>> Live from San Francisco, it's theCUBE, covering Google Cloud Next '19. Brought to you by Google Cloud and its ecosystem partners. >> Hi everyone, welcome back to the third day of live coverage of theCUBE here in San Francisco for Google Cloud Next 2019. I'm John Furrier, the host of theCUBE, my co-host Stu Miniman, Stu, good to see you this morning. >> Great to see you, John. >> Got a very special guest here, George Kurian, the CEO of NetApp, not to be confused with Thomas Kurian, his twin brother, who's the CEO of Google Cloud, George, it's great to see you. >> Good morning. >> Thanks for stopping by. >> Thank you for having me. >> So, when you've been walking through the hallways, you getting like, a lot of looks and some selfies, um, people want to take a selfie with you, thinking you're Thomas, the famous? >> Quite a few, quite a few. >> So what's it like? >> Oh, it's exciting to see all of the innovation here and the real commitment that Google's made to building out an enterprise platform. We've been working with them for many years, and, uh, we're excited at all of the potential new opportunities that creates, alongside Google's customers and ours. >> Yeah, George, it's got to be interesting, it's almost a little bit of a mirror image, is Google is looking to get deeper into the enterprise, and of course we've been documenting NetApp for many years now, has moved beyond just being an enterprise company, you've been moving to the cloud, maybe, just go back, tell us a little bit- some of the lessons you've learned, and, you know, what you're seeing happen, dynamics in the space. >> I think customers, Thomas said, you know, many of the core tenets that we see which is customers want to operate in a hybrid, multi-cloud world. They want to have cloud technology integrated into their data centers and conversely their applications be portable with a common programming model. I think it's come a long way. You know, I think our technologies now available natively in the Google Cloud, I think the programming model with microservices and containers, and with Kubernetes as an orchestration layer, truly allows, you know, this kind of hybrid world to operate, and I think our opportunity there is to help our customers use data properly across all of these landscapes, understand where it is, you know, orchestrate new applications as well as traditional, uh, so that they can progress the business. And so it's, you know I tell you coming to these conferences over the last three to five years, you can see the pace of change really start to accelerate. I'm interested in what you guys think about. >> Well, one of the things we've been commenting on theCUBE in our opening segments is kind of looking at how the transformation of Google Cloud from Google large-scale, they know data, they know tech, into becoming an enterprise, so, a lot of window dressing around the event, you know, digital transformation, all the right words, but they got the technology. And, you know, one of the things I'd love to get your perspective of because it's not- it's no secret that the Kurian brothers, yourself and your brother, Thomas, are, have great tech chops, also have tons of enterprise experiences, you specifically have been involved in a lot of ecosystems. That's been a big topic here. Can Google really get an ecosystem up and running, I mean, they participated in the CNCF with Cloud Native, but, as an organization, this is something that you're very familiar with, uh, at NetApp, you've been in many ecosystems, you've seen the formula. How, how, how should that evolve, because it's changing, the service's base, I think you're part of the Console Google Cloud from what I've been reporting here. What's the ecosystem formula for, for this new cloud world? >> You know, I'll tell you that, uh, enterprises expect their providers to work together, that's always been the expectation, and, uh, we've had to coexist with even our competitors for a long period of time. I think the core ideas there are to keep the customer at the center of the discussion and figure out how to best solve their problems, regardless of whether it is having to coexist with someone else, right? I think what's been interesting to me is, Linux has really become sort of the core underpinning of the cloud, and Linux was an open-source technology that, in the early years, IBM backed and sponsored. I think containers together with uh, you know, what Google's doing to sponsor it, has really become the opportunity to create the next, kind of layer of, you know, common development model, programming model, common orchestration. I think there's that promise, I think, uh, it's got to be realized. >> George, you, uh, you talked about, uh, the change that we see in the industry, and, you know, we know enterprise is not like, oh, let's just redo everything we were doing, whether I'm a five year old or a, you know, hundred and fifty year old company, I have things that I need to look at, and, I mean, the applications are really tough. It'd be wonderful if I just had a clean sheet of paper, and I can make it all serverless or containerize all my pieces there. Um, the message I heard a lot this week is, you know, meeting customers where they are. It's not just, Google we know has great tech, and smart people, maybe a little too smart sometimes, but, you know, I'd love to hear your viewpoint is, you know, those enterprise customers, are they catching up to the pace of innovation faster and making more change, or, you know, is it still one of these things that we're going to measure in decades as to how long it takes to move things. >> I think it, you know, I see it in a couple of, uh, ways. One is which industry are you in, and the impact of, you know, transformation to your industry. I think if you are in a highly digitally-oriented industry, like media and entertainment, you've got to transform quickly because the whole industry's getting transformed, right? I think conversely, if you're in an industry where digitization helps your workforce be more productive, I think you can take more time. What we see also is, in the places that, uh, are common, for example, in how you evolve your customer experience and how you interact with customers, we see virtually every company needing to transform, right? So I see that, you know, this is a long transformation, it's not going to happen overnight. I think that customers will pragmatically choose to, you know, either refactor existing applications or bill Net New, on a case-by-case, business-process by business-process basis. And that's why we see hybrid, sort of being the de facto operating model. >> George, I want to get your thoughts on multi-cloud and hybrid, obviously the modern application renaissance and revolutions kind of happening, whether you call it a renaissance or revolution, applications are exploding. That's clear. Multi-cloud and hybrid-cloud are key architectural shifts. I'm writing a story right now about the Department of Defense big contract that was awarded to, or to, shorthand, Microsoft and AWS. But, one of the things that have people arguing is that it should be multi-cloud! Now, the Department of Defense is an example, and this is public sector, but also enterprises have the same makeup, they have hundreds of cloud projects. Hundreds! And the Department of Defense is five hundred cloud projects. So there's not one cloud, that's not Amazon. So, this is a world where workloads and cloud selection and the parts of the architecture have to support multiple clouds. Can you explain that, kind of, what that means to customers? Because people get often confused coming from the old way. I'm buying IBM, I'm buying Oracle, I'm buying Google Cloud, and we're done. No, it's really not that case. Can you, kind of, can you react to that? >> Most enterprises that we speak to have hundreds of applications, everything from, you know, mainframe-based core business processing, to highly digital, you know, mobile-based, customer interaction applications. I think they have, sort of, a portfolio approach to manage those, where they say, hey, some of those are going to stay on premise, some of those are going to stay in a private cloud, and then I've got this palette of, you know, choices around whether I choose software as a service or infrastructure or platform as a service. And I think that when you look at a, you know, a reasonably large company like ours, we run about five hundred applications in the company. There's no single palette, right? You've got to have these inter-operate, I think from a governance standpoint from how you integrate the data across these landscapes, and from how you ensure compliance, security, and so on. And I, so I think, you know whenever a company tries to say that I can do everything, I think that's a little bit facetious, to be honest. >> And so, the reality is, multiple workloads, multiple cloud projects will happen, multiple vendors, but in a new way. Workload driven, with the data, obviously the data's critical, storage is key. Um, Stu, you want to- >> Yeah, so, you know, I think back to the storage world, storage was always a fragmented marketplace, and I had my application silos that I, that did this. Now, what have we learned from multi-cloud, that would, from multi-vendor, as we go into multi-cloud and, how can we allow customers to really unlock that value of data, because if it all stays fragmented in silos, it's a lot harder to be able to actually leverage it, use it, for all the, you know, AI, ML, or data, uh, value. >> Absolutely, I think, you know, one of the long-term theses we've had is that the world gradually moves from system-centric or process-centric to a data-centric world where the core asset that you're operating on is not the value of an individual business process, but the integration across your business processes, right? And so, this is why we think in a hybrid world, you need something like a data fabric to stitch together all of these landscapes. Those landscapes need to increasingly be stitched together in real time because of the speed of decision making or the use of, you know, real time analytics or real time business deci-, you know, processing. And so that's why we've integrated our technology into multiple landscapes, right, both traditional, but increasingly containerized or cloud-based, cloud-native applications. And I think that's again a multi-year journey. I think IT has to transform, IT architectures has to transform, and frankly businesses need to as well. They need to think about data as a property of the whole business, rather than a for function or a department. >> So just to click on that, double click on that for a second because, what you're saying is, a data fabric allows for multiple data to move around the workloads. So what you're saying is, if you want to take it- well, I'm saying- want to take advantage of machine learning and AI, the data has to be addressable in real time. Meaning, you don't have time to go fetch it from a database that may or may not be available at any given time, so making data addressable, horizontally scalable, for whatever workload, at any given time from retail to personalization, or whatever, right? >> Absolutely, right, so for example, if you look at the way a, um, AI or an ML data pipeline works, there's a period in the pipeline which is about training and feature engineering where you're trying to develop the model the right way. And then you're going to let the model run, but the model's going to be reacting to real time data input and constantly making transformations to how the business reacts. I think that data input needs to be fed in from all of the business processes that support the business, right, rather than a, hey I'm going to create an artifact that's, uh, static artifact that's trained once and then you're going to run the business. So that's why we think you've got to operate the hybrid world as an integrated world at the data layer. >> Yeah, George, one of the interest, there's a study, uh, that Google put out that they had acquired a group, DORA that looks at high performing environments, uh, and you know, what differentiates kind of, the, you know, the leaders of the pack. You talk to a lot of companies, and I'm sure you must, you know, have some, you know, opinions on this. Tell us, what, what is separating, you know, the leaders in the end user space, as to, uh, you know, from, from those that are, that are following. >> I think that, uh, the leaders, you know, are, have the capability to transform themselves, and transformation, you know, people talk about digital transformation. I think the most important part of that is actually the transformation part, and it's organizing people to allow experimentation, learning from experimentation, to celebrate failure, I think that's hard for big companies to do, right? Because you're set up to ensure that you're managing the risk of not failing, on the other hand, I think, in a world where there's a new game being created, you got to be able to allow the organization to try different things and it's okay to fail. >> And the speed pressure, too, to go faster, certainly with cloud, everything's accelerated from time to market, time to value, technology development. >> Absolutely. And I think that is also one of the fundamental changes going on in the industry. We were at the end of a paradigm where there were horizontal slices of expertise, which is really the ultimate optimization of an existing paradigm. The new paradigm isn't exactly clear, so, you know, to move faster, IT is creating vertically integrated squads. You look at, you know, Google's creation of a site reliability engineer, it's really a way to accelerate the creation of digital services and optimize the infrastructure associated with it, so. It's a time of change, I think, you know, our view is you got to lean into it, and, uh, you've got to trust the fact that the skills and the cultural values that you've brought are going to help you innovate into the future, not necessarily just the products and the ways that you've done them. And so that's why we think culture is a massively important part of these transformations. >> We're here with George Kurian, CEO of NetApp, not to be confused with Thomas Kurian, CEO of Google who's also walking around the floor, show floor, talking to customers. George, thanks for coming on and sharing your insight, you guys are awesome, the twins are super smart, running two big companies, thanks for spending time. Share us personal story, with George, I mean Thomas hasn't come on yet, he's too busy, we'll get him later on theCUBE, but share a story about him, what's he like, who wins the arm wrestling matches, share a- what's he like, tell a personal story. >> I think he's shy, uh I think we're both really, we realize how lucky we are, you know, we grew up in places where people, you know, some of us had sort of unmerited grace, you know, the blessings of being born to extraordinary, good families and parents, and so we're always cognizant of that. It's amazing that two guys in India, who had never seen a computer till we left India to come to the United States, now have the opportunity to be a big part of the computer industry, so we're just really grateful, and God's been good to us. >> Well congratulations, love the tech chops, value and culture, big deal right now, thanks for spending the time sharing the insights, appreciate it. >> Thank you for having me. >> George Kurian here on theCUBE with John Furrier, myself, and Stu Miniman, more CUBE coverage after this short break. (upbeat music)

>> Narrator: Live from Las Vegas it's theCUBE, covering NetApp Insight 2018. Brought to you by NetApp. >> Welcome back to theCUBE's continuing coverage of the third annual NetApp Insight, with customers, partners about 5,000 plus people here Lisa Martin with Stu Minamin and very excited to welcome to theCUBE, for the first time George Kurian the CEO of NetApp. George, thank you so much for stopping by. >> Of course, thank you for having me. >> Really enjoyed your key note this morning, first of all it was standing room only there was about 5,000 plus people here Jean English, your CMO mentioned to us a few hours ago, that this is the biggest collaboration of your partners and customers under one roof, the momentum is palpable the messages are palpable, and I really enjoyed some of the messages that you delivered in your keynote. One, I'd love to get your perspective on the data authority and how NetApp itself has transformed in recent years to become that data authority, what does that mean from your C-level perspective? >> You know, we've always been in the business of helping our customers, help make their businesses better with data. We used to do it strictly in the form of storage systems, but over the last few years we have built a much more robust portfolio of capabilities. Both technological as well as partnerships to enable customers to use our technology wherever their data sits, whether it's in the edge of the enterprise or in heart of the biggest cloud providers in the world, and we believe that the world will be a hybrid, multi-cloud world, because of the need for speed and efficiency in how IT delivers support to digital businesses. And our idea is to help our customers by using our tools to integrate all of their data for business advantage. So, we see ourselves as someone who is really knowledgeable about being, managing customers' data in a hybrid cloud world. That's what we call data authority for the hybrid cloud. >> And you talked about, this morning too, kind of early in your keynote it sounded like you were addressing, NetApp has a massive install base, to helping those customers understand those that weren't born in the digital age they have to be there now to be relevant, to compete, to identify new service models, so I thought that was a very, poignant message. But something, that Stu and I were talking about is the four, kind of, pillars of digital transformation, walk us through, for those that didn't have a chance to see your keynote, walk us through those four pillars, how NetApp is enabling customers to utilize them. >> Absolutely, we talk to our customers about if you're not a born digital business you need to transform yourself especially using your data, to compete with these born digital companies. And, there are four ideas that we shared with customers that are the cornerstones of such a transformation. The first is that, digital transformation requires IT transformation, businesses usual in IT wouldn't cut it for the digital era. The second is an idea that was created by the Boston Consulting Group, which is that, speed is the new scale. It's the hallmark of competitive differentiation and advantage in the digital world. You know, I was talking about the fact that, Fortnite, a game that was created just a year ago has now got 125 million customers or players. That wouldn't happen in the physical world. And the third is, that because of the need for speed you need to be able to take advantage of innovation sources anywhere, which creates the necessity to operate in a hybrid multi-cloud world where IT is enabling the business to access innovation everywhere. And finally, that while you're doing it you need to think about your data. The critical asset that you have, that the born digital companies don't and how to use that and you need to build a data strategy which requires you to move from thinking about data centers to data fabrics, and so those were four key principles that we're sharing with our customers. >> Yeah, George I think that's a great way to measure what's happening with digital transformation. I wonder if you can help us take a lens at NetApp itself, so, when you talk about speed, NetApp has 26 years of experience, you've got over 10,000 employees a company of this size and this heritage you have some strengths but you're competing against some of those cloud native players. You know cloud is the bar which we are all measured someone said in the keynote this morning, I believe it was you, can you speak especially to the speed aspect how you look internally, what has to change culturally, I know Jean talked to us this morning, operationally there were changes made, that's your background. >> Absolutely, you know I think that we are an example of a company that is using data to accelerate our business right, in multiple ways. The first was in product development, we have used a lot of information about how customers use our systems. How, the support organization reacts to customer situations, and have accelerated cycle times for software development, it was 20 months when I joined, it's now six months on our hardware platforms and on the cloud we're releasing new capabilities every two weeks. So, we've really become a cloud native development organization and it required a lot of changes, I will just tell you that, getting the engineers through to the other side of it, has been extraordinary, they love the new world. They would never want to go back to the old world. Another place is around our custom interface where we've invested a lot more in digital marketing capabilities our CMO Jean English, is an expert in that world and so we have had new discussions with cloud only customers entirely electronically, and on the back end in terms of support we have amassed a lot of information about our customers systems, and now we're using artificial intelligence through a capability called active-IQ to tell them proactively what they can do to bench mark themselves against the best. So we say, listen Stu, we think your system which is operating in exactly similar environment to Lisa's system, is not working as well because you've done these five things. And so there's a lot of ways where we are trying to progress our own transformation. I would tell you that the secret, there are two important lessons learned. One was we started with business led initiatives rather than an end to end transformation of the business. And the second is we structured a transformation program led by the chief transformation officer so that it would become the day to day reality of our business, not the after thought of the normal course of business. And so, those are two key practical tips that we would share with our customers about transformation. >> George, NetApp has a strong history with partnerships, when I think about channel lead, NetApp has always been there, from a technology stand point, NetApp has negotiated some challenging waters I think specifically, VMware was a big wave of course acquired by EMC, but NetApp did better in VMware environments than it did in the market as a whole. Today VMware is still a very important piece of the marketplace, but Amazon's another one that is a challenging company to partner with, everybody's always worried, okay how long do you partner with them before they take over. How do you look at that, what are the most important partnerships from a NetApp standpoint, and how do you face those today? >> We've always kept the customer at the center of a partnership. I think that the secret to our success has always been that we keep the customer interests paramount, and it allows us to partner with companies who may be part of some of our competitors. I think today, if I look at it, clearly, in terms of the customer lens we have a lot of work going on with the big cloud providers, both in North America as well as overseas. To help customers architect a truly hybrid multi-cloud, we showed some really exciting work that we've done over the last year to make that a lot more tangible and real, and it's the result of deep engineer to engineer collaboration with them. I think the second area that we're making investments in are really to build the foundation for using data alongside artificial intelligence and machine learning, specifically with training and inference models and there we've been fortunate to be able to collaborate with the leader, NVIDIA, in that market. And it's about focusing on what we bring and keeping the customer at the center of the conversation. In terms of the go to market side of things. We've also done work, for example, with Lenovo, where we are bringing complimentary skill sets into the market, they are bringing computing skills, we're bringing storage and data management skills. They have strength in certain geographies and so we feel like it's a really complimentary relationship and we respect all of our partners, what they bring to the market and we're excited to, and honored to work with them to be honest. >> So, one of the things that I've read recently and it was apparent in a lot of the messaging today is the evolution of the data fabric. It's moved, it's transformed from a vision to a legitimate architecture. Talk to us about some of the evolution in the last twelve months and how your customers have helped be able to really make that real? >> We've learnt a lot, about, real use cases of the data fabric. Today, we have hundreds of customers deployed and in production with it, and we've been fortunate to be able to iterate at cloud speed on the new capabilities, it is real today, we allow you to have data management services integrated across all of your environments, in your data center with the world's best flash we've connected and we're very excited to connect our enterprise Grade 8CI solution to it, and of course a catalog of consistent data services that cross enterprise cloud with our 8CI and the biggest public clouds, we have taken advantage of new container technology and capabilities that Kubernetes and Istio bring to the market to build a really good control plane for all of this, we've innovated around data insights using foundational technology from on command insight that gives you now visibility into where all your data sits. And you'll see us continue to bring out really exciting innovations in the data fabric. The reason that the data fabric is resonating with customers is because it helps you build a consistent set of data services in a hybrid multi-cloud world, and use your data for business advantage. That's why it's resonating. >> George, NetApp has gone through some ups and downs over the 26 years. In many ways, it's been close, or people have said it's on the brink of being gone, and it's remade itself. How has NetApp continued to do this, and why should people believe that NetApp is in the position to execute best for the future? >> I think we've always been resilient at looking at things that could have been threats, and making them opportunities. Throughout the generations there was the transition from the internet computing, the dotcom bust that affected everybody, virtualization was supposed to kill storage, the cloud was supposed to kill storage, and through every one of those transitions we have looked carefully at how could we take what could be a threat and make it an opportunity, and make it an opportunity by serving our customers best through those technology moves, and I think that's the core to our success, I would say that what we have done over the last few years, is massively upped the game on execution. We laid out the data fabric strategy four years ago, as a vision and four years later we've got customers, we've got the biggest cloud providers, we've integrated it with the world's best flash and the world's best HCI and we are delivering road maps. So, I think that's really the promise of the new NetApp, we are really, really, focused on execution. >> Another, thing, sorry Stu, that we've heard along those lines in terms of NetApp's evolution, and continuing to stay relevant, is that the NetApp on NetApp story is one that NetAppians are proud of and should be, but it's also seeming like, is that a differentiator, when you're talking with customers who have so much choice that NetApp on NetApp story, that authentic, this is how we pivoted over the last 26 years to stay relevant, to compete. Tell us little bit about how you're, as the CEO, when you're meeting with customers, how does that story resonate with them? >> Our transformation story is a topic of conversation with all C-level executives. Everything we talked about with our customers today, we are an example of. So, for example, we did not take on an end to end IT re-architecture, we prioritize the digital business initiatives in the company and said, what are the barriers in our own IT that preclude that and so we prioritized IT initiatives to support the digital business transformation of the company. We have created two data hubs in the company as we have progressed those initiatives, one a product data hub through our auto support mechanism, which is now integrated into every technology that we sell to customers, both in the data centers of our customers and the cloud and on the customer facing side we've evolved to a customer hub that so, I think that there are examples that we share both in terms of leadership, people change management, transformation of IT that are extraordinarily relevant and I think that one of the things that we are open about sharing is the mistakes we've made. I think that brings an honesty and a transparency to our relationships with our customers and they trust us because of that. >> Alright, George, it's been really interesting, people have said for years storage is going to be killed off by everything else. If you look at all of the big waves right now data's at the center of all of it. >> George: That's correct. >> What I want you to help us understand is connect the dots for us, because NetApp, most of the customers I talk to here, the first thing they'll think about is, oh, well, NetApp's my storage company. Storage versus the data and how I get value out of that, help us connect the dots as to how I go from being a storage supplier to helping customers become data visionaries, as you say. >> I think one of the really important discussions we have with customers is data is the foundation of a digital business it's sort of the oil of the digital business, and software is the engine. It operates on the data to make the business go better, the challenge that most business leaders have as they think about digitizing their businesses is that they have fragmented their data across systems and silos that were the prevailing norm in IT, not only did it fragment the data, but it made operating IT much more complicated and so two long held paradigms that we have shared are finally coming to reality, NetApp has always been a simplify your data center unlike our competitors and that's coming through for the needs of simplification. And the second is, while you're doing it build a platform that can integrate all of your data, so that you can accelerate your transformation, and I think we're well positioned for that. I think there are customers here who have never met us in the storage systems world, that have joined us on the cloud like WuXi NextCODE, the genomics company that never buys a piece of equipment from NetApp, so we're really excited about an enormous number of those new faces that we're seeing. And then there are customers that started with us, as a storage system supplier, that we are bringing to the cloud. And, so we're going to keep pushing forward. >> Just quick follow up on that, it really opened my eyes, I was at the Cisco show earlier this year and when you talk about the future, Cisco, the networking company, they said, ten years from now you won't think of us as a networking company, you'll think of us just as a software company. What's NetApp of the future? >> We will offer our intellectual property in a broad range of ways, I think we'll still be offering systems but I think the brains of those systems will really be super smart software. Software that's, digitally enhanced and software that's enhanced with machine learning capabilities. I think we'll offer them also as cloud services, and we're really going to be focused on helping our customers with their data problems we think that's an extraordinarily rich landscape and we think that it has the opportunity to propel our business to achieve everything we've wanted to achieve. So, we're excited about the momentum. We are, honored to have so many customers, partners, and technologists here, and I think this is the best insight in the three years that I've been CEO, and I'm looking forward to having an even better one next year. >> Excellent, keep moving up bar, George. Thanks so much for stopping by theCUBE, you're now an alumni so I'm going to give you a sticker so you-- >> Thank you >> Can brand yourself. Stu and I really appreciate you sharing your insights and your time with us. >> Thank you so much, it's been an honor to be here. >> We want to thank you for watching theCUBE, we are live from NetApp Insights 2018 in Las Vegas, I am Lisa Martin for Stu Minium, stick around we'll be back with our next guest shortly. (upbeat music)

