs and you can see we already are developing 33 custom solutions for the largest hyperscalers in the world. And then we're not just running notebooks through this factory where YY said, we're running 37 notebook boards a minute, we're now putting in tens and tens and tens of thousands of server board capacity per month into this same factory, so absolutely we can compete with the most aggressive ODM's in the world, but it's not just putting these things in in the motherboard side, we're also building out these systems all around the world, India, Brazil, Hungary, Mexico, China. This is an example of a new hyperscale customer we've had this last year, 34,000 servers we delivered in the first six months. The next 34,000 servers we delivered in 68 days. The next 34,000 servers we delivered in 35 days, with more than 99 percent on-time delivery to 35 data centers in 14 countries as diverse as South Africa, India, China, Brazil, et cetera. And I'm really ashamed to say it was 99.3, because we did have a forklift driver who rammed their forklift right through the middle of the one of the server racks. (audience laughing) At JFK Airport that we had to respond to, but I think this gives you a perspective of what it is to be a top five global supply chain and technology. So last year, I said we would invest significantly in IP, in joint ventures, and M and A to compete in software defined, in networking, and in storage, so I wanted to give you an update on that as well. Our newest software-defined partnership is with Cloudistics, enabling a fully composable cloud infrastructure. It's an exclusive agreement, you can see them here. I think Nag, our founder, is going to be here today, with a significant Lenovo investment in the company. So, this new ThinkAgile CP series delivers the simplicity of the public cloud, on-premise with exceptional support and a marketplace of essential enterprise applications all with a single click deployment. So simply put, we're delivering a private cloud with a premium experience. It's simple in that you need no specialists to deploy it. An IT generalist can set it up and manage it. It's agile in that you can provision dozens of workloads in minutes, and it's transformative in that you get all of the goodness of public cloud on-prem in a private cloud to unlock opportunity for use. So, we're extremely excited about the ThinkAgile CP series that's now shipping into the marketplace. Beyond that we're aggressively ramping, and we're either doubling, tripling, or quadrupling our market share as customers move from traditional server technology to software-defined technology. With Nutanix we've been public, growing about more than 150 percent year-on-year, with Nutanix as their fastest growing Nutanix partner, but today I want to set another audacious goal. I believe we cannot just be Nutanix's fastest growing partner but we can become their largest partner within two years. On Microsoft, we are already four times our market share on Azure stack of our traditional business. We were the first to launch our ThinkAgile on Broadwell and on Skylake with the Azure Stack Infrastructure. And on VMware we're about twice our market segment share. We were the first to deliver an Intel-optimized Optane-certified VSAN node. And with Optane technology, we're delivering 50 percent more VM density than any competitive SSD system in the marketplace, about 10 times lower latency, four times the performance of any SSD system out there, and Lenovo's first to market on that. And at VMworld you saw CEO Pat Gelsinger of VMware talked about project dimension, which is Edge as a service, and we're the only OEM beyond the Dell family that is participating today in project dimension. Beyond that you're going to see a number of other partnerships we have. I'm excited that we have the city of Bogota Columbia here, an eight million person city, where we announced a 3,000 camera video surveillance solution last month. With pivot three you're going to see city of Bogota in our breakout sessions. You're going to see a new partnership with Veeam around backup that's launching today. You're going to see partnerships with scale computing in IoT and hyper-converged infrastructure working on some of the largest retailers in the world. So again, everything out in the breakout session. Transitioning to storage and data management, it's been a great year for Lenovo, more than a 100 percent growth year-on-year, 2X market growth in flash arrays. IDC just reported 30 percent growth in storage, number one in price performance in the world and the best HPC storage product in the top 500 with our ThinkSystem DSS G, so strong coverage, but I'm excited today to announce for Transform 2.0 that Lenovo is launching the largest data management and storage portfolio in our 25-year data center history. (audience applauding) So a year ago, the largest server portfolio, becoming the largest fastest growing server OEM, today the largest storage portfolio, but as you saw this morning we're not doing it alone. Today Lenovo and NetApp, two global powerhouses are joining forces to deliver a multi-billion dollar global alliance in data management and storage to help customers through their intelligent transformation. As the fastest growing worldwide server leader and one of the fastest growing flash array and data management companies in the world, we're going to deliver more choice to customers than ever before, global scale that's never been seen, supply chain efficiencies, and rapidly accelerating innovation and solutions. So, let me unwrap this a little bit for you and talk about what we're announcing today. First, it's the largest portfolio in our history. You're going to see not just storage solutions launching today but a set of solution recipes from NetApp that are going to make Lenovo server and NetApp or Lenovo storage work better together. The announcement enables Lenovo to go from covering 15 percent of the global storage market to more than 90 percent of the global storage market and distribute these products in more than 160 countries around the world. So we're launching today, 10 new storage platforms, the ThinkSystem DE and ThinkSystem DM platforms. They're going to be centrally managed, so the same XClarity management that you've been using for server, you can now use across all of your storage platforms as well, and it'll be supported by the same 10,000 plus service personnel that are giving outstanding customer support to you today on the server side. And we didn't come up with this in the last month or the last quarter. We're announcing availability in ordering today and shipments tomorrow of the first products in this portfolio, so we're excited today that it's not just a future announcement but something you as customers can take advantage of immediately. (audience applauding) The second part of the announcement is we are announcing a joint venture in China. Not only will this be a multi-billion dollar global partnership, but Lenovo will be a 51 percent owner, NetApp a 49 percent owner of a new joint venture in China with the goal of becoming in the top three storage companies in the largest data and storage market in the world. We will deliver our R and D in China for China, pooling our