(upbeat music) >> The transformation of Dell into Dell EMC, and now Dell Technologies, has been one of the most remarkable stories in the history of the enterprise technology industry. The company has gone from a Wall Street darling rocketship PC company, to a middling enterprise player, forced to go private, to a debt-laden powerhouse that controlled one of the most valuable assets in enterprise tech, i.e., VMware. And now is a $100 billion dollar giant with a low-margin business, a strong balance sheet, and the broadest hardware portfolio in the industry. The financial magic that Dell went through would make anyone's head spin. The last lever of the Dell EMC deal was detailed in Michael Dell's book "Play Nice But Win," in a captivating chapter called "Harry You and the Bolt from the Blue." Michael Dell described how he and his colleagues came up with the final straw of how to finance the deal. If you haven't read it, you should. And of course, after years of successfully integrating EMC and becoming VMware's number-one distribution channel, all of this culminated in the spin-out of VMware from Dell, and a massive wealth-creation milestone, pending, of course, the Broadcom acquisition of VMware. So where's that leave Dell, and what does the future look like for this technology powerhouse? Hello, and welcome to theCUBE's exclusive coverage of Dell Technologies Summit 2022. My name is Dave Vellante, and I'll be hosting the program. Now, today in conjunction with the Dell Tech Summit, we're going to hear from four of Dell's senior executives. Tom Sweet, who's the CFO of Dell Technologies. He's going to share his views on the company's position and opportunities going forward. He's going to answer the question, why is Dell a good long-term investment? Then we'll hear from Jeff Boudreau, who's the President of Dell's ISG business. That unit is the largest profit driver of Dell. He's going to talk about the product angle, and specifically, how Dell is thinking about solving the multi-cloud challenge. And then Sam Grocott, who's the Senior Vice President of Marketing, will come on the program and give us the update on APEX, which is Dell's as-a-Service offering, and then the new edge platform called Project Frontier. Now, it's also Cybersecurity Awareness Month, that we're going to see if Sam has, you know, anything to say about that. Then finally, for a company that's nearly 40 years old, Dell actually has some pretty forward-thinking philosophies when it comes to its culture and workforce. And we're going to speak with Jenn Saavedra, who's Dell's Chief Human Resource Officer, about hybrid work, and how Dell is thinking about the future of work. However, before we get into all this, I want to share our independent perspectives on the company, and some research that we'll introduce to frame the program. Now, as you know, we love data here at theCUBE, and one of our partners, ETR, has what we believe is the best spending intentions data for enterprise tech. So here's a graphic that shows ETR's proprietary Net Score methodology on the vertical axis, that's a measure of spending velocity, and on the x-axis is overlap or pervasiveness in the data sample. This is a cut for just the server, the storage, and the client sectors within the ETR taxonomy. So you can see Dell's CSG products, laptops in particular, are dominant on both the x and the y dimensions. CSG is the Client Solutions Group, and accounts for nearly 60% of Dell's revenue, and about half of its operating income. And then the arrow signifies that dot that represents Dell's ISG business, that we're going to talk to Jeff Boudreau about. That's the Infrastructure Solutions Group. Now, ISG accounts for the bulk of the remainder of Dell's business, and it is its, as I said, its most profitable from a margin standpoint. It comprises the EMC storage business, as well as the Dell server business, and Dell's networking portfolio. And as a note, we didn't include networking in that cut. Had we done so, Cisco would've dominated the graphic. And frankly, Dell's networking business isn't industry leading in the same way that PCs, servers, and storage are. And as you can see, the data confirms the leadership position Dell has in its client side, its server, and its storage sectors. But the nuance is, look at that red dotted line at 40% on the vertical axis. That represents a highly elevated Net Score, and every company in the sector is below that line. Now, we should mention that we also filtered the data for those companies with more than a hundred mentions in the survey, but the point remains the same. This is a mature business that generally is lower margin. Storage is the exception, but cloud has put pressure on margins even in that business, in addition to the server space. The last point on this graphic is, we put a box around VMware, and it's prominently present on both the x and y dimensions. VMware participates with purely software-defined high-margin offerings in these spaces, and it gives you a sense of what might have been, had Dell chosen to hold onto that asset or spin it into the company. But let's face it, the alternatives for Michael Dell were just too attractive, and it's unlikely that a spin-in would've unlocked the value in the way a spin-out did, at least not in the near future. So let's take a look at the snapshot of Dell's financials, to give you a sense of where the company stands today. Dell is a company with over $100 billion dollars in revenue. Last quarter, it did more than 26 billion in revenue, and grew at a quite amazing 9% rate, for a company that size. But because it's a hardware company, primarily, its margins are low, with operating income 10% of revenue, and at 21% gross margin. With VMware on Dell's income statement before the spin, its gross margins were in the low 30s. Now, Dell only spends about 2% of revenue on R&D, but because it's so big, it's still a lot of money. And you can see it is cash-flow positive. Dell's free cash flow over the trailing 12-month period is 3.7 billion, but that's only 3.5% of trailing 12-month revenue. Dell's APEX, and of course its hardware maintenance business, is recurring revenue, and that is only about 5 billion in revenue, and it's growing at 8% annually. Now, having said that, it's the equivalent of ServiceNow's total revenue. Of course, ServiceNow has 23% operating margin and 16% free cash-flow margin, and more than $5 billion in cash on the balance sheet, and an $85 billion market cap. That's what software will do for you. Now Dell, like most companies, is staring at a challenging macro environment, with FX headwinds, inflation, et cetera. You've heard the story. And hence it's conservative, and contracting revenue guidance. But the balance sheet transformation has been quite amazing, thanks to VMware's cash flow. Michael Dell and his partners from Silver Lake et al., they put up around $4 billion of their own cash to buy EMC for 67 billion, and of course got VMware in the process. Most of that financing was debt that Dell put on its balance sheet to do the transaction, to the tune of $46 billion it added to the balance sheet debt. Now, Dell's debt, the core debt, net of its financing operation, is now down to 16 billion, and it has $7 billion in cash on the balance sheet. So a dramatic delta from just a few years ago. So, pretty good picture. But Dell, a $100 billion company, is still only valued at 28 billion, or around 26 cents on the revenue dollar. HPE's revenue multiple is around 60 cents on the revenue dollar. HP Inc., Dell's laptop and PC competitor, is around 45 cents. IBM's revenue multiple is almost two times. By the way, IBM has more than $50 billion in debt thanks to the Red Hat acquisition. And Cisco has a revenue multiple that's over 3x, about 3.3x currently. So is Dell undervalued? Well, based on these comparisons with its peers, I'd say yes, and no. Dell's performance, relative to its peers in the market, is very strong. It's winning, and has an extremely adept go-to-market machine, but its lack of software content and its margin profile leads one to believe that if it can continue to pull some valuation levers while entering new markets, it can get its valuation well above where it is today. So what are some of those levers, and what might that look like, going forward? Despite the fact that Dell doesn't have a huge software revenue component since spinning out VMware, and it doesn't own a cloud, it plays in virtually every part of the hardware market. And it can provide infrastructure for pretty much any application in any use case, in pretty much any industry, in pretty much any geography in the world. And it can serve those customers. So its size is an advantage. However, the history for hardware-heavy companies that try to get bigger has some notable failures, namely HP, which had to split into two businesses, HP Inc. and HPE, and IBM, which has had an abysmal decade from a performance standpoint, and has had to shrink to grow again, and obviously do a massive $34 billion acquisition of Red Hat. So why will Dell do any better than these two? Well, it has a fantastic supply chain. It's a founder-led company, which makes a cultural difference, in our view. And it's actually comfortable with a low-margin software-light business model. Most certainly, IBM wasn't comfortable with that, and didn't have these characteristics, and HP was kind of just incomprehensible at the end. So Dell in my opinion, has a much better chance of doing well at 100 billion or over, but we'll see how it navigates through the current headwinds as it's guiding down. APEX is essentially Dell's version of the cloud. Now, remember, Dell got started late. HPE is further along from a model standpoint with GreenLake, but Dell has a larger portfolio, so they're going to try to play on that advantage. But at the end of the day, these as-a-Service offerings are simply ways to bring a utility model to existing customers, and generate recurring revenue. And that's a good thing, because customers will be loyal to an incumbent if it can deliver as-a-Service and reduce risk for customers. But the real opportunity lies ahead. Specifically, Dell is embracing the cloud model. It took a while, but they're on board. As Matt Baker, Dell's Senior Vice President of Corporate Strategy, likes to say, it's not a zero-sum game. What he means by that is, just because Dell doesn't own its own cloud, it doesn't mean Dell can't build value on top of hyperscale clouds. What we call supercloud. And that's Dell's strategy, to take advantage of public cloud capex, and connect on-prem to the cloud, create a unified experience across clouds, and out to the edge. That's ambitious, and technically it's nontrivial. But listen to Dell's Vice Chairman and Co-COO, Jeff Clarke, explain this vision. Please play the clip. >> You said also, technology and business models are tied together, and an enabler. >> That's right. >> If you believe that, then you have to believe that it's a business operating system that they want. They want to leverage whatever they can, and at the end of the day, they have to differentiate what they do. >> Well, that's exactly right. If I take that and what Dave was saying, and I summarize it the following way: if we can take these cloud assets and capabilities, combine them in an orchestrated way to deliver a distributed platform, game over. >> Eh, pretty interesting, right? John Furrier called it a "business operating system." Essentially, I think of it sometimes as a cloud operating system, or cloud operating environment, to drive new business value on top of the hyperscale capex. Now, is it really game over, as Jeff Clarke said, if Dell can do that? Uh, (sucks in breath) I'd say if it had that today, it might be game over for the competition, but this vision will take years to play out. And of course, it's got to be funded. And that's going to take time, and in this industry, it tends to move, companies tend to move in lockstep. So, as often is the case, it's going to come down to execution and Dell's ability to enter new markets that are ideally, at least from my perspective, higher margin. Data management, extending data protection into cybersecurity as an adjacency, and of course, edge and telco/5G opportunities. All there for the taking. I mean, look, even if Dell doesn't go after more higher-margin software content, it can thrive with a lower-margin model just by penetrating new markets and throwing off cash from those markets. But by keeping close to customers, and maybe through tuck-in acquisitions, it might be able to find the next nugget beyond today's cloud and on-prem models. And the last thing I'll call out is ecosystem. I say here, "Ecosystem, ecosystem, ecosystem," because a defining characteristic of a cloud player is ecosystem, and if APEX is Dell's cloud, it has the opportunity to expand that ecosystem dramatically. This is one of the company's biggest opportunities and challenges at the same time, in my view. It's just scratching the surface on its partner ecosystem. And its ecosystem today is both reseller heavy and tech partner heavy. And that's not a bad thing, but it's starting to evolve more rapidly. The Snowflake deal is an example of up-the-stack evolution, but I'd like to see much more out of that Snowflake relationship, and more relationships like that. Specifically, I'd like to see more momentum with data and database. And if we live in a data-heavy world, which we do, where the data and the database and data management offerings, you know, coexist and are super important to customers, I'd like to see that inside of APEX. I'd like to see that data play beyond storage, which is really where it is today, in its early days. The point is, with Dell's go-to-market advantage, which company wouldn't treat Dell like the on-prem, hybrid, edge, supercloud player that I want to partner with to drive more business? You'd be crazy not to. But Dell has a lot on its plate, and we'd like to see some serious acceleration on the ecosystem front. In other words, Dell as both a selling partner and a business enabler with its platform, its programmable Infrastructure-as-a-Service. And that is a moving target that will rapidly evolve. And of course, we'll be here watching and reporting. So thanks for watching this preview of Dell Technologies Summit 2022. I'm Dave Vellante, we hope you enjoy the rest of the program. (upbeat music)