>> From theCUBE Studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. (intense music) >> Hi, everybody, this is Dave Vellante in theCUBE, and as you know, I've been doing a CEO series, and welcome to the isolation economy. We're here at theCUBE's remote studio, and really pleased to have Charlie Giancarlo, who is the CEO of PureStorage. Charlie, I wish we were face-to-face at Pure Accelerate, but this'll have to do. Thanks for coming on. >> You know, Dave, it's always fun to be face-to-face with you. At Pure Accelerate when we do it in person is great fun, but we do what we have to do, and actually, this has been a great event for us, so appreciate you coming on air with me. >> Yeah, and we're going to chat about that, but I want to start off with this meme that's been going around the internet. I was going to use the wrecking ball. I don't know if you've seen that. It's got the people, the executives in the office building saying, "Eh, digital transformation; "not in my lifetime," complacency, and then this big wrecking ball, the COVID-19. You've probably seen it, but as you can see here, somebody created a survey, Who's leading the digital transformation at your company? The CEO, the CTO, or of course circled is COVID-19, and so we've seen that, right? You had no choice but to be a digital company. >> Well, there's that, and there's also the fact that the CEOs who've been wanting to push a digital transformation against a team that wants to stick with the status quo, it gives the CEO now, and even within our own company in Pure, to drive towards that digital transformation when people didn't really take up the mantle. So no, it's a great opportunity for digital transformation, and of course, the companies that have been doing it all along have been getting ahead during this crisis, and the ones that haven't are having some real trouble. And you and I have had some really interesting conversations. Again, that's, I think, the thing I miss most, not only having you in theCUBE, but the side conversations at the cocktail parties, et cetera. And we've talked about IP, and China, and the history of the US, and all kinds of interesting things there, but one of the things I want to put forth, and I know you guys, Kix especially, has done a lot of work on Tech For Good, but the narrative pre-COVID, PC I guess we'd call it, was really a lot of vitriol toward big tech especially, but you know what? That tech lash... Without tech, where would we be right now? >> Well, just think about it, right? Where would we be without videoconferencing, without the internet, right? We'd be sheltered in place with literally nothing to do, and all business would stop, and of course many businesses that require in-person have, but thank God you can still get goods at your home. You can still get food, you can still get all these things that today is enabled by technology. We've seen this ourselves, in terms of having to make emergency shipments during our first quarter to critical infrastructure to keep things going. It's been quite a quarter. I was saying to my team recently that we had just gotten everyone together in February for our sales kickoff for the year, and it felt like a full year since I had seen them all. >> Well, I had interviewed, I think, is it Mike Fitzgerald, your head of supply chain. >> Yes. >> In March, and he was saying, "No. "We have no disruptions. "We're delivering for clients," and we certainly saw that in your results in the quarter. >> Yeah, no, we're very fortunate, but we had been planning for doing our normal business continuity disaster planning, and actually, once we saw COVID in Asia in January we started exercising all those muscles, including pre-shipping product around to depos around the world in case transportation got clogged, which it in fact did. So we were well-prepared, but we're also, I think, very fortunate in terms of the fact that we had a very distributed supply chain. >> Yeah, I mean you guys obviously did a good job. You saw in Dell's earnings they held pretty firm. HPE, on the other hand, really saw some disruption, so congratulations to you and the team on that. So as we think about exiting this isolation economy, we've done work that shows about 44% of CIOs see a U-shaped recovery, but it's very fragmented. It varies by industry. It varies by how digital the organizations are. Are they able to provide physical distancing? How essential are these organizations? And so I'm sure you're seeing that in your customer base as well. How are you thinking about exiting this isolation economy? >> Well, I've certainly resisted trying to predict a U- or a V-shape, because I think there are many more unknowns than there are knowns, and in particular, we don't know if there's a second wave. If there is a second wave, is it going to be more or less lethal than the first wave? And as you know, maybe some of your audience knows, I contracted COVID in March. So I've done a lot of reading on not just COVID, but also on the Spanish flu of 1918-1919. It's going to take a while before this settles down, and we don't know what it's going to look like the rest of the year or next year. So a lot of the recovery is going to depend on that. What we can do, however, is make sure that we're prepared to work from home, work in the office, that we make sure that our team out in the field is well-placed to be able to support our customers in the environment, and the way that we're incenting our overall team now has less to do with the macro than it does with our specific segment, and what I mean by that is we're incenting our team to continue to build market share, and to continue to outperform our competition as we go forward, and also on our customer satisfaction figure, which you know is our Net Promoter Score, which is the highest in the industry. So that's how we're incenting our team. >> Yeah, and we're going to talk about that, and by the way, yes, I did know, and it's great to see you healthy, and I'd be remiss if I didn't also express my condolences, Matt, the loss of Matt Danziger, your head of IR, terrible tragedy. Of course Matt had some roots in Boston, went to school in Maine. >> Yeah. >> Loved Cape Cod, and so really sad loss, I'm sure, for all of the Puritans. >> It's affected us all very personally, because Matt was just an incredible team member, a great friend, and so young and vital. When someone that young dies for almost unexplainable reasons. It turned out to be a congenital heart condition that nobody knew about, but it just breaks... It just breaks everyone's heart, so thank you for your condolences. I appreciate it. >> You're welcome. Okay, so let's get into the earnings a little bit. I want to just pull up one of the charts that shows roughly, I have approximately Q1 because some companies like NetApp, Dell, HPE, are sort of staggered, but the latest results you saw IBM growing at 19%. Now we know that was mainframe-driven in a very easy compare. Pure plus 12, and then everybody else in the negative. Dell, minus five, so actually doing pretty well relative to NetApp and HPE, who, as I said, had some challenges with deliveries. But let's talk about your quarter. You continue to be the one sort of shining star in the storage business. Let's get into it. What are your big takeaways that you want us to know about? >> Well, of course I'd rather see everybody in the black, right, everybody in the positive, but we continue to take market share and continue to grow 20 to 30% faster than the rest of the industry combined, and it's quarter after quarter. It's not just a peak in one quarter and then behind in another quarter. Every quarter we're ahead of the rest of the industry, and I think the reasoning is really quite straightforward. We're the one company that invests in storage as if it's high technology. You do hear quite often, and even among some customers, that storage is commoditized, and all of our competitors invest in it, or don't invest in it, as if it's a commoditized market. Our view is quite straightforward. The science and the engineering of computing and data centers continues to evolve, continues to advance, has to advance if we continue down this path of becoming more of a digital economy. As we all know, processors advance in speed and capability. Networking advances in terms of speed and capability. Well, data storage is a third of data center spend, and if it doesn't continue to advance at the same pace or faster than everything else, it becomes a major bottleneck. We've been the innovator. If you look at a number of different studies, year after year, now over six or seven years, we are the leader in innovation in the data storage market, and we're being rewarded for that by penetrating more and more of the customer base. >> All right, let's talk about that. And you mentioned in your keynote at Accelerate that you guys spend more on R&D as a percentage of revenue than anybody, and so I want to throw out some stats. I'm sorry, folks, I don't have a slide on this. HPE spends about 1.8 billion a year on R&D, about 6% of revenues. IBM, I've reported on IBM and how it's spending the last 10 years, spent a huge amount on dividends and stock buybacks, and they spent six billion perpetually on R&D, which is now 8% of revenue. Dell at five billion. Of course Dell used to spend well under a billion before the EMC acquisition. That's about 6% of revenue. And NetApp, 800 million, much higher. They're a pure play, about 13%. Pure spends 430 million last year on R&D, which is over 30% of revenue on R&D, to your point. >> Yeah, yeah, well, as I said, we treat it like it's high technology, which it is, right? If you're not spending at an appropriate level you're going to fall behind, and so we continue to advance. I will say that you mentioned big numbers by the other players, but I was part of a big organization as well with a huge R&D budget, but what matters is what percent of the revenue of a specific area are you spending, right? You mentioned Dell and VMware. A very large fraction of their spend is on VMware. Great product and great company, but very little is being spent in the area of storage. >> Well, and the same thing's true for IBM, and I've made this point. In fact, I made this point about Snowflake last week in my breaking analysis. How is Snowflake able to compete with all these big whales? And the same thing for you guys. Every dime you spend on R&D goes to making your storage products better for your customers. Your go-to-market, same thing. Your partner ecosystem, same thing, and so you're the much more focused play. >> Right, well I think it boils down to one very simple thing, right? Most of our competitors are, you might call them one-stop shops, so the shopping mall of IT gear, right? The Best Buy, if you will, of information technology. We're really the sole best of breed player in data storage, right, and if you're a company that wants two vendors, you might choose one that's a one-stop shop. If you have the one-stop shop, the next one you want is a best of breed player, right? And we fill that role for our customers. >> Look it, this business is a technology business, and technology and innovation is driven by research and development, period, the end. But I want to ask you, so the storage business generally, look, you're kind of the one-eyed man in the land of the blind here. I mean the storage business has been somewhat on the back burner. In part it's your fault because you put so much flash into the data center, gave so much headroom that organizations didn't have to buy spindles anymore to get to performance, the cloud has also been a factor. But look, last decade was a better decade for storage than the previous decade when you look at the exits that you guys had and escape velocity, Nutanix, if you can kind of put them in there, too. Much larger than say the Compellents or 3PARs. They didn't make it to a billion. So my question is storage businesses, is it going to come back as a growth business? Like you said, you wish everybody were in the black here. >> Right, well a lot of what's being measured, of course, is enterprise on-prem storage, right? If we add on-prem and cloud, it actually continues to be a big growth business, because data is not shrinking. In fact, data is still growing faster than the price reduction of the media underneath, right, so it's still growing. And as you know, more recently we've introduced what we call Pure as-a-Service and Cloud Block Store. So now we have our same software, which we call Purity, that runs on our on-prem arrays, also running on AWS, and currently in beta on Azure. So from our point of view this is a... First of all, it's a big market, about $30 to $40 billion total. If you add in cloud, it's another $10 to $15 billion, which is a new opportunity for us. Last year we were about 1.65 billion. We're still less than, as you know, less than 10% of the overall market. So the opportunity for us to grow is just tremendous out there, and whether or not total storage grows, for us it's less important right now than the market share that we pick up. >> Right, okay, so I want to stay on that for a minute and talk about... I love talking about the competition. So what I'm showing here with this kind of wheel slide is data from our data partner ETR, and they go out every quarter. They have a very simple methodology. It's like Net Promoter Score, and it's very consistent. They say relative to last year, are you adopting the platform, that's the lime green, and so this is Pure's data. Are you increasing spend by 6% or more? That's the 32%, the forest green. Is spending going to be flat? Is it going to decrease by more than 6%? That's the 9%. And then are you replacing the platform, 2%. Now this was taken at the height of the US lockdown. This last survey. >> Wow. >> So you can see the vast majority of customers are either keeping spending the same, or they're spending more. >> Yeah. >> So that's very, very strong. And I want to just bring up another data point, which is we like to plot that Net Score here on the vertical axis, and then what we call market share. It's not like IDC market share, but it's pervasiveness in the survey. And you can see here, to your point, Pure is really the only, and I've cited the other vendors on the right hand, that box there, you're the only company in the green with a 40% Net Score, and you can see everybody else is well below the line in the red, but to your point, you got a long way to go in terms of gaining market share. >> Exactly, right, and the reason... I think the reason why you're seeing that is really our fundamental and basic value is that our product and our company is easy to do business with and easy to operate, and it's such a pleasure to use versus the competition that customers really appreciate the product and the company. We do have a Net Promoter Score of over 80, which I think you'd be hard-pressed to find another company in any industry with Net Promoter Scores that high. >> Yeah, so I want to stay on the R&D thing for a minute, because you guys bet the company from day one on simplicity, and that's really where you put a lot of effort. So the cloud is vital here, and I want to get your perspective on it. You mentioned your Cloud Block Store, which I like that, it's native to AWS. I think you're adding other platforms. I think you're adding Azure as well, and I'm sure you'll do Google. >> Azure, Azure's in beta, yes. >> Yeah, Google's just a matter of time. Alibaba, you'll get them all, but the key here is that you're taking advantage of the native services, and let's take AWS as an example. You're using EC2, and high priority instances of EC2, as an example, to essentially improve block storage on Amazon. Amazon loves it because it sells Compute. Maybe the storage guys in Amazon don't love it so much, but it's all about the customer, and so the native cloud services are critical. I'm sure you're going to do the same thing for Azure and other clouds, and that takes a lot of investment, but I heard George Kurian today addressing some analysts, talking about they're the only company doing kind of that cloud native approach. Where are you placing your bets? How much of it is cloud versus kind of on-prem, if you will? >> Yeah, well... So first of all, an increasing fraction is cloud, as you might imagine, right? We started off with a few dozen developers, and now we're at many more than that. Of course the majority of our revenue still comes from on-prem, but the value is the following in our case, which is that we literally have the same software operating, from a customer and from a application standpoint. It is the same software operating on-prem as in the cloud, which means that the customer doesn't have to refactor their application to move it into the cloud, and we're the one vendor that's focused on block. What NetApp is doing is great, but it's a file-based system. It's really designed for smaller workloads and low performance workloads. Our system's designed for high performance enterprise workloads, Tier 1 workloads in the cloud. To say that they're both cloud sort of washes over the fact that they're almost going after two completely separate markets. >> Well, I think it's interesting that you're both really emphasizing cloud native, which I think is very important. I think that some of the others have some catching up to do in that regard, and again, that takes a big investment in not just wrapping your stack, and shoving it in the cloud, and hosting it in the cloud. You're actually taking advantage of the local services. >> Well, I mean one thing I'll mention was Amazon gave us an award, which they give to very few vendors. It's called the Well-Architected AWS Award, because we've designed it not to operate, let's say, in a virtualized environment on AWS. We really make use of the native AWS EC2 services. It is designed like a web service on EC2. >> And the reason why this is so important is just, again, to share with our audience is because when you start talking about multi-cloud and hybrid cloud, you want the same exact experience on-prem as you do in the cloud, whether it's hybrid or across clouds, and the key is if you're using cloud native services, you have the most efficient, the highest performance, lowest latency, and lowest cost solution. That is going to be... That's going to be a determinate of the winner. >> Yes, I believe so. Customers don't want to be doing... Be working with software that is going to change, fundamentally change and cause them to have to refactor their applications. If it's not designed natively to the cloud, then when Amazon upgrades it may cause a real problem with the software or with the environment, and so customers don't want that. They want to know they're cloud native. >> Well, your task over the next 10 years is something. Look it, it's very challenging to grow a company the size of Pure, period, but let's face it, you guys caught EMC off-guard. You were driving a truck through the Symmetrics base and the VNX base. Not that that was easy. (chuckling) And they certainly didn't make it easy for ya. But now we've got this sort of next chapter, and I want to talk a little bit about this. You guys call it the Modern Data Experience. You laid it out last Accelerate, kind of your vision. You talked about it more at this year's Accelerate. I wonder if you could tell us the key takeaways from your conference this year. >> Right, the key takeaway... So let me talk about both. I'll start with Modern Data Experience and then key takeaways from this Accelerate. So Modern Data Experience, for those that are not yet familiar with it, is the idea that an on-prem experience would look very similar, if not identical, to a cloud experience. That is to say that applications and orchestrators just use APIs to be able to call upon and have delivered the storage environment that they want to see instantaneously over a high speed network. The amazing thing about storage, even today, is that it's highly mechanical, it's highly hardware-oriented to where if you have a new application and you want storage, you actually have to buy an array and connect it. It's physical. Where we want to be is just like in the cloud. If you have a new application and you want storage or you want data services, you just write a few APIs in your application and it's delivered immediately and automatically, and that's what we're delivering on-prem with the Modern Data Experience. What we're also doing, though, is extending that to the cloud, and with Cloud Block Store as part of this, with that set of interfaces and management system exactly the same as on-prem, you now have that cloud experience across all the clouds without having to refactor applications in one or the other. So that's our Modern Data Experience. That's the vision that drives us. We've delivered more and more against it starting at the last Accelerate, but even more now. Part of this is being able to deliver storage that is flexible and able to be delivered by API. On this Accelerate we delivered our Purity 6.0 for Flash Array, which adds not only greater resiliency characteristics, but now file for the first time in a Flash Array environment, and so now the same Flash Array can deliver both file and block. Which is a unified experience, but all delivered by API and simple to operate. We've also delivered, more recently, Flash Array 3.0... I'm sorry, Purity 3.0 on FlashBlade that delivers the ability for FlashBlade now to have very high resiliency characteristics, and to be able to even better deliver the ability to restore applications when there's been a failure of their data systems very, very rapidly, something that we call Rapid Restore. So these are huge benefits. And the last one I'll mention, Pure as-a-Service allows a customer today to be able to contract for storage as a service on-prem and in the cloud with one unified subscription. So they only pay for what they use. They only pay for what they use when they use it, and they only pay for it, regardless of where it's used, on-prem or in the cloud, and it's a true subscription model. It's owned and operated by Pure, but the customer gets the benefit of only paying for what they use, regardless of where they use it. >> Awesome, thanks for that run through. And a couple other notes that I had, I mean you obviously talked about the support for the work from home and remote capabilities. Automation came up a lot. >> Yep. >> You and I, I said, we have these great conversations, and one of the ones I would have with you if we were having a drink somewhere would be if you look at productivity stats in US and Europe, they're declining-- >> Yes. >> Pretty dramatically. And if you think about the grand challenges we have, the global challenges, whether it's pandemics, or healthcare, or feeding people, et cetera, we're not going to be able to meet those challenges without automation. I mean people, for years, have been afraid of automation. "Oh, we're going to lose jobs." We don't have enough people to solve all these problems, and so I think that's behind us, right-- >> Yeah, I agree. >> The fear of automation. So that came up. Yeah, go ahead, please. >> I once met with Alan Greenspan. You may remember him. >> Of course. >> This is after he was the chairman, and he said, "Look, I've studied the economies now "for the last 100 years, "and the fact of the matter is "that wealth follows productivity." The more productive you are as a society, that means the greater the wealth that exists for every individual, right? The standard of living follows productivity, and without productivity there's no wealth creation for society. So to your point, yeah, if we don't become more productive, more efficient, people don't live better, right? >> Yeah, I knew you'd have some good thoughts on that, and of course, speaking of Greenspan, we're seeing a little bit of rational exuberance maybe in the market. (chuckling) Pretty amazing. But you also talked about containers, and persisting containers, and Kubernetes, the importance of Kubernetes. That seems to be a big trend that you guys are hopping on as well. >> You bet. It is the wave of the future. Now, like all waves of the future, it's going to take time. Containers work entirely differently from VMs and from machines in terms of how they utilize resources inside a data center environment, and they are extraordinarily dynamic. They require the ability to build up, tear down connections to storage, and create storage, and spin it down at very, very rapid rates, and again, it's all API-driven. It's all responsive, not to human operators, but it's got to be responsive to the application itself and to the orchestration environment. And again, I'll go back to what we talked about with our Modern Data Experience. It's exactly the kind of experience that our customers want to be able to be that responsive to this new environment. >> My last question is from John Furrier. He asked me, "Hey, Charlie knows a lot about networking." We were talking about multi-cloud. Obviously cross-cloud networks are going to become increasingly important. People are trying to get rid of their MPLS networks, really moving to an SD-WAN environment. Your thoughts on the evolution of networking over the next decade. >> Well, I'll tell you. I'm a big believer that even SD-WANs, over time, are going to become obsolete. Another way to phrase it is the new private network is the internet. I mean look at it now. What does SD-WAN mean when nobody's in the local office, right? No one's in the remote office; they're all at home. And so now we need to think about the fact... Sometimes it's called Zero Trust. I don't like that term. Nobody wants to talk about zero anything. What it really is about is that there is no internal network anymore. The fact of the matter is even for... Let's say I'm inside my own company's network. Well, do they trust my machine? Maybe not. They may trust me but not my machine, and so what we need to have is going to a cloud model where all communication to all servers goes through a giant, call it a firewall or a proxy service, where everything is cleaned before it's delivered. People, individuals only get, and applications, only get access to the applications that they're authorized to use, not to a network, because once they're in the network they can get anywhere. So they should only get access to the applications they're able to use. So my personal opinion is the internet is the future private network, and that requires a very different methodology for authentication for security and so forth, and if we think that we protect ourselves now by firewalls, we have to rethink that. >> Great perspectives. And by the way, you're seeing more than glimpses of that. You look at Zscaler's results recently, and that's kind of the security cloud, and I'm glad you mentioned that you don't like that sort of Zero Trust. You guys, even today, talked about near zero RPO. That's an honest statement-- >> Right. >> Because there's no such thing as zero RPO. (chuckling) >> Right, yeah. >> Charlie, great to have you on. Thanks so much for coming back in theCUBE. Great to see you again. >> Dave, always a pleasure. Thank you so much, and hopefully next time in person. >> I hope so. All right, and thank you for watching, everybody. This is Dave Vellante for theCUBE, and we'll see you next time. (smooth music)