IP and resources together, and delivering a single route to market through a complementary channel, not just in China but worldwide. And in the future I just want to tell everyone this is phase one. There is so much exciting stuff. We're going to be on the stage over the next year talking to you about around integrated solutions, next-generation technologies, and further synergies and collaborations. So, rather than just have me talk about it, I'd like to welcome to the stage our new partner NetApp and Brad Anderson who's the senior vice president and general manager of NetApp Cloud Infrastructure. (upbeat music) (audience applauding) >> Thank You Kirk. >> So Brad, we've known each other a long time. It's an exciting day. I'm going to give you the stage and allow you to say NetApp's perspective on this announcement. >> Very good, thank you very much, Kirk. Kirk and I go back to I think 1994, so hey good morning and welcome. My name is Brad Anderson. I manage the Cloud Infrastructure Group at NetApp, and I am honored and privileged to be here at Lenovo Transform, particularly today on today's announcement. Now, you've heard a lot about digital transformation about how companies have to transform their IT to compete in today's global environment. And today's announcement with the partnership between NetApp and Lenovo is what that's all about. This is the joining of two global leaders bringing innovative technology in a simplified solution to help customers modernize their IT and accelerate their global digital transformations. Drawing on the strengths of both companies, Lenovo's high performance compute world-class supply chain, and NetApp's hybrid cloud data management, hybrid flash and all flash storage solutions and products. And both companies providing our customers with the global scale for them to be able to meet their transformation goals. At NetApp, we're very excited. This is a quote from George Kurian our CEO. George spent all day yesterday with YY and Kirk, and would have been here today if it hadn't been also our shareholders meeting in California, but I want to just convey how excited we are for all across NetApp with this partnership. This is a partnership between two companies with tremendous market momentum. Kirk took you through all the amazing results that Lenovo has accomplished, number one in supercomputing, number one in performance, number one in x86 reliability, number one in x86 customers sat, number five in supply chain, really impressive and congratulations. Like Lenovo, NetApp is also on a transformation journey, from a storage company to the data authority in hybrid cloud, and we've seen some pretty impressive momentum as well. Just last week we became number one in all flash arrays worldwide, catching EMC and Dell, and we plan to keep on going by them, as we help customers modernize their their data centers with cloud connected flash. We have strategic partnerships with the largest hyperscalers to provide cloud native data services around the globe and we are having success helping our customers build their own private clouds with just, with a new disruptive hyper-converged technology that allows them to operate just like hyperscalers. These three initiatives has fueled NetApp's transformation, and has enabled our customers to change the world with data. And oh by the way, it has also fueled us to have meet or have beaten Wall Street's expectations for nine quarters in a row. These are two companies with tremendous market momentum. We are also building this partnership for long term success. We think about this as phase one and there are two important components to phase one. Kirk took you through them but let me just review them. Part one, the establishment of a multi-year commitment and a collaboration agreement to offer Lenovo branded flash products globally, and as Kurt said in 160 countries. Part two, the formation of a joint venture in PRC, People's Republic of China, that will provide long term commitment, joint product development, and increase go-to-market investment to meet the unique needs to China. Both companies will put in storage technologies and storage expertise to form an independent JV that establishes a data management company in China for China. And while we can dream about what phase two looks like, our entire focus is on making phase one incredibly successful and I'm pleased to repeat what Kirk, is that the first products are orderable and shippable this week in 160 different countries, and you will see our two companies focusing on the here and now. On our joint go to market strategy, you'll see us working together to drive strategic alignment, focused execution, strong governance, and realistic expectations and milestones. And it starts with the success of our customers and our channel partners is job one. Enabling customers to modernize their legacy IT with complete data center solutions, ensuring that our customers get the best from both companies, new offerings the fuel business success, efficiencies to reinvest in game-changing initiatives, and new solutions for new mission-critical applications like data analytics, IoT, artificial intelligence, and machine learning. Channel partners are also top of mind for both our two companies. We are committed to the success of our existing and our future channel partners. For NetApp channel partners, it is new pathways to new segments and to new customers. For Lenovo's channel partners, it is the competitive weapons that now allows you to compete and more importantly win against Dell, EMC, and HP. And the good news for both companies is that our channel partner ecosystem is highly complementary with minimal overlap. Today is the first day of a very exciting partnership, of a partnership that will better serve our customers today and will provide new opportunities to both our companies and to our partners, new products to our customers globally and in China. I am personally very excited. I will be on the board of the JV. And so, I look forward to working with you, partnering with you and serving you as we go forward, and with that, I'd like to invite Kirk back up. (audience applauding) >> Thank you. >> Thank you. >> Well, thank you, Brad. I think it's an exciting overview, and these products will be manufactured in China, in Mexico, in Hungary, and around the world, enabling this amazing supply chain we talked about to deliver in over 160 countries. So thank you Brad, thank you George, for the amazing partnership. So again, that's not all. In Transform 2.0, last year, we talked about the joint ventures that were coming. I want to give you a sneak peek at what you should expect at future Lenovo events around the world. We have this Transform in Beijing in a couple weeks. We'll then be repeating this in 20 different locations roughly around the world over the next year, and I'm excited probably more than ever about what else is coming. Let's talk about Telco 5G and network function virtualization. Today, Motorola phones are certified on 46 global networks. We launched the world's first 5G upgradable phone here in the United States with Verizon. Lenovo DCG sells to 58 telecommunication providers around the world. At Mobile World Congress in Barcelona and Shanghai, you