(upbeat music) >> The transformation of Dell into Dell EMC and now Dell Technologies has been one of the most remarkable stories in the history of the enterprise technology industry. The company has gone from a Wall Street darling rocket ship PC company, to a middling enterprise player forced to go private, to a debt-laden powerhouse that controlled one of the most valuable assets in enterprise tech i.e VMware. And now is a 100 billion dollar giant with a low margin business, a strong balance sheet, and the broadest hardware portfolio in the industry. Financial magic that Dell went through would make anyone's head spin. The last lever of Dell EMC, of the Dell EMC deal was detailed in Michael Dell's book, "Play Nice But Win." In a captivating chapter called Harry You and the Bolt from the Blue, Michael Dell described how he and his colleagues came up with the final straw of how to finance the deal. If you haven't read it, you should. And, of course, after years of successfully integrating EMC and becoming VMware's number one distribution channel, all of this culminated in the spin out of VMware from Dell in a massive wealth creation milestone. Pending, of course, the Broadcom acquisition of VMware. So where's that leave Dell and what does the future look like for this technology powerhouse? Hello, and welcome to theCUBE's exclusive coverage of Dell Technology Summit 2022. My name is Dave Vellante and I'll be hosting the program. Now, today in conjunction with the Dell Tech Summit, we're going to hear from four of Dell's senior executives Tom Sweet, who's the CFO of Dell Technologies. He's going to share his views on the company's position and opportunities going forward. He's going to answer the question, why is Dell a good long-term investment? Then we'll hear from Jeff Boudreau who's the president of Dell's ISG business. That unit is the largest profit driver of Dell. He's going to talk about the product angle and specifically, how Dell is thinking about solving the multi-cloud challenge. And then Sam Grocott who is the senior vice president of marketing will come on the program and give us the update on Apex, which is Dell's as-a-service offering, and then the new edge platform called Project Frontier. Now, it's also Cyber Security Awareness month that we're going to see if Sam has anything to say about that. Then finally, for a company that's nearly 40 years old, Dell actually has some pretty forward-thinking philosophies when it comes to its culture and workforce. And we're going to speak with Jennifer Saavedra who's Dell's chief human resource officer about hybrid work and how Dell is thinking about the future of work. However, before we get into all this, I want to share our independent perspectives on the company and some research that will introduce to frame the program. Now, as you know, we love data here at theCUBE and one of our partners, ETR has what we believe is the best spending intentions data for enterprise tech. So here's a graphic that shows ETR's proprietary net score methodology in the vertical axis. That's a measure of spending velocity. And on the x-axis is overlap of pervasiveness in the data sample. This is a cut for just the server, the storage, and the client sectors within the ETR taxonomy. So you can see Dell CSG products, laptops in particular are dominant on both the X and the Y dimensions. CSG is the client solutions group and accounts for nearly 60% of Dell's revenue and about half of its operating income. And then the arrow signifies that dot that represents Dell's ISG business that we're going to talk to Jeff Boudreau about. That's the infrastructure solutions group. Now, ISG accounts for the bulk of the remainder of Dell's business and it is, as I said, it's most profitable from a margin standpoint. It comprises the EMC storage business as well as the Dell server business and Dell's networking portfolio. And as a note, we didn't include networking in that cut. Had we done so, SISCO would've dominated the graphic. And frankly, Dell's networking business is an industry-leading in the same way that PCs, servers, and storage are. And as you can see, the data confirms the leadership position Dell has in its client side, its server and its storage sectors. But the nuance is look at that red dotted line at 40% on the vertical axis. That represents a highly elevated net score and every company in the sector is below that line. Now, we should mention that we also filtered the data for those companies with more than a 100 mentions in the survey, but the point remains the same. This is a mature business that generally is lower margin. Storage is the exception but cloud has put pressure on margins even in that business in addition to the server space. The last point on this graphic is we put a box around VMware and it's prominently present on both the X and Y dimensions. VMware participates with purely software-defined high margin offerings in these spaces, and it gives you a sense of what might have been had Dell chosen to hold onto that asset or spin it into the company. But let's face it, the alternatives from Michael Dell were just too attractive and it's unlikely that a spin in would've unlocked the value in the way a spin-out did, at least not in the near future. So let's take a look at the snapshot of Dell's financials to give you a sense of where the company stands today. Dell is a company with over a 100 billion dollars in revenue. Last quarter, it did more than 26 billion in revenue and grew at a quite amazing 9% rate for a company that size. But because it's a hardware company primarily, its margins are low with operating income 10% of revenue and at 21% gross margin. With VMware on Dell's income statement, before the spin its gross margins were in the low 30s. Now, Dell only spends about 2% of revenue on R&D because because it's so big, it's still a lot of money. And you can see it is cash flow positive, Dell's free cash flow over the trailing 12-month period is 3.7 billion but that's only 3.5% of trailing 12-month revenue. Dell's Apex and of course it's hardware maintenance business is recurring revenue and that is only about 5 billion in revenue and it's growing at 8% annually. Now having said that, it's the equivalent of Service now's total revenue. Of course, Service now has 23% operating margin and 16% free cash flow margin and more than $5 billion in cash on the balance sheet and an 85 billion dollar market cap. That's what software will do for you. Now, Dell, like most companies, is staring at a challenging macro environment with FX headwinds, inflation, et cetera. You've heard the story, and hence it's conservative and contracting revenue guidance. But the balance sheet transformation has been quite amazing thanks to VMware's cash flow. Michael Dell and his partners from Silver Lake et al, they put up around $4 billion of their own cash to buy EMC for $67 billion and of course got VMware in the process. Most of that financing was debt that Dell put on its balance sheet to do the transaction to the tune of $46 billion it added to the balance sheet debt. Now, Dell's debt, the core debt, net of its financing operation is now down to 16 billion and it has 7 billion in cash in the balance sheet. So dramatic delta from just a few years ago. So pretty good picture. But Dell, a 100 billion company, is still only valued at 28 billion or around 26 cents on the revenue dollar. HPE's revenue multiple is around 60 cents on the revenue dollar. HP Inc, Dell's laptop and PC competitor, is around 45 cents. IBM's revenue multiple is almost two times. By the way, IBM has more than $50 billion in debt thanks to the Red Hat acquisition. And Cisco has a revenue multiple, it's over 3X, about 3.3X currently. So is Dell undervalued? Well, based on these comparisons with its peers, I'd say yes and no. Dell's performance relative to its peers in the market is very strong. It's winning and has an extremely adept go to market machine. But it's lack of software content and it's margin profile leads one to believe that if it can continue to pull some valuation levers while entering new markets, it can get its valuation well above where it is today. So what are some of those levers and what might that look like going forward? Despite the fact that Dell doesn't have a huge software revenue component, since spinning out VMware, and it doesn't own a cloud, it plays in virtually every part of the hardware market. And it can provide infrastructure for pretty much any application, in any use case, in pretty much any industry, in pretty much any geography in the world and it can serve those customers. So its size is an advantage. However, the history for hardware-heavy companies that try to get bigger has some notable failures. Namely HP which had to split into two businesses, HP Inc and HPE, and IBM which has had in abysmal decade from a performance standpoint and has had to shrink to grow again and obviously do a massive $34 billion acquisition of Red Hat. So why will Dell do any better than these two? Well, it has a fantastic supply chain. It's a founder-led company which makes a cultural difference, in our view, and it's actually comfortable with a low margin software light business model. Most certainly, IBM wasn't comfortable with that and didn't have these characteristics and HP was kind of just incomprehensible at the end. So Dell in my opinion is a much better chance of doing well at a 100 billion or over, but we'll see how it navigates through the current headwinds as it's guiding down. Apex is essentially Dell's version of the cloud. Now remember, Dell got started late. HPE is further along from a model standpoint with GreenLake. But Dell has a larger portfolio so they're going to try to play on that advantage. But at the end of the day, these as-a-service offerings are simply ways to bring a utility model to existing customers and generate recurring revenue. And that's a good thing because customers will be loyal to an incumbent if it can deliver as-a-service and reduce risk for customers. But the real opportunity lies ahead, specifically Dell is embracing the cloud model. It took a while, but they're on board. As Matt Baker, Dell's senior vice president of corporate strategy likes to say, it's not a zero sum game. What he means by that is just because Dell doesn't own its own cloud, it doesn't mean Dell can't build value on top of hyperscale clouds, what we call super cloud. And that's Dell's strategy to take advantage of public cloud CapEx and connect on-prem to the cloud, create a unified experience across clouds and out to the edge. That's ambitious and technically it's non-trivial. But listen to Dell's vice chairman and co-COO Jeff Clarke explain this vision. Please play the clip. >> You said also technology and business models are tied together and enabler. If you believe that, then you have to believe that it's a business operating system that they want. They want to leverage whatever they can and at the end of the day, they have to differentiate what they do. >> No, that's exactly right. If I take that and what Dave was saying and I summarize it the following way. If we can take these cloud assets and capabilities, combine them in an orchestrated way to deliver a distributed platform, game over. >> Yeah, pretty interesting, right? John Freer called it a business operating system. Essentially, I think of it sometimes as a cloud operating system or cloud operating environment to drive new business value on top of the hyperscale CapEx. Now, is it really game over as Jeff Clarke said, if Dell can do that? I'd say if it had that today, it might be game over for the competition but this vision will take years to play out, and of course it's got to be funded. And now it's going to take time and in this industry, it tends to move, companies tend to move in lockstep. So as often as the case, it's going to come down to execution and Dell's ability to enter new markets that are ideally, at least from my perspective, higher margin. Data management, extending data protection into cyber security as an adjacency and, of course, edge at Telco slash 5G opportunities. All there for the taking. I mean, look, even if Dell doesn't go after more higher margin software content, it can thrive with a lower margin model just by penetrating new markets and throwing off cash from those markets. But by keeping close to customers and maybe through tuck in acquisitions, it might be able to find the next nugget beyond today's cloud and on-prem models. And the last thing I'll call out is ecosystem. I say here ecosystem, ecosystem, ecosystem. Because a defining characteristic of a cloud player is ecosystem and if Apex is Dell's cloud, it has the opportunity to expand that ecosystem dramatically. This is one of the company's biggest opportunities and challenges at the same time, in my view. It's just scratching the surface on its partner ecosystem. And it's ecosystem today is is both reseller heavy and tech partner heavy. And that's not a bad thing, but it's starting to evolve more rapidly. The snowflake deal is an example of up to stack evolution. But I'd like to see much more out of that Snowflake relationship and more relationships like that. Specifically, I'd like to see more momentum with data and database. And if we live at a data heavy world, which we do, where the data and the database and data management offerings coexist and are super important to customers, I'd like to see that inside of Apex. I'd like to see that data play beyond storage which is really where it is today and it's early days. The point is, with Dell's go to market advantage, which company wouldn't treat Dell like the on-prem, hybrid, edge, super cloud player, that I want to partner with to drive more business? You'd be crazy not to. But Dell has a lot on its plate and we'd like to see some serious acceleration on the ecosystem front. In other words, Dell as both a selling partner and a business enabler with its platform. Its programmable infrastructure as-a-service. And that is a moving target that will rapidly involve. And, of course, we'll be here watching and reporting. So thanks for watching this preview of Dell Technology Summit 2022. I'm Dave Vellante, we hope you enjoy the rest of the program. (upbeat music)

>> From The Cube studios in Palo Alto, in Boston, bringing you data driven insights from the cube and ETR. This is breaking analysis with Dave Vellante. >> Last year, we noted in a breaking analysis that the cloud ecosystem is innovating beyond the idea or notion of multi-cloud. We've said for years that multi-cloud is really not a strategy but rather a symptom of multi-vendor. And we coined this term supercloud to describe an abstraction layer that lives above the hyperscale infrastructure that hides the underlying complexities, the APIs, and the primitives of each of the respective clouds. It interconnects whether it's On-Prem, AWS, Azure, Google, stretching out to the edge and creates a value layer on top of that. So our vision is that supercloud is more than running an individual service in cloud native mode within an individual individual cloud rather it's this new layer that builds on top of the hyperscalers. And does things irrespective of location adds value and we'll get into that in more detail. Now it turns out that we weren't the only ones thinking about this, not surprisingly, the majority of the technology ecosystem has been working towards this vision in various forms, including some examples that actually don't try to hide the underlying primitives. And we'll talk about that, but give a consistent experience across the DevSecOps tool chain. Hello, and welcome to this week's Wikibon, Cube insights powered by ETR. In this breaking analysis, we're going to share some recent examples and direct quotes about supercloud from the many Cube guests that we've had on over the last several weeks and months. And we've been trying to test this concept of supercloud. Is it technically feasible? Is it business rational? Is there business case for it? And we'll also share some recent ETR data to put this into context with some of the players that we think are going after this opportunity and where they are in their supercloud build out. And as you can see I'm not in the studio, everybody's got COVID so the studios shut down temporarily but breaking analysis continues. So here we go. Now, first thing is we uncovered an article from earlier this year by Lori MacVittie, is entitled, Supercloud: The 22 Answer to Multi-Cloud Challenges. What a great title. Of course we love it. Now, what really interested us here is not just the title, but the notion that it really doesn't matter what it's called, who cares? Supercloud, distributed cloud, someone even called it Metacloud recently, and we'll get into that. But Lori is a technologist. She's a developer by background. She works at F-Five and she's partial to the supercloud definition that was put forth by Cornell. You can see it here. That's a cloud architecture that enables application migration as a service across different availability zones or cloud providers, et cetera. And that the supercloud provides interfaces to allocate, migrate and terminate resources... And can span all major public cloud providers as well as private clouds. Now, of course, we would take that as well to the edge. So sure. That sounds about right and provides