(electronic music) >> Narrator: Live from Las Vegas it's theCUBE! Covering NetApp Insight 2018. Brought to you by NetApp. >> Welcome back to theCUBE's coverage of NetApp Insight 2018, Lisa Martin with Stu Miniman and guess who's here now, Dave Hitz, EVP and founder of NetApp, Dave, welcome back to theCUBE. >> Thank you and glad to be here. >> This is a big event, we were in the keynote this morning when we were walking out, standing room only really strong messages delivered by George Kurian, who stopped by for the first time couple hours ago. Great customer story, the futurist was very interesting perspective, 26 years ago, can you envision? >> You know the futurist? >> Where you are? >> Never mind that, I have a very different perspective than him, I think we are entering the golden decade of artificial intelligence. It's smart enough to be super, super cool and it hasn't figured out how to kill us yet, decade. (laughing) >> Lisa: That's good. >> Enjoy your last 10 years. >> Oh no, that's it? >> I, no, no, you asked, you asked that I envision this 26 years ago, oh my god, no, I mean, you know, we were a little start-up and we had these spread sheets that said we would grow to, you know it basically that, what the VC's told us if we could get to 100 million in revenue we can go public, so, naturally our spread sheets showed 200 million (laughs) in revenue, you know or five, six, some where in there and is like, we're so far beyond anything I imagined when we started, and we were doing technical nerdy products for little engineers and little work groups, you know and the idea that that part of the storage market would merge against the heavy duty, high-end enterprise storage market doing databases, and then that would end up colliding with the cloud market and helping, like no we didn't even imagine this stuff that's happening now, I mean it's so far beyond. >> Enabling DreamWorks to make movies, I mean-- >> I love that, you know they do showings, they do previews for their vendors and so I've gotten to take my 11-year-old daughter, she's 11 now, but to see, you know early viewing of some of these movies it's, it's just fun. >> So, Dave, it's always interesting in the industry a lot of time you say like, okay, this architecture is long in the tooth, there's a new generation do things better and everything like that. ONTAP, been around for a long time now.. >> You know, so let me-- >> Seems like it's been reinvigorated with the cloud and everything like that, you know. >> Let me make a comment about that. >> Yeah. >> Cause people do this, oh, ONTAP is so old, isn't that the old generation? So lets talk about old. Mainframes are old, and AS400s are old, and Unix is old, and then there's Windows which is kind of younger, and ONTAP's younger than that, and then there's Windows NT, which was a rewrite of Windows and Clustered ONTAP is younger than that, so like stop with the old, you know I mean iOS is after that, so okay fine we're older than iOS, but it's not an ancient, and then we've revamped it again to go run in the cloud, I mean we first started doing ONTAP running in Azure, sorry I mean Amazon initially, we started that work in 2013 and shipped it in 2014, so like that was yet another refresh so. >> Well, but you bring a point, you've, it is adjusted and moved, it wasn't something that's static. Can you speak a little bit, that cloud, the you know, the rewrite and focus around the cloud and what, that mean internally, I know you've been reinvigorated. >> Ha! >> With everything that's happened for the last few years. >> You know, the cloud everybody's doing it now and everybody's trying to be cloud relevant, we were really struggling early on I will say you know 2013, 2014 we were really trying to get our heads around what to do and a lot of people were stepping back like, no, no, no, let's see if we can slow it down, and, I mean not just outside of NetApp but NetApp as well, and the guy that was the CEO of the time Tom Georgens, and George Kurian was part of the staff then. We, I'm proud of what we did was we said, you know let's really lean in, its either going to happen or it's not going to happen, probably not, based on what we do, and if it does happen we'll be way better off leaning into it early, learning how to make this stuff work, and that's, you know we shipped ONTAP in the cloud in 2014, and it sucked, I mean, and no one body else had anything like it, it was awesome, right, whenever you look at old tech die, the first iPhone sucked too, but it was both great, but it needed so much more work, like the very first rev I remember a story, Joe CaraDonna as a programmer he's like, we tried to get our own IT organization to use it and they told us the security wasn't good enough, so we had to fix the security, like, I mean we've been through so much stuff that's almost five years ago. We've been working on it, and so you do all of this work and then Cloud Volumes is a complete, have you guys had Anthony on? >> Both: Yes. >> Couple hours ago. >> I love how Anthony thinks, so, he's a cloudy guy right from the foundation, he joins the executive staff, whole new perspective on stuff, so Cloud ONTAP, like ONTAP's my baby and we put it in the cloud. I'm proud of that, like you have our forward leaning cloud and Anthony's like, you know, just so you know, that's not nearly good enough, like, that is a very old school infrastructural thing, probably storage infrastructural people will like that they can have their same old OS running in the cloud, but it's not what cloudy people want, cloudy people don't want to run a storage OS in the cloud, cloudy people just want to say, I'd like a volume, please. Here's your volume, Thank you, and by the way, it should be a RESTful API, like God, ONTAP was none of those things and so if you look at the work we're doing now is like, okay, here's a RESTful API, here's the JSON schema, send it to the Azure Resource Manager Like that's cloudy and so, it was because, you know we did a good job engineering getting it in but we didn't, we didn't have that like the, what does cloud smell like? If you know what I mean, like, the right whiff of cloud. Anyway, so Anthony really brought that and I, and I just feel really good about where we are at now, because, it's like cloud developers, develop this stuff for other cloud developers, it feels like that. >> Well in the last five years it sounds like tremendous amounts of transformation, reinvigoration, NetApp has some bold marketing messaging. We are the data authority, we help customers become data driven, you talk about these three business imperatives, customers have lots of choices that, you know public cloud, private cloud, hybrid, George talked about this morning in his keynote that hybrid and multi-cloud is now de facto. >> You know, someone asked me, I was giving a talk and they asked me, okay so much cloud, how long do you think till NetApp's not shipping hardware? And I was like, no, no, like we don't see that going away anytime soon, if anything we think our success in the cloud, 'cause customers want to do that, will help us gain share on-prem because customers also want to do that, right? George's picture shows, yes there is traditional on-prem IT, enterprise IT, there's private clouds people, HCI, convergence CI, and then there's public cloud. To me the interesting question, is why do people do those different things, the number one driver for public cloud is innovation, like, if you just, like all the catchwords you can think of, if you want to start up a DevOps team to-go program, I would like a new mobile phone app and I want it to take a picture of the person's face, oh look it's a woman, she looks happy, and then you want it to listen to her, to the voice, and like transcribe the voice and then do a sentiment analysis on the words, oh, she looked happy but it's snarky, and then you want to feed that into neural net deep learning engine, and say, what should we try to sell her, like, I guaranteed you, the team working on the public cloud will beat the on-prem team hands down every time. Right, I mean that's, so when you look at people and they go, we want all in on the cloud, or there's got to be 100% cloud. My question is what, what's your, like, don't start with that, what's your problem? If it's derive innovation, for the private cloud, typically that's just all about speed. They're so uniform regular, they're all the same you have extra capacity, you know you got empty rack space, for where the next one goes, someone says, I need some storage, and you say, hey, it's got a self service offer defined API, like, just do it yourself, and then in the enterprise space, the enterprise IT, Unix, Windows, clients, server, like that zone, probably the bulk of your investment, right? That's where you been spending the money historically. Probably still the bulk of most people's investment, but they want to modernize it, they don't want to get rid of it, they don't want to turn it off, it's working, but they'd like it to work better, so flash enable it, just get the performance issues out of the way. By the way, shrinks your footprint in the data center, frees up space, and connected to the cloud. Like not moving it, but just back it up or do DR, or like something cloudy and so to me I look at those three goals are tightly linked to the three styles of infrastructure. Notice, I haven't talked about products yet? The conversations I like to have with customers these days, help me understand what your business challenges are, your trying to move faster, be more innovative, modernize the stuff you have. Okay, like what ratio, now lets talk about how we could do those things together with the Data Fabric and let you build the Data Fabric you need, I mean, our Data Fabric strategy is not to tell customers what to do, it's to help them build the Data Fabric they need for their needs based on, oh, we're all about innovation, all on the cloud, like okay fine. We can do that like, but let's talk about that or is it. Now I'm stuttering. >> You bring up a great point there, Dave. >> I'm excited about this stuff. >> It's really exciting 'cause you know I think back, you know, just a couple of years ago, if you go to the enterprise, oftentimes storage was the boat anchor to prevent me from moving forward. Now we know that data, is absolutely going to be one of the drivers going forward, how do we help those people make that transition? How do you see NetApp driving that transition? So boating, that's an interesting word because I think if you look at cloud compute, it's very easy to move compute into the cloud, right. >> Stu: Yes. >> The thing about compute is it just happens and then its done, like you turn it on, you turn if off. You spin up the VM, you spin down the VM, it's easy. The reason data is a boat anchor is not because its a boat anchor, because data is the hard part, like you fired up the compute to the cloud but usually you're computing some data, well, how did you get the data to the place where the compute is? And then when you're finished a lot of times you created some data, well, how do you keep track of the data you created in the cloud, and is it legal for it to stay in the cloud, and now you want to put the data in a different cloud or put the data in your own data center and like, who's watching all that data? It's not a boat anchor because data sucks, it's a boat anchor actually because its the important thing you want to keep forever, right? I mean, maybe you do or maybe you want to delete it and know for sure it's gone. Like, those, compute doesn't have any of those issues. So, what's my point, whatever is hard, like if this was easy anybody can do it, right? Whatever is hard, you go hire lots and lots of smart people to work on hard problems and then customers are like, whoa, you're solving hard problems, I guess I will pay you after all. Isn't that what business is? >> So the majority of your conversations start with helping customers identify what they've got, where best to spread out their investments, it's not product based its about business outcomes. I'd love to get kind of in the last few minutes here, your perspective on NetApp's own IT and digital, and cultural transformation, how does that help your legacy long time enterprise customers feel an even stronger trust with NetApp? >> I think prior to our cloud work customers for the most part, customers and potential customers, they knew us, you know, it was interesting even as we thought about marketing the new work that we are doing, one of the questions was like, how much should be about the cloud, how much should be about the old stuff, and we've really leaned in almost 100% on telling people our new cloud stories, they're both public and private. And our VP of marketing I think she had a really, Jean English, she had a really good perspective. She basically said look, we've been telling the on-prem storage iron story for 26 years and if there's a customer who's out there waiting to decide who to use I don't think telling them that story again and year 27, is going to be the thing that makes the difference, like, they've decided they're happy with their Hitatchi or they're EM's, whatever it is, but, but they don't know that NetApp can help them in this brave new world. Right, they have no clue that ONTAP is also running on Amazon, I mean, It's like, seriously, I can run ONTAP on Amazon? Yeah like fire it up, it's five bucks an hour, or whatever the number is, it's like that's crazy, you know and so, so and then people go, well, we've had so many conversations where they're trying to get a cloud strategy together, and we talk about all these things and data movement and data management and cloud, and like just all of these tools and they're very excited about where they're trying to go and they said, you know, by the way, I do also have a on-prem storage need. Could you do me a quote for like what I need this week and meanwhile let's do some planning about what I need next year, right, you've got both of them working together, and I think it's that combo that's important. >> Last question, how do you, if only you had more energy and excitement like legitimately about this, but how do you keep some of the NetApp folks that have been here for a long time? How have you helped reinvigorate them to, to really be able to digest the massive impact that you guys are being able to make across industries? >> One of the things I think helps, 'cause there is a... Let me back up a step, you know, Steve Jobs, is such an awesome guy and also in his life he made so many mistakes, and one of the things he did when, when Apple was almost entirely floated on their Apple III business and, was that Apple III, Apple II? And he was doing the Mac, and basically his message to everybody else was, if you're not working on the Mac, you suck, except, by the way, that's the product that's floating the entire business and generating all the products, and I really was conscious of, like that's the wrong way to do it. And when I look in particular of what we're doing we've got new operating systems like E-Series and like SolidFire, the HCI is a whole new thing, and yet ONTAP is still shot through our entire product line. I mean, the Cloud Volumes' the cool, hottest new thing. It's ONTAP under the covers, right, and you look at the HCI it's got the SolidFire block storage built in there as a very scalable model, oh but if you'd like files guess what? We run ONTAP in a VM, it's HCI it runs VM, and so actually if you look at what's going on in there the work that we've done going way back, and yes it's evolved, it's changed, but that same work is actually shot through as technology, no longer the front piece but it's shot through all of it as technology, so it is kind of a unifying characteristic. If you talk about that, I think it helps people get more comfortable both internally but, we have the same, you know, you asked how do you get employees comfortable, a lot of customers have the same problem, you know-- >> Lisa: Right. >> They've spent a lot of investment and learning ONTAP's foibles over the year and Cloud Volume's hides all of that. So, gee, maybe I don't like this, you know what if you need all those features Cloud ONTAP, you can run ONTAP, like some people do want to do that, so, I just feel like the fact that the pieces all fit together, work together, actually gets people comfortable with it. >> Excellent, well Dave thanks so much for stopping by. >> Thank you for having me. >> Thank you for sharing your energy, and your excitement, your passion and all this wisdom and looking at where you guys are 26 years later, we look forward to year 27. >> Great, thank you. >> We want to thank you for watching theCUBE, I'm Lisa Martin with Stu Miniman, we're at NetApp Insight 2018 in Vegas. Stick around Stu and I will be right back with our next guest. (electronic music)

(electronic music) >> Announcer: Live from Las Vegas, it's theCUBE, covering NetApp Insight 2018. Brought to you by NetApp. >> Welcome back to theCUBE's continuing coverage of NetApp Insight 2018. We are in Mandalay Bay in Las Vegas, I'm Lisa Martin, with Stu Miniman. And we have a couple of guests joining us now from the A-Team, cue the music rights too. We've got Phoebe Goh, Cloud architect from NetApp, and we've got Paul Stringfellow, one of our CUBE alumni, technical director of Gardner Systems, one of NetApp's partners. Guys thanks so much for stopping by theCUBE. >> You're welcome. >> In your matching outfits! >> Thank you for having us. >> So first of all, this morning, before the general session started, I saw both of you on camera talking a little bit about the A-Team. For our audience who might not be familiar with that, I know it's been around for five years. Phoebe, talk to us a little bit about the A-Team, who composes it, obviously we've got a channel partner, it's not just NetAppians, but give our viewers a little bit of an overview of the A-Team. >> NetApp really appreciates our advocates from channel partners and also from our customers. We really love hearing from them, and we also love giving them back information about what we do, and where we're going with our vision and our strategy. So, we have channel partners on the A-Team as well as customers, and technical advisors from NetApp, such as myself, and we get together every now and then at events like Insight, and we also bring them to Sunnyvale where they are given some information about what's coming up with our strategy. >> And this is a small group of about maybe 30 people. Paul how long have you been part of the A-Team, and what has that, what you have learned from some of the other folks that are on that team? >> It's a great question, I've been a part of the team for three years, and it's kind of a symbiotic relationship almost in that it kind of works both ways. I think there's lots of value for NetApp in the partnership, in that they get to hear kind of from channel partners on the street, about what people actually think of their technology. It also works in that we get to see quite a lot of pre-release information, and it gives us the opportunity to feed back to NetApp directly from the things that we see out in the channel about what customers actually want, and then we can feed that back into NetApp, and we've seen over kind of the five years of the team, we've seen product strategies change, we've seen new products come to market, because of that direct feedback. And then from our side, when we talk to our customers, there's real value in being able to say that we've got that direct relationship with NetApp, we've got that access to their executives, and access to their research team. It works really well both ways for us. >> In the keynote this morning, we heard George Kurian talk about digital transformation, and one of those pieces is that hybrid multi cloud is the defacto IT architecture, Paul I would love to get your feedback as a channel partner, what this kind of hybrid multi cloud means to your customers, means to your business. >> So I think the idea of hybrid I think, it's different for a lot of people, so in lots of cases, hybrid for some organizations may be that their entire data center remains on prem within their own walls, however they might be using a software service, an Office 365, they may be using a Dropbox, and I don't think kind of the definition that George was talking about this morning when he talked about hybrid cloud. My little take on what George talked about as well with hybrid cloud , I think he's understanding that it exists, understand that public cloud is a thing, that the Azures, that the AWSs, the Googles, play a part in a way that some organizations are working. That's not necessarily the way your organization wants to work, so understanding that it's there, designing an architecture that recognizes that, and makes sure that if you ever want to use those kind of services in the future, that you'll be able to do so, but it's equally valid to say, actually, public cloud isn't for us. As long as you make that as a decision, and don't just fall into it because you've not really thought about it, that's a perfectly valid strategy. >> I really agree with what you were saying. So often when we talk about hybrid and multi-cloud, we're talking about infrastructure. >> Paul: Yep. >> And there's more than just infrastructure, a thing that I've been saying for a few years, let's follow the applications, and even more importantly, let's follow the data. I love we get some international viewpoints here because sometimes North America, it's like oh let's talk only about public cloud and seems to be kind of a monolithic thing. Phoebe, I would love to get your viewpoint, what are you hearing from customers when they talk about cloud, what does that mean for them, and how's NetApp and NetApp's channel partners helping them sort through this new future? >> Definitely, our customers and our channel partners are talking a lot about cloud, creating, adding agility to their business, allowing them to move faster, and to be more flexible, and what NetApp is looking to do is really enable that and speed that up for, no matter where you are in the globe, whether you're in Australia, or in America, or in Europe, that you can achieve those business outcomes that you really want, and we know that the cloud is going to help us get there, so we really want to help them use the data the best ways, and use the technology that makes sense for the business to be able to get to public cloud. >> How are you hearing, a lot of the messaging coming out, NetApp is data driven, it's the data authority, lot of transformation that NetApp's undergone in its 26 year history, I'd love to get your both of your perspectives before we wrap here about how are customers embracing that as looking to NetApp and its ecosystem partners to help them embrace this hybrid multi-cloud environment in which they live, and look at NetApp as part of their core cloud strategy, rather than data management storage? >> I'm actually really excited about this because I love collaborating and talking our customers and our partners, and what I find is that they're coming to us and saying, "Wow, we didn't know you guys did that, and "you're not even, you're not selling us something, you're "really helping us get there." We're having a conversation about how we can really get there, get to their business outcomes, rather than trying to push a product, where I find that we get to have really collaborative conversations, Paul? >> Actually, I couldn't agree more, I think that what data fabric, what this kind of hybrid cloud model means to our customers, is it opens up a much wider conversation. We're not having a conversation about storage, we're not talking to a partner saying, would you like to buy some NetApp, as a customer, because that can be, that's a yes no, I use something else, I'm not interested in NetApp or I'd love to buy some NetApp. Actually, if we can have a data conversation that talks about how do you want to use this, what are the business outcomes that you'd like to achieve, what is it you are trying to do as a business, let's help data be part of that transformation. >> Guys, thanks so much for stopping by having a quick convo, especially Phoebe since you've been in Vegas for four days already, and your voice is hanging on by a thread. Paul, Phoebe, thanks so much for your time. >> Thank you. >> You're welcome, pleasure, thank you. >> We want to thank you for watching theCUBE, from Las Vegas NetApp Insight 2018, I'm Lisa Martin with Stu Miniman, Stu and I will be right back with our next guest after a short break. (electronic music)