saw China Telecom and China Mobile in the Lenovo booth, China Telecom showing a video broadband remote access server, a VBRAS, with video streaming demonstrations with 2x less jitter than they had seen before. You saw China Mobile with a virtual remote access network, a VRAN, with greater than 10 times the throughput and 10x lower latency running on Lenovo. And this year, we'll be launching a new NFV company, a software company in China for China to drive the entire NFV stack, delivering not just hardware solutions, but software solutions, and we've recently hired a new CEO. You're going to hear more about that over the next several quarters. Very exciting as we try to drive new economics into the networks to deliver these 20 billion devices. We're going to need new economics that I think Lenovo can uniquely deliver. The second on IoT and edge, we've integrated on the device side into our intelligent devices group. With everything that's going to consume electricity computes and communicates, Lenovo is in a unique position on the device side to take advantage of the communications from Motorola and being one of the largest device companies in the world. But this year, we're also going to roll out a comprehensive set of edge gateways and ruggedized industrial servers and edge servers and ISP appliances for the edge and for IoT. So look for that as well. And then lastly, as a service, you're going to see Lenovo delivering hardware as a service, device as a service, infrastructure as a service, software as a service, and hardware as a service, not just as a glorified leasing contract, but with IP, we've developed true flexible metering capability that enables you to scale up and scale down freely and paying strictly based on usage, and we'll be having those announcements within this fiscal year. So Transform 2.0, lots to talk about, NetApp the big news of the day, but a lot more to come over the next year from the Data Center group. So in summary, I'm excited that we have a lot of customers that are going to be on stage with us that you saw in the video. Lots of testimonials so that you can talk to colleagues of yourself. Alamos Gold from Canada, a Canadian gold producer, Caligo for data optimization and privacy, SciNet, the largest supercomputer we've ever put into North America, and the largest in Canada at the University of Toronto will be here talking about climate change. City of Bogota again with our hyper-converged solutions around smart city putting in 3,000 cameras for criminal detection, license plate detection, et cetera, and then more from a channel mid market perspective, Jerry's Foods, which is from my home state of Wisconsin, and Minnesota which has about 57 stores in the specialty foods market, and how they're leveraging our IoT solutions as well. So again, about five times the number of demos that we had last year. So in summary, first and foremost to the customers, thank you for your business. It's been a great journey and I think we're on a tremendous role. You saw from last year, we're trying to build credibility with you. After the largest server portfolio, we're now the fastest-growing server OEM per Gardner, number one in performance, number one in reliability, number one in customer satisfaction, number one in supercomputing. Today, the largest storage portfolio in our history, with the goal of becoming the fastest growing storage company in the world, top three in China, multibillion-dollar collaboration with NetApp. And the transformation is going to continue with new edge gateways, edge servers, NFV solutions, telecommunications infrastructure, and hardware as a service with dynamic metering. So thank you for your time. I've looked forward to meeting many of you over the next day. We appreciate your business, and with that, I'd like to bring up Rod Lappen to introduce our next speaker. Rod? (audience applauding) >> Thanks, boss, well done. Alright ladies and gentlemen. No real secret there. I think we've heard why I might talk about the fourth Industrial Revolution in data and exactly what's going on with that. You've heard Kirk with some amazing announcements, obviously now with our NetApp partnership, talk about 5G, NFV, cloud, artificial intelligence, I think we've hit just about all the key hot topics. It's with great pleasure that I now bring up on stage Mr. Christian Teismann, our senior vice president and general manager of commercial business for both our PCs and our IoT business, so Christian Teismann. (techno music) Here, take that. >> Thank you. I think I'll need that. >> Okay, Christian, so obviously just before we get down, you and I last year, we had a bit of a chat about being in New York. >> Exports. >> You were an expat in New York for a long time. >> That's true. >> And now, you've moved from New York. You're in Munich? >> Yep. >> How does that feel? >> Well Munich is a wonderful city, and it's a great place to live and raise kids, but you know there's no place in the world like New York. >> Right. >> And I miss it a lot, quite frankly. >> So what exactly do you miss in New York? >> Well there's a lot of things in New York that are unique, but I know you spent some time in Japan, but I still believe the best sushi in the world is still in New York City. (all laughing) >> I will beg to differ. I will beg to differ. I think Mr. Guchi-san from Softbank is here somewhere. He will get up an argue very quickly that Japan definitely has better sushi than New York. But obviously you know, it's a very very special place, and I have had sushi here, it's been fantastic. What about Munich? Anything else that you like in Munich? >> Well I mean in Munich, we have pork knuckles. >> Pork knuckles. (Christian laughing) Very similar sushi. >> What is also very fantastic, but we have the real, the real Oktoberfest in Munich, and it starts next week, mid-September, and I think it's unique in the world. So it's very special as well. >> Oktoberfest. >> Yes. >> Unfortunately, I'm not going this year, 'cause you didn't invite me, but-- (audience chuckling) How about, I think you've got a bit of a secret in relation to Oktoberfest, probably not in Munich, however. >> It's a secret, yes, but-- >> Are you going to share? >> Well I mean-- >> See how I'm putting you on the spot? >> In the 10 years, while living here in New York, I was a regular visitor of the Oktoberfest at the Lower East Side in Avenue C at Zum Schneider, where I actually met my wife, and she's German. >> Very good. So, how about a big round of applause? (audience applauding) Not so much for Christian, but more I think, obviously for his wife, who obviously had been drinking and consequently ended up with you. (all laughing) See you later, mate. >> That's the beauty about Oktoberfest, but yes. So first of all, good morning to everybody, and great to be back here in New York for a second Transform event. New York clearly is the melting pot of the world in terms of culture, nations, but also business professionals from all kind of different industries, and having this event here in New York City I believe is manifesting what we are trying to do here at Lenovo, is transform every aspect of our business and helping our customers on the journey of intelligent transformation. Last year, in