further confirmation that something new is really happening out there. And that was our initial premise when we put this fourth last year. Now we want to dig deeper and hear from the many Cube guests that we've interviewed recently probing about this topic. We're going to start with Chuck Whitten. He's Dell's new Co-COO and most likely part of the Dell succession plan, many years down the road hopefully. He coined the phrase multi-cloud by default versus multi-cloud by design. And he provides a really good business perspective. He's not a deep technologist. We're going to hear from Chuck a couple of times today including one where John Furrier asks him about leveraging hyperscale CapEx. That's an important concept that's fundamental to supercloud. Now, Ashesh Badani heads products at Red Hat and he talks about what he calls Metacloud. Again, it doesn't matter to us what you call it but it's the ecosystem gathering and innovating and we're going to get his perspective. Now we have a couple of clips from Danny Allan. He is the CTO of Veeam. He's a deep technologist and super into the weeds, which we love. And he talks about how Veeam abstracts the cloud layer. Again, a concept that's fundamental to supercloud and he describes what a supercloud is to him. And we also bring with Danny the edge discussion to the conversation. Now the bottom line from Danny is we want to know is supercloud technically feasible? And is it a thing? And then we have Jeff Clarke. Jeff Clark is the Co-COO and Vice Chairman of Dell super experienced individual. He lays out his vision of supercloud and what John Furrier calls a business operating system. You're going to hear from John a couple times. And he, Jeff Clark has a dropped the mic moment, where he says, if we can do this X, we'll describe what X is, it's game over. Okay. So of course we wanted to then go to HPE, one of Dell's biggest competitors and Patrick Osborne is the vice president of the storage business unit at Hewlett Packet Enterprise. And so given Jeff Clarke's game over strategy, we want to understand how HPE sees supercloud. And the bottom line, according to Patrick Osborne is that it's real. So you'll hear from him. And now Raghu Raghuram is the CEO of VMware. He threw a curve ball at this supercloud concept. And he flat out says, no, we don't want to hide the underlying primitives. We want to give developers access to those. We want to create a consistent developer experience in that DevsSecOps tool chain and Kubernetes runtime environments, and connect all the elements in the application development stack. So that's a really interesting perspective that Raghu brings. And then we end on Itzik Reich. Itzik is a technologist and a technical team leader who's worked as a go between customers and product developers for a number of years. And we asked Itzik, is supercloud technically feasible and will it be a reality? So let's hear from these experts and you can decide for yourselves how real supercloud is today and where it is, run the sizzle >> Operative phrase is multi-cloud by default that's kind of the buzz from your keynote. What do you mean by that? >> Well, look, customers have woken up with multiple clouds, multiple public clouds, On-Premise clouds increasingly as the edge becomes much more a reality for customers clouds at the edge. And so that's what we mean by multi-cloud by default. It's not yet been designed strategically. I think our argument yesterday was, it can be and it should be. It is a very logical place for architecture to land because ultimately customers want the innovation across all of the hyperscale public clouds. They will see workloads and use cases where they want to maintain an On-Premise cloud, On-Premise clouds are not going away, I mentioned edge clouds, so it should be strategic. It's just not today. It doesn't work particularly well today. So when we say multi-cloud by default we mean that's the state of the world today. Our goal is to bring multi-cloud by design as you heard. >> Really great question, actually, since you and I talked, Dave, I've been spending some time noodling just over that. And you're right. There's probably some terminology, something that will get developed either by us or in collaboration with the industry. Where we sort of almost have the next almost like a Metacloud that we're working our way towards. >> So we manage both the snapshots and we convert it into the Veeam portable data format. And here's where the supercloud comes into play. Because if I can convert it into the Veeam portable data format, I can move that OS anywhere. I can move it from physical to virtual, to cloud, to another cloud, back to virtual, I can put it back on physical if I want to. It actually abstracts the cloud layer. There are things that we do when we go between cloud some use BIOS, some use UEFI, but we have the data in backup format, not snapshot format, that's theirs, but we have it in backup format that we can move around and abstract workloads across all of the infrastructure. >> And your catalog is control in control of that. Is that right? Am I thinking about that the right way? >> Yeah it is, 100%. And you know what's interesting about our catalog, Dave, the catalog is inside the backup. Yes. So here's, what's interesting about the edge, two things, on the edge you don't want to have any state, if you can help it. And so containers help with that You can have stateless environments, some persistent data storage But we not not only provide the portability in operating systems, we also do this for containers. And that's true. If you go to the cloud and you're using say EKS with relational database services RDS for the persistent data later, we can pick that up and move it to GKE or move it to OpenShift On-Premises. And so that's why I call this the supercloud, we have all of this data. Actually, I think you termed the term supercloud. >> Yeah. But thank you for... I mean, I'm looking for a confirmation from a technologist that it's technically feasible. >> It is technically feasible and you can do it today. >> You said also technology and business models are tied together and enabler. If you believe that then you have to believe that it's a business operating system that they want. They want to leverage whatever they can. And at the end of the day, they have to differentiate what they do. >> Well, that's exactly right. If I take that in what Dave was saying and I summarize it the following way, if we can take these cloud assets and capabilities, combine them in an orchestrated way to deliver a distributed platform, game over. >> We have a number of platforms that are providing whether it's compute or networking or storage, running those workloads that they plum up into the cloud they have an operational experience in the cloud and they now they have data services that are running in the cloud for us in GreenLake. So it's a reality, we have a number of platforms that support that. We're going to have a a set of big announcements coming up at HPE Discover. So we led with Electra and we have a block service. We have VM backup as a service and DR on top of that. So that's something that we're providing today. GreenLake has over, I think it's actually over 60 services right now that we're providing in the GreenLake platform itself. Everything from security, single sign on, customer IDs, everything. So it's real. We have the proofpoint for it. >> Yeah. So I want to clarify something that you said because this tends to be very commonly confused by customers. I use the word abstraction. And usually when people think of abstraction, they think it hides capabilities of the cloud providers. That's not what we are trying to do. In fact, that's the last thing we are trying to do. What we are trying to do is to provide a consistent developer experience regardless of where you want to build your application. So that you can use the cloud provider services if that's what you want to use. But the DevSecOp tool chain, the runtime environment which turns out to be Kubernetes and how you control the Kubernetes environment, how do you manage and secure and connect all of these things. Those are the places where we are adding the value. And so really the VMware value proposition is you can build on the cloud of your choice but providing these consistent elements, number one, you can make better use of us, your scarce developer or operator resources and expertise. And number two, you can move faster. And number three, you can just spend less as a result of this. So that's really what we are trying to do. We are not... So I just wanted to clarify the word abstraction. In terms of where are we? We are still, I would say, in the early stages. So if you look at what customers are trying to do, they're trying to build these greenfield applications. And there is an entire ecosystem emerging around Kubernetes. There is still, Kubernetes is not a developer platform. The developer experience on top of Kubernetes is highly inconsistent. And so those are some of the areas where we are introducing new innovations with our Tanzu Application Platform. And then if you take enterprise applications, what does it take to have enterprise applications running all the time be entirely secure, et cetera. >> Well, look, the multi-cloud by default today are isolated clouds. They don't work together. Your data is siloed. It's locked up and it is expensive to move and make sense of it. So I think the word you and I were batting around before, this is an interconnected tissue. That's what the world needs. They need the clouds to work together as a single platform. That's the problem that we're trying to solve. And you saw it in some of our announcements here that we're starting to make steps on that journey to make multi-cloud work together much simpler. >> It's interesting, you mentioned the hyperscalers and all that CapEx investments. Why wouldn't you want to take advantage of a cloud and build on the CapEx and then ultimately have the solutions machine learning as one area. You see some specialization with the clouds. But you start to see the rise of superclouds, Dave calls them, and that's where you can innovate on a cloud then go to the multiple clouds. Snowflakes is one, we see a lot of examples of supercloud... >> Project Alpine was another one. I mean, it's early, but it's its clearly where you're going. The technology is just starting to come around. I mean it's real. >> Yeah. I mean, why wouldn't you want to take advantage of all of the cloud innovation out there? >> Is that something that's, that supercloud idea is a reality from a technologist perspective. >> I think it is. So for example Katie Gordon, which I believe you've interviewed earlier this week, was demonstrating the Kubernetes data mobility aspect which is another project. That's exactly part of the it's rationale, the rationale of customers being able to move some of their Kubernetes workloads to the cloud and back and between different clouds. Why are we doing? Because customers wants to have the ability to move between different cloud providers, using a common API that will be able to orchestrate all of those things with a self-service that may be offered via the APEX console itself. So it's all around enabling developers and meeting them where they are today and also meeting them into tomorrow's world where they actually may have changed their mind to do those things. So yes we are walking on all of those different aspects. >> Okay. Let's take a quick look at some of the ETR data. This is an X-Y graph. You've seen it a number of times on breaking analysis, it plots the net score or spending momentum on the Y-axis and overlap or pervasiveness in the ETR dataset on the X-axis, used to be called market share. I think that term was off putting to some people, but anyway it's an indicator of presence in the dataset. Now that red dotted line that's rarefied air where anything above that line is considered highly elevated. Now you can see we've plotted Azure and AWS in the upper right. GCP is in there and Kubernetes. We've done that as reference points. They're not necessarily building supercloud platforms. We'll see if they ever want to do so. And Kubernetes of course not a company, but we put 'em in there for context. And we've cherry picked a few players that we believe are building out or are important for supercloud build out. Let's start with Snowflake. We've talked a lot about this company. You can see they're highly elevated on the vertical axis. We see the data cloud as a supercloud in the making. You've got pure storage in there. They made the public, the early part of its supercloud journey at Accelerate 2019 when it unveiled a hybrid block storage service inside of AWS, it connects its On-Prem to AWS and creates that singular experience for pure customers. We see Hashi, HashiCorp as an enabling infrastructure, as code. So they're enabling infrastructure as code across different clouds and different locations. You see Nutanix. They're embarking on their multi-cloud strategy but it's doing so in a way that we think is supercloud, like now. Now Veeam, we were just at VeeamON. And this company has tied Dell for the number one revenue player in data protection. That's according to IDC. And we don't think it won't be long before it holds that position alone at the top as it's growing faster than in Dell in the space. We'll see, Dell is kind of waking up a little bit and putting more resource on that. But Veeam, they're a pure play vendor in data protection. And you heard their CTO, Danny Allan's view on Supercloud, they're doing it today. And we heard extensive comments as well from Dell that's clearly where they're headed, project Alpine was an early example from Dell technologies world of Supercloud in our view. And HPE with GreenLake. Finally beginning to talk about that cross cloud experience. I think it in initially HPE has been more focused on the private cloud, we'll continue to probe. We'll be at HPE discover later on the spring, actually end of June. And we'll continue to probe to see what HPE is doing specifically with GreenLake. Now, finally, Cisco, we put them on the chart. We don't have direct quotes from recent shows and events but this data really shows you the size of Cisco's footprint within the ETR data set that's on the X-axis. Now the cut of this ETR data includes all sectors across the ETR taxonomy which is not something that we commonly show but you can see the magnitude of Cisco's presence. It's impressive. Now, they had better, Cisco that is, had better be building out a supercloud in our view or they're going to be left behind. And I'm quite certain that they're actually going to do so. So we have a lot of evidence that we're putting forth here and seeing in the marketplace what we said last year, the ecosystem is take taking shape, supercloud is forming and becoming a thing. And really in our view, is the future of cloud. But there are always risks to these predictive scenarios and we want to acknowledge those. So first, look, we could end up with a bunch of bespoke superclouds. Now one supercloud is better than three separate cloud native services that do fundamentally the same thing from the same vendor. One for AWS, one for GCP and one for Azure. So maybe that's not all that bad. But to point number two, we hope there evolves a set of open standards for self-service infrastructure, federated governance, and data sharing that will evolve as a horizontal layer versus a set of proprietary vendor specific tools. Now, maybe a company like Veeam will provide that as a data management layer or some of Veeam's competitors or maybe it'll emerge again as open source. As well, and this next point, we see the potential for edge disruptions, changing the economics of the data center. Edge in fact could evolve on its own, independent of the cloud. In fact, David