(electronic music) >> Announcer: Live from Las Vegas, it's theCUBE. Covering NetApp Insight 2018. Brought to you by NetApp. >> Welcome back to theCUBE's continuing coverage of NetApp Insight 2018. From the Mandalay Bay in Las Vegas. I'm Lisa Martin with Stu Miniman and we're welcoming back to theCUBE one of our alumni, Jennifer Meyer, Senior Director of Cloud Product Marketing at NetApp. And welcoming to theCUBE Alok Arora, Senior Director of Cloud Data Services and the Product Owner for NetApp Cloud Advisor, which we'll talk about today. So guys, the keynote this morning, one of the things that George Kurian, your CEO, whose going to be on the program I think next with Stu and me, talked about the four pillars of digital transformation, and one of them was hybrid and multi-cloud is now the de facto architecture. Jennifer, from a cloud marketing, product marketing stand point, how is NetApp engaging with your customers, both your install base enterprise customers and engaging with new customer to help them evolve a successful multi-cloud strategy? >> Well what's funny about that is it's not really even up to us, it's up to the customer and where they're at today, meeting them there and then taking them kind of to that destination that's interesting or important for them. And what we know today is that not only are customers in the cloud because they want to be close to innovation, that's one of our big themes, inspiring innovation with the cloud, but they've got their hands in multiple clouds. And studies show that at least 80-81% of customers are doing multi-cloud with two or more public clouds, and I think that's really interesting, you know I think that in some cases it's because their end uses, or their customers, have chosen a cloud that they want to go with and so they're trying to service those needs where they exist, but also maybe they realize that they want to subscribe or consume services in one cloud versus what's available in another cloud, and so it's not our job really to tell them where to go, it's to make sure we've got a consistent seamless amount of services to give these customers to consume, wherever they may be, in whichever public cloud. >> Yeah, well I like what you said, meeting them where they are, cause I think in some ways we're giving customers a little bit of credit that this was actually planned for as to how they got to where they are, you know I'm sure if we took that 81% that say they know they're multi-cloud, if we go with the other 19%, most of them are probably multi-cloud and just don't realize it. >> Jennifer: Absolutely. >> Because just like we had an IT in the old day, I have an application, a business unit, or somebody drives something, and oh my gosh, that's how we ended up with silos, we ended up breaking those things apart. >> Or shadow IT, right? You've got a lot of developers that know exactly what tools they want. >> We had a good discussion with Anthony Lye and Ted Brockway talking about Azure and some unique functionality that NetApp's looking to drive into that partnership with Microsoft. I wonder if we could step back, if you could help us understand kind of the cloud portfolio of NetApp, people that just know NetApp as "Oh it's, that's that filer company that I've probably "got a lot of products from." The multi-cloud has been evolving, for quite a few years now, so I want to help understand the breadth and depth of the offering. >> That's right and I think you know we always think about it almost like a four layer stack, in terms of our strategy and what we're doing to bring more of these innovative data services to our install base to your point, but also our net new buyers, folks that are coming to us through Microsoft Azure, or Google Cloud, or AWS, and so it really does start with our legacy and our foundation of, in this case, cloud storage, and the data services, or the advanced data management that's built upon those storage protocols. So of course it's NFS, NSMB, but when you think about being able to offer that, and compliment what's available in the public clouds today, because that's why they've chosen to partner with NetApp. On top of that we are delivering advanced services in those public clouds that have never been available before, things like automatic snapshots, or rapid cloning, and backup, and tiering, and I think it's really important because what it does is it extends our customers' experience from On-prem into the public cloud, without having to sacrifice a thing. >> Alok, it's a tough thing that customers are trying to figure out. When I look at it and talk to customers, they've got an application portfolio. What are they modernizing? What are they starting from fresh? And then they've got all the other stuff that they have, how is NetApp helping with what they do? >> Yeah, absolutely, I think that's a great point. So you talked about the offerings that we have with multi-cloud and that creates all the options for future state architecture, I can build there, however, in order to understand how do I get there I need to understand where I am today, right? So we start looking at your current state footprint, we look at our customer's current state footprint. Understand how it is architected. How it is designed, how it is serving up the applications. Because it can be really a tedious job to get started, to get to the cloud and building the roadmap. So what Cloud Advisor does is it leverages active IQ data to get that inside for us and be leveraging data science, machine learning, to give them a guidance as to how they can get there. What should be their migration approach. How should they build a transition strategy. Because a lot of times they would call the consultants to help with the transition strategy, at the end they get a PowerPoint, which is not very actionable. We started this grounds up, we understand their detail you know, how the stuff, the bits and bites, are organized so we start giving them an actionable strategy they can execute upon. So that's really Cloud Advisor geared for accelerating that journey to the cloud that our customers should be taking to. >> How are you guys helping customers to start embracing emerging technologies, IoT devices, we had Ducati on this morning, a MotoGP bike is basically an IoT device, but in terms of, Jennifer you talked about this, and Alok you reinforced it, you are basically co-developing in partnership with your customers, it's about where they, helping them understand where they are, what they can do today. How are some of the services helping them to be able to harness the power of AI, say for example, to work with data authority to use that data for actionable business insight, and outcomes? >> Yeah it's interesting you talk about the IoT, I think NetApp saw that 20 years ago. I mean ASAP is our original IoT, that is what we get billions of data points from our customers. Controllers, millions of controllers worldwide, and we build on that mirror data, and we apply the artificial intelligence in there. We actually start looking at classifying their applications so that, if they have a strategy driven by the application, as you were saying, hey there is a director from a BU, from majority point of view, we want to take these applications in the cloud. How do you figure out what application are? Where does the data live? How does it governed? We figure that out by that IoT data, by that artificial intelligence and also making sure that these applications, no work loads are left behind because applications can be complicated they talk to each other. So when you start thinking about taking one part of the application, you also want to make sure the other parts that make that application whole also go to the cloud. And that is where we're leveraging Artificial Intelligence to cluster these applications and recommending the customer that: "Hey don't make, don't leave these workloads behind "because otherwise you're going to have a failed strategy." So we warn them upfront to make sure they're successful when they start making the executions. >> I think another piece to that too is just the fact that for many years we've had workloads just trapped On-prem. They haven't had a place to go into the public cloud without a ton of refactoring or rearchitecting, right. You'd have to rewrite them for objectory. You'd have to do a lot of manual labor and things just to make it happen. In most cases it hasn't been worth it. And so when you looked at the fact that about 80% of On-prem files where in NFS V3 protocol, there wasn't really a place in the public cloud to match that and so by even just delivering Cloud Volumes Service for Google Cloud and AWS or Azure NetApp Files which is the version for Azure, we're able to give customers an, a way to free up that trapped set of workloads, put those into the public hub, so that it then can be available to all of those advanced services that live on those public clouds to do things like Big Data Analytics or to do developing, you know, applications and services of their own and for their own benefit. >> You Know. >> Yeah I think that's a great point because >> He's so excited.| >> Sorry. >> Because when you start looking at building your strategy you want to have confidence in your strategy. >> Jennifer: right. >> So, with your protocols and all that discovery. We also not only give you the option that NetApp offers but show you what are the other options you have within Hyperscalers and how would your workload perform with NetApp technology. So you can move with confidence, right. So that's the good part of about Cloud Advisor to make sure you're moving with confidence not just, you know, with a blind spot with you. >> You know one of the transitions we've been watching is really the ascendancy with the developer in DevOps. And I've talked to the SolidFire team for many years, I see them at some of the shows that we've been covering. In the Keynote this morning George Kurian said that Kubernetes and Istio are the multi-Cloud control plane. Jennifer I'm wondering if you can help explain the StackPointCloud acquisition. >> Jennifer: (agrees) >> Some people that might not have the context of about what NetApp and SolidFire, even before the acquisition were doing. You know, we're being like: "Wait I don't understand, you know." >> Sure. >> Kubernetes is something That you know Google and you know, Red Hat and others are doing. >> Why is NetApp talking about Kubernetes? >> Why is NetApp talking about Kubernetes? >> And we even learned what the abbreviation for is was. >> Stu: K8s. >> It's like we're all hip. Absolutely. >> Absolutely, just because. >> It's all about concatenate long words together. So it, it's really interesting because when I talked about that four layer strategy, right the third layer. So it's you know cloud storage at the bottom. Then it's the advanced capabilities and data management above that. But the one that's next is orchestration and integration. And there's really a few things that live in there. You know, the, our cloud orchestration sort of technology is really what we got from our Qstack acquisition. Our teams in Iceland and what they've been able to do largely to underpin a lot of what we've seen with cloud volume service today. But certainly right in there is NetApp Kubernetes service, which as you now know, is from our StackPoint intellectual property. And so back on September 18th, when we announced this acquisition it was really to kind of give our developers and our DevOps folks a way to finally start solving for some of that data gravity that I think we've been periled by over the last few years. And what we now know is Kubernetes is the operating system of the clouds, right. It is the clear winner of container orchestration among things so it made a lot of sense to pair that kind of multi-cloud orchestration again given our strategy to be where our customers want to be with some of our cloud orchestration technology from our Qstack acquisition and make sure that with Trident and some of the ways that we're able to deliver finally persistent storage to those containers. I mean this is like a match made in heaven. Right, we're going to give people the way to make sure that they know that containers are a femoral and data is not. So let's help them do kind of all the things that they want to do in the clouds if they want to do them. >> I think I read on line that, was the StackPointCloud acquisition based on after actually NetApp used it internally. >> Jennifer: Yes. >> Tell us a little bit more about that. Because I think the NetApp on that up story is probably something that could be leverage, you're a marketer, as a differentiator when customers have so much choice. >> Well and I feel like it's a story that every vendor should be forced to tell. If you're not willing to use your own IP and technology what is that saying to your customers. >> Lisa: Yeah. >> So it is true and a lot of our developer teams, if you've hear of Jonsi Stefansson and Anthony Lye's team, that is how this sort of came about as we were looking for a way to sort of do it ourselves. And we thought man through all this investigation there's something here. There's something that we shouldn't hold to ourselves and we should share with the rest of the world. And so at one point we need to get those guys on with you as well so they can tell a little bit more about their story. >> So proof is always in the pudding. Can you give uan example of one of your favorite customer stories. We'll start with you Alok. Who have really embraced the clouds, first of all helped you develop the optimal cloud services are now really achieving big business benefits with the cloud services NetApp is developing. >> Yeah so, several of the customers as we talked to you and specially for Cloud Advisor, as we were looking at their journey as they were starting to think about how much money they were spending upfront to figure out a strategy, they had a strategy driven by a data center that was, were the lease was coming up, and so they had to plan to evacuate that data center into the cloud from there they need to figure out what applications they're running there obviously the virtualization also was there, so that had to be configured in the cloud. So we started thinking about in that use case that we need to provide these triggers and strategy points to our customers. At the same time the other shift that we saw was that these guys were not just talking amongst the infrastructure teams, they had to talk to the application owners and they had to have conversations with CFO's to talk about the economics of the clouds. So we made sure that when we build this that give them the tools that enable them to talk to various stakeholders. Give them the application footprint that is running there. Give them the economics. What it is going to cost to run these applications and workloads that they have identify too when they're in the cloud. So give them the data point that they can go and talk to their CFO. So with that really it starts shaping a product that will meet their needs and meet the needs of all of our customers. >> Lisa: Jennifer, favorite customer example. >> Oh, it's easy this week because it's all about WuXi NextCODE and I don't know if you picked up on any of their story cause we've plastered it around our conference this week because we're so proud of, not only what they're doing as a mission which is very impressive in terms of genomics sequencing and the scale at which they're doing it but the fact that they've based their foundation now on NetApp Cloud Volume services is huge. And really what they came to us and said is: "Look, we are trying to sequence all of these genomes "in parallel and our benchmark is really to look at about "a hundred thousand individuals at once." When they were trying to do that on their own, using there own self-managed storage in the cloud, they could never complete it. It would either fail or they would have some sort of a problem where they just couldn't get it to work. And with NetApp Cloud Volume Service they were able to complete in about 45 minutes. And so what their finding is again with this extreme performance, with the ability to scale and most importantly the tie it back to our discussion, it's multi-cloud, they themselves are multi-cloud because of their big pharma and hospitals that they serve. They have customers in every one of those public clouds and so we are able to help them where ever they need us to be. And that's very exciting. >> It's also one of those great examples that everybody understands. Genomic sequencing related to healthcare, you know disease predictions and things like that. So it's a story that resonates well. >> Jennifer: Sure. >> But something that you just said sort of reminded me of one of the four principles that George Kurian talked about this morning. And speed is the new scale. And this sounds like a customer who's achieving that in spades. >> Well it's so fun because I think for a long time we've been really fast On-prem and I think people have just sort of come to expect a certain level of it's good enough in the public cloud and what we're showing them in droves again on AWS GCP or with Azure is that you should expect more. Particularly for high-performance computing workloads or things that you really just, if you're moving your SAP workloads to the cloud and speed is, there is no option it has to be fast. We are showing people now possibilities that they didn't ever dream of before because of this extreme performance through things like Cloud Volumes Service. >> It's really too bad you guys aren't excited about this. (laughs) >> I know how much longer do you have? >> (laughs) Jennifer, Alok, thank you so much for stopping by and having a chat with Stu and me. And talking about how customers are really helping NetApp become a data authority that they need to be to help customers become data driven. We appreciate your time. >> It's our pleasure. >> Have a great time at the rest of the show. >> Thank you. >> Thank you both. >> Thank you. >> For Stu Miniman, I'm Lisa Martin. You're watching theCUBE live from NetApp Insight 2018, from Mandalay Bay, Las Vegas. Stick around Stu and I will be back shortly with our next guest. (electronic music)

(upbeat techno) [Announcer] Live from Las Vegas, it's theCUBE, covering NetApp Insight 2018. Brought to you by NetApp. >> Welcome back to theCUBE's continuing coverage of NetApp Insight 2018 There's over 5000 customers, partners, Netappians, analysts, press here. TheCUBE is here as well, I'm Lisa Martin with Stu Miniman back for our second year of covering. We're joined by two guests, one an alumni and one a new guest to theCUBE, Henri Richard EVP a worldwide field and customer operations from NetApp, welcome. >> Good morning. >> Morning. And Kamran Amini, the VP and GM of data center infrastructure from Lenovo, welcome back! >> Glad to be here. >> So guys, Lenovo, NetApp, just about a month ago announced some exciting news, Henri let's start with you, kind of give our viewers who may not be that familiar with the news announcement what this new technology partnership is all about. >> Well, it's a multi-faceted partnership. I think it's important to understand that for us there is a component that has to do with a worldwide engagement of Lenovo around storage solutions that will be infused with NetApp technology. There's a second element, which is the opportunity for us to pull or go to market organization in certain countries, and get to critical mass to cover the needs of customers. And then the last part, the one that's probably the most talked about, is a joint venture in China where we will combine our forces to serve the needs of the very fast-growing Chinese market. >> Alright, yeah. Henri, I was at the Lenovo event where this was announced, want you to give us a little bit about the field engagement, because it really does seem a place where NetApp and Lenovo, there's good synergies there, but there's not a ton of overlap. Maybe explain a little bit from the field engagement. >> That is really one of the reasons we were excited, I think, on both sides to do this agreement. You know, we feel that Lenovo is a fantastic server company, that's demonstrated incredible momentum in the last 12 months. We have ourselves, you know, modestly a pretty nice momentum in the storage business, and in coming together I think we can be stronger in serving the needs of customers that have both compute and storage needs. When we did the analysis of our market coverage, it so happens that there's a lot of places where we're strong and Lenovo can benefit from that, and other places where they're strong, and we can benefit from it, so you're correct in stating that there was not that much overlap. And then lastly, we've put in place a process where our go-to-market organizations are going to combine their strength and help each other in some of accounts where both a strong compute story and a strong storage - needs to be integrated to serve the needs of the customer. >> Let's talk a little bit more, guys, about the impetus from the customers. The keynote this morning, as I was mentioning was jam packed, and we heard a lot, Stu, about the customer experience, and how NetApp is an enabler of customers to harness their data to become data-driven. Kamran, from your perspective, what was some of the customer input that really sort of brought this partnership - and this multi-faceted partnership - together? >> I think as we see customers looking their applications, not only current applications, but emerging applications, data's becoming very critical. And be able to accelerate data and the availability of data is going to be key for them, alright? As you heard earlier this morning, data's gold, right? It's the next oil, as we think about it. So we looked at our customers and at their transforming moving toward machine learning and AI, big data analytics, and it's driving massive amount of data that you have to be able to accelerate and be able to give results back. The partnership was the best of breed here. Looking at a leader partner around all flash and growing massively with their data-management solutions, and us leveraging our server technology and the capability we bring as a data center group, bring the both of best breeds to deliver an end solution for customers is really what we're focused on. And it's all being driven, really, by data, really where we see the acceleration happening in the workload aspect of it. >> You know, I was listening to the keynote this morning it talked about how customers today, it's a hybrid, multi-cloud world, is what NetApp positioned, and what I actually like is both NetApp and Lenovo are really aware and work with, really, the hyper scalers out there. There's a bunch of years that we kind of - there was this fighting from certain vendors out there, it was like, "Don't go that, that's not the future," you know, "We know what we're telling." Maybe talk a little bit about how that plays into philosophy, how you deal with customers, and how that leads to co engineered solutions that you'll work with together. >> Well, I think that both companies have a history of being good partners in the industry. Let's start there. Secondly, you're right, that some vendors in what we call traditional IT, are still fighting the reality of the hybrid multi-cloud, and I think that that's the path to death. Lenovo doesn't have that position, we certainly don't have that position, and we believe that combining our strength, when we're serving the customer to help them go to the public cloud, to help them leverage both great compute capabilities on prem and the extraordinary innovation that happens in the cloud is the right way to serve the customers. >> No, absolutely. I think that customers are looking to be more agile, all right? As their business evolves, and they're seeing competitive nature in their line of business, agility is becoming more and more important. Everybody also has to fit within a budget, so the hybrid-cloud story is really the path. And today, again, Lenovo is serving six of the top 10 hyper-scalers today from a technology, and we believe the hybrid-cloud story for on prem is the path of the future, where the customer adopt and deploy, to be more agile and reactive to their markets. >> George Kurian talked about, in his keynote this morning, that we seemed to kind of initially address, stand up has a massive install base, a lot of enterprises that were not born in the digital age, so he kind of talked about something that reminded me of what you said, Henri, is, "If customers don't adapt, transform rapidly at scale, they're out of business." So NetApp itself has undergone a very significant transformation, I'd love to understand from both of your perspectives, Henri, we'll start with you. How does the NetApp Lenovo multi-faceted partnership deliver differentiators? Presumably Lenovo has a lot of choices to do a partnership with a cloud storage data management company. What are some of those unique things from NetApp's field? >> So, one of the salient points that George made this morning is that for legacy companies, you know, they have to understand that the fact that they already have data is a huge asset that they need to leverage, right? That's using that data is how they're not going to become disrupted by a new company. Startups have agility, but they don't have the data. So jumping on that opportunity was certainly something we did at NetApp, and we have an application called Active IQ that actually takes a massive data lake of information we get from our systems, and is helping our customers make better usage of our technology. So just an example of our digital transformation. To the point of the relationship with Lenovo, the nice thing about our data fabric strategy is that it is not related to NetApp hardware, it's really all encompassing, it's there to serve the needs of the customer to be able to leverage the value of their data. And so it makes it very easy to partner with us, because really we're not parochial about, how we go about leveraging the technology. >> Yeah, I think what we see is, you know this digital transformation is driving many new use cases. IOT's becoming a big thing, putting edge to the cloud. So, data and our understanding data, and what you can do with data, is going to become more relevant across all lines of business. And that's where we're really focused on, and our transformation as Lenovo it's all around, "How do we address that shift that's happening in the market, where customers are moving away from data being just there to actually leveraging data and being able to create an outcome out of that data so it's going to be effective?" >> Alright, so this was announced about a month ago. Give us a little insight, how's the rollout been going? What's the reaction been from customers, channel partners, and the like? >> So I think channel partners, analysts, and press have been very positive, right? I think as we talked about being frictionless, it's been there, right? I think people see that what we said is actually out there. We're seeing good success in parts of geography worldwide already for the parts that have been shipping as of 09/14. We have our DE series shipping shortly, in early November, and we're going to continue acceleration in our channel partners and our customers. So we're very excited, I think as we saw prior to announcement we were growing triple digits in all flash as Lenovo. I think that with the expanded TAM going from 15% to averaging above 90% on market with the storage portfolio, we're excited here. We're anxious to keep going. >> Yeah, I'll go a little further, I would tell you that I think many channel partners felt hostage to some of the other choices in the industry. And the overwhelming feedback to the announcement of this relationship is, "Thank God, I now have an alternative that is powerful, with great focus on the compute side, great momentum on the storage side, bringing together best of great portfolio, and now I've got choice that I didn't have before." So I think there's a very high level of expectation, excitement, and I expect the momentum with channel partners and distributors to be very high. >> Let's unpack that joint go-to-market GTM strategy a little bit more. Let's talk about it first from the NetApp side. How are you going to market with an image and your partners? The selling motion, how do customers engage? Help us understand that. >> So NetApp is really coming from a very high-touch sales model, you know the beauty of our partnership with Lenovo is they have a velocity model. So for the part of the markets that are really about having velocity, I think it's a perfect marriage. The second thing is, they have a much larger world-wide presence than we do, I mean they've got physical location in many countries where we are not present. So that's expanding the footprint of potential close in service to NetApp customers. And then lastly, you know, the world is evolving very quickly, it's all about the apps, and I am excited about the fact that my go-to-market team rubbing shoulders with the Lenovo team is going to get more intelligent about compute, which is important for us to understand the real needs of the customers. >> Lisa: And Kamran, from your view? >> I mean I think we - And Lenovo serves over 160 countries, as you know, Henri, so we have a very expanded. We serve customers all the way from SMB all the way to very large enterprise like cloud service providers and MSBs. I think the momentum we have based on the park announcement is really provides an alternative solution to the HPE 3PAR and Delhi AMC, right? As Henri stated I think a lot of our channel partners, our disties, our value-added resellers are looking for an alternative route of a solution between the two leading platform solution providers here. And I think we're seeing that momentum, right? I think as of 09/13 when we made the announcement at Transform, we're seeing the excitement and the pull coming from the field and driving it, and of course we of course have a direct sales model, right? Having that high touch with a customer, selling the value prop of this storage solution and entire portfolio we can bring in, and the partnership value that brings in with NetApp here. >> Alright, so what should we expect to see from this partnership in the near future? >> Well, I think, you know, expansion of the product portfolio, particularly in the case of the China JV. One of the mission of that JV will be to design products specifically for the Chinese market, which we all know is very big and growing extremely fast, so that's one aspect that is yet to be seen. And then the second thing is as we collaborate on solving real customer problems, I expect to see a higher level of innovation, as we understand both sides of the equation and how we can bring our technologies together to solve real customer problems. >> The last question for both of you. You both talked about this joint partnership gives both NetApp and Lenovo and your respective install bases choice. What is the one differentiator? Why would a customer choose to go this route versus, as you mentioned, Delhi MC, HPE...? >> So I think you look at where NetApp has had leadership performance in all flash, and Ontap's amazing software, data management software solution. And look at Lenovo, we've been the fastest-growing server provider in the world. We see where we're bleeding in HPC environments, and really driving software to find. So I think customers are looking for, "How do I take the best of breed of things and bring it together? And making sure when you bring it together it is working together." So part of having the relationship of leveraging the NetApp technology is that Lenovo storage portfolio also provides that ability that says, it's a proven technology, the server technologies and the storage are proven. So it doesn't matter if a customer wants to leverage a NetApp technology with a Lenovo server, it is a proven solution for them, and they can depend on the value it's going to deliver. >> From my standpoint, you've got two credible, long term, solid people in the industry, partnering to get best-of-breed solutions with an eye towards being leaning into the cloud, and I think that in two days, IT business with a new wave of IT, if you don't embrace the cloud, the cloud will kill you. And so I think that's our unique differentiation, is that we have two companies that can serve our customers on prem needs, but have a very comprehensive private cloud, public cloud, and on prem strategy. And I think that nobody else can claim that differentiation. >> Henri, Kamran, thank you so much for stopping by theCUBE and chatting and sharing a little bit more about this exciting partnership. We look forward to hearing news next year! >> It's been a pleasure. >> Thank you. >> We want to thank you for watching theCUBE, I'm Lisa Martin with Stu Miniman, and we are live from NetApp Insight 2018, we'll be back after a short break. (upbeat techno)