our transformation on the device business, I talked about how the PC is transforming to personalized computing, and we've made a lot of progress in that journey over the last 12 months. One major change that we have made is we combined all our device business under one roof. So basically PCs, smart devices, and smart phones are now under the roof and under the intelligent device group. But from my perspective makes a lot of sense, because at the end of the day, all devices connect in the modern world into the cloud and are operating in a seamless way. But we are also moving from a device business what is mainly a hardware focus historically, more and more also into a solutions business, and I will give you during my speech a little bit of a sense of what we are trying to do, as we are trying to bring all these components closer together, and specifically also with our strengths on the data center side really build end-to-end customer solution. Ultimately, what we want to do is make our business, our customer's businesses faster, safer, and ultimately smarter as well. So I want to look a little bit back, because I really believe it's important to understand what's going on today on the device side. Many of us have still grown up with phones with terminals, ultimately getting their first desktop, their first laptop, their first mobile phone, and ultimately smartphone. Emails and internet improved our speed, how we could operate together, but still we were defined by linear technology advances. Today, the world has changed completely. Technology itself is not a limiting factor anymore. It is how we use technology going forward. The Internet is pervasive, and we are not yet there that we are always connected, but we are nearly always connected, and we are moving to the stage, that everything is getting connected all the time. Sharing experiences is the most driving force in our behavior. In our private life, sharing pictures, videos constantly, real-time around the world, with our friends and with our family, and you see the same behavior actually happening in the business life as well. Collaboration is the number-one topic if it comes down to workplace, and video and instant messaging, things that are coming from the consumer side are dominating the way we are operating in the commercial business as well. Most important beside technology, that a new generation of workforce has completely changed the way we are working. As the famous workforce the first generation of Millennials that have now fully entered in the global workforce, and the next generation, it's called Generation Z, is already starting to enter the global workforce. By 2025, 75 percent of the world's workforce will be composed out of two of these generations. Why is this so important? These two generations have been growing up using state-of-the-art IT technology during their private life, during their education, school and study, and are taking these learnings and taking these behaviors in the commercial workspace. And this is the number one force of change that we are seeing in the moment. Diverse workforces are driving this change in the IT spectrum, and for years in many of our customers' focus was their customer focus. Customer experience also in Lenovo is the most important thing, but we've realized that our own human capital is equally valuable in our customer relationships, and employee experience is becoming a very important thing for many of our customers, and equally for Lenovo as well. As you have heard YY, as we heard from YY, Lenovo is focused on intelligent transformation. What that means for us in the intelligent device business is ultimately starting with putting intelligence in all of our devices, smartify every single one of our devices, adding value to our customers, traditionally IT departments, but also focusing on their end users and building products that make their end users more productive. And as a world leader in commercial devices with more than 33 percent market share, we can solve problems been even better than any other company in the world. So, let's talk about transformation of productivity first. We are in a device-led world. Everything we do is connected. There's more interaction with devices than ever, but also with spaces who are increasingly becoming smart and intelligent. YY said it, by 2020 we have more than 20 billion connected devices in the world, and it will grow exponentially from there on. And users have unique personal choices for technology, and that's very important to recognize, and we call this concept a digital wardrobe. And it means that every single end-user in the commercial business is composing his personal wardrobe on an ongoing basis and is reconfiguring it based on the work he's doing and based where he's going and based what task he is doing. I would ask all of you to put out all the devices you're carrying in your pockets and in your bags. You will see a lot of you are using phones, tablets, laptops, but also cameras and even smartwatches. They're all different, but they have one underlying technology that is bringing it all together. Recognizing digital wardrobe dynamics is a core factor for us to put all the devices under one roof in IDG, one business group that is dedicated to end-user solutions across mobile, PC, but also software services and imaging, to emerging technologies like AR, VR, IoT, and ultimately a AI as well. A couple of years back there was a big debate around bring-your-own-device, what was called consumerization. Today consumerization does not exist anymore, because consumerization has happened into every single device we build in our commercial business. End users and commercial customers today do expect superior display performance, superior audio, microphone, voice, and touch quality, and have it all connected and working seamlessly together in an ease of use space. We are already deep in the journey of personalized computing today. But the center point of it has been for the last 25 years, the mobile PC, that we have perfected over the last 25 years, and has been the undisputed leader in mobility computing. We believe in the commercial business, the ThinkPad is still the core device of a digital wardrobe, and we continue to drive the success of the ThinkPad in the marketplace. We've sold more than 140 million over the last 26 years, and even last year we exceeded nearly 11 million units. That is about 21 ThinkPads per minute, or one Thinkpad every three seconds that we are shipping out in the market. It's the number one commercial PC in the world. It has gotten countless awards but we felt last year after Transform we need to build a step further, in really tailoring the ThinkPad towards the need of the future. So, we announced a new line of X1 Carbon and Yoga at CES the Consumer Electronics Show. And the reason is not we want to sell to consumer, but that we do recognize that a lot of CIOs and IT decision makers need to understand what consumers are really doing in terms of technology to make them successful. So, let's take a look at the video. (suspenseful music) >> When you're the number one business laptop of all time, your only competition is yourself. (wall shattering) And, that's different. Different, like