Floria sees the edge somewhat differently from Danny Allan. Floria says he sees a requirement for distributed stateful environments that are ephemeral where recovery is built in. And I said, David, stateful? Ephemeral? Stateful ephemeral? Isn't that an oxymoron? And he responded that, look, if it's not ephemeral the costs are going to be prohibitive. He said the biggest mistake the companies could make is thinking that the edge is simply an extension of their current cloud strategies. We're seeing that a lot. Dell largely talks about the edge as retail. Now, and Telco is a little bit different, but back to Floria's comments, he feels companies have to completely reimagine an integrated file and recovery system which is much more data efficient. And he believes that the technology will evolve with massive volumes and eventually seep into enterprise cloud and distributed data centers with better economics. In other words, as David Michelle recently wrote, we're about 15 years into the most recent cloud cycle and history shows that every 15 years or so, something new comes along that is a blind spot and highly disruptive to existing leaders. So number four here is really important. Remember, in 2007 before AWS introduced the modern cloud, IBM outpost, sorry, IBM outspent Amazon and Google and RND and CapEx and was really comparable to Microsoft. But instead of inventing cloud, IBM spent hundreds of billions of dollars on stock buybacks and dividends. And so our view is that innovation rewards leaders. And while it's not without risks, it's what powers the technology industry it always has and likely always will. So we'll be watching that very closely, how companies choose to spend their free cash flow. Okay. That's it for now. Thanks for watching this episode of The Cube Insights, powered by ETR. Thanks to Stephanie Chan who does some of the background research? Alex Morrison is on production and is going to compile all this stuff. Thank you, Alex. We're all remote this week. Kristen Nicole and Cheryl Knight do Cube distribution and social distribution and get the word out, so thank you. Robert Hof is our editor in chief. Don't forget the checkout etr.ai for all the survey action. Remember I publish each week on wikibon.com and siliconangle.com and you can check out all the breaking analysis podcasts. All you can do is search breaking analysis podcast so you can pop in the headphones and listen while you're on a walk. You can email me at david.vellante@siliconangle.com. If you want to get in touch or DM me at DVellante, you can always hit me up into a comment on our LinkedIn posts. This is Dave Vellante. Thank you for watching this episode of break analysis, stay safe, be well and we'll see you next time. (upbeat music)

>>The cube presents, Dell technologies world brought to you by Dell. >>Welcome back to Las Vegas. We're here in the Venetian convention center. My name is Dave Alan. I'm here with my co-host John fur. You're watching the Cube's live coverage of Dell tech world 2022. Great crowd. I would say 7,000, maybe even 8,000 people. When you add in all the peripheral attendees, Jeff Clark is here. He's the vice chairman and co-chief operating officer of Dell technologies. Great to see you face to face, man. >>Hey guys. Good to see you again. Awesome. >>So really enjoyed your keynote this morning. You were pumped up, uh, I thought the, the presentations and the demos were crisp. So congratulations. Thank you. How you feeling? >>Doing a great job? How am I feeling? Uh, well, one relieved. If you know me well enough, I'm an engineer by heart. So trade the anxiety to do that is, uh, and build up is quite draining, but having it done, I feel pretty good now, but I feel good about what we discussed. Uh, it was a fun day to be able to talk to real customers and partners face to face like we're doing here and showcasing what we've been doing. I must admit that was a little bit of fun. Yeah. >>Well, we're chilling on the cube. Uh, we're laid back as you know. Um, what was your favorite moment? Cause you got a lot of highlights. The snowflake deal. We love been talking about it all, all show. Um, the, the, I IP of Dell with software define was pretty cool. Lot of great stuff. What's what >>Some cool laptop stuff too. That was interesting. You know, I don't have to. Where's the, where's the share button. >>We have a discord server now and all 18,000 people want to know. >>You're asking me to pick a monks, my should, which I like the most. >>How big is your monitor on your desk? >>Uh, I have a 49 on one side and a 42 on the other side. That's what both you guys need >><laugh> productivity, da >><laugh> well, in the world of zoom, it was incre incredibly productive to have that surface area in front of you. So, which of my announcements was my favorite, I think from a raw technology point of view, showcasing Dell, thinking about what we've done in a very differentiated way. It's hard not to say the power flex >>Engagement. Oh, look at that. Look, I wrote just, just wrote down power flex. Yep. Right. >><laugh> okay. Think about it. Softer defined. We, the leader and softer defined, uh, infrastructure that can be, think of it as independently, independent ability to scale compute from storage so we can linear scale and those no bounds, unlimited IO performance. The ability to put file block support, hyper hypervisors and bare metal all on a single platform. And then we made a, a bunch of other improvements around it. It's truly an area where we a leader we're differentiated in our core IP matters >>And that's Dell IP, Dell technology top >>The bottom. >>Okay, cool. >>So from a pure technical point of view, it's probably my favorite. What's not liked about PowerMax, the most mission critical, the most secure high end storage system in the world. And we made it better. We made it more secure. We put an isolated vault in it. We added some, uh, multifactor authentication. We improved the architecture for twice the performance, 50% better response time, blah, blah, blah, blah, blah. Yes, pretty cool. <laugh> and then you gotta put a notebook in front of everybody where you think about in this modern workplace. And what we've learned is hybrid users. What software that we've embedded into that latitude 93 30 was pretty interesting. I thought. And then if I pull day one into the conversation, sort of the direction of where we're going of, multi-cloud the role of multi-cloud and our ability to be sort at the center of our customers multi-cloud world. I loved how Chuck described moving from multi-cloud by default to multi cloud, by design, and then the subsequent architecture that we put behind it. And then probably cherry on the old cake was the snowflake announcement that got a lot of people excited about bringing a really differentiated view of cloud based analytics down on our object storage. I know that was more than one, but I can't help. >>I like the cherry on top >>You've um, said a number of times, I think the 85% of your engineers are software engineers. You talked about, is that the right number, roughly? Yes, sir. And, and so, uh, you talked also about 500 new features today and, and every time you're talking about those features, I inferred anyway, it was part of the OS. A lot of it anyway, a lot of software does hardware still matter? And if so, why? >>Of course hardware still >>Matter. Explain why. >>Well, last time I checked doesn't the software stuff work on the hardware. Exactly. Doesn't the software things make hardware calls to exploit the capability we built into the software. Of course it does says it absolutely does matter, but I think what we're trying to describe or to get across today is we're moving up the stack, we're adding more value. Basically our customers are dragging us into a broader set of problems and software is increasingly the answer to that running on the best hardware, the best infrastructure, being able to build the right software abstraction to hook into either data frameworks, like a snowflake, being able to present our storage assets of software in the pub book cloud, ultimately the ability to pull them and think of it as a pool of storage for developers to make developers lives easier. Yeah. That's where we're going >>And, and is accurate in your view, you're going up to stack more software content and there's value. That's also flowing into Silicon, whether it's accelerators or Nicks and things like that, is that a right way to think about what's happening in hardware and software. We, >>You and I have had a number of conversations, David, the evolution of the architecture, where we're going from a general purpose CPU based thing to now specialty processors, whether that be a smart Nick purpose, built accelerators. If we leaped all the way out to quantum, really purpose built accelerators for a specific algorithm, there's certainly specialization going on. And as that happens, more software and software defined is necessary to knit together. And we have to be the person that does that. Mm-hmm <affirmative> yeah. >>Talk about how the software defined piece makes the innovation happen on the hardware. Is it, is it the relationship that it's decoupled or you guys are just building design Silicon to make the software better? Cuz that interplay is a design, uh, is designed in, right? >>Uh, I, I think it's a little bit of both clearly being able to exploit the underlying hardware features and capabilities in your software in a differentiated way is important. Something we've excelled at for many, many years, but then the ability to abstract. If you think about some of the things that we talk about as a data fabric or a data plane and a data plane working across different architectures, that's an abstracted piece of software that ultimately leads to a very different and that's where we're driving towards >>What's different now. And what's similar now from the past, I was just on a, a panel. I talking about space, Cal poly and California space symposium and this hardware and space and it's, software's driving everything you can't do break, fix and space. It's talk about the edge. You can't talk about. You can't do break hard to do break, fix and space. So you gotta rely on software in the supply chain. Big part of the design as software becomes more prevalent with open source and et cetera, that innovation equation is designed in. What's your, what's your thoughts on that? >>Help me understand John, what more of this specific of what you're looking for, where do you want to dive into >>The, as Silicon becomes more of a more efficient, what does that do for the software in things like edge, for instance, as the boxes move out and the, the devices move to the home, they gotta be faster, more intelligent, more secure. Uh, Michael says it's a, it's a compute tower now 5g for instance. >>Yeah. Uh, maybe another way to look at it. We've been in the industry a little while for the longest time hardware capabilities were always ahead of software. We built great hardware. We let software catch up. What's changed certainly in this time. And as we look going forward is the software capabilities are now ahead of those very hardware capabilities in bringing it. And to me, that's a, it's a very fundamental change. Certainly in my 35 years of doing this, that's very different. And if you believe that continues, which I do, particularly as we face increasingly more difficult challenges to continue with Moore's law, how do we continue to build out the transistor density? We've all benefited from for four, five decades now, softer innovation is going to lead, which is what we tried to hint at today. And I think that's the future. That's where you're gonna see us continue to drive and think about how we talk about, uh, technology today. I know Dave and I had this conversation not too long ago, whether it's infrastructure is code, who would've thought of that idea a decade ago. <laugh> uh, if we think about, uh, data as code we were talking about before we got on air, what data on code data's little bits, one's in zero stored in Silicon, you store >>It, <laugh> you move it >>Around now. So it, it opens the door or the door to, I think innovation done differently and perhaps even done it more scale as if we abstract it correctly. >>Yeah. And might led a good point on when he was on about all the good benefits that come from that in the customer and in society. And I guess the next question with the customer side, it take your, if the, if the flip, if the script is flipping, which I believe that it is, I agree with you. How does the customers deal with the innovation strategy? Because now they wanna take advantage of the new innovation, but what problems and opportunities are they facing? That's different now than say a decade ago, if you're in it or you're trying to create a great group within your CISO organization. I mean, there are problems now that we didn't see before. What do you, how do you see that? >>Well, I, I, I think the, the biggest change would be again, if you look and reflect on our careers, it was sort of in the business, it played a role. It was often put off to the corner, just make the place sort of work. And today, and I think the pandemic has the pandemic and global health crisis accelerated this technology is now part of people's business and you can't compete without technology. And in fact, we saw it during the early days of the pandemic, those CU customers that were further along on their digital transformation, generally weathered the storm in their sector better than those who were behind. >>Yeah, >>Absolutely. What does that tell us technology was an enabler. Technology helped them, whether the storm prepared them, made them more competitive. So now I think I don't meet many CIO and CEOs who don't have the conversation about their business model and technology being symbiotic, that they're integrated, that they can't do one without the other. That's a very different mindset than when we grew up in this industry where this stuff was. So now you take that as a basis. We got data everywhere. Most of the data's gonna come out of the data, not in the data center's gonna be created outside of the data center. The attack surface has grown disproportionately >>People, people sharing data, too, their data with other data, very much so generating >>Data in places. Sometimes they don't know where it is and hope to get it back. So the role to be able to protect that estate, if you will, to be able to protect the information, which increasingly data is companies fuel, but makes 'em go, how do you protect it? How do you ultimately analyze it? How do you provide them the insights to ultimately run and drive their business? That's the opportunity. >>So we are in the same wavelength with Powerflex and, and I'm a little concerned about confirmation bias, but, but I, I wanna say this, I really like the way your Dell's language and yours specifically has evolved. You talk about abstraction layers, hiding that underlying complexity, building value on top of the hyperscalers on prem connecting sore, we call it super cloud. You guys call it multi-cloud. We saw two examples of that today, project Alpine and the snowflake is early examples. Uh, I'm trying to gauge how real this is. We think it's real. Uh, we talked to customers who clearly say, this is what they want. Um, I wonder if you could add a little detail to that, some color on your thoughts on, on how real this is, how it will evolve over time. >>Well, from our, from our seat and the way that I, that, that I see it in driving our underlying product development, roadmaps, people want to drag into conversation about public and private and this, and what have you. And, and that's not how customers work today. Uh, customers really have got to this point where they want to use the best capabilities regardless of where they lie. And if