>> Announcer: Live from Las Vegas, it's theCUBE covering NetApp Insight 2018, brought to you by NetApp. >> Welcome back to theCUBE. I'm Lisa Martin with Stu Miniman, live in Las Vegas at Mandalay Bay at NetApp Insight 2018, the third annual with customers, partners, endless press, NetAppians. We're excited to welcome two alumni back to theCUBE. We have Nancy Hart, Head of Marketing for Cloud Infrastructure at NetApp, and Dale Degen, Cloud Infrastructure Business Director. Guys, welcome back to theCUBE. >> Thank you so much. It's so great to see you guys again. >> Likewise. So we got back from a standing room only keynote, thousands of people here, and one of the interesting things, Nancy, that Stu and I both observed were today no product announcements. It was really about concepts. The first time we heard anything architecture related was really the Data Fabric, but George Kurian, the CEO of NetApp, talked about the four principles of digital transformation. >> Nancy: Right >> I wonder if we can unpack those with you guys. >> Nancy: Yes >> The first one talking about digital transformation requires IT transformation. >> Nancy: Yes >> Talk to us about that speed as the new scale. What does that mean for NetAPP as a company that needs transformed... >> Nancy: Right >> and to your customers? >> So it means for our customers the idea is that speed is the new scale, right. That to create new businesses, to create new opportunities, to create new revenues, there has to be a lot more agile and agilent on their ITs. Right. So, NetApp will really focus on doing is how to break down the barriers between Dev and Ops. The days of silos, months of provisioning all of that is now gone. Because companies need to now help their teams build faster, build better, and that's really what George was talking about, in this idea that the speed is the new scale. And if our customers are not driving IT agile... Agile IT operations on their own data centers, their competitors certainly are. >> How does... NetApp talks a lot about being driven, the data authority and hybrid cloud. George also said hybrid clouds do in multi-cloud or the defacto architecture. >> Yes >> When you talk with customers, how do they digest "NetApp's going to help "me be data driven?" >> Nancy: Right >> What's that conversation like? >> So, looks like a lot these days, we have our customers, they have their own users, their own internal DevOps team who have gotten very used to taking their Corporate AMEX and running up the Amazon, setting up a new compute shape or storage. The thing is we see customers are trying to rebalance where they put their data cap with data, where they put their applications. Do somethings being, belong in public cloud? Absolutely, but there is also this natural rebalance, that not every application should be in the cloud. For reasons of data governance, perhaps cost, whatever it is, when they build that next new application, it may be in the data center. So, to make that work is the idea of a hybrid multi-cloud experience, and the key part of that is the experience. It's not a management experience. It's a consumption experience. It's a very seamless, simple consumption experience if you've got up in the public cloud, but in a private cloud in your data center. >> Stu: Nancy, I like that. We've always, we've been saying on theCUBE for a couple of years now, cloud is not a destination, it's an operating model. >> Yes It's the way we need to think things, but Dale, when I talk to customers, we talk about their cloud strategy, we talk about what they want, every single one of them, totally different. How much they're doing SaaS , versus how many mulvic public lines they're doing, and of course, they're still figuring out what they've got in their traditional data centers. And its that certain companies have been selling them multiple products, they've got their data all spread out, so, are we getting away from silos, how architecturally do we build this? There's so much differentiation out in the marketplace today. It'd be lovely to have a magic wand and say "Oh, everything's, "you know, simple." But that really hasn't been the case in an enterprise IT. >> Dale: I think you nailed it the way you described it right there You have an enterprises that have built up a collection of applications, some of them have been given a cloud mandate. And so, that means something different to everyone. Sometimes they're going out all SaaS, sometimes they're saying, "I want to put everything, "all my storage in the cloud." We're seeing an interesting moment in time where, there's almost a reaction to that, and finding out maybe there's silos within different public cloud service providers, maybe the monthly cost is a little bit larger than what people might have expected on that. At NetApp, we've been working with our customers, I kind of love being here because the last couple years has just been this huge transformation of the company around that, taking a lot of our customers have viewed us as number one in storage the trusted provider on that. I really, expanding out to a more data driven solution on there. And things we've done internally to address side is really focused on different business imperatives there. Because I think each of our customers has their data center that they need their rock solid applications on. They're thinking about this journey to the cloud. They're trying to innovate with acceleration in the cloud with different services with the cloud public... the biggest public clouds and along the way they're also saying "I need some of that agility internally." And so we've, we've really built that, to build out your kind of a hybrid multi cloud experience. And the company strategy is coming together. We're seeing investments, we're seeing growth and announcements and all of those. >> So one of the interesting things that I observed in the keynote this morning was NetApp being 26 year old, 26 years young company, right? Massive install base. You've got a lot of customers who were not born in the digital age and George Kurian your CEO seems to kind of address them almost right out of the gate. >> Nancy: Yes. >> So let's talk about the data fabric a little bit more. Let's unpack that because some of the messaging seems to be reflecting that, that, and I think Anthony liked talked about this a little bit this morning in the keynote as well. It, it's, it's transforming from a vision to an architecture for your customers, your incumbent enterprise customers who were not born in the cloud, what does being data driven mean to them? How are they embracing this architecture idea of the data fabric and using it to use their data to identify new customer touchpoints, deliver new services, increased revenue? >> Dale: So we're seeing a lot of our customers really transform their business to take advantage of these new services in the cloud. The value that a lot of them are bringing to us is they have a massive amount of institutional data that maybe was in different silos. May be they had different as a service offerings touching it. We're able to bring it together with the data fabric. So now they can consolidate this into a large amount of tangible data. You can have multiple as a service solutions and services coming from public cloud service providers to do analytics on data. For example, we have energy companies that have seismic data from 50 years ago that is sitting on tapes. It's better than anything they could even get today. They bring it all together and now they're doing data analytics on this and they're finding new ways to really take advantage of that. So we're seeing that across the board and we're, Our goal is to try to move them along that journey. >> Nancy: Yes >> Stu: Nancy, could you give us a little insight as to who you're selling to? >> Yes Where is NetApp getting involved in kind of those strategic discussions? As I said, >> Great >> you know everybody's got a cloud strategy, but I said usually the external still drawing and it's something you need to revisit often so you know where is NetApp seat at that table? You've got a lot of partners here >> Nancy: Yes >> and how are things changing? >> Nancy: So, a lot of things are changing a lot of ways for Netapp and the companies that we're selling to and who we're selling to at those companies. We certainly see a lot of new buyers and it's interesting to see now that the decision making, the who's sitting at the decision table when they make that decision of what kind of infrastructure to purchase, is it getting larger and larger group and now we're really seeing the Dev teams, their internal Dev ops teams have a seat at that table who are and they're having significant influence on the infrastructure and operations teams on what kind of investments that companies should be making. Right, so, working with partners, going to market through the largest public hyper scalers and reaching these new buyers and new and existing accounts as well. So even if there is a traditional part of the data center, I guarantee you somewhere in every company there's a new Dev team working on new business models. And so we want to attend (mumbles) >> Lisa: Does the conversation Nancy, start at the business outcomes level? >> Nancy: Absolutely. >> And, and your perspective, how are you seeing some of the more technical folks in an organization participating in a business outcomes driven conversation where it's more about these are the things we need to do to, to compete to increase our revenue. What, how is that persona based conversation changing? So actually I have a story from a customer meeting earlier this week, right? And so we were talking with the customer about data fabric and what we can do and how we can deliver a seamless experience between public and private clouds. And we walked out of their room and the gentleman from the customer who's I walked in that room as a storage admin and I walked out as a data fabric architect. Right. >> Lisa: It's pretty good validation >> It's pretty good validation. It's happening right now like the personas, even personas that we've traditionally known are certainly changing. What do yo say? >> So that point we're seeing some of the attributes that service providers are offering. We're seeing enterprises at the same time trying to build those up scale. And it's really been amazing as we're seeing you, you spoke about speed is the new agility on here and it's really the agility to be kind of build those infrastructures quickly and take advantage of that at a business advantage level. And a lot of the most technical customers of ours are saying now they're kind of at a, they have a seat at the table to kind of inspire some of those business innovations. They, they see how they could make the company more efficient and all of a sudden they're getting a lot more attention at the C level. >> Stu: Alright. So a few years ago there was the wave of big data, you know, it was really what I summed it up. One of the key findings was it was that bit flip of saying, oh my gosh, I have so much data to, Oh yes, yes, I've got so much data and I can take advantage of it. What I want you to help connect us is when you talk about being data driven, NetApp at its core is you know, there's storage, there's infrastructure, there's software. How do I then get the insights and the value out of the data, the data that I've helped my customers get to? >> Nancy: So let me give you an example of what NetApp is doing around this very issue, right? So we have a very large install base like you talked about. We have a new product called the active IQ. And what it does is based on community wisdom pulled from 30,000 or more installed systems across our entire customer base. And what we do is we use AI ML to extract value and intelligent insights and then actionable plans for our customers. So even if a customer doesn't have 30,000 units installed, they can take advantage of all of that knowledge themselves. So we drink our own champagne and we apply the things that we learned, but we can also help customers do the same thing in their own business as an extract value from their own data. >> Lisa: I'm curious too, from a company as as history does NetApp, formerly network appliance, how is NetApp drinking our own champagne example? How does that influence customers perspective on NetApp's transformation and convince a customer to trust NetApp and go, "yes, this is a partner "that I want to work with "to help us be able "to just do point, "not just a mass, "a tonne of data "and the silo, "but extract insights that are "essential to try this, this change." >> Dale: So we actually have some breakout sessions here where NetApp IT is speaking to that a talking about how we have NetApp on NetApp. You know we've got the active IQ data coming in, so an all flash fas tier being teared down through east series to object storage to a giant data lake of active IQ doing analytics on that. And so that's a great reference for us. We're able to have them speak to our customers directly, eye to eye in our executive briefing center, and oftentimes that pushes them over the edge on that one. >> Nancy: Because we're living the dream and we're making our own mistakes along the way and so when we have folks from our NetApp's own IT department come speak with customers, it's very credible about we did this at work, we did this. It didn't work so much. Right? But we're in that same transformation journey as our customers as well. >> Well, the failure I always say is my, It's not a bad word. It's part of that journey. >> Nancy: Yes. Well, finishing up Nancy with you. Talk to us about the media customer example that really articulates the value that NetApp is delivering as an enabler of the data driven company. >> So one of my favorites these days as we work with a company called Children's Mercy Hospital, Kansas City, right? And they brought us new Ciox and he was really interested in transforming the IT experience for his clinicians. Right. These are the people that work with kids in the hospital, sick kids, they're stressed out families. And I love this story because it's very easy for me to imagine if my child was in the hospital, how stressed out I would be to have a clinician walk in fast, easy access, the latest data about my child, a happy clinician. That would be such an impact to me. And so to see what our customers are doing at children's mercy and they'll also multi cloud they've got their own private clouds are accelerating their VDI, they're working with public clouds all through NetApp product in the end to help those kids and to help maybe some moms on wherever you are, just a smidge less. >> Lisa: Are you helping them to use some of the emerging technologies, IoT AI to drive faster, better outcomes and decision making for these in these critical literally life and death situations? >> So the first project we're working on them as about accelerating their VDI. How does he get a virtual desktop to all his clinician? So whatever room that clinician is in, he has access. So she has access to the latest data about that child. Right. And to make the overall just a better experience so that the new ciox is very keen on just delivering a better experience, not better technology, but a better experience for his clinicians and for his patients. >> Nancy, Dale, thanks so much for stopping by on day one of insight. We appreciate your time. Got to give you some cubes stickers because you're doubling the alumni now. Real. Exactly. We want to thank you. I'm Lisa Martin with Stu Miniman for watching the cube. Again, we're live all day at NetApp Insight 2018. Stick around. Stu and I will be right back with our next guest.

>> Announcer: Live from Las Vegas, it's theCUBE, covering NetApp Insight 2018. Brought to you by NetApp. >> Welcome to theCUBE, we are live at NetApp Insight 2018, I'm Lisa Martin and I'm joined by Stu Miniman. Stu and I are going to be here all day. And this is the third annual Insight, with customers and partners and NetAppians and analysts and press. Stu this is the second time theCUBE has been here. We just came from the keynote and the interesting thing that Stu, that you and I both noticed, was at least the first 75 minutes of the keynote that we got to see today, none of the product news was announced. It was really about strategy, #datadriven, how NetApp wants to enable their customers from DreamWorks to oil and gas companies, health care, etc. To use data, develop a data strategy, to move their businesses into the digital age. >> Yeah, Lisa, first of all, great to be working with you again. >> Always. >> And I'm excited, it's second year that we've been at this show, third of the NetApp Insights that we've done. Cause we've done both the U.S. and the European shows. My first time actually coming to a NetApp event. I remember, gosh I'm showing my age, I remember when NetApp started, network storage was becoming a thing. NetApp really rose its ascendancy with file systems and NAS, and FAS was the one operating system to rule them all, really grew into a very sizable business. Company's about $6 billion worth of revenue and I think somewhere about 10,000 employees. Today, NetApp is really the largest independent storage company after Dell took EMC off as an independent now, so it's interesting to watch. George Kurian got on stage and talked about digital transformation. And one of the things I'm really interested in looking at is how is NetApp doing in that transformation? Because, most people when I was talking to some customers at some of the meals and walking the floor and things like that it's, NetApp is my filer company. I buy boxes, sometimes I mine some software and there's some things there, but I'm the guy that runs NetApp Gear, if you will. And that transformation, what is the NetApp of 2019 and beyond? Are they a storage company? Are they a hybrid, multi-cloud software led something something company in the future? Are they a services company? There's a nice ecosystem here, so that's what I'm excited to dig into. George Kurian he in the keynote this morning, laid out the four things that companies need to do for digital transformation. It's something we'll dig into, but yeah, I had to go search NetApp on the news release and be like, oh Cloud Insights, and ONTAP in the Cloud, and HCI and Partnership News and things like that, so there definitely is some news, they just didn't talk about it in the keynote. >> Yeah, it was an interesting keynote for me, and as theCUBE we go to a lot of keynotes, many times a year, and this was an interesting start to it. It's clear from the NetApp messaging on NetApp.com, NetApp Insight, things that are being put out on media that they're really putting cloud at the heart of their strategy. The discussions and the keynote this morning included futurist Gerd Leonhard, who's going to be on the program with us in just a few minutes. Interesting take on data, humanity, the only thing that NetApp talked about was about 75 minutes minutes into they keynote this morning was when Anthony Lye got on, he's going to be on the show later today, talking about the data fabric. And I think some of the messages that NetApp was wanting to get out is that data fabric is transforming from a vision into an architecture kind of foundationally to enable organizations to employ those four principals of digital transformation that George Kurian talked about. Digital transformation requires IT transformation, speed is the new scale, some interesting thoughts and concepts there, more conceptual. I liked the DreamWorks customer, I think she's a great speaker. Kind of talked also about how DreamWorks, everybody knows DreamWorks, "Shrek", "How to Train your Dragon", are becoming more morphing from a customer to an engineering partner. So that was and interesting kind of, I wouldn't even say undertone, but part of the story today. >> You know, Lisa, absolutely. When you look at traditionally, not only NetApp, but all the storage companies, where they sold to. It was the storage budget, and oh how do I manage with the explosion of data, and that growth and what's the performance, the speeds and feeds, the price per terabyte, all that kind of stuff? I thought we could actually take George Kurian's four characteristics and say, how's NetApp doing? First is digital transformation requires IT transformation. >> (Lisa) Right. >> I heard yesterday in some of the sessions they actually had some of NetApp's IT people talk about how they're leveraging and using new technologies. We talked about speed is the new scale, well how fast is NetApp? We have a number of acquisitions. There was the big SolidFire acquisition which is now fully part of the portfolio. They had a Kubernetes company that they bought recently. They've had management companies that they bought. How fast is NetApp keeping up with the pace of what they're doing? Hybrid multi-cloud, I think NetApp first of all was really what you would call software-defined before that was a thing, and they were very early in jumping on this wave of we need to play in the cloud environment. Most of the storage companies really lined up and was like, oh wait, Amazon's the competition, you can't do that, but NetApp was partnering with Amazon for many years, now I'd like to see more proof points as to what customers are doing, how are they doing it differently. But absolutely we're going to have Microsoft Azure on the program with Anthony Lye, this afternoon. I know we're going to be talking about Amazon, we're going to be talking about Kubernetes and Istio, where does NetApp fit into that environment? I've been going to theCUBE Con shows for a couple years, and storage is actually lagging in that space. When you talk about having persistent data, that's not something we're there with. We spent more than a decade trying to fix storage and networking in the virtualized environments, and NetApp played a strong role in helping on the storage piece there. So it would be great to see how they are going to play into the Kubernetes and issue discussion. And the last piece is they said moving from data center to data fabric. >> Right. >> Which is the closest tie to the products as you said. >> (Lisa) Yes, exactly. >> To what they're doing. >> Well, Stu we have a jam-packed schedule today, all day. We're going to be able to unpack a lot of things from NetApp, execs, to their branding folks, to customers, so Stu and I will be right back with our next guest. Again, theCUBE Live from NetApp Insight 2018. We'll be right back. (music)

(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. (audience applauding) (upbeat music) ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ba do ♪

>> Live from San Francisco, it's theCUBE. Covering Google Cloud Next 2018. Brought to you by Google Cloud, and it's ecosystem partners. >> Hey, welcome back everyone. This is theCUBE live in San Francisco for coverage of Google Cloud Next 18, #GoogleCloudNext18 I'm John Furrier, Dave Vellante. Your next guest, Anthony Lye, Senior Vice President and General Manager of Cloud Data Services Business Unit at NetApp. Yes, Business Unit at NetApp, storage in the cloud. Anthony, welcome to theCUBE, Good to see you. >> Thank you very much. nice to see you guys again. >> Great to have you on, we have been, first of all, very complimentary of NetApp over the years. We've had some critical analysis, but one thing I will say that you guys were early on cloud. I remember talking to Tom Georgans years ago, >> Yup. >> You listened to the customers, and you saw cloud, and there was some work going on. Now, you're here at Google Cloud, you're in Amazon, kind of not conventional wisdom for a storage company selling boxes to be living in a cloud where there's serverless, and, some would argue, storageless soon. >> Well, you know-- >> How did this happen? How did this business unit happen? (mumbled speech) >> Well, I think George Kurian, our CEO, probably now about five years ago, I think saw that cloud computing had just too much, I think, going for it not for us to pay attention to it. And he took the top ten engineers at NetApp, and said, you know our flagship operating system ONTAP that runs on our engineered systems, he said, port it to Amazon. And so we spent time porting the operating system over directly to Amazon and today, now, it's a real business. Fully funded, staffed, growing, and you know to your point, you know, who'd have thought NetApp would be calling the cloud. Google chose us. >> Big announcement today, in the keynote-- >> Yup. >> Right >> Oh yeah. >> I mean it's-- >> Key partner >> Turns out that enterprises need enterprise level files, whether that's NFS or SMB, and we're the best in the business to do it. >> So talk about that a little more, because a lot of people get confused, and they say, well wait a minute, why do I need NetApp on Google Cloud or AWS? Why don't I just use whatever object store the cloud provider gives me? Explain that. >> So I think there's a number of use cases, certainly if you look at legacy, there's a lot of applications, databases, that need and demand file. And customers would rather not have to do all the work to translate them over to something like object. Now, you know, object is a very descriptive storage protocol, but it's not as fast as file. So, there are distinct advantages to file that I think the cloud companies have realized they need, to win the enterprise business, whether it's the lift-and-shift business, there's a lot of applications. If you look at oil and gas, all that seismic data is in a file in a volume. You look at CAD-CAM, all of those applications demand file. Oracle database runs incredibly fast on file, so file is certainly not to be discounted, and I think it's very much now a hot topic in public cloud. >> And there's more to this story than just running in the public cloud. THere's a whole business model around the economics, >> Yup. >> the pricings, can you explain that? >> The way we think about cloud is we think that we can build a business that's just in the cloud. We basically monetize a service, a set of services that we offer to our customers to help them manage their data, protect their data, secure their data, integrate and orchestrate their data. Whether it's on one cloud or many. Whether it's a combination of onprem and cloud. And we charge very, very simply based on capacity or API call. We provide a full service. And that's what I think the cloud has done is democratized and empowered many, many people to consume technology that, prior to these big public clouds, you'd have to go to IT and wait six months and get charged a lot of money. The clouds make everything instantly available. It's wonderful. >> You guys have a great history, and again we've been, not critical but complementary of NetApp. You listen to customers, got a very loyal customer base. No matter what the trend is against you, by the pundits, you guys persevere as a company. And it's been great to watch, classic Silicon Valley success story. But you got Solify, you got Flash, you've been doing some kicking the tires early in cloud, now you created a business unit out of it. As you listen to customers, you see DevOps, you see (mumble) Infrastructures go, massive amounts of new proliferation, there's going to be a renaissance in software development, it's coming very fast. You almost see it coming very, very fast. What are the use cases for NetApp in the cloud, what are some of the things that customers are talking to you about, what are the top use cases, and where do you think they're going to be? >> Yeah, yeah, yeah. Well, so people have been very ... in Google we've been in preview phase onboarding customers to test the system out, sort of flush water through the pipes. And we've been very lucky at Google, we've had really every use case that we wanted to test tested. At the low end, it can be as simple as just home directories shared across ... whether it's POSIX or Windows, people need access to those file systems and NetApp is the only company that offers that sort of dual protocol access. So we have home directories at the low end, all the way up to genome sequencing databases, big data, relational databases, data warehouses at the high end. And what's nice about our service is we have service level objectives. So we, for the first time, have actually put a performance guarantee on the volumes. And what's nice about that is the customer knows that that's something that we stand to. What's really nice is the customer can dial up or dial down, either the capacity that they want or the performance that they want. So they may say, Monday through Friday we want to run the volumes at this basic service level, and then over the weekend, through an API, we're going to crank them up and make them run at 128 MB/sec. So, we really are, I think, providing incredible value for all workload types. >> You just described what I consider chew software, defined strategy, programmable through an API, I mean that's something that is nuanced but dramatically simplified-- >> Oh, you know, I'm an application developer. >> I was going to say. >> And I can tell you the last thing application developers want to do is talk to IT. Second to last thing application developers want to do is mess around with UI's. So, you know, the cloud, where there are lots of pretty demos of Google Console, which is a very, very, I think, well written user interface. What we really want is the API. We want the code or application code to tell the cloud what to do and how to do it. And so, everything behind our cloud business is API first. >> The programmable aspect is critical. >> Yup. >> And this is where we're starting to see microservices >> Absolutely. >> Become interesting phenomenon. Because now you can have pure application developers, >> Yup. >> Never talking to anyone but other developers in collaboration space. They just collaborate, and they go play in open source communities, and they're-- >> Absolutely. >> Happy as a clam. >> We've now got NFS persisting in containers, so we've done ... we worked on a project called Trident. Which is an open source project and we contribute to that. On Google, you'll be able to mount file systems directly into containers. And persist storage now, with all the cool, new (mumble) things that Google brings. So, you know, the files are a very integral part, I think, of technology and strategy. And we seem to have, according to Google, the best one. What are the go-to-market aspects of your relationship with Google? Well that's the other thing I tell you I'm incredibly pleased with is Google sells our product. Google supports our product. Google bills the customers for our product. >> That's good. >> Google has kind of chosen us, and Google wants it to be part of Google. So, the experience is completely native to the console. We encapsulate all of the permissions, access control lists, it looks and feels exactly like any native Google service. >> And what's next now, obviously great relation with Google. You're almost embedded/operationalized with them. Congratulations. >> Thank you. >> What's next, what's going on, what's the agenda for you guys? >> For us it's really increased investment in two dimensions. I think the first dimension is now the roll-out. We've got a very aggressive schedule to roll this out to all the major Google data centers to support all their major regions. And that's probably a never ending task, cause Google ups its ante and increases its data centers, so that keeps us busy, making the service available. The second thing then is sort of integrating that service with more of our own services. And integrating our service into some of the other Google services like BigQuery, or Spanner, or obviously there's a huge opportunity for people to bring file based data into Google Cloud and take advantage of AI and ML. (overlapping voices) >> That's interesting, integration into Spanner, I mean you've pointed out, Anthony, that Oracle runs really well on file. You guys, decade ago or so, made that happen. We had a conversation yesterday with a customer that basically moved from Oracle to Spanner. So that level of integration is one to really watch, from a transaction/database in the cloud standpoint. >> Our mission is to make file a first class protocol. >> It was interesting, also, about this, and George Kurian was talking about this on the scene, I haven't yet interviewed him yet, I'll do that next time on theCUBE, but I've heard him speak publicly, I've seen comments, software is critical. You're a software company, >> Yeah, exactly. >> you happen to have hardware here and there. So this is actually ... >> We don't make the hardware, you know. >> You don't bend the metal. >> Right. >> Google loves software. >> Yeah. >> So, interesting, so you have a lot of range, potentially, looking out in the future. >> I tell you, you know, George asked me to come to NetApp, and he gave me a blank canvass, and told me to paint whatever picture I wanted. And so, as an application developer, I wanted to have a rich set of services to help me manage my data, and I wanted to be able to do it in the cloud. >> And you want to do it without storage. >> Yeah, I mean at the end of the day ... >> You're a developer, you just want it to be there working. >> Exactly right. You expect it to be like dial tone. When you pick up the phone, at home, you don't ask yourself, how does it work? >> Nor do you want to ask the operator to connect it for you. >> Exactly right. >> And that's what's been unique, I've been following NetApp since they took on Auspex. Early on, we realized that this is a company who, basically, has storage services, and makes calls to those storage services as required, like a software developer would. >> Exactly. >> Not things that are locked into some piece of hardware. >> No, I tell you, I think what the other thing that I'm particularly proud of is I think that all of those loyal customers who have built their careers on NetApp and ONTAP, we've now given them the next part of their journey. >> Yeah. >> We've now made all of their skills relevant for Google. >> That's another 20 year lease. >> Well, the other thing ... >> It's a beautiful thing. >> The other thing you've done is, by integrating with the cloud, you bring scale that has always been a challenge for clustered systems that the cloud resolves. It was a barrier to the adoption of the cluster concept. >> I tell you the other thing that customers say more than anything else is, you know, NetApp really provides probably the industry's best insurance. I mean, any customer that makes an onpremise decision, of which there are still many, are choosing NetApp onpremise because NetApp is in the cloud. >> That's interesting, because you see Oracle's marketing with same/same but Oracle's storage products are deficient. So (laughs) >> Well, when are we start to see storage functions and terms like storageless? We have serverless. I mean ... (laughs) >> We have some, let me tell you, we have some pretty cool tricks up our sleeve. We're not going to show our hand just yet, but the stuff we're doing with the Google guys, you know, I wouldn't underestimate the amount of work the teams have put into this. This is a amazing collaboration at the development level. It's something that I don't think Google has ever done before. And I think Google, like NetApp, we see each other as very, very strong partners at a very, very deep level. >> So you're talking about engineering resources that you're providing. Can you help us understand that? Or quantify that in any way? >> Oh yeah, so ... >> Couple of guys and a laptop, or we talking about ... >> It's a very large team, and a growing team. You know, my team at NetApp, just building software on the cloud, is six-seven hundred people strong now, all product managers and developers. I mean, we take this business very, very seriously. >> This is the future of NetApp. This is a competitive strategy for you guys. >> I think NetApp is cloud first. Just imagine, did you ever think you'd hear NetApp say we're a cloud first company? Because that's what we are. >> We don't hear your competitors saying that, I can tell you that right now. >> This is NetApp's fifth life. Like I said, I've been following this company a long time. It started with workstations, you brought file to dot-com. Then you went hard after that, dot-com blew up. You went hard into the enterprise. Bet the farm on virtualization. Now you're betting the farm on cloud. >> You know, I tell you the one thing that I've been at NetApp, as I said, for about 18 months. And the company has passion and conviction and belief. And what it does so amazingly well is it leans into the things that people think are going to kill it. >> Yeah. And there ... >> And you've met Dave, right? He's a wonderful guy. He founded the company, he's still involved in the company. He's here, he's learning cloud, and he loves it. >> We saw him last night, he's a great entrepreneur. And again, that's the kind of leadership, when the founders stay around, companies succeed. I've always said that, I wrote about it. And it statistically is proven. Lean in to anything you think will probably kill you, you'll probably come out stronger. And that's really an entrepreneurial lesson. >> I tell you, the other thing that I would say, more than anything else, and it was really the biggest part of my decision to join NetApp, is a technical CEO. >> Yeah. >> You have to have a technical CEO. No disrespect to sales guys that become CEO's, or finance guys that become CEO's, they're just not as good as the technical ones. And George is an engineer. >> Yup. And he gets it. He's very passionate and committed about the product. And that, that to me, I think-- >> More than ever now in a changing tide where technology decisions, the bets can be company killing or company making, about little things, how you deal with service meshes, >> Exactly right. >> How you deal with provisioning storage through software now, these are new things. >> You know, this stuff doesn't happen overnight, right. It takes a lot of time and a lot of effort. Software engineering, you know, is something that takes time. >> Well Anthony we really appreciate you taking the time to come on theCUBE. We love covering NetApp, we've been following your journey again, we see you at all the events, you guys are part of theCUBE community. We really appreciate that. And more than ever, we want to follow what you guys are doing in the cloud. We think it's competitive advantage vis-a-vis the competition. And want to see how it turns out. So... >> We're having so much fun. >> Let's keep in touch. >> So much fun. Thanks guys very much. >> Storageless is a big trend coming, trust me you heard it here first on theCUBE. I don't think they use that term yet, Dave. We'll be back with more live coverage, Day Two is coming to a close. Couple more segments, stay with us, for our three days of coverage of Google Cloud Google Next 2018. Be right back. (techno music)