resisting heat, ice, dust, and spills. Different, like sharper, brighter OLA display. The trackpoint that reinvented controls, and a carbon fiber roll cage to protect what's inside, built by an engineering and design team, doing the impossible for the last 25 years. This is the number one business laptop of all time, but it's not a laptop. It's a ThinkPad. (audience applauding) >> Thank you very much. And we are very proud that Lenovo ThinkPad has been selected as the best laptop in the world in the second year in a row. I think it's a wonderful tribute to what our engineers have been done on this one. And users do want awesome displays. They want the best possible audio, voice, and touch control, but some users they want more. What they want is super power, and I'm really proud to announce our newest member of the X1 family, and that's the X1 extreme. It's exceptionally featured. It has six core I9 intel chipset, the highest performance you get in the commercial space. It has Nvidia XTX graphic, it is a 4K UHD display with HDR with Dolby vision and Dolby Atmos Audio, two terabyte in SSD, so it is really the absolute Ferrari in terms of building high performance commercial computer. Of course it has touch and voice, but it is one thing. It has so much performance that it serves also a purpose that is not typical for commercial, and I know there's a lot of secret gamers also here in this room. So you see, by really bringing technology together in the commercial space, you're creating productivity solutions of one of a kind. But there's another category of products from a productivity perspective that is incredibly important in our commercial business, and that is the workstation business . Clearly workstations are very specifically designed computers for very advanced high-performance workloads, serving designers, architects, researchers, developers, or data analysts. And power and performance is not just about the performance itself. It has to be tailored towards the specific use case, and traditionally these products have a similar size, like a server. They are running on Intel Xeon technology, and they are equally complex to manufacture. We have now created a new category as the ultra mobile workstation, and I'm very proud that we can announce here the lightest mobile workstation in the industry. It is so powerful that it really can run AI and big data analysis. And with this performance you can go really close where you need this power, to the sensors, into the cars, or into the manufacturing places where you not only wannna read the sensors but get real-time analytics out of these sensors. To build a machine like this one you need customers who are really challenging you to the limit. and we're very happy that we had a customer who went on this journey with us, and ultimately jointly with us created this product. So, let's take a look at the video. (suspenseful music) >> My world involves pathfinding both the hardware needs to the various work sites throughout the company, and then finding an appropriate model of desktop, laptop, or workstation to match those needs. My first impressions when I first seen the ThinkPad P1 was I didn't actually believe that we could get everything that I was asked for inside something as small and light in comparison to other mobile workstations. That was one of the I can't believe this is real sort of moments for me. (engine roars) >> Well, it's better than general when you're going around in the wind tunnel, which isn't alway easy, and going on a track is not necessarily the best bet, so having a lightweight very powerful laptop is extremely useful. It can take a Xeon processor, which can support ECC from when we try to load a full car, and when we're analyzing live simulation results. through and RCFT post processor or example. It needs a pretty powerful machine. >> It's come a long way to be able to deliver this. I hate to use the word game changer, but it is that for us. >> Aston Martin has got a lot of different projects going. There's some pretty exciting projects and a pretty versatile range coming out. Having Lenovo as a partner is certainly going to ensure that future. (engine roars) (audience applauds) >> So, don't you think the Aston Martin design and the ThinkPad design fit very well together? (audience laughs) So if Q, would get a new laptop, I think you would get a ThinkPad X P1. So, I want to switch gears a little bit, and go into something in terms of productivity that is not necessarily on top of the mind or every end user but I believe it's on top of the mind of every C-level executive and of every CEO. Security is the number one threat in terms of potential risk in your business and the cost of cybersecurity is estimated by 2020 around six trillion dollars. That's more than the GDP of Japan and we've seen a significant amount of data breach incidents already this years. Now, they're threatening to take companies out of business and that are threatening companies to lose a huge amount of sensitive customer data or internal data. At Lenovo, we are taking security very, very seriously, and we run a very deep analysis, around our own security capabilities in the products that we are building. And we are announcing today a new brand under the Think umbrella that is called ThinkShield. Our goal is to build the world's most secure PC, and ultimately the most secure devices in the industry. And when we looked at this end-to-end, there is no silver bullet around security. You have to go through every aspect where security breaches can potentially happen. That is why we have changed the whole organization, how we look at security in our device business, and really have it grouped under one complete ecosystem of solutions, Security is always something where you constantly are getting challenged with the next potential breach the next potential technology flaw. As we keep innovating and as we keep integrating, a lot of our partners' software and hardware components into our products. So for us, it's really very important that we partner with companies like Intel, Microsoft, Coronet, Absolute, and many others to really as an example to drive full encryption on all the data seamlessly, to have multi-factor authentication to protect your users' identity, to protect you in unsecured Wi-Fi locations, or even simple things like innovation on the device itself, to and an example protect the camera, against usage with a little thing like a thinkShutter that you can shut off the camera. SO what I want to show you here, is this is the full portfolio of ThinkShield that we are announcing today. This is clearly not something I can even read to you today, but I believe it shows you the breadth of security management that we are announcing today. There are four key pillars in managing security end-to-end. The first one is your data, and this has a lot of aspects around the hardware and the software itself. The second is identity. The third is the security around online, and ultimately the device itself. So, there is a breakout on security and ThinkShield today, available in the afternoon, and encourage you to really take a deeper look at this one. The first pillar around productivity was the device, and around the device. The second