that's keeping mission critical data on premise taking advantage of analytic tools in the cloud, doing some test dev in the public cloud, moving out to edge, they want to be able to do that reasonably quickly and not. We were talking about this before we got on the air in an easy fashion. It can't be complex. Yeah. So how do you actually knit this together in a way that is not complex and enables customers? That's what I think customers want. So you think about our multi-cloud vision. It's about building an ecosystem across all of the public clouds, which we've made announcement and announcement to do that. Well, >>You said earlier default versus by design, which referencing to the multi-cloud. But I think the design is the key word here. The design is a system architecture you're talking about. You said also technology and business models are tied together and enable or that's. If you believe that, then you have to believe that it's a business operating system that they want, they wanna leverage whatever they can. And at the end of the day, they have to differentiate what they do >>Well, that that's exactly right. If I take that in what, what Dave was saying. And, and, and I summarize it the following way. If we can take these cloud assets in Cape capabilities, combine them in an orchestrated way to delivery, distributed platform, game over, >>Tell us we gotta wrap, which bummed me out because I, we had so much, we haven't covered. We haven't talked about 5g. We really haven't hit on apex. Uh, what else is exciting? You something, you know, let's let's in the last minute or so, let's do a wrap. >>We just, >>I know we just got started. We had >>A schedule, >>Two guys, the boss, this >>Is great. We wanna go the next, >>Not when it comes to the schedule, just laid >>Out the, just laid out the checkmate move right there. You know, um, >>Look, what I get excited about, uh, >>Edge to me is a domain that we're gonna see in this part of our careers have the same level of innovation and discovery that we just saw in the early part of our careers and probably times 10 or times a hundred. And I, and I think about the world we live in and matching up what's happening in this digitization of our world and everything, having a sensor in it, collecting data everywhere on everything, and then being able to synthesize it in a way that we can derive reasonable insight from to be able to make real time decisions from whether that be in healthcare, a smart city, a factory of the transportation area, our own website of how the traffic comes in and how we present our offers more effectively to what you want, which are different than what Dave wants. The possibilities are unlimited and, or on the half of the first ending, if you like baseball, analogies, absolutely. And a long way to go and a tremendous amount of innovation that'll happen here. I get excited about that place. Now. It's not gonna happen overnight every once say, oh, we're smoking edge. Wasn't at IOT, stop putting a timeframe on it. Yeah. Know, the foundation is built to be able to develop, evolve and innovate from here. Like I've never seen. >>And the playbook to get back to your game overcome is whoever can simplify the comp and reduce the complexity and make things simpler and easier. That's, I mean, that's kind of the formula for success basically. I mean, it sounds kind of easy, right? Like >>Spot on, >>Just do it, but what, but that's hard. >>Remember it's hard and being able to build data centers and, and millions of places. So for example, what we'll leave in a little 5g, you think about all of the public cloud data centers today. I think there's roughly 600 locations. You've got 7 million cell towers. Yeah. 7 million cell towers gonna >>Be like how reach right there. >>Data center at the edge of the network. Yeah. As we just aggregate the telecom infrastructure. Sure. From a monolithic big black box into a disaggregated standards based architecture with virtualization and containerization in it. >>I mean, outta compute, I love the whole Metro operating model there, like having that data center at that edge, all that wire wireless coming in. >>I >>Agree. Pretty impressive. Powering the Teslas and all the cars out there sending telematics to, uh, people's phones. And >>Let's wait to next wearables >>Here >>To, I was gonna say next Dell technology world choose to have some fun. <laugh> >>Jeff Clark. Thanks so much for coming to the cube. You're awesome guest and, uh, congratulations on all the success and really appreciate your time. Yeah. Thanks for >>Having me. Thanks for kind words. >>All right. Thank you for watching. This is Dave for John furrier, Dell tech world 2022 live. We'll be right back. You're watching the cube. >>That was great. Mean you great riff.

>> Announcer: TheCUBE presents Dell Technologies World brought to you by Dell. >> Welcome back to theCUBE's coverage, day one, Dell Technologies World live from Las Vegas at the Venetian. Lisa Martin here with Dave Vellante and John Furrier. Guys let's talk, first of all, first time back in person since Dell Tech World 2019. Lots going on, lots of news today. I'm going to start with you, Dave, since you're closest to me. What are some of the things that have impressed you at this first in-person event in three years? >> Well, the first thing I want to say is, so John and I, we started theCUBE in 2010, John, right? In Boston, EMC World. Now of course, Dell owns EMC, so wow. It's good to be back here. Dell's built this beautiful set. I'd say the number one thing that's surprised me was how many people were here. Airport was packed, cab lines, the line at the Palazzo, the hotel, to get in was, you know, probably an hour long. And there's, I thought there'd be maybe 5,000 people here. I would say it's closer to eight. So the hall was packed today and everybody was pumped. Michael Dell was so happy to be up on stage. He talked, I dunno if you guys saw his keynote. He basically talked, obviously how great it is to be back, but he talked about their mission, building technologies that enable that better human condition. There was a big, you know, chewy words, right? And then they got into, you know, all the cool stuff they're doing so we can get into it. But they had CVS up on stage, they had USAA on stage. A big theme was trust. Which of course, if you're Dell, you know, you want people to trust you. I guess the other thing is this is the first live event they've had since the VMware spin. >> Right. >> So in 2019 they owned VMware. VMware's no longer a part of the income statement. Dell had a ton of debt back then. Now Dell's balance sheet looks actually better than VMware's because they restructured everything. And so it's a world without VMware where now with VMware their gross margins were in the 30-plus percent range. Now they're down to 20%. So we're now asking what's next for Dell? And they stood up on stage, we can talk about it some more, but a lot of multi-cloud, a lot of cyber resilience, obviously big themes around APEX, you know, hybrid work, John. So, well let's get into that. >> What are some of the key things that you heard today? >> Well, first of all, the customers on stage are always great. Dell's Technologies, 10 years for theCUBE and their history. I saw something back here, 25 years with celebrating precision, the history of Michael Dell's journey and the current Dell Technologies with EMC folded in and a little bit of VMware DNA still in there even though they're separated out. Just has a loyal set of customers. And you roam the hallways here, you see a lot of people know Dell, love Dell. Michael Dell himself was proud to talk before the event about he's number one, Dave, in PC market share. That's been his goal to beat HP for years. (laughing) And so he's got that done. But they're transforming their business cause they have to, the data center is now cloud. Cloud is now the distributed computing. Dell has all the piece parts today. We've covered this three years ago. Now it's turned into multi-cloud, which is multi-vendor, as a service is how the consumers consume, innovate with data, that's kind of the raw material. Future of work, and obviously the partners that they have. So I think Dell is going to continue to maintain the news of being the great in the front lines as a data-center-slash-enterprise, now cloud, Edge player. So, you know, I'm impressed with their constant reinvention of the company and the news hits all the cards: Snowflake partnership, cutting edge company in the cloud, partnership with Snowflake, APEX, their product that's innovating at the Edge, this new kind of product that's going to bring it together. Unifying, all those themes, Dave, are all hitting the marks. >> Chuck Whitten up on stage, obviously he was the multicloud, you know, conversation. And I think the vision that they they're laying out and Jeff Clarke talked about it as well, is a term that John and I coined. We can't remember who coined it, John or me, "supercloud." >> Yeah. (laughing) >> And they're talking about building an abstraction layer, building on top of the clouds, connecting on-prem to the clouds, across clouds, out to the Edge, hiding the underlying complexity, Dell managing all that. That's their vision. It's aspirational today but that really is supercloud. And it's more than multi-cloud. >> You coined the term supercloud. >> Did I? >> We riffed together. I called it sub-cloud. >> Oh, that's right. And then I said, no, it's got to float over. Super! Superman flies. (John laughs) Right, that's right. >> Sub-cloud, not really a good name. Nobody wants to be sub of anything. >> I think my kid gave it to me, John, actually. (laughing) >> Well if we do know that Michael Dell watches theCUBE, he's been on theCUBE many times. He watches theCUBE, clearly he's paying attention! >> Yeah, well I hope so. I mean, we write a lot about this and we talk to a lot of customers and talk to a lot of people. But let's talk about the announcements if we can. So... The APEX cyber recovery service, you know, ransomware recovery. They're now also running that on AWS and Azure. So that's big. We heard Presidio, they was super thrilled about that. So they're... The thing I'd say about that is, you know, Dell used to be really defensive about cloud. Now I think they're leaning in. They're saying, "Hey we're not going to spend, you know, Charles Fitzgerald, the snarky guy, does some good work on CAPEX. I mean, you look at how much the cloud guys are spending on CAPEX a year, $30, $40 billion. >> They can't compete. >> On cloud CAPEX. Dell doesn't want compete. >> John: You can't compete. >> Build on top of that, so that's a gift. So that's cool. You mentioned the Snowflake announcement. I thought that was big. What that is... It's very interesting, so Frank Slootman has always said, "We're not doing a half-way house, we're in the cloud." Okay, so square that circle for me. Now Snowflake's coming on-prem. Well, yeah, what they're doing is allowing customers to keep data in a Dell object store, ECS or other object stores. But use Snowflake. So non-native Snowflake data on-prem. So that expands Snowflake cloud. What it also does is give Dell a little sizzle, a little better partner and there's a path to cloud migration if that's where the customers want to go. >> Well, I mean, I would say that that's a dangerous game because we've seen that movie before, VMware and AWS. >> Yeah but that we've talked about this. Don't you think that was the right move for VMware? >> At the time, but if you don't nurture the relationship AWS will take all those customers, ultimately, from VMware. >> But that product's still doing very well. We'll see with NetApp is another one. NetApp on AWS. I forget what they call it, but yeah, file and AWS. So that was, go ahead. >> I was just going to say, what's the impact of Snowflake? Why do you think Snowflake chose Dell? >> Because Dell's a $101 billion company and they have a huge distribution channel and a lot of common customers. >> They own storage on the premise. >> Yep. And so Snowflake's looking for, you know, storage options on which they can, you know, bring data into their cloud. Snowflake wants the data to go from on-prem into the cloud. There's no question about that. >> And I would add another thing, is that Snowflake can't do what Dell Technologies does on-premises with storage and Dell can't do what Snowflake's doing. So I think it's a mutual short-term and medium-term benefit to say, "Hey you want to run on Snowflake? You need some services there? Great, but come back and use Dell." So that to me, I think that's a win-win for Snowflake. Just the dangerous game is, whoever can develop the higher-level services in the cloud will ultimately be the winner. >> But I think the thing I would say there is, as I said, Snowflake would love for the migration to occur, but they realize it's not always going to happen. And so why not partner with a company like Dell, you know, start that pipeline. And for Dell, hey, you know, why fight fashion, as Jeremy Burton would say. The other thing was Project Alpine, which is file, block and object across cloud. That's again setting up this supercloud. And then APEX. I mean, APEX is the discussion. We had a one-on-one session, a bunch of analysts with Jeff Woodrow who runs ISG. We were supposed to be talking about ISG, all we talked about is APEX. Then we had another session with APEX and all we talked about, of course, is APEX. So, they're still figuring that out, I would say, at this point. They don't quite have product market fit and I think they'd admit that, but they're working hard on scaling engineering, trying to figure out the channel model, the compensation. You know, taking their time even, but moving fast if you know what I mean. >> I mean, Dave, I think the big trend that's jumping out of me here is that, something that we've been covering, the headless cloud, meaning if you can do as a service, which is one of Dell's major points today, that to me, everyone is a PaaS layer. I think everyone that's building digital transformation apps has to be their own SaaS. So they either do that with somebody, a man in service, which fits beautifully into that trend, or do it own. Now e-commerce has this nailed down. Shopify or build your own on top of the cloud. So headless retail's a hot trend. You're going to start to see that come into the enterprise where the enterprise can have their cake and eat it too and take advantage of managed services where they don't have expertise. So those two things right there I think is going to drive a lot of growth for Dell. >> So essentially Lisa, what Dell is doing is saying, "Okay, the timing's good with the VMware spin." They say, "Now we're going to build our own cloud as a service, APEX." And they're starting with infrastructure as a service, you know, storage as a service. Obviously cyber recovery is a service. So you're going to get compute and storage and data protection. Eventually they'll move into other areas. And it's really important for them to do that to have their own cloud, but they've got to build up the ecosystem. Snowflake is a small example. My view, they need hundreds and hundreds of Snowflakes to fill the gaps, you know, move up the stack in middleware and database and DevOps. I mean, they should be partnering with HashiCorp. They should be partnering with all these companies that do DevOps stuff. They should be... I'd like to see them, frankly, partner with competitors to their data protection group. Why, you know, sounds crazy, but if you're going to build a cloud, look at AWS. They partner with everybody, right? And so that's what a true cloud experience looks like. You've got this huge menu. And so I think Dell's going to have to try to differentiate from HP. HPE was first, right, and they're all in. Dell's saying we're going to let the customers tell us where to