>> Live from Orlando, Florida it's theCUBE covering Cisco Live 2018. Brought to you by Cisco, NetApp and theCUBE's ecosystem partners. >> Hey, welcome back everyone. This is theCUBE's coverage here in Orlando, Florida at Cisco Live 2018. Our first year here at Cisco Live. We were in Barcelona this past year. Again, Cisco transforming to a next generation set of networking capabilities while maintaining all the existing networks and all the security. I'm John Furrier your host with Stu Miniman my co-host for the next three days. Our next guest is Arun Garg. Welcome to theCUBE. You are the Director of Product Management Converged Infrastructure Group at NetApp. >> Correct, thank you very much for having me on your show and it's a pleasure to meet with you. >> One of the things that we've been covering a lot lately is the NetApp's really rise in the cloud. I mean NetApp's been doing a lot of work on the cloud. I mean I've wrote stories back when Tom Georges was the CEO when Amazon just came on the scene. NetApp has been really into the cloud and from the customer's standpoint but now with storage and elastic resources and server lists, the customers are now startin' to be mindful. >> Absolutely. >> Of how to maximize the scale and with All Flash kind of a perfect storm. What are you guys up to? What's your core thing that you guys are talking about here at Cisco Live? >> So absolutely, thank you. So George Kurian, our CEO at NetApp, is very much in taking us to the next generation and the cloud. Within that I take care of some of the expansion plans we have on FlexPod with Cisco and in that we have got two new things that we are announcing right now. One is the FlexPod for Healthcare which is in FlexPod we've been doing horizontal application so far which are like the data bases, tier one database, as well as applications from Microsoft and virtual desktops. Now we are going vertical. Within the vertical our application, the first one we're looking in the vertical is healthcare. And so it's FlexPod for Healthcare. That's the first piece that we are addressing. >> What's the big thing with update on FlexPod? Obviously FlexPod's been very successful. What's the modernization aspect of it because Cisco's CEO was onstage today talking about Cisco's value proposition, about the old ways now transitioning to a new network architecture in the modern era. What's the update on FlexPod? Take a minute to explain what are the cool, new things going on with FlexPod. >> Correct, so the All Flash FAS, which is the underlying technology, which is driving the FlexPod, has really picked up over the last year as customers keep wanting to improve their infrastructure with better latencies and better performance the All Flash FAS has driven even the FlexPod into the next generation. So that's the place where we are seeing double-digit growth over the last five quarters consistently in FlexPod. So that's a very important development for us. We've also done more of the standard CVDs that we do on SAP and a few other are coming out. So those are all out there. Now we are going to make sure that all these assets can be consumed by the vertical industry in healthcare. And there's another solution we'll talk about, the managed private cloud on FlexPod. >> Yeah, Arun, I'd love to talk about the private cloud. So I think back to when Cisco launched UCS it was the storage partners that really helped drive that modernization for virtualization. NetApp with FlexPod, very successful over the years doing that. As we know, virtualization isn't enough to really be a private cloud. All the things that Chuck Robbins is talking about onstage, how do I modernize, how do I get you know, automation in there? So help us connect the dots as to how we got from you know, a good virtualized platform to this is, I think you said managed private cloud, FlexPod in Cisco. >> Absolutely. So everybody likes to consume a cloud. It's easy to consume a cloud. You go and you click on I need a VM, small, medium, large, and I just want to see a dashboard with how my VMs are doing. But in reality it's more difficult to just build your own cloud. There's complexity associated with it. You need a service platform where you can give a ticket, then you need an orchestration platform where you can set up the infrastructure, then you need a monitoring platform which will show you all of the ways your infrastructure's working. You need a capacity planning tool. There's tens of tools that need to be integrated. So what we have done is we have partnered with some of the premium partners and some DSIs who have already built this. So the risk of a customer using their private cloud infrastructure is minimized and therefore these partners also have a managed service. So when you combine the fact that you have a private cloud infrastructure in the software domain as well as a managed service and you put it on the on-prem FlexPod that are already sold then the customer benefits from having the best of both worlds, a cloud-like experience on their own premise. And that is what we are delivering with this FlexPod managed private cloud solution. >> Talk about the relationship with Cisco. So we're here at Cisco Live you guys have a good relationship with Cisco. What should customers understand about the relationship? What are the top bullet points and value opportunities and what does it mean to the impact for the customer? >> So we, all these solutions we work very closely with the Cisco business unit and we jointly develop these solutions. So within that what we do is there's the BU to BU interaction where the solution is developed and defined. There is a marketing to marketing interaction where the collateral gets created and reviewed by both parties. So you will not put a FlexPod brand unless the two companies agree. >> So it's tightly integrated. >> It's tightly integrated. The sales teams are aligned, the marketing, the communications team, the channel partner team. That's the whole value that the end customer gets because when a partner goes to a high-end enterprise customer he knows that both Cisco and NetApp teams can be brought to the table for the customer to showcase the value as well as help them through it all. >> Yeah, over in one of the other areas that's been talked about this show we talk about modernization. You talk about things like microservices. >> Yes. >> Containers are pretty important. How does that story of containerization fit into FlexPod? >> Absolutely. So containerization helps you get workloads, the cloud-native workloads or the type two native. Type two workloads as Gartner calls them. So our mode two. What we do is we work with the Cisco teams and we already had a CVD design with a hybrid cloud with a Cisco cloud center platform, which is the quicker acquisition. And we showed a design with that. What we are now bringing to the table is the ability for our customers to benefit with a managed service on top of it. So that's the piece we are dealing with the cloud teams. With the Cisco team the ACI fabric is very important to them. So that ACI fabric is visible and shown in our designs whether you do SAP, you do Oracle, you do VDI and you do basic infrastructure or you do the managed private cloud or FlexPod on Healthcare. All of these have the core networking technologies from Cisco, as well as the cloud technologies from Cisco in a form factor or in a manner that easily consumable by our customers. >> Arun, talk about the customer use cases. So say you've got a customer, obviously you guys have a lot of customers together with Cisco, they're doing some complex things with the technology, but for the customer out there that has not yet kinda went down the NetApp Cisco route, what do they do? 'Cause a lot of storage guys are lookin' at All Flash, so check, you guys have that. They want great performance, check. But then they gotta integrate. So what do you say to the folks watching that aren't yet customers about what they should look at and evaluate vis-a-vis your opportunity with them and say the competition? >> So yes, there are customers who are doing all this as separate silos, but the advantage of taking a converged infrastructure approach is that you benefit from the years of man experience or person experience that we have put behind in our labs to architect this, make sure that everything is working correctly and therefore is reduces their deployment time and reduces the risk. And if you want to be agile and faster even in the traditional infrastructure, while you're being asked to go to the cloud you can do it with our FlexPod design guides. If you want the cloud-like experience then you can do it with a managed private cloud solution on your premise. >> So they got options and they got flexibility on migrating to the cloud or architecting that. >> Yes. >> Okay, great, now I'm gonna ask you another question. This comes up a lot on theCUBE and certainly we see it in the industry. One of the trends is verticalization. >> Yes. >> So verticalization is not a new thing. Vertical industry, people go to market that way, they build products that are custom to verticals. But with cloud one of the benefits of cloud and kind of a cloud operations is you have a horizontally scalable capability. So how do you guys look at that, because these verticals, they gotta get closer to the front lines and have apps that are customized. I mean data that's fastly delivered to the app. How should verticals think about architecting storage to maintain the scale of horizontally scalable but yet provide customization into the applications that might be unique to the vertical? >> Okay, so let me give a trend first and then I'll get to the specific. So in the vertical industry, the next trend is industry clouds. For example, you have healthcare clouds and you'll have clouds to specific industries. And the reason is because these industries have to keep their data on-prem. So the data gravity plays a lot of impact in all of these decisions. And the security of their data. So that is getting into industry-specific clouds. The second pieces are analytics. So customers now are finding that data is valuable and the insight you can get from the data are actually more valuable. So what they want is the data on their premise, they want the ability all in their control so to say, they want the ability to not only run their production applications but also the ability to run analytics on top of that. In the specific example for health care what it does is when you have All Flash FAS it provides you a faster response for the patient because the physician is able to get the diagnostics done better if he has some kind of analytics helping him. [Interviewer] - Yeah. >> Plus the first piece I talked about, the rapid deployment is very important because you want to get your infrastructure set up so I can give an example on that too. >> Well before we get to the example, this is an important point because I think this is really the big megatrend. It's not really kinda talked much about but it's pretty happening is that what you just pointed out was it's not just about speeds and feeds and IOPs, the performance criteria to the industry cloud has other new things like data, the role of data, what they're using for the application. >> Correct. >> So it's just you've gotta have table stakes of great, fast storage. >> Yes. >> But it's gotta be integrated into what is becoming a use case for the verticals. Did I get that right? >> Yes, absolutely. So I'll give two examples. One I can name the customer. So they'll come at our booth tomorrow, in a minute here. So LCMC Health, part of UMC, and they have the UMC Medical Center. So when New Orleans had this Katrina disaster in Louisiana, so they came up with they need a hospital, fast. And they decided on FlexPod because within three months with the wire one's architecture and application they could scale their whole IT data center for health care. So that has helped them tremendously to get it up and running. Second is with the All Flash FAS they're able to provide faster response to their customer. So that's a typical example that we see in these kind of industries. >> Arun, thanks for coming on theCUBE. We really appreciate it. You guys are doing a great job. In following NetApps recent success lately, as always, NetApp's always goin' the next level. Quick question for you to end the segment. What's your take of Cisco Live this year? What's some of the vibe of the show? So I know it's day one, there's a lot more to come and you're just getting a sense of it. What's the vibe? What's coming out of the show this year? What's the big ah-ha? >> So I attended the keynote today and it was very interesting because Cisco has taken networking to the next level within 10 base networking, its data and analytics where you can put on a subscription mode on all the pieces of the infrastructure networking. And that's exactly the same thing which NetApp is doing, where we are going up in the cloud with this subscription base. And when you add the two subscription base then for us, at least in the managed private cloud solution we can provide the subscription base through the managed private cloud through our managed service provider. So knowing where the industry was going, knowing where Cisco was going and knowing where we want to go, we have come up with this solution which matches both these trends of Cisco as well as NetApp. >> And the number of connected devices going up every day. >> Yes. >> More network connections, more geo domains, it's complicated. >> It is complicated, but if you do it correctly we can help you find a way through it. >> Arun, thank you for coming on theCUBE. I'm John Furrier here on theCUBE with Stu Miniman here with NetApp at Cisco Live 2018. Back with more live coverage after this short break. (upbeat music)

>> From Orlando, Florida, it's theCUBE, covering SAP Sapphire Now 2018, brought to you by NetApp. >> Welcome to theCUBE, I'm Lisa Martin, we are with Keith Townsend, we are in Orlando, in the NetApp booth, at SAP Sapphire 2018, joined by the CIO of NetApp, Bill Miller, Bill welcome to theCUBE. >> Thank you, great to be here, I really appreciate it. >> So, NetApp, 26-year-old company, you guys have been on a big transformation journey, give us some nuggets of NetApp's transformation story. >> Yeah, it's really a fascinating story, and it all centered around the customer. In going back a couple of years when we realized this story was evolving from a storage story and a storage history, to a data-centric story going forward. We spent a lot of time listening to our customers. We listened to them in briefing center meetings, we listened to them through strategic customer account sessions, and we really were drawn to this notion of providing outcomes for our customers rather than providing storage long-term. Storage, like all other appliances, ironically in the name of the company, a very well-established respected company, Network Appliance. It was not going to be about appliances in the future, it was going to be about data management and leveraging the value of the data for our customers. So our transformation was about bringing that journey to life and giving our customers choice. Choice around where their data resides and how they utilize that data and how they leverage that data for their customers. So as we listened and we, we kind of absorbed the impact of this, it became clear that for the foreseeable future we were going to live in a hybrid-cloud world. And really what I mean by that is our large established customers were going to have very consequential private cloud data centers for a long time to come. We did very large complex applications that served their customer communities. They weren't going to be able to pick up those large applications and move them quickly to the cloud so they were going to run in high-intensity private cloud very efficient data centers. But at the same time, they were looking to transform digitally, to go on this digital transformation journey, and the vast majority of them wanted to lean in to the hyperscale or clouds, the cloud suppliers, and build their future strategic applications in the cloud. And it became clear to us that their data was now going to be bifurcated, it was going to reside in their own prim facilities but critical, mission critical, and advantageous data was also going to sit out there in the hyperscaler cloud and a company like NetApp could build this data fabric to connect them seamlessly so that the customers had choice. I mean, that's really what was behind the initiative to transform NetApp. >> So as we talk about that transformation, NetApp identified the opportunity. >> Yes. >> Looked at the product portfolio, looked at the gaps. Identified where they needed to go. >> Right. >> NetApp the company needed to go through a digital transformation itself. >> Yeah. >> So as an SAP customer, as a NetApp customer, as the person responsible for enabling developers, application teams, product teams, to execute on that digital transformation, what were some of the challenges, lessons learned as the CIO of NetApp that you experienced. >> It's an awesome question. You kind of went from we're going to transform for our customers to what I did to, or my teams and myself did, to enable that. There's a middle step which is all of our business partners in the company. You know, whether that's finance or sales or marketing, having to realign their business processes to this new need. So let me give you an example on the sales, the go-to-market function, you know. We call this a go-to-market motion, you know, how you sell. Well if you're selling an appliance, you know a piece of hardware with some software with it, that's one very well-defined and familiar motion. If you're going to sell software solutions, if you're going to sell advanced professional services that advise our customers on how to leverage data, those are very different motions that you have to enable to be successful. So what that means is taking that set of business processes that are unfamiliar to us. You know, when a customer wants to buy our products on a pay-as-you-go, a consumption model, rather than a capitalization acquisition, that's a whole different set of processes we have to put in place behind the scenes. Financial processes, legal processes, and of course IT systems. So it started with the business functions, figuring out how they were going to transform their work flows, and then IT had to come in underneath and say do we have the systems, the tools, the platforms, like SAP and other partner-provided platforms to enable that and make those work flows come to life. So it was really a partnership across the whole enterprise and if you really listen to our CEO, George Kurian, George will tell you, this transformation affected every single employee and every single leader in the corporation. It was a major change for us to figure out how you're going to take a business steaming in this direction and turn them 45 degrees on a dime and quickly embrace those new processes and mobilize them through new systems, tools, and platforms. So this was a wholesale change to the corporation, I mean it was a burn-the-ship's model, we're never going back, (Keith laughs) this is the new way of doing business for NetApp. Very exciting, and at the beginning a daunting journey. >> We had Dave Hitz on theCUBE doing a NetApp insight last year and one of the things that he said, he had to come in and tell the on-tap engineers, on-tapping the cloud is okay, we're NetApp and we can burn down what we've done before and do it again, and we'll make that journey. So, it's enlightening to hear that NetApp was willing to burn down the old stuff to build the new. So as we talk about that new, what are the major drivers, as you're talking to other CIOs, you know, I'm sure the sales team wants more of your time than you can give. >> Very perceptive, very perceptive Keith. (laughs) >> As you're talking to CIOs, what is that conversation, what jewels are they trying to get out of you? >> So, we spent a lot of time with our customers. One of the enjoyable parts of my job is my customers are my peers, our customers are my peers, so I did spend a lot of time looking at what's on their agenda. They're driven by two passions almost globally and consistently across the industry. They're driven by a desire to move to the cloud, to move to the cloud aggressively for flexibility, to take advantage of these new marketplaces that the hyperscalers are offering. Hyperscalers and their partners. But if you come out to our home base in Silicon Valley, what you see, all the start-up companies are being designed in the cloud functionality, so that's where a lot of the new R&D and the new IP is being created. So, my peers want to invest more heavily in the cloud. And the second thing they want to do is enable digital transformation, real digital transformation, how do they monetize the wealth of the data that they've acquired through their relationships with their customers, and then how do they leverage that for their customer benefit. That's what digital transformation really means to CIOs, and how do I engage in the cloud to do that. So when we looked at that we said, okay the story's about data, it's digital transformation around data, and it's enabling that cloud journey for our customers at a rate of consumption that is acceptable and digestable to them, right? Because every customer has a different rate of motion to the cloud and depending on their industry type and their degree of risk and enthusiasm to embrace change, they're in different places. So, we had to be very flexible in guiding different customers in different industries to that cloud database journey and so that's why we have to spend an awful lot of time listening to our customers to help them do that. >> Did you find during this time where, not only are you having to burn some ships down and transform yourself, while still transacting business in a competitive way. >> That's exactly right. >> Did you find yourselves going, alright so NetApp's talking about data is key, data fabric, are you going away from storage, did you find that was a question that was commonly asked and if so, how are they responding now to NetApp's transformation? >> That's a great question. Let me get back to that as you know, NetApp going away from storage, and hit something both of you said. This journey of transformation, you can do transformation a number of ways, but the two common ways are I do it and I'm gone. In other words, I get through the fiery pit and I'm on the other side, I'm like, wow I'm glad that's over, okay? That's not the nature of our company. It is, what George would call it, a culture of transformation, right? It's about being willing to change directions if you need to change direction and go, in this dynamic world. >> Based on the customers, what they think, not what as a company, NetApp would like. >> And we're in one of the most dynamic areas of high-tech, when you look at data and you look at the cloud and the solutions. So we realize, it's not over, we haven't transformed and we're done. We're in transformation 2.0, which is the whole next generation, and most of our leadership team is very comfortable with the discomfort associated with continually transforming. >> Comfortably uncomfortable. >> Yeah and I think it takes a certain kind of person to lead in our company and you have to be bold. You have to be bold and want to do that, okay? >> So George gave some emotional examples last year of data-driven capability. In order to make these transformations, NetApp itself has to be driven by data. >> That's right. >> What are some of the key capabilities as a CIO that you've given the business to be data-driven? George can't make these decisions unless he has data. What new capability has NetApp provided George? >> Well, I'll give you an example sitting here at this wonderful SAP conference, you know? We rolled out SAP C4C Hybris this past year. A big journey for us, we were on a separate platform, we knew we needed to build these new work flows into our day-to-day processes and as we thought about what potential solutions would be to kind of break the mold from where we were and move forward, we really liked the SAP HANA platform. We think the HANA platform, very dynamic you know in memory, a high-performance computing platform that's built on the NetApp framework, right? It's a NetApp high-performance infrastructure with an in-memory processing capability that's second to none in my opinion. So we looked at data availability, reporting, insights that we could get, and the commitment from our partners to continue to evolve in insights. So you know, you hear about Leonardo here, and some of the AI and machine learning platforms that are being developed, we felt like that HANA platform would give us a lot of flexibility in the future to be data-driven, to pull data and to do it fast and dynamically to help our business make the right decisions going forward. >> I'm curious, as we finish up here, how influential is NetApp's transformation? And you're right, it's a journey, right? You're going to get a destination, oh and now we're an intelligent enterprise, if only. How impactful and influential has NetApp's transformation been on really continuing to establish NetApp's relevance and your customer base, have you seen that like make deals happen because look what they've done. >> Yeah, a couple things I'll say to that. First of all, customers admire companies that are bold and that really want to lean into technology and make change, so our journey of transformation is absolutely a fascinating one for our customers. They feel like, if you're willing to do that, if you're willing to change dynamically on the behalf of your customers, we got a lot more confidence that you're serious about what you're doing and you're committed to the future. So number one, they love it. Number two, they just want to know how to transform themselves, so any nuggets they can take away from our journey, and reuse and position in their business for future success is much appreciated. And then the third thing I would say, and it gets back to an earlier question you asked. You know, as we give them more choice, as we give them a choice to either advance their current data center with high-performing flash or build a really cost-effective high-performing private cloud with converged infrastructure or really venture out into that digital transformative space of the hyperscalers, we're giving them choice every day. So, we're not afraid to offer them data management solutions in all three of those environments and not only choice by going out to a hyperscaler, an AWS or an Azure or a Google Cloud platform, but to be able to choose multiple cloud supplier platforms so they can put some workloads in Azure, some workloads in GPC, and get a confident feeling that NetApp's going to be there for them in any of those platforms in any of those configurations. They really feel more confident when they hear that story, and I would argue, to some degree, they're more likely to buy our traditional storage if they feel confident of our future vision in the enablement to allow them to succeed with that future vision, so it's been well received at that level. >> NetApp, bold. I love it Bill. >> I think we are. >> Thanks so much for stopping by, and now you're Cube Alumni, so congratulations. >> Well thank you and I hope to come back some time. >> Absolutely, we'd love to have you back. Thank you for watching theCube, I'm Lisa Martin with Keith Townsend and the NetApp booth at SAP Sapphire 2018. Thanks for watching.