major pillar that we are seeing in terms of intelligent transformation is the workspace itself. Employees of a new generation have a very different habit how they work. They split their time between travel, working remotely but if they do come in the office, they expect a very different office environment than what they've seen in the past in cubicles or small offices. They come into the office to collaborate, and they want to create ideas, and they really work in cross-functional teams, and they want to do it instantly. And what we've seen is there is a huge amount of investment that companies are doing today in reconfiguring real estate reconfiguring offices. And most of these kind of things are moving to a digital platform. And what we are doing, is we want to build an entire set of solutions that are just focused on making the workspace more productive for remote workforce, and to create technology that allow people to work anywhere and connect instantly. And the core of this is that we need to be, the productivity of the employee as high as possible, and make it for him as easy as possible to use these kind of technologies. Last year in Transform, I announced that we will enter the smart office space. By the end of last year, we brought the first product into the market. It's called the Hub 500. It's already deployed in thousands of our customers, and it's uniquely focused on Microsoft Skype for Business, and making meeting instantly happen. And the product is very successful in the market. What we are announcing today is the next generation of this product, what is the Hub 700, what has a fantastic audio quality. It has far few microphones, and it is usable in small office environment, as well as in major conference rooms, but the most important part of this new announcement is that we are also announcing a software platform, and this software platform allows you to run multiple video conferencing software solutions on the same platform. Many of you may have standardized for one software solution or for another one, but as you are moving in a world of collaborating instantly with partners, customers, suppliers, you always will face multiple software standards in your company, and Lenovo is uniquely positioned but providing a middleware platform for the device to really enable multiple of these UX interfaces. And there's more to come and we will add additional UX interfaces on an ongoing base, based on our customer requirements. But this software does not only help to create a better experience and a higher productivity in the conference room or the huddle room itself. It really will allow you ultimately to manage all your conference rooms in the company in one instance. And you can run AI technologies around how to increase productivity utilization of your entire conference room ecosystem in your company. You will see a lot more devices coming from the node in this space, around intelligent screens, cameras, and so on, and so on. The idea is really that Lenovo will become a core provider in the whole movement into the smart office space. But it's great if you have hardware and software that is really supporting the approach of modern IT, but one component that Kirk also mentioned is absolutely critical, that we are providing this to you in an as a service approach. Get it what you want, when you need it, and pay it in the amount that you're really using it. And within UIT there is also I think a new philosophy around IT management, where you're much more focused on the value that you are consuming instead of investing into technology. We are launched as a service two years back and we already have a significant number of customers running PC as a service, but we believe as a service will stretch far more than just the PC device. It will go into categories like smart office. It might go even into categories like phone, and it will definitely go also in categories like storage and server in terms of capacity management. I want to highlight three offerings that we are also displaying today that are sort of building blocks in terms of how we really run as a service. The first one is that we collaborated intensively over the last year with Microsoft to be the launch pilot for their Autopilot offering, basically deploying images easily in the same approach like you would deploy a new phone on the network. The purpose really is to make new imaging and enabling new PC as seamless as it's used to be in the phone industry, and we have a complete set of offerings, and already a significant number customers have deployed Autopilot with Lenovo. The second major offering is Premier Support, like in the in the server business, where Premier Support is absolutely critical to run critical infrastructure, we see a lot of our customers do want to have Premier Support for their end users, so they can be back into work basically instantly, and that you have the highest possible instant repair on every single device. And then finally we have a significant amount of time invested into understanding how the software as a service really can get into one philosophy. And many of you already are consuming software as a service in many different contracts from many different vendors, but what we've created is one platform that really can manage this all together. All these things are the foundation for a device as a service offering that really can manage this end-to-end. So, implementing an intelligent workplace can be really a daunting prospect depending on where you're starting from, and how big your company ultimately is. But how do you manage the transformation of technology workspace if you're present in 50 or more countries and you run an infrastructure for more than 100,000 people? Michelin, famous for their tires, infamous for their Michelin star restaurant rating, especially in New York, and instantly recognizable by the Michelin Man, has just doing that. Please welcome with me Damon McIntyre from Michelin to talk to us about the challenges and transforming collaboration and productivity. (audience applauding) (electronic dance music) Thank you, David. >> Thank you, thank you very much. >> We on? >> So, how do you feel here? >> Well good, I want to thank you first of all for your partnership and the devices you create that helped us design, manufacture, and distribute the best tire in the world, okay? I just had to say it and put out there, alright. And I was wondering, were those Michelin tires on that Aston Martin? >> I'm pretty sure there is no other tire that would fit to that. >> Yeah, no, thank you, thank you again, and thank you for the introduction. >> So, when we talk about the transformation happening really in the workplace, the most tangible transformation that you actually see is the drastic change that companies are doing physically. They're breaking down walls. They're removing cubes, and they're moving to flexible layouts, new desks, new huddle rooms, open spaces, but the underlying technology for that is clearly not so visible very often. So, tell us about Michelin's strategy, and the technology you are deploying to really enable this corporation. >> So we, so let me give a little bit a history about the company to understand the daunting tasks that we