go. And so they, I think one differentiation is their ecosystem, their ability to build that ecosystem. Yeah, but HP's got a good distribution channel too. Just not as big as Dell's. >> They all got the assets in it, but they're transforming. So I think at the end of the day, as Dell and even HPE transforms, they got to solve the customer problems and reduce the complexity. So again, the managed services piece with APEX is huge. I think having the building blocks for multi hybrid cloud at the Edge, just, you can't go wrong with that. If the customers can deploy it and consume it. >> What were some of the messages that you heard from, you mentioned CVS on stage, USAA on stage. Dell's always been very, very customer-focused. They've got some great brands. What did you hear from that customer's voice that shows you they're going in the right direction? >> Well first of all, the customers are longstanding customers of Dell Technologies, so that's one recognition of the ongoing partnerships. But they're also messaged up with Dell's messaging, right? They're telling the Dell story. And what I heard from the Dell story was moving fast and reducing complexity is their number one goal. They see the cloud option has to be there. Cloud native, Edge came up a little bit and the role of data. So I think all the new application development today that's relevant has a data as code kind of concept. Data engineering is the hottest skillset on the planet right now. And data engineering is not data science. So you start to see top-level CSOs and CIOs saying the new modern applications have to have data embedded in. It's just too hard. It's too hard to find that engineering team. So I heard the customer saying, we love the direction, we love the managed services. And by the way, we want to have that supply chain and cyber risk reduced. So yeah, big endorsement for Dell. >> You know, the biggest transformation in Dell, the two biggest transformations. One was the financials. You know, the income statement is totaled at a $101 billion company, growing at 17% a year. That's actually quite remarkable. But the flip side of that, the other big transformation was the customer. And with the acquisition of EMC but specifically VMware, it changed the whole conversation for Dell with customers. I think pre-2015, you wouldn't have had that type of narrative up on stage with customers. Cause it was, you know, compellant and it was equal logic and it was small businesses. Now you're talking about really deep strategic relationships that were enabled by that transformation. So my point is, to answer your question, it's going to be really interesting to see what happens post-VMware because when VMware came together with Dell, the industry didn't like it. The VMware ecosystem was like (growls) Dell. Okay, but customers loved it, right? And that's one of the things I heard on stage today. They didn't say, oh, well we love the VMware. But he mentioned VMware, the CTO from USAA. So Dell configured this commercial agreement with VMware, Michael Dell's the chairman of both companies. So that was part of the incentive. The other incentive is Dell is the number one distribution channel for VMware. So I think they now have that muscle memory in place where they've earned that trust. And I think that will continue on past the spin. It was actually quite brilliant the way they've orchestrated that. >> Yeah, Lisa, one more thing I want to add to that is that what I heard also was, you got the classic "here's how you be a leader in the modern era." It's a big leadership message. But then when you heard some of the notes, software-defined, multi-cloud with an emphasis on operations, Dave. So, okay, if you're a good leader, stay with Dell in operations. So you see strategy and operations kind of coming together around cloud. But big software defined multi-cloud data operational story. And I think those customers are kind of on that. You know, you got to maintain your operations. DevOps is operations, DevSecOps is operations. So big, like, don't get too greedy on the modern, shiny new toy, you know, in the cloud. >> Yeah, it's a safe bet, right? For infrastructure. I mean, HPE is a good bet too, but I mean Dell's got a way broader portfolio, bigger supply chain. It's got the end-to-end with the desktop, laptop, you know, the client side business, you know, a bigger services organization. And now the big challenge in my mind for Dell is okay, what's next? And I think they got to get into data management, obviously build up as a service, build up their cloud. They need software in their portfolio. I mean, you know, 20% gross margin company, it just, Wall Street's not as interested. You know, if they want to build more value, which they do, they've got to get more into software and I think you're going to see that. Again, I think you're going to see more M&A. I'd love to see more organic R&D instead of stock buybacks but I get why they have to do that. >> Well one of the things I'm looking at, Dave, in terms of what I think the future impact's going to be is the generational shift with the gen-Z and millennials running IT in the modern era. Not your old school rack-and-stack data center mentality. And then ultimately the scoreboard will determine, in my mind, the winner in their race is, where are the workloads running? Right? The workloads, and then also what's the application development scene look like? What do the apps look like? What are they building on? What's scaling them, what's running them? And the Edge is going to be a big part of that. So to me, operations, Edge, workloads and the development and then the workforce shift. >> And I do think Edge, I'm glad you brought up Edge. Edge is, you know, so fragmented but I think there's going to be a massive opportunity in Edge. There's going to be so much compute at the Edge. Dell talked about it, so much data. It's unclear to me right now how they go after that other than in pockets, like we heard from Gill. I believe they're going to do really well in retail. No question there. >> Yeah. >> But there's so much other industrial aisle IT- >> The telco space of towers, Edge. >> And Dell's, you know, Dell's server business, eh okay, it's got Intel and AMD inside, okay great. Their high margins come from storage, not from compute. Not the case with AWS. AWS had 35% operating margins last quarter. Oracle and Microsoft, that's the level that they're at. And I'd love to see Dell figure out a way to get paid more for their compute expertise. And that's going to take some R&D. >> John: Yeah, yeah. >> Last question guys, as we wrap up our wrap of day one. Given everything that we've all been through the last couple of years, what is your overall summary of what Dell announced today? The vibe of the show? How well have they fared the last two years? >> Well, I mean, they had a remarkable last two years. In a large part thanks to the client business. I think today you're seeing, you know, them lift the veil on what's next. And I think their story is coherent. There's, again, financially, they're a much more sound company, much better balance sheet. Not the most attractive income statement from a margin standpoint and they got work to do there. But wow, as far as driving revenue, they know how to sell. >> Yeah, I mean to me, I think looking back to before the pandemic, when we were here on the stage last, we were talking end-to-end, Dell leadership. And I say the biggest thing is Dell's catching up fast, faster than I thought. And I think they got, they're skating to where the puck is going, Dave, and I'll tell you why. The end-to-end I thought wouldn't be a total flyer if the Edge got too dynamic, but the fact that the Edge is growing so fast, it's more complex, that's actually given Dell more time. So to me, what I see happening is Dell having that extra time to nail the Edge piece, cause if they get there, if they get there, then they'll have their core competency. And why do I say that? Cause hardware is back. Server god boxes are going to be back. You're going to see servers at the Edge. And look at the failure of Amazon's Outpost, okay? Amazon's Outpost was essentially hardware. That's Dell's business. So you talk about like compute as a cloud but they really didn't do well with deploying compute like Dell does with servers. EKS is kicking ass at the Edge. So serverless with hardware, I think, is going to be the killer solution at the Edge. A combination of cloud and Edge hardware. And the Edge looks more like a data center than the cloud looks like the data center, so- >> So you're saying hardware matters? >> HardwareMatters.com. >> I think that's what I heard. >> HardwareMatters.com, check out that site, coming soon. (all laughing) >> I think it matters more than ever, you know- >> Blockchain, silicon advances. >> I think reason hardware matters is cause it's barbelling. It's going from the box to the silicon and it's going, you know, upstream into software defined. >> Horizontally, scalability means good silicon at the Edge, under the cover, scaling all the stuff and machine learning and AI in the application. So we've said this on theCUBE now, what, five years now? >> Dave: Yeah, yep. >> Guys, we've got an action packed night tonight. Two days tomorrow and Wednesday. Michael Dell is on tomorrow. Chuck Whitten is on, Jeff Clarke, et cetera, et cetera. Caitlin Gordon is on Wednesday. >> All the heavy hitters are coming on. >> They're coming on, they're going to be... >> Dave: Allison Dew's coming on. >> Allison Dew's coming on. >> We're going to talk about the Matthew McConaughey interview, which was, I thought, fantastic. J.J. Davis is coming on. So we're going to have a great channel discussion, as well, with Cheryl Cook. >> That's right. >> A lot of the product people are coming on. We're going to be talking APEX, it's going to be good. With cyber recovery, the Storage Alchemist is coming on, John! (all laughing) >> Boy, I can't wait to see that one. >> Well stick around guys for our coverage all day tomorrow, Tuesday and Wednesday. Lisa Martin with Dave Vellante and John Furrier coming to you live from the Venetian in Las Vegas. This is Dell Technologies World 2022. We look forward to seeing you tomorrow and the next day. (bouncy, upbeat music)

>> Announcer: From around the globe, it's theCUBE with digital coverage of Dell Technologies world, digital experience, brought to you by Dell Technologies. >> Hi, I'm Stu Miniman and this is theCUBE coverage of Dell Technologies world digital experience. Happy to welcome to the program. First we have a first time guest Akanksha Mehrotra, she's the Vice President of Marketing with Dell Technologies. Joining us one of our CUBE alumni, Caitlin Gordon, she's the Vice President of Product Marketing, also with Dell Technologies. Caitlin, welcome back, Akanksha welcome to the program. >> Thank you Stu, happy to be here. >> Alright, so one of the big models we've been talking about for the last few years is a change in how customers acquire things, big thing we've talked about, for many years, this shift from CAPEX to OPEX. How cloud is impacting everything Jeff Clarke in the keynote was talking about, it's the Dell Technologies on demand, DTOD, I guess is the, four letter acronym we use Akansha help us understand a little bit from your standpoint, what is it? Why is it important to your customers? >> Yeah, so Stu, as soon as you as you heard, as part of the keynote, from from Jeff and others earlier today, we've been working really hard to bring the benefits of on demand IT to our customers, in private cloud, public cloud and edge. And certainly this year, especially, we've seen a lot of interest in this, COVID have catalyzed customer interest in flexible consumption in as a service. As we talk with our customers and partners, we hear this almost daily, it's required a level of agility that candidly traditional CAPEX based models simply haven't been able to provide, I mean, imagine taking your workforce remote over the weekend, and the stress that puts on your infrastructure. And so I think that's kind of forced IT to consider some of these alternatives. Another factor has also been, companies have been wanting to preserve capital, right, and avoid large cash outlays and having this type of flexibility and being able to pay for infrastructure, as you're using it, it gives them a way to do that. So I mean, those are some of the customer drivers that we've seen. Last year at Dell Tech Summit, around the this time last year, actually, in November timeframe, we introduced Dell Technologies on demand as our umbrella program for a flexible consumption and as a service solutions. And really what it what it seeks to do is make it easier for customers to get the simplicity and flexibility of cloud, along with the performance and security of on-premises infrastructure. So it's giving them a range of consumption models that include both payment option as well as services that they can apply on any one of the products in our portfolio from end user devices to core data center infrastructure to hybrid cloud solutions. And we've announced that last year, one of the things that you heard about today, and that we're announcing over this event is that we're continually looking to make it easier and simpler for our customers with various turnkey offerings and simpler offerings for them, given the interest that we've seen. >> Yeah, I want to key off of, you mentioned the impact of COVID-19. And for your customers, it's something we've definitely seen that the promise of cloud always has been to be highly flexible, we can scale up, we can scale down. We know that some services out there aren't always as flexible as we might hope. There's certain SaaS solutions, where you're signing up for a multi year offering and even for the cloud, I might lock in some savings by buying something in bulk. So help us understand, what are the benefits that your customer sees, the savings that they get and is this truly cloud flexible, which means I can burst up and scale as I need. And I can it reached the point, oh, hey, I need half the capacity for the next six months. Can I do that? >> Yeah, absolutely. So, Stu we actually commissioned IBC to talk to a few of our customers. So let me maybe share some of the benefits that they saw in broad terms, and then I can maybe share a specific example of what a particular customer saw. So we had IDC talk to several of the customers using Dell Technologies on demand models, various GIOS, and various sort of sizes. And what they found was that on average, they saw about a 23%, lower cost of storage operations per year, which is great, right? Lower cost of operations is always great. IT is always looking for those efficiencies, especially, in the current environment, but that's not all. I think that's just sort of part of the story. What they also shared with us is that, these types of models were able to help them become much more agile in how they work and change how they work. And what they found was that they saw 54% fewer incidents of downtime and they were 92% faster in their ability to deploy storage capacity, because they had that capacity in their data center available ready for that spike when their business saw it. ` So those are just some of the broad examples of what our customers have seen. Another specific example that I would would share with you is a large multinational institution, financial services company, we've been working with them for years to service their, enterprise scale, private cloud. And then more recently, they had us also, manage their storage as a service managed utility. And they've seen phenomenal results, they've been able to get 50% more compute power at 8%, lower cost, and 90% faster or reduce time and provisioning data. It's all about the yes, it's about the cost savings but really, it's about the agility that the