>> Announcer: Live from San Jose it's The Cube presenting Big Data, Silicon Valley brought to you by SiliconANGLE Media and its ecosystem partners. >> Good morning. Welcome to The Cube. We are on day two of our coverage our event Big Data SV. I'm Lisa Martin with my cohost Dave Vellante. We're down the street from the Strata Data Conference. This is The Cube's tenth big data event and we had a great day yesterday learning a lot from myriad guests on very different nuances of big data journey where things are going. We're excited to welcome back to The Cube an alumni, Octavian Tanase, the Senior Vice President of Data ONTAP fron Net App. Octavian, welcome back to The Cube. >> Glad to be here. >> So you've been at the Strata Data Conference for the last couple of days. From a big data perspective, what are some of the things that you're hearing, in terms of from a customer's perspective on what's working, what challenges, opportunities? I'm very excited to be here and learn about the innovation of our partners in the industry and share with our partners and our customers what we're doing to enable them to drive more value out of that data. The reality is that data has become the 21st Century gold or oil that powers the business and everybody's looking to apply new techniques, a lot of times machine learning, deep learning, to draw more value of the data, make better decisions and compete in the marketplace. Octavian, you've been at NetApp now eight years and I've been watching NetApp, as we were talking about offline, for decades and I've seen the ebb and flow and this company has transformed many, many times. The latest, obviously cloud came in, flash came into play and then you're also going through a major transition in the customer based to clustered ONTAP. You seemed to negotiate that. NetApp is back, thriving, stock's up. What's happening at NetApp? What's the culture like these days? Give us the update. >> I think we've been very fortunate to have a CEO like George Kurian, who has been really focused on helping us do basically fewer things better, really focus on our core business, simplify our operations and continue to innovate and this is probably the area that I'm most excited about. It's always good to make sure that you accelerate the business, make it simpler for your customers and your partners to do business with you, but what you have to do is innovate. We are a product company. We are passionate about innovation. I believe that we are innovating with more pace than many of the startups in the space so that's probably the most exciting thing that has been part of our transformation. >> So let's talk about big data. Back in the day if you had a big data problem you would buy a big Unix box, maybe buy some Oracle licenses, try to put all your data into that box and that became your data warehouse. The brilliance of Hadoop was hey we can leave the data where it is. There's too much data to put into the box so we're going to bring five megabytes to code to a petabyte of data. And the other piece of it is CFOs loved it, because we're going to reduce the cost of our expensive data warehouse and we're going to buy off the shelf components: white box, servers and off the shelf disk drives. We're going to put that together and life will be good. Well as things matured, the old client-server days, it got very expensive, you needed enterprise grade. So where does NetApp fit into that equation, because originally big storage companies like NetApp, they weren't part of the equation? Has that changed? >> Absolutely. One of the things that has enabled that transformation, that change is we made a deliberate decision to focus on software defined and making sure that the ONTAP operating system is available wherever data is being created: on the edge in an IoT device, in the traditional data center or in the cloud. So we are in the unique position to enable analytics, big data, wherever those applications reside. One of the things that we've recently done is we've partnered with IDC and what the study, what the analysis has shown is that deploying in analytics, a Hadoop or NoSQL type of solution on top of NetApp is half the cost of DAS. So when you consider the cost of servers, the licenses that you're going to have to pay for, these commercial implementations of Hadoop as well as the storage and the data infrastructure, you are much better off choosing NetApp than a white box type of solution. >> Let's unpack that a little bit, because if I infer correctly from what you said normally you would say the operational costs are going to be dramatically lower, it's easier to manage a professional system like a NetApp ONTAP, it's integrated, great software, but am I hearing you correctly, you're saying the acquisition costs are actually less than if I'm buying white box? A lot of people are going to be skeptical about that, say Octavian no way, it's cheaper to buy white box stuff. Defend that statement. >> Absolutely. If you're looking at the whole solution that includes the server and the storage, what NetApp enables you to do if you're running the solution on top of ONTAP you reduce the need for so many servers. If you reduce that number you also reduce the licensing cost. Moreover, if you actually look at the core value proposition of the storage layer there, DAS typically makes three copies of the data. We don't. We are very greedy and we're making sure that you're using shared storage and we are applying a bunch of storage efficiency techniques to further compress, compact that data for world class storage efficiency. >> So cost efficiency is obviously a great benefit for any company when they're especially evolving, from a digital perspective. What are some of the business level benefits? You mentioned speed a minute ago. What is Data ONTAP and even ONTAP in the cloud enabling your enterprise customers to achieve at the business level, maybe from faster time to market, identifying with machine learning and AI new products? Give me an example of maybe a customer that you think really articulates the value that ONTAP in the cloud can deliver. >> One of the things that's really important is to have your data management capability, whatever the data is being produced so ONTAP being consumed either as a VM or a service ... I don't know if you've seen some of the partnerships that we have with AWS and Azure. We're able to offer the same rich data management capabilities, not only the traditional data center, but in the cloud. What that really enables customers to do is to simplify and have the same operating system, the same data management platform for the both the second platform traditional applications as well as for the third platform applications. I've seen a company like Adobe be very successful in deploying their infrastructure, their services not only on prem in their traditional data center, but using ONTAP Cloud. So we have more than about 1,500 customers right now that have adopted ONTAP in the AWS cloud. >> What are you seeing in terms of the adoption of flash and I'm particularly interested in the intersection of flash adoption and the developer angle, because we've seen, in certain instances, certain organizations are able to share data off of flash much more efficiently that you would be, for instance, of a spinning disk? Have you seen a developer impact in your customer base? >> Absolutely I think most of customers initially have adopted flash, because of high throughput and low latency. I think over time customers really understood and identified with the overall value proposition in cost of ownership in flash that it enables them to consolidate multiple workloads in a smaller footprint. So that enables you to then reduce the cost to operate that infrastructure and it really gives you a range of applications that you can deploy that you were never able to do that. Everybody's looking to do in place, in line analytics that now are possible, because of this fast media. Folks are looking to accelerate old applications in which they cannot invest anymore, but they just want to run faster. Flash also tends to be more reliable than traditional storage, so customers definitely appreciate that fewer things could go wrong so overall the value proposition of flash, it's all encompassing and we believe that in the near future flash will be the defacto standard in everybody's data center, whether it's on prem or in the cloud. >> How about backup and recovery in big data? We obviously, in the enterprise, very concerned about data protection. What's similar in big data? What's different and what's NetApp's angle on that? >> I think data protection and data security will never stop being important to our customers. Security's top of mind for everybody in the industry and it's a source of resume changing events, if you would, and they're typically not promotions. So we have invested a tremendous deal in certifications for HIPAA, for FIPS, we are enabling encryption, both at rest and in flight. We've done a lot of work to make sure that the encryption can happen in software layer, to make sure that we give the customers best storage class efficiency and what we're also leveraging is the innovation that ONTAP has done over many years to protect the data, replicate its snapshots, peering the data to the cloud. These are techniques that we're commonly using to reduce the cost of ownership, also protect the data the customers deploy. >> So security's still a hot topic and, like you said, it probably always will be, but it's a shared responsibility, right? So customers leveraging NetApps safe or on prem hybrid also using Azure or AWS, who's your target audience? If you're talking to the guys and gals that are still managing storage are you also having the CSO or the security guys come in, the gals, to understand we've got this appointment in Azure or AWS so we're going to bring in ONTAP to facilitate this? There's a shared responsibility of security. Who's at the table, from your perspective, in your customers that you need to help understand how they facilitate true security? >> It's definitely been a transformative event where more and more people in IQ organizations are involved in the decisions that are required to deploy the applications. There was a time when we would talk only to the storage admin. After a while we started talking to the application admin, the virtualization admin and now you're talking to the line of business who has that vested interest to make sure that they can harness the power of the data in their environment. So you have the CSO, you have the traditional infrastructure people, you have the app administration and you have the app owner, the business owner that are all at the table that are coming and looking to choose the best of breed solution for their data management. >> What are the conversations like with your CXO, executives? Everybody talks about digital transformation. It's kind of an overused term, but there's real substance when you actually peel the onion. What are you seeing as NetApp's role in effecting digital transformations within your customer base? >> I think we have a vision of how we can help enterprises take advantage of the digital transformation and adopt it. I think we have three tenants of that vision. Number one is we're helping customers harness the power of the cloud. Number two, we're looking to enable them to future proof their investments and build the next generation data center. And number three, nobody starts with a fresh slate so we're looking to help customers modernize their current infrastructure through storage. We have a lot of expertise in storage. We've helped, over time, customers time and again adopt disruptive technologies in nondisruptive ways. We're looking to adopt these technologies and trends on behalf of our customers and then help them use them in a seamless safe way. >> And continue their evolution to identify new revenue streams, new products, new opportunities and even probably give other lines of business access to this data that they need to understand is there value here, how can we harness it faster than our competitors, right? >> Absolutely. It's all about deriving value out of the data. I think earlier I called it the gold of the 21st Century. This is a trend that will continue. I believe there will be no enterprise or center that won't focus on using machine learning, deep learning, analytics to derive more value out of the data to find more customer touch points, to optimize their business to really compete in the marketplace. >> Data plus AI plus cloud economics are the new innovation drivers of the next 10, 20 years. >> Completely agree. >> Well Octavian thanks so much for spending time with us this morning sharing what's new at NetApp, some of the visions that you guys have and also some of the impact that you're making with customers. We look forward to having you back on the program in the near future. >> Thank you. Appreciate having the time. >> And for my cohost Dave Vellante I'm Lisa Martin. You're watching The Cube live on day two of coverage of our event, Big Data SV. We're at this really cool venue, Forager Tasting Room. Come down here, join us, get to hear all these great conversations. Stick around and we'll be right back with our next guest after a short break. (electronic music)

>> Announcer: Live from Las Vegas, it's The Cube, covering NetApp Insight 2017, brought to you by NetApp. >> Okay, welcome back everyone. We're here live in Las Vegas, Mandalay Bay. This is The Cube's exclusive coverage of NetApp Insight 2017. I'm John Furrier, the cohost of The Cube, co-founder of SiliconANGLE Media with my cohost, Keith Townsend with CTO Advisors. Our next guest is Jean English. She's the Chief Marketing Officer of NetApp. Great to see you, thanks for having us, and thanks for coming on The Cube. >> Oh, thank you, thank you guys for being here. >> So NetApp is no longer a storage company, we learned. But then last year, now this year, you're a data company. >> Jean: (laughs) That's right. >> The brand promise is still the same. Take us through, as the Chief Marketing Officer, you have to, it's a complex world. One of your concepts here we've been seeing is winning while in a tough environment and IT is a tough environment. I got application development going on. I got DevOps. I got data governance. I got security issues, internet of things. It's a challenging time for our customers. How is your brand promise evolving? >> So we really see that NetApp is the data authority for hybrid cloud, and the amazing thing is is that what we see is our customers aren't talking to us about storage anymore. They're talking to us about data, and what their data challenges are, and most companies are trying to think through if they're going to transform, how are they going to harness the wealth of the data. What are they going to do to maximize the value of the data? >> And the cloud too is center stage, 'cause the cloud is a forcing function that's changing the relationship of your partners, VARs who has a lot of folks on talking about the dynamics with customers around multiple clouds. We saw on stage the announcement with Microsoft. Congratulations. >> Jean: Thank you. >> So you've been in Amazon for a while. We've been covering that, but the on-premise work still is growing, where you have the data from Wikibon Research came out shows that the on-premise true private cloud, which is defined as cloud operation business model is actually growing. However, the decline in automation of non-differentiated labor is declining by 1.5 billion over the next five years, which means the SAS market is going to continue to explode and grow, so the on-premise is actually growing, as is the cloud. How does that change the narrative for you guys, or does it, or is that a tailwind for NetApp? >> We think it's a complete tailwind in for NetApp. When we think about data today, we see that it's really becoming more distributed across environments. It's definitely more dynamic, as you're looking for the latest source of truth. And the diversity of data, especially with machine learning. I mean, it is exploding. So, how do you start to be able to build that data together? We really think of it as that our customers want to maximize that value and the only way to do that is to start to think about how do they bring it together, and how do they get more insight from that data, and then how do they have more access and control of that data, and then the most questions we usually get from our customers around, how do I make sure it's secure? But the really big point is is that, as we think about what NetApp is doing, it has been about three things that we see with our customers. They have to make sure that they're modernizing what they have today, and that goes to the on-prem environment, so if it's going to be that they got to accelerate applications, they want to make sure that they have that. But this notions of building clouds, even building private clouds. And we think of that as a next-generation data center, especially with DevOp environments. Then harnessing the power of the cloud and hybrid cloud world. And if they are not able to really leverage the cloud for SAS applications, if they're leveraging the cloud for backup, or even disaster recovery, data protection, that's where we see that these three imperatives, when they come together, that they're truly, truly able to unleash the power. >> So we saw on stage, CEO George Kurian talking about his personal situations in light of what's happened in Las Vegas here. Data is changing the world, and your tagline is "Change the world with data." So I got to ask you, obviously, data, we see a lot of examples in society and also personal examples of data being harnessed for value. The cloud can be great there, it's all on-prem. How do you guys position NetApp as a company? I know there's a lot of positioning exercises in marketing you do, but positioning is really important. That's what you do. The tagline is kind of the emotional aspect of it, okay, changing the world, let's change the world with data. I believe that. But what's the positioning of NetApp? How would you say that the positioning- What's the positioning statement of NetApp? >> The positioning statement of NetApp, I think we've really seen a big break in the positioning in the last couple of years. And why is because the customers are demanding something different. They're really looking for more hybrid cloud data services. And what are those data services that accelerate and integrate data, and that notion of on-prem and in the cloud, that's where we see what's going to happen to accelerate digital transformation. And so, this notion of yes, thought about as storage before, customers are demanding more for their data and they need data services, especially in hybrid environments to really be able to drive their business. >> The old expression, "Position it, they will come." And you guys have done a good job with the data. Okay, now let's get to the customer reality. You have to go out and do the tactical marketing. They're busy, right? There's a lot of noise out there. We just came back from New York and our Big Data NYC event that we ran in conjunction with Strata, which is a separate event, and it's clear they don't want the hype. They want reality. The rubber's hitting the road because they're so busy, and with the the security and the governance challenges- GDPR, for instance, in Europe is a huge pressure point for data. A lot of challenges but they want the magic. (laughter) It should be easy, right? But it's not. How do you guys go out day to day and take that to the field message? What's your strategy? >> Well, you talked about changing the world with data. And it feels like a lofty promise, but we really believe that when we come down to the purpose of why NetApp exists, it is to empower our customers to change the world with data and that's something that NetApp has been focused on not just for today, but the 25 years of history, and then also into the future. So what makes that the reality? Well number one, they want something that's simple. And so this notion of simplicity, and no matter how they think about managing or optimizing their data, it's got to be simple and easy to manage. Optimized to protect, I think data protection is critically important. Things about safeguarding data across its life cycle. and I think that NetApp has always been focused on how to make sure data is secure and protected. And that now is what we're seeing in the cloud too. So, all the relationships and partnerships that we've been creating and solidifying, AWS has been for the last couple years, we've had some latest`announcements of what we're doing to really make sure we have stronger data protection in multi-cloud environments. Obviously, today from what we're doing with Microsoft Azure, in really providing- Not even having to know how to manage storage, you can do it easily in Azure, and- >> No, I'm sorry. I really love this, this message from NetApp. As a traditional technologist, I understand NetApp disrupting the original storage CN Market with Fowlers, you guys were one of the first in the cloud with AWS, so from a trusted partner inside of the infrastructure team, I understand the vision of NetApp. But the transformation also means that you're starting to expand that conversation beyond just that single customer of the storage admin, of the infrastructure group. How is that messaging been going towards that new group of customers within your customers who have said, "NetApp? Isn't that a storage company?" How is that transformation been going? >> (laughs) You know, when we talk about reinventing, NetApp is reinventing itself. And that's what we're going through right now. And what we see is, is that the customers that we know and love, the storage admins and the storage architects, those are definitely tried-and-true and we love our relationships with them. But we see that the demands around data are growing and those demands are starting to reach more into DevOps, application developers, definitely into cloud enterprise architects as we think about cloud environments. The CIO is now under more pressure to think through how- They have a mandate to move to the cloud. Now what? But who do they want to move with? Someone that they've trusted before, and by the way, because we've been first, and because we're so open with all our relationships with the cloud providers, why not move with us? Because we can help them think through it. >> So you're keeping the core. You're not pivoting off the core, you're building on top of the core, extending that. Is that what you're saying? >> We're building off of a really great foundation of who we've had as customers all along. We're establishing new relationships, though, as well, with cloud enterprise architects, and today, we actually just had here at Insight our first executive summit, where we brought together CIOs and CTOs and really talked about what's happening with data and organizations, what's happening with data that's being disruptive, what's happening if you want to thrive, based on data as well. >> There used to be an old expression back in the day when Polaroid was around, "What's the new Polaroid picture of something?" Now it's Instagram, so I have to ask this question. What is the new Instagram picture of NetApp with the customers that you have and for customers now in the data space, there's a lot of data conversations happening. What is that picture of NetApp? What should they know about NetApp? >> NetApp is in the cloud. >> Yeah, I love that messaging that NetApp is in the cloud. And how important is that moving forward? Especially as we look at technology such as ONTAP. They have been there from the beginning. I love the NFS on Azure story, but that's powered by ONTAP, which I kind of- It took me a few minutes to kind of get it, because I'm thinking, "ONTAP in Azure, that's bringing the old to the new." But that's not exactly what it is. What messaging do you want customers to get out of something like an NFS in Azure? >> We want them to understand that they don't have to know anything about storage to be able to protect and manage their data. No matter what environment that they're in. >> And by the way, we've been looking at and commenting critically on The Cube many events now that multi-cloud is a pipe dream. Now I say that only as folks know me. It's real. Customers want multi-cloud, but multi-cloud has been defined as, "Oh, I run 365 on Azure, and I got some analytics on Redshift on Amazon, I do some stuff on-prem. That's considered multi-cloud because there happen to be stuff on multiple clouds. You guys are doing something with cloud orchestrate that's quite interesting. It truly is multiple clouds in the sense that you can move data, if I get this right, across clouds. >> Jean: That's right. >> So it's in a complete transparent way, seamless way, so I don't have to code anything. Is that true? If that's true, then you might be one of the first multi-cloud use cases. >> We are one of the first multi-cloud use cases. We have created the data fabric, which is really looking at how do you seamlessly integrate across multiple clouds or on-prem environments? The data fabric, we've been talking about this vision for a couple of years. What we're seeing now is customers are seeing it come to reality. And now that we have more and more relationships expanding, as we mentioned we've been building SAS offerings with AWS for a couple years, we just had the big announcement today with Microsoft Azure. We're working with IBM Cloud. We're also working with Google Cloud, Alibaba, so as we think about a seamless data fabric, they want frictionless movement in and out of the cloud. >> Jean, I got to change gears for a second, because one of the things we've been observing over the past couple of months, certainly we were at the Open Source Summit, Linux Foundation. Open source is growing exponentially now. You've seen the new onboarding of developers in general and enterprise is going to take the bulk of that. Companies are supplying personnel to contribute on open source projects. That's continuing to happen. Nothing new there. But it's starting to change the game. You see Blockchain out there, getting some traction, ICOs and all that hype, but it points to one thing. Communities are really valuable. So as a marketer, I know you were at IBM, very community-oriented, very open source oriented, the role of communities is going to be super important as customers discover- So marketing is changing from batch marketing, you know, surge email marketing to real-time organic with communities. It's not just have a social handle. Really, have you guys looked at the B2B marketing transformation as customers start to make selections and take opinions in the new organic communities, because you have people in these projects, in open source, who are making decisions based on content. What's your view on communities and the importance of communities? >> Well, we believe highly in communities. Our A-Team is a community with us that is so strong, and they're our biggest advocates. They get brought in very, very early on in terms of learning about our new technologies and learning our story and understanding our strategy and where we're moving. I think you may have talked to some of our A-Team members before. >> John: Quite strong, very strong. >> But they are an amazing group of people and we believe highly that their advocacy is what is really going to help us to stay in touch and be really close to these new buyers as well. >> And you've got to really internalize that too in the company. Operationally, any best practices you can share with other CMOs? 'Cause this is a challenge for a lot of marketers is, how do you operationalize something new? >> Yes, well, we're finding that this notion of reinvention and it starts with the company itself. And it starts with their own employees. So when we talk about the shift from storage to data, we're even having our own employees talk about their own data story and how do they connect data. George talked about his data story, actually, on the main stage in our keynote the other day. But connecting to that's been really important. This notion of transforming to think about these new customers and new buyers, it starts with the customer needs, it's not about a product-out discussion. And so, a new story to a new buyer, relevancy, what's happening in their industry, and then engagement, engagement, engagement. >> I've been following NetApp since they were start-up and they went public, great story. They have a DNA of reinvention. David Hitz is going to to come out, I'm sure. We'll talk about that, because he's been an entrepreneur, but he's also had that entrepreneurial DNA. It's kind of still in the company, so my question to you is, from a personal perspective, what have you learned or observed at NetApp during this reinvention, not a pivot, it's not at all. It's more of an inflection point for NetApp and a new way, a new way to engage with customers, a new way to build products, a new way to do software development, a new way to use data. This is a theme we're seeing. What's your personal observation, learnings that you could share? >> Well, in my first month, what I really learned is just the absolute amazing culture of what NetApp has and this notion of we're always embracing what our customers want to where we move. So what our customer wants, we move with it. We embrace it holistically. Years and years ago, you know, Linux and Windows. A couple of years later, virtualization, virtualized environments. Could've killed us. Made us stronger. Now, embracing the cloud. A lot of our customers say, "I would have canceled the meeting with you, but now I understand that you're interested in the cloud and that you're in the cloud, I've totally changed my mind." And we say, "We love the cloud. We embrace the cloud holistically." >> You guys are progressive. I've noticed it's a competitive strategy kind of theory but as the old expression goes, "You got to eat your own to get to the new market. Some companies will milk the market share dry and then can't get to the new model. This is the reinvention challenge. When do you stop making profits to build for the future? It's a tough call. >> It is, but that's why we listen to what our customers say. And so, when they talked about wanting to move to the cloud a few years ago, we said, "We're going to be the first to holistically embrace the cloud." >> Okay, so you got the NetApp Insight 2017 going on in Berlin. Okay, that brings up the question, because it's in Germany, so I have to ask. GDPR has been super hot. The global landscape, how is that going on for NetApp? Obviously you have some experience in outside the US. It's not always the US, North America centric world. What's the global story for NetApp? >> It's not. I lived in China and Singapore, and I know that there are demands that are not just US-centric. When we talk about Germany, I was just there a few months ago, and this notion of how do we start to address the articles that are in GDPR that help to make sure that we have the right compliance and protection for data inside of a country and inside of Europe. We actually have expertise in that area. We've been actually consulting and talking with customers about what they want to do with data compliance and we're being asked now to say, "How does NetApp help address those articles? How do we come back with solutions to help control data and make sure we have the right access of data?" So, we're already consulting with customers. We know it's a top priority, and we have expertise to be able to help. >> We had Sheila FitzPatrick on. She's the Chief Privacy Officer. Very colorful, very dynamic, a lot of energy. >> Jean: She is. (laughs) >> She's going to slap anyone around who says you don't bolt on privacy. Good policy conversations, the policies converging in with that. It's interesting, the global landscape- The Cube will be in China next week for the Alibaba Cloud Conference, so we're going to go report, see what's going on there, so huge international challenge around regulations and policy. Does that affect the marketing at all? Because policy kind of is data privacy and security. Security super hot, obviously. Data security is number- A big thing. How does policy intersect with the technology? How as a CMO do you get that realized and put into action? >> Well, I think basing on the foundation that we're always optimized to protect. That's one of our key foundations of why people choose NetApp. We definitely know that there are other demands that are happening in local markets. I was just in Australia few weeks ago and was meeting with the New South Wales government, which they've had a mandate that all of the agencies need to use their own cloud platform. They've been working with NetApp to ensure that they can have the right data management solutions on that platform. And from a marketing perspective, we embrace that. And so we work with, whether it's Telstar, we're working with New South Wales, we're thinking about how do we ensure that that message is strong, because we know customers there have different demands than just what's in the US. >> So when you get CIOs and and senior executives together at a summit like you guys had over the past few days, ideas start to percolate, problem start to come across. What was some of the biggest policy concerns throughout those conversations? Was it GDPR? Was it something else? What's top-of-mind? >> What we're hearing top-of-mind right now is data governance. And I think that that could be towards data compliance in terms of GDPR for Europe. I think it expands beyond Europe, though. I just heard, like I said, in Australia, where they're having demands based on the government of what's needed to be really driven through a cloud platform. We're hearing through our customers in the last couple weeks about if I'm moving to the cloud, number one, I want to have seamless transition during the move in or out of the cloud, but I got to make sure I've got the right governance model in place. >> So we've heard this repeatedly. Customers moved into the cloud. How many customer are coming to you saying, "You know what, for whatever reason, whether it's cost, agility, the overall capability we thought we'd have available in the cloud, not really what we thought it would be. We need help moving it back." And what is that conversation like? >> Well, it's a conversation that we're able to help with pretty easily. Right now, we have had customers that have either had one, a cloud mandate, so they got to think about how am I going to move all my data to the cloud. Once they actually start getting into the detail, we do a design workshop where we help them think about maybe there's not all workloads going to the cloud. Maybe some workloads go in the cloud. We have had a customer who did move the majority of workloads in the cloud and then decided, actually, we think we'll get better cost performance and better efficiencies if we actually have those back on-prem. We said, "No problem. We can help you with that too." And I think that's the beauty of what we talked about with data fabric is, we're able to help them think through, no matter where they want their data, on-prem or in the cloud, we can help them. >> Jean, thanks for coming up here. I know your time is super valuable. I got to get one more point in, 'cause I want to make sure we get that out there. Public sector. NetApp's position strong, getting better? What's your thoughts? A quick update on public sector. >> We are very, very strong on public sector. We've actually had a strong presence in public sector with our customers for many years. And we're continuing to help them think about too how they start to look at cloud environments. >> All right, Jean English, CMO here on The Cube. Getting the hook here in the time. She's super busy. Thanks for coming. Congratulations- >> Jean: Thank you. >> On great positioning and looking forward to chatting further at The Cube. Live coverage here, Las Vegas at the Mandalay Bay. I'm John Furrier, Keith Townsend. We'll be right back with more live coverage after this short break. (upbeat music)