had before us. So we have over 114,000 people in the company under 170 nationalities, okay? If you go to the corporate office in France, it's Clermont. It's about 3,000 executives and directors, and what have you in the marketing, sales, all the way up to the chain of the global CIO, right? Inside of the Americas, we merged in Americas about three years ago. Now we have the Americas zone. There's about 28,000 employees across the Americas, so it's really, it's really hard in a lot of cases. You start looking at the different areas that you lose time, and you lose you know, your productivity and what have you, so there, it's when we looked at different aspects of how we were going to manage the meeting rooms, right? because we have opened up our areas of workspace, our CIO, CEOs in our zones will no longer have an office. They'll sit out in front of everybody else and mingle with the crowd. So, how do you take those spaces that were originally used by an individual but now turn them into like meeting rooms? So, we went through a large process, and looked at the Hub 500, and that really met our needs, because at the end of the day what we noticed was, it was it was just it just worked, okay? We've just added it to the catalog, so we're going to be deploying it very soon, and I just want to again point that I know everybody struggles with this, and if you look at all the minutes that you lose in starting up a meeting, and we know you know what I'm talking about when I say this, it equates to many many many dollars, okay? And so at the end the day, this product helps us to be more efficient in starting up the meeting, and more productive during the meeting. >> Okay, it's very good to hear. Another major trend we are seeing in IT departments is taking a more hands-off approach to hardware. We're seeing new technologies enable IT to create a more efficient model, how IT gets hardware in the hands of end-users, and how they are ultimately supporting themselves. So what's your strategy around the lifecycle management of the devices? >> So yeah you mentioned, again, we'll go back to the 114,000 employees in the company, right? You imagine looking at all the devices we use. I'm not going to get into the number of devices we have, but we have a set number that we use, and we have to go through a process of deploying these devices, which we right now service our own image. We build our images, we service them through our help desk and all that process, and we go through it. If you imagine deploying 25,000 PCs in a year, okay? The time and the daunting task that's behind all that, you can probably add up to 20 or 30 people just full-time doing that, okay? So, with partnering with Lenovo and their excellent technology, their technical teams, and putting together the whole process of how we do imaging, it now lifts that burden off of our folks, and it shifts it into a more automated process through the cloud, okay? And, it's with the Autopilot on the end of the project, we'll have Autopilot fully engaged, but what I really appreciate is how Lenovo really, really kind of got with us, and partnered with us for the whole process. I mean it wasn't just a partner between Michelin and Lenovo. Microsoft was also partnered during that whole process, and it really was a good project that we put together, and we hope to have something in a full production mode next year for sure. >> So, David thank you very, very much to be here with us on stage. What I really want to say, customers like you, who are always challenging us on every single aspect of our capabilities really do make the big difference for us to get better every single day and we really appreciate the partnership. >> Yeah, and I would like to say this is that I am, I'm doing what he's exactly said he just said. I am challenging Lenovo to show us how we can innovate in our work space with your devices, right? That's a challenge, and it's going to be starting up next year for sure. We've done some in the past, but I'm really going to challenge you, and my whole aspect about how to do that is bring you into our workspace. Show you how we make how we go through the process of making tires and all that process, and how we distribute those tires, so you can brainstorm, come back to the table and say, here's a device that can do exactly what you're doing right now, better, more efficient, and save money, so thank you. >> Thank you very much, David. (audience applauding) Well it's sometimes really refreshing to get a very challenging customers feedback. And you know, we will continue to grow this business together, and I'm very confident that your challenge will ultimately help to make our products even more seamless together. So, as we now covered productivity and how we are really improving our devices itself, and the transformation around the workplace, there is one pillar left I want to talk about, and that's really, how do we make businesses smarter than ever? What that really means is, that we are on a journey on trying to understand our customer's business, deeper than ever, understanding our customer's processes even better than ever, and trying to understand how we can help our customers to become more competitive by injecting state-of-the-art technology in this intelligent transformation process, into core processes. But this cannot be done without talking about a fundamental and that is the journey towards 5G. I really believe that 5G is changing everything the way we are operating devices today, because they will be connected in a way like it has never done before. YY talked about you know, 20 times 10 times the amount of performance. There are other studies that talk about even 200 times the performance, how you can use these devices. What it will lead to ultimately is that we will build devices that will be always connected to the cloud. And, we are preparing for this, and Kirk already talked about, and how many operators in the world we already present with our Moto phones, with how many Telcos we are working already on the backend, and we are working on the device side on integrating 5G basically into every single one of our product in the future. One of the areas that will benefit hugely from always connected is the world of virtual reality and augmented reality. And I'm going to pick here one example, and that is that we have created a commercial VR solution for classrooms and education, and basically using consumer type of product like our Mirage Solo with Daydream and put a solution around this one that enables teachers and schools to use these products in the classroom experience. So, students now can have immersive learning. They can studying sciences. They can look at environmental issues. They can exploring their careers, or they can even taking a tour in the next college they're going to go after this one. And no matter what grade level, this is how people will continue to learn in the future. It's quite a departure from the old world of textbooks. In our area that we are looking is IoT, And as YY already elaborated, we are clearly learning from our own processes around how we improve our supply chain and manufacturing and how we improve also retail experience and warehousing, and we are working with some of