business gets, right. And as you started out, right, with COVID, they really needed that agility and that flexibility and having these models available, ready to spike, ready to go down, right, have been able to provide that. >> Yeah, I think another thing we've seen is, people rush to cloud because it promised that agility, and we've had those conversations before is, there's a reality of what that means, which it might not be the resiliency you're looking for, it also might not actually be as simple as he thought it might be. And we're seeing some of that come back on-prem, whether you need resiliency or performance or security, or you don't want to be really locked into a specific public cloud but you still want to have that agility in the benefits of really running your data center in a service oriented model. And that trend has been picking up over the past couple years. And as we've already said a couple times today, we've seen that accelerate, but also, we starting to see more customers ask for it. It's not just the big and more strategic and the aggressive customers that are looking for this more and more customers are kind of seeing that this is the end game and that's kind of leads into where we're going, which is, how do we make this more accessible to others? >> Well, Caitlin, you're using one of one of my punch lines that I've used for a number of years now if remember, when we thought that cloud was inexpensive and easy to use, it's not. And if we look at what customers are doing, it's a hybrid model. They're deploying in multiple environments, we're seeing the public cloud look more like the enterprise, the enterprise look more like, the public cloud. So these offerings have, OPEX flexibility and the like, make a whole lot of sense. So you've said that, you've seen a lot of growth, especially this year, any metrics you can give us on, adoption, love the one customer example, in the financial space, anything else to kind of paint the picture as to, how prevalent this is becoming. >> Yeah, maybe I'll get started. So, we've seen nearly 50%, year over year growth in the customer base or our most recent quarter, and it's growing, we've seen over 500% increase, year on year in signed contracts, customer demand in these types of models has caused us to expand our offerings to into countries like Brazil, Chile, Colombia, India, and China. I mean, we already offered about 50 plus countries and along with our partner, network and even more, so, I mean, those are just some of the data points around business traction. In the models that we have another proof point that I could point you to is that, in April, we include, we announced a payment flexibility program, which gave our customers a number of promotions and options to extend this flexibility into, across our portfolio and into other parts of our businesses. And just recently, about a month ago, we extended that, and we've seen really good traction in that as well. So I think overall, like you said there's aspects about public cloud that customers really like, and they tell us, hey, I want to be able to pay as I go, I want to be able to extend and contract the infrastructure as I'm using it. I want a simple management experience. But then as Caitlin said, they realize that Oh, but I don't want to, pay for the refactoring and then the egress and the ingress charges and some of my workloads are better off on premises for performance, locality, security, compliance reasons, right. And therein lies the promise of as a service for on-prem infrastructure, 'cause really, I keep looking for the best of both worlds. And this gives you that right you can use the consumption models to grow and shrink as you needed, you can us the payment models to only pay for what you're using and along with our partner network, you can have in the location that you want so you can sort of have your cake and eat it too. >> Yeah, and I would just add on to that is that more and more of the conversation is both about how can I consume that more as a service and pay for just what I'm using? But also, how can I spend less time maybe zero time and energy actually managing that infrastructure? And how can I then allocate the time energy resources into running my business and investing in more strategic things? So becomes both an important financial conversation but even more so a conversation about how IT can empower the business, which really just changes what we're able to do for customers. So it's an exciting kind of transition to see this really evolve into really not talking about products anymore, and helping our customers have all their business. >> Well, Caitlin, that's a really interesting point, I want you to talk to us a little bit about the Dell Tech storage as a service, how does that fit, we were just talking about don't want to talk about products, we want to talk about really moving to that full OPEX model so help connect the dots for us. >> Yeah, so we're really excited about this, this will be coming in the first half of next year, as you probably heard earlier today. And what we're doing here is we've really taken what we already have had in market. And we've really upped that to the next level, we've accelerated the simplicity of what we offer here. And think of the experience is all starting in a single console, where you just pick up four things, what's the type of storage you want, what's the performance you want, how much and for how long, that's it. And then now we're counting the time from then to when it's in your data center in days, not months, not weeks, but in days and we're able to get you up and going. And it's your data center of your choice, whether that's on-prem in your own data center, or at a colo facility, we bring that equipment in, we get that deployed, we manage it for you, you operate it, and you simply pay for what you use. So you're really in a quick time to value you're in a very simple model and you're not really responsible for managing infrastructure that's really on us. And that moves you into being in a true OPEX model and it also enables you to accelerate what you're able to leverage that whether it's Blob Storage, file storage, you can get up and running quickly and let us worry about how to manage the infrastructure and we give you the ability to operate what you need to. >> Caitlin, maybe if you could give us a little bit of color as to what happens behind the scenes to make that work. As it sounds wonderful, you've had the program around for a year, these aren't trivial things that you're talking about all the logistics, the management the the gear, and making sure that the physical and the power and everything is all set. So help us understand the engineering, the development, and what this means from kind of a services and go to market that make a solution like this work. >> Yeah, and a lot of ways we're having to change our entire business to help our customers change there's, it goes from top to bottom, and you'll get to hear a lot more about it when we're actually available next year. But when you think about it, we have a lot of the DNA, we have a lot of the experience, we have the technology, but we almost have to completely flip the script on ourselves of how we deliver it, who our customer is, what our then end user customer needs from us, and what the role of things like our global services organization is what the role of our global sales organization is and how do we accelerate providing outcomes to our customers and get the rest out of their way. And the fact that I haven't mentioned a product name, but by the way, we actually have industry leading products and pretty much every category. So of course, on the back end, all of this is going to be powered by our industry leading storage solutions, like power store will be in your data center but at the same time, we will actually have worked to really masked that you don't even need to know that nor do you need to really operate much beyond what you need to really run your business. And that's really it's been an interesting work for us to just flip how we think about everything and you'll hear a whole lot more about it next year as we really bring this out into market but it's been really fun and a big learning for everyone. >> Excellent well yeah, something something power is underneath there well Caitlin. All right why don't you both give us the final takeaway for the Dell Tech on demand account. Start with you in just give us the final takeaway. >> Yeah, so I think look, I back to kind of what we were talking about, we've actually been offering these types of solutions to our customers for a really long time. Through Dell financial services, we've been offering payment flexibility for over 23 years, over 15 years and manage utility. So the customer example that I gave you is a customer who's running storage as a service and has been for many years, I think, building on that experience, listening to our customers feedback over that time period and over, of course, this past year, we're looking to apply all of that, to make it even more simpler for them to consume our infrastructure in the near future. And so, storage as a service is going to be a really exciting proof point of that, the momentum stats and some of the other things that I shared with you today and that you're going to hear about over the next couple of days or another proof point of it. But we're excited about this, and looking forward to continuing the dialogue with our customers with our partners and (mumbles) >> Then I would I'll kind of play off of one of your words there which is is all about simplicity for us is how do we take what we've been able to do for a lot of our customers accelerate that and simplify it to a point where we can offer that for all of our customers. And we're really looking to accelerate this first with storage and then get all of our offerings really into this model, because it's really about getting our customers out of managing infrastructure and give them the time, energy, resources to manage their business and simplicity is paramount to making sure that happens. >> Caitlin and Akanksha, thank you so much for giving us the updates. Congratulations to all the progress and definitely looking forward to hearing more beginning of next year. Thanks for joining. >> Thank you Stu. >> Thank you Stu >> All right, I'm Stu Miniman this is Dell Technology world digital experience. I'm Stu Miniman. And thank you as always for watching theCUBE (upbeat music)

>>from around the globe. It's the Cube with digital coverage of Dell Technologies. World Digital Experience Brought to you by Dell Technologies. Welcome back to the cubes. Continuing coverage of Dell Technology World del Tech, World 2020. Jeff Clark is here. He is the chief operating officer and vice chairman of Dell Technologies. Jeff, awesome to see you. Thanks for coming on. >>Thanks for having me today. Appreciate it. >>Yeah, you're very welcome. When my first question is, when do you have time to be vice chairman? Well, >>you know, in today's world, it's pretty hectic. We're all working around the clock. If there's anything about the new norm, there are no boundaries. And unless you establish some boundaries so I've been able to find a rhythm that works for me personally, but also allows me to look after the company and, uh, kind of keep things moving and making progress of Dell. So pretty exciting times. It's certainly been a challenge finding new ways to break through new ways to get things done. But our team has done a great job rising to the occasion. >>Well, you know, a Z. You know, I didn't know you that well prior to you taking over the whole enchilada and do it going back into the enterprise. I mean, I knew you were obviously, but you have been able to see you know, how you operate in the decision making on how you rally the troops. Your several years now into the new Dell, you had to do a lot of tactical things, you know, including product portfolio rationalizations. But I wanted to start with the macro picture in a particular Can you share some of the acceleration points and the levers that you're really pulling in the operation? >>Well, clearly, if you look back at the company's strategy and I'll start there and then kind of build on from that platform if you think about the first tenet of our strategy is to win in the consolidation in our court marketplaces. So the core commercial PC market, the course server market in the course storage market, and clearly what we've been able to do and certainly been at this now for Gosh, I think it's three years now that we've been turning over the portfolio and modernizing the portfolio on the I s g side and to the point you referenced earlier. We've now modernized that portfolio. It is now under all the power brand and now represents new, fresh modern architecture er modern products that allows us to be competitive going forward across the entire eyes. T portfolio. We've had continued success on the commercial PC side. Then if you think about the next tenant of our strategy, which is to really build deeply integrated solutions across the Dell Technologies portfolio, we've made a lot of progress in the last handful of years, particularly integrating this new competitiveness of our I S G portfolio with the M R. And we're now beginning to see the fruits of that labor PC side will quickly. You've seen that with unified workspace work workspace one are leading services and are leading PC products to be able to bring a different change experience for end users on the PC side on the side. This all started with getting again this competitive portfolio. It started with Dell Technology Cloud a little over a year ago. It now is in joint collaboration around the edge. You've heard from my comments during the keynote around five g going forward. So as we think about this new modern world playing out. We now have the infrastructure competitive. We have a great asset and capability with VM, are now have figured out how to tightly integrate those and innovate on top of those platforms. And we think that's sort of the success for the future as we move forward. >>So it sounds like I mean, covitz change so many things, but it doesn't sound like it's materially changed your thinking on these leverage points or your strategy is gonna pre cove in Post Cove. It you kind of sort of approaching the same playbook, if you will. >>Well, a covert in many levels. While it's had a huge impact on many lives around the world, which we shouldn't, that should not be lost on any of us and the impact that it's had across many businesses and many parts of the world. If you step back and what I try to mention the keynote, what cove it has done is really accelerate digital transformation. I've heard many characterizations, but the way I tend to look at it is if you think of what's happened around us and the forcing of working remote learning remote the world as we look at it going forward, data driven. It's accelerated 10 years of what I thought would take us to get done into the first half of this decade. In many cases the first three years, Uh, this nomenclature that I've talk about is the future is now, and what it's really done is actually reinforced. The points that we thought were going toe happen brought them sooner and has made us believe mawr double down, if you will, that the path we're on is the right path, and we see our customers migrating that way rapidly. In fact, what's interesting? If you look at customers who embrace digital transformation earlier, we call them digital leaders. They're actually breaking away from the pack, sort of speak from their peer set and driving differentiated performance in their sector. We think that's a great, obviously proof point of digital transformation. But what all companies will have to go through to compete >>Well, it's interesting we saw