>> Narrator: Live from Las Vegas, it's The Cube, covering NetApp Insight 2017, brought to you by NetApp. >> Welcome back to our live coverage. It's The Cube here in Mandalay Bay in Las Vegas. I'm John Furrier, the co-host and co-founder of SiliconANGLE Media, with Keith Townsend my co-host, CTO Advisor. Our next two guests is Sheila Fitzpatrick, the Chief Privacy Officer for NetApp, and Michael Archuleta, CIO HIPPA and Information Security Officer at San Rafael Hospital. Thanks for joining us. >> Thank you. >> Thank you very much. >> Great topic, privacy, healthcare, ransomware, all these hacks going on, although it's not a security conversation, it really is about how data is changing, certainly with the HIPAA, which has got a history around protecting data, but is that good? So, all kinds of hornets' nest of issues are going on. Michael, all for the good, right? I mean, everything's for the good but, at what point are things foreclosed, the role of the tech? What's your update on healthcare and the role of data, and kind of the state of the union? >> Yeah, absolutely. So, data right now, is one of those assets that's really critical in a healthcare organization. When you look at value-based care, on improvements, utilization of real-time data, it's really critical that we have the data in place. But the thing though is, data is also very valuable to hackers, so it is really a major problem that we're basically having in healthcare organizations, because right now, healthcare organizations are one of the most attacked sectors out there. I was basically stating that there's an actual poll out there that stated that 43% of individuals don't even know what ransomware is. And you figure, in healthcare organizations, we're really behind the curve when it comes to technology. So when you bring that into, and you say okay guys, what's ransomware, what's cyber security? What's a breach? Everyone's like, well I-- >> Malware, resilient things. >> I don't know what it is. So it becomes an issue, and the thing though is the culture has not been fully developed in organizations like healthcare, because we're so behind in the curves. But what we've been focusing a lot on, is employee cyber security awareness, kind of bringing in that culture, having individuals understand, because as you were stating too, I mean, healthcare information is 10-times, 20-times more valuable than a Social Security and a credit card, on the dark net right now. If you figure, PHI contains a massive amount of data, so it is very profitable, and these individuals go in, hack these systems, because of course, healthcare organizations are so easy to hack, they place it out on the dark net, you go out, you buy some Bitcoins, you can go and have some good identity theft going on. And I mean, we have a massive issue here in the States, with substance abuse, so if you want basically a script, or you want multiple scripts with different identities, go out there and purchase those specific things. So, it is a problem, and then on my standpoint is, imagine if this was your mother's, your father's, your grandma's, any family member's information. That's why data is so valuable, and it's so critical that we take care of the information as securely as possible, but it starts with the people, because I always say at the end of the day, our employees hold the keys to either letting the individuals stay out, or inviting them in. So it is a problem, absolutely. >> Sheila, I want to get your thoughts, 'cause obviously this segment here is why data privacy is always one of the top-five concerns for CXOs. And obviously, the tagline NetApp has for the show is "Change the World With Data". There's a lot of societal impacts going on. We're seeing it every day, in front of our eyes, certainly here in Vegas and then throughout the world, with hacks, Equifax just still in memory there. And there's going to be another Equifax down the road. The hackers are out there, lots of security concern. You've got developers that are getting on the front lines, getting closer to business, that's a trend in the tech business. Data privacy has always been important, but this means that there's a confluence of two things happening right now, that's really that collision course: technology and policy. Privacies and policy things that people spend a lot of time trying to get right, and for all the right reasons, but I'll make some assumptions here, and could foreclose and all penaltize them, put a penalty for the future. How should CEOs, COOs, CDOs, Chief Data Officers, chief everybody, they're all CXOs, think about privacy? >> Well I think it starts with the fundamental, and you're absolutely right, there's a real misperception out there, around privacy. And I always tell people, people that know me know that my pet peeve is when people say to me we have world-class security, therefore we're good on privacy. I literally want to slap them, because they're not the same thing. If you think about-- >> She's closer to John. >> Yeah, you better move that way. If you think about the analogy of the wheel, data privacy is that full life-cycle of the wheel. It's that data that you're collecting, from the time you collect it to the time you destroy it. It's the legal and regulatory requirements that say what you can have, what you can do with that data, obtaining the consent of the individual to have that data. Certainly, protecting that data is very important, that's one spoke on that wheel, but if you're only looking at encryption, that wheel's not going to turn, 'cause you're literally encrypting data you're not legally allowed to have. So if you think about the healthcare industry, where I absolutely agree, the data that you deal with is one of the most valuable data and sensitive data individuals can have, but often times, even healthcare organizations don't even know what they're collecting, or they're collecting data that maybe they don't necessarily need, or they only think about protecting that protected health information, but they don't think about the other personal data they collect. They collect information on your name, your phone number, your home address, dependent information, emergency contact. That's not protected health information. That's personal data that's covered under privacy laws. >> Here's the dilemma I want to ask you guys to react to, because this is kind of the reality as we see it on The Cube. We go to hundreds of events a year, talk to a lot of thought leaders and experts. You guys are on the field every day. Here's the dilemma: I need to innovate my business, I got to do a digital transformation. Data is the new competitive advantage. I got a surface data, not in batch basis, real-time, so I can provide the kinds of services in real-time, using data, at the same time that's an innovative, organic growing, fast-paced technological advancement. At the same time, I'm really nervous, because the impact of ransomware and some of these backlash events, cause me to go pause. So the balancing out between governance and policy, which could make you go slower, versus the let's go, move fast, break stuff, you know, let's go build some new apps. I want to go faster, I want to innovate for my business and for my customers, but I don't want to screw myself at the same time. How do you think about that? How do you react to that? And how do you talk to customers about that when they try to figure it out? >> So that's something, that's an area that I spend a lot of time talking out, 'cause I'm very fortunate that I get to travel the globe and I'm meeting with our customers all over the world. And those same issues, they want to adapt to new technology. They want to invest in the cloud, they want to invest in AI, in internet-of-things, but at the same time, I keep going back to, it's like building a house, you have to start with the ground floor. You have to build your privacy compliance program, and understand what data do you need in order to drive your business? What data do you need to sort your customers, your patients, your employees? Once you've determined that fundamental need and what your legal requirements are, that's when you start looking at technology. What's the right technology to invest in? You don't start that journey by deciding on technology and then fit the data in. You have to start with what the data is, and what you want to do with that data, what service you're trying to provide, and what the basics are, and then you build up. >> So foundationally, data is the initial building block. >> Absolutely. You don't build a house by starting with the second floor. If you start looking at tools and technology to begin with, that house is going to collapse. So you start with the data and then you build up. >> Michael, you're on the front lines, and the realities are realities. Your thoughts? >> Absolutely. So you know, you have some excellent points. The thing is, at the end of the day, I always say security at times is inconvenience. I mean, we add two-factor authentication, we add all these additional fundamentals in what we basically do, but the bottom line is we're trying to secure this data. There has to be security governance, to really focus on okay, this is the information you need. We need to kind of go through legal, we need to go through compliance, and we need to kind of determine that this is going to be ease-of-access for your group, and we need to make sure that we are keeping you secure as well too. The bottom line is innovation, of course, it won't do so much disruption, et cetera. It's absolutely amazing. You know, I love innovation, honestly, but we still have to have some governance, and focus on that in keeping it secure, keeping it focused, and having the right individuals really-- >> How do you tackle that as a team, with your team? It's cultural organizational behavior, or project management, product planning. How do you deal with the balance? >> Well at the end of the day, the CEO of NetApp basically states it starts from the top down. You really have to have a data-driven CEO that basically understands at least the fundamentals of cyber security, information technology, innovation, have those all combined and together and having that main focus of governance, so everyone has that full fundamentals of understandment, if that makes sense. >> Let's talk tech. You know, we've talked at the high level. I love it that you brought in the global conversation into this, you're taking a global view. We talked a little bit before the show, there's a mismatch in taxonomy. Here in the U.S., we're focused first on security, maybe, and then secondarily on this concept of PII, which really doesn't exist outside of the U.S. Now we have GDPR. Talk to us about the gap in understanding of GDPR, and what we consider as PII, here in the U.S., and where U.S. companies need to get to. >> Okay, that's a great question. So, the minute an individual talks about PII, you automatically go, U.S.-centric, understanding that you must operate in a purely domestic environment. The global term for personal data is personal data, it's not PII. There is a fundamental difference: in the U.S. there is a respect for confidentiality, but there's no real respect for privacy. When you talk about GDPR, that is the biggest overhaul in data protection laws in 25 years. It is going to have ramifications and ripple-effect across the globe. It is the first extra-territorial data privacy law, and under GDPR, personal data is defined as any piece of information that is identifiable to an individual, or can identify an individual either directly or indirectly. But more importantly, it has expanded that definition to include location data, IP address, biometric information, genetic information, location data. So if you have that data and you say well I can't really tie that back to a person, if you can go through any kind of technology process to be able to tie it back to a person, it is now covered under GDPR. So one of the concepts under GDPR is privacy by design. So it's saying that you have to think about privacy very similar to where we've always sat about security up front, when you're investing in new technology, when you're investing in a new program, you need to think about, going back to what I said earlier, what data do you need? What problem are you trying to solve? What do you absolutely have to have to make this technology work? And then, what is the impact going to be on personal data? So I absolutely agree, security is incredibly important, because you need to build a fortress around that data. If you haven't dealt with the privacy component of GDPR, and other data protection laws, security would be like me going down and robbing a bank, coming home and putting that money in the vault in my house, locking it up, and going that money's secure, no one can get to it. When the police come knocking on my door, they're not going to care that I have that locked in a vault. That's not my money. And you have to think about personal data the same way, and certainly healthcare information the same way. You need the consent of the individual, and you need to articulate what you're going to do with that data, be transparent. So the laws are not trying to inhibit or prohibit technology, they're just trying to get you to think about-- >> So Michael, as we think about this, how it impacts GDPR specifically, the healthcare industry talked to dinner about this a little bit. We're talking about medical records, doctors, medical professionals like to keep as much data as possible. Researchers want to get to as much data as possible. What are some of the ramifications or considerations at least, for the medical industry? >> Yeah, absolutely. So you know, on your standpoint there, as you stated, at the end of the day when we basically look and we focus on our security governance, we go over the same fundamentals as you are going. What information is basically needed to access that information for the patient? What is needed from the physician's standpoint? What is needed from the nurse's standpoint? Because the thing is, we don't just open it up to everyone, like on a coming in by different specific job functionalities, you know. We kind of prioritize and put different levels of this is the level of data this individual basically needs, versus this individual. And the thing is, the beauty about what we basically have focused on a lot too, is we developed the overall security governance committee that kind of focuses on the specific datas from HIPAA, high-tech, and the different laws that we're focused on in healthcare. And you know, we really have started focusing a lot on two-factor authentication with accessing information, so we're really utilizing some of those VASCO tokens, RSA tokens, with algorithm changes, et cetera. But at the end of the day, the thing is, the main focus is what information do you need? And the bottom line too is, it has to have that specific culture of understanding that cyber security and data is very important. And the thing is, on a physician's standpoint, they want access to everything, literally everything, and that's understandable, because these individuals are saving lives, but the thing is though, there has to be governance in place, and they have to have that understanding that this can be an issue moving forward. These are the potential problems of a breach that could basically happen, this is the information that you need. If there's more information that is needed, it will go through the security compliance governance committee. >> It's a hard job. They want the nirvana, they want the holy grail, they want everything right there. Thanks for coming on, appreciate making aware of the data, privacy issues. Sheila, thanks so much for coming on. >> Thank you. >> Michael, I'll give you guys the final word on how management teams and executives should align around this important objective? Because there's some inconvenience, it happening in the short term, but automation is coming, machine learning, all this great stuff is being promised. Looks good off the tee as they say in golf. But, the reality is that there's a lot of lip service out there. So the taglines, oh, we're strong on privacy. So, walking the talk is about having a position, not just the tagline or the talking points, having a positioning around it first, and getting an executive alignment. So final point: what's your advice to folks out there who either are thinking this through hard? Is it a matter of reducing choices, evaluation? What is your thoughts on how to attack and think about, and start moving the ball down the field, on privacy? >> Well that's a great question. I think certainly at NetApp, and as you mentioned earlier, our executive team, and certainly George Kurian, our CEO, absolutely has a philosophical belief in that fundamental right to privacy, and respects the fact that privacy is key to what we do. It has become a competitive advantage, almost in an accidental way, because we take it so seriously. It's a matter of balance. Absolutely, we need to take advantage of new technology. We're a technology company, we're building technology, but we also have to respect the fact that we operate around the world, and there are laws that we have to comply with, and those laws dictate what data we can and cannot have, and what we can do with that data. So it's that balance between data's our greatest asset, we need to protect it, it can also be our greatest detriment if we're not treating it in a respectful manner, and if we're not building technology that enables our customers to protect that fundamental right to privacy. >> Michael, from a management team perspective, obviously, have functioning with an alignment, implies a well-oiled machine. Now always the case these days. But how do you get there? What's your advice? >> You know, my advice is speak the language. CEOs, CFOs, administration, they basically don't want to hear this tech lingo at times, okay? Have them understand the basic fundamentals of what cyber security is, what it can do to the operations of an organization, what a breach can do financially to an organization. Really have those kind of put in place. Bring that story to the Board of Directors, have them kind of focusing on the fundamentals on this is why we're protecting our information, and this is why it is so critical to keep this information safe. Because the thing is, if you don't know how to tell the story, and if you don't know how to sell it, and really sell it to the point, you will not be successful-- >> That's a great point, Michael. And you know, we hear all the time too, the trend now is, IT has always been kind of a cost center. Security and data governance around privacy should be looked at not so much as a profit center, but as a, you could go out of business. So you don't treat it as maximizing your efficiency on costs, the effectiveness of privacy is a stay-in-business table stake. And that has an impact on revenue, so it's quasi-top line. >> Well absolutely. If you think about the sanctions under the new GDPR alone, you could have one data privacy violation that could, the sanction could be equal to four-percent of your annual global turnover. So it is something-- >> It's a revenue driver. >> It's a revenue driver. It's something you need-- >> It's a revenue saver. >> Yeah. Well for some companies-- >> It's a revenue saver. >> It's become a revenue driver. Yeah, absolutely. >> Most people think P&L, oh, the cost structure, profit center. If net profit, and then sales, this is a new dynamic where risk management actually is a profit objective. >> Absolutely. >> Absolutely. >> Guys, great topic. We should continue this back in California. >> I'd love to. >> Michael, thanks for coming on and sharing the CIO perspective. >> Thank you very much. >> Great content. It's The Cube, breaking it down here, getting all the data and keeping it public. That's our job is to make all our data public and sharing it on SiliconANGLE.com and TheCube.net. More live coverage here in Las Vegas, with NetApp Insight 2017, after this short break. (electronic theme music) >> Narrator: Calling all barrier-breakers: status quo-smashers.