the largest companies in the world on pilots, on deploying IoT solutions to make their businesses, their processes, and their businesses, you know, more competitive, and some of them you can see in the demo environment. Lenovo itself already is managing 55 million devices in an IoT fashion connecting to our own cloud, and constantly improving the experience by learning from the behavior of these devices in an IoT way, and we are collecting significant amount of data to really improve the performance of these systems and our future generations of products on a ongoing base. We have a very strong partnership with a company called ADLINK from Taiwan that is one of the leading manufacturers of manufacturing PC and hardened devices to create solutions on the IoT platform. The next area that we are very actively investing in is commercial augmented reality. I believe augmented reality has by far more opportunity in commercial than virtual reality, because it has the potential to ultimately improve every single business process of commercial customers. Imagine in the future how complex surgeries can be simplified by basically having real-time augmented reality information about the surgery, by having people connecting into a virtual surgery, and supporting the surgery around the world. Visit a furniture store in the future and see how this furniture looks in your home instantly. Doing some maintenance on some devices yourself by just calling the company and getting an online manual into an augmented reality device. Lenovo is exploring all kinds of possibilities, and you will see a solution very soon from Lenovo. Early when we talked about smart office, I talked about the importance of creating a software platform that really run all these use cases for a smart office. We are creating a similar platform for augmented reality where companies can develop and run all their argumented reality use cases. So you will see that early in 2019 we will announce an augmented reality device, as well as an augmented reality platform. So, I know you're very interested on what exactly we are rolling out, so we will have a first prototype view available there. It's still a codename project on the horizon, and we will announce it ultimately in 2019, but I think it's good for you to take a look what we are doing here. So, I just wanted to give you a peek on what we are working beyond smart office and the device productivity in terms of really how we make businesses smarter. It's really about increasing productivity, providing you the most secure solutions, increase workplace collaboration, increase IT efficiency, using new computing devices and software and services to make business smarter in the future. There's no other company that will enable to offer what we do in commercial. No company has the breadth of commercial devices, software solutions, and the same data center capabilities, and no other company can do more for your intelligent transformation than Lenovo. Thank you very much. (audience applauding) >> Thanks mate, give me that. I need that. Alright, ladies and gentlemen, we are done. So firstly, I've got a couple of little housekeeping pieces at the end of this and then we can go straight into going and experiencing some of the technology we've got on the left-hand side of the room here. So, I want to thank Christian obviously. Christian, awesome as always, some great announcements there. I love the P1. I actually like the Aston Martin a little bit better, but I'll take either if you want to give me one for free. I'll take it. We heard from YY obviously about the industry and how the the fourth Industrial Revolution is impacting us all from a digital transformation perspective, and obviously Kirk on DCG, the great NetApp announcement, which is going to be really exciting, actually that Twitter and some of the social media panels are absolutely going crazy, so it's good to see that the industry is really taking some impact. Some of the publications are really great, so thank you for the media who are obviously in the room publishing right no. But now, I really want to say it's all of your turn. So, all of you up the back there who are having coffee, it's your turn now. I want everyone who's sitting down here after this event move into there, and really take advantage of the 15 breakouts that we've got set there. There are four breakout sessions from a time perspective. I want to try and get you all out there at least to use up three of them and use your fourth one to get out and actually experience some of the technology. So, you've got four breakout sessions. A lot of the breakout sessions are actually done twice. If you have not downloaded the app, please download the app so you can actually see what time things are going on and make sure you're registering correctly. There's a lot of great experience of stuff out there for you to go do. I've got one quick video to show you on some of the technology we've got and then we're about to close. Alright, here we are acting crazy. Now, you can see obviously, artificial intelligence machine learning in the browser. God, I hate that dance, I'm not a Millenial at all. It's effectively going to be implemented by healthcare. I want you to come around and test that out. Look at these two guys. This looks like a Lenovo management meeting to be honest with you. These two guys are actually concentrating, using their brain power to race each others in cars. You got to come past and give that a try. Give that a try obviously. Fantastic event here, lots of technology for you to experience, and great partners that have been involved as well. And so, from a Lenovo perspective, we've had some great alliance partners contribute, including obviously our number one partner, Intel, who's been a really big loyal contributor to us, and been a real part of our success here at Transform. Excellent, so please, you've just seen a little bit of tech out there that you can go and play with. I really want you, I mean go put on those black things, like Scott Hawkins our chief marketing officer from Lenovo's DCG business was doing and racing around this little car with his concentration not using his hands. He said it's really good actually, but as soon as someone comes up to speak to him, his car stops, so you got to try and do better. You got to try and prove if you can multitask or not. Get up there and concentrate and talk at the same time. 62 different breakouts up there. I'm not going to go into too much detai, but you can see we've got a very, very unusual numbering system, 18 to 18.8. I think over here we've got a 4849. There's a 4114. And then up here we've got a 46.1 and a 46.2. So, you need the decoder ring to be able to understand it. Get over there have a lot of fun. Remember the boat leaves today at 4:00 o'clock, right behind us at the pier right behind us here. There's 400 of us registered. Go onto the app and let us know if there's more people coming. It's going to be a great event out there on the Hudson River. Ladies and gentlemen that is the end of your keynote. I want to thank you all for being patient and thank all of our speakers today. Have a great have a great day, thank you very much. 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