early on in the US locked down worldwide, locked down you have you have such a broad portfolio that yeah, maybe some parts of the portfolio or, you know, directly negatively affected. Certainly. For instance, your you know your airline customers or your hospitality customers, etcetera. But the work from home was was a tailwind for you guys. So the fact that you have that broad portfolio somewhat, you know, one part of the business that cushioned you, maybe the other part of the business, You felt that. But on balance, you're able to get through that, and part of that was your supply chain. And some of your competitors struggled, you know, for instance, with laptop supplies. But you guys really have done a good job, sort of navigating through that, almost like you've been through it before. But nobody's been through this before. >>No, you know, David, thanks for recognizing it. One of the benefits of the Indian portfolio we have, which no one else has. The Indian portfolio that we do. We're able to weather the storm of different impacts to whether it's sectors, whether it's different parts of the business. And we've been able to do that on our our supply chain has performed well. It's been unbelievably resilient. We think it's appointed differentiation over us against anyone else in the marketplace. You couple that with our global service footprint, the two of them working together we designated those capabilities is essential. Very early in the pandemic, we protected our team members and we were able to serve our customers and a pretty non disruptive way. Now, behind the scenes are teams were doing all sorts of things to bring, uh, that continuity supply and those expectations we sent to our customers to the forefront. But I couldn't be more pleased at how we responded, and it set us up to where things were going to go. When we think about the future and migrating tomb or integrated solutions, I suspect we may talk about as a service and the capabilities needed with that services in the supply chain play a key role. >>I guess so much to talk to you about. What? I wanna come back to digital transformation For a minute. I was talking to the C i o the other day and I asked him what was the digital transformation mean to you? He said, David, I got a 15 year old s a P system. Digital transformation means to me I My business has changed in the last 15 years, but my s a P system Hasn't I gotta bring it up to speed. I have to modernize. So there's a spectrum. On the other hand, if if you're not digital today and you're, say, a restaurant, you can't do business. So what does that spectrum look like of digital transformation to you and your customers? >>Well, I think your examples were very good. I mean, our industries as a long reputation of overhyping, different constructs. The fact is, the world is rapidly digitizing. It's undeniable. If you look at the cost of a sensor and how those sensors air now being placed in everything, all of the data that's being collected as a result, That's certainly the forefront of what's happening. And every business has to deal with that. You mean you can't We talked about hospitality. You got hotel rooms that have sensors in them for lights, for water, for a temperature. You think about what's happening in the finance sector in the amount of data that's being created on the edge of that has to be processed on the edge. You think about smart factory smart hospitals in the amount of technology that's going in to bring those new areas to the forefront. So in my mind. Digital transformation is catching up with where the world's going. We know the world is going from an analog world to a digital world, and as that acceleration, mhm goes faster and faster and faster, which I absolutely we absolutely believe this happening. Companies have to change the business. They have to change their models. They have to figure out how to take all of this data and turn data into information to drive better business outcomes. We tend to get into this digital transformation and everyone to talk about this piece of gear, this piece of gear, this piece of gear. I actually don't spend any time on that. It's where customers are going. What are they doing to really instrument, if you will, the digital world they're going to participate in and have to figure out how to overcome the obstacles and barriers with that to compete in their particular sectors. That's where we come in. We help them help them with certainly the gear part of it, but more importantly, the solution orientation to bring better business outcomes to them, to help them get to where they want to go. Does that help? >>Yes, and it does, and it sort of leads me to the hybrid cloud multi cloud. To me, it's edges all part of that and it's critical for your customers. Digital transformations. I mean, what I mean by that is creating a trusted operating environment across whatever platform you're on, whether you're on Prem when you're in a public cloud, whether you're at the edge, so multi cloud is part of that. You know, I used to think a lot of this stuff was aspirational. It seems to becoming more and more really. Where do you see your customers in that maturity cycle? >>Well, I love the way you described it. What we see is the notion of Cloud is much broader than perhaps we would have talked about earlier on when I got this job was the public cloud. No, there's Public Cloud. There's private clouds, and clearly the edge is going to be a cloud operating a model. In fact, we see the world of five G edge and cloud, those three circles intersecting toe high degree. So we're gonna bring a cloud operating model to the edge. We're gonna bring new advanced connectivity data driven connective ity to this edge where all of this instrumentation and all of this data is going to be created that will have toe have real time analytics done, uh, at the edge we think, is this opportunity to really step back and go well. Those cloud things can't be separate. They have to be a set of systems. In fact, it has to become an integrated system. And we think that integrated system has to be able to move data, be able to consistently manage, consistently orchestrate and consistently Dr Operations across those three cloud environments, I think we have gone. Probably the best characterization is early innings. We're certainly not in the first inning. We're not in the ninth inning, but we're certainly into the ballgame here of helping customers orchestrate a multi cloud hybrid cloud environment. If you think about what we've done with VM wars enablement or interaction with the public domains, the work that we've done from our private area, we have accomplished a lot in a short period of time, I'd also tell you there's a fair amount of work in front of us as this spends very quickly and the edge of balls we have to connect those worlds and not leave the edge out on an island by itself. We have to bring it together. We're bringing into the public and private cloud domains that we have today, >>and I definitely wanna hit on as a service. But since we're on this topic, I wanna I wanna talk about five G and Telco a little bit. Let me just spiel for a bit and then you can respond. So I mean, this seems to be a lot of confusion around five G. There's very high expectations. There's there's a there's a lot of talk, but if it's hard toe sort of identify the true impact, that's that's tangible today, anyway. And then you got the telecom telco transformation going on. We've been We've been hearing this for a long, long time. Meanwhile, you got the over over the top providers. They're living off the infrastructure. The telcos price per bit is declining, but the usage is exploding. And so what do you make of all this? You know, the telcos air reinventing themselves. Five g is a part of that consumers Airway waiting for that. There's a lot of, you know, mixed marketing messages going on. What's your take on this and what's tells role? >>Well, look, I I tend to try to break it down into things. At least I can understand. If I look at five G is the next generation Cellular, which I believe it's far more than that. I mean, I think it's the next data fabric for the data era. I think it's going to be this intersection, as I mentioned moments ago of five g Cloud and Edge, all coming together. But I think about it from the infrastructure side that you describe. What we have is the first opportunity to bring a cloud environment to the telco space that hasn't happened before. And I think a cloud environment needs to be implemented because I think there are cost pressures in that sector, and this is going to be a way to become more competitive and to bring out new technologies and services much faster. So now if you bring a cloud operating model to this which I believe five g enables, there is now the opportunity to bring, I think, um, or standard based infrastructure rather than the proprietary ones. In the past, we now can bring a industry standard set of architectures was softer to find layers in the stack. And for the first time in the telcos space, you have the ran going through significant transformation. And on my mind, Iran is one of the significant control points in the telco or five g stack, and that is going to be more open. And then we have to think of five. G is just more than a cellular network. I mean, we're gonna have private private five G. So to the degree that it displaces why, if I will be interesting to see and unfold. But there's a huge opportunity now. Is those sensors that I talked about in the digitization of hospitals and factories and cities, all interconnected by a bunch of private five G networks, all working in an interactive combined system way. I think it just lends itself to a solutions orientation, a standardization orientation, a cloud model, and that's sort of what we do. So I get excited. All of what I just said or alluded to is not solved to your point. You've been hearing this discussion for some time, but the opportunity is large for us. It's one of the single biggest largest opportune, single biggest opportunity that we see for Delon View more and we're going to pursue it together. And we think we can take our at scale technologies that we brought to the Enterprise Data Center and bring those to the telco providers in the private five g build out. >>It's amazing, Jeff, when you think about the when you and I started in this business and how far we've come, it's It's just just mind boggling, isn't it? It >>really is. We've been at this a while and things have changed. But again, it's been on this consistent technology curve, this consistent standardization curve, and it's now applying to new sectors >>I want to end with as a service. You mentioned that before and and so you've got actually really growing business in subscriptions? Uh, you got a lot of options for customers, which is good, but sometimes it's confusing. What's the strategy around as a service? What can we expect there? >>Well, one of the things that we've done and you're right, we've made a lot of progress. We launched L Technology on demand last year. We have 2000 plus customers of $1.3 billion revenue run rate, it's growing at 30% so we're pleased. But at the same time, all the data suggest customers we're gonna want to deploy even at a greater rate. So I think I made reference during our keynote. Today, about 75% of the world's data is gonna be created outside of the data center, 75% off the edge. Build out is going to be done as a service, as is half of the infrastructure. So we think we need to take this to the proverbial next level. We announced Project Apex, Project Apex for us to take all of the properties that we have across the company, all of the different activities and to unify them a single effort for as a service model for the Dell company going forward for our entire portfolio. We think the timing is right. We think we have to be able to, if you will project APEC should be translated as the easy button for our customers. It's a way to make things simpler. It's a way to give them the choice they need to drive consistency in the operating model, and that's the path Ron, we're pretty excited about this unification, if you will. Galvanizing across the entire organization with Project Apex. >>Awesome. Listen, I know you're super busy. Appreciate all the time you've given us your You're a fun executive toe. Hang around with a mission, man. I wish we were together, but hopefully, hopefully sometime soon we can We could see each other face to face. >>I would like that very much. I missed the interactions themselves. I appreciate the time today. Thank you, Dave. >>All right, We'll see you, Jeff. Thanks again. All right. Thank you for watching everybody. Keep it right there. We're back with our next guest. It del Technology World 2020. You're watching the Cube.

>> Narrator: From around the globe, it's The Cube, with digital coverage of Dell technologies world digital experience brought to you by Dell technologies. >> Welcome back to The Cube's continuing coverage of Dell technology world. Dell tech world 2020, Jeff Clark is here. He's the chief operating officer and vice chairman of Dell technologies. Jeff, awesome to see you. Thanks for coming on. >> Thanks for having me today, I appreciate it. >> Yeah, you're very welcome. Well, my first question is when do you have time to be vice chairman? >> Well, you know, in today's world, it's pretty hectic. We're all working around the clock. If there's anything about the new norm, there are no boundaries unless you establish some boundaries. So I've been able to find a rhythm that works for me personally but also allows me to look after the company and kind of keep things moving and making progress at Dell. So pretty exciting times, it's certainly been a challenge, finding new ways to break through, new ways to get things done, but our team has done a great job rising to the occasion. >> Well, you know as you know, I didn't know you that well prior to you taking over the whole enchilada and going back into the enterprise. I mean, I knew who you were obviously but you know, been able to see how you operate and the decision making and how you rally the troops. You're several years now, into the new deal. You had to do a lot of tactical things you know, including product portfolio rationalizations but I wanted to start with the macro picture. And in particular, can you share some of the acceleration points and the leavers that you're really pulling in the operation? >> Well, clearly if you look back at the company strategy and I'll start there and then kind of build on from that platform, if you think about the first tenant of our strategy is to win in the consolidation in our core marketplaces. So the core commercial PC market, the core server market and the core storage market, and clearly what we've been able to do, and certainly been at this now for, gosh, I think it's three years now that we've been turning over the portfolio and modernizing the portfolio on the ISG side. And to the point you referenced earlier we've now modernized that portfolio. It is now under all of the power brand it now represents new fresh, modern architecture, modern products that allows us to be competitive going forward across the entire ISG portfolio. We've had continued success on the commercial PC side. Then if you think about the next tenant of our strategy which is to really build deeply integrated solutions across the Dell technologies portfolio we've made a lot of progress in the last handful of years particularly integrating this new competitiveness of our ISG portfolio with VMware. And we're now beginning to see the fruits of that labor PC side real quickly. You've seen that with unified workspace, workspace one are leading services and are leading PC products to be able to bring a differentiated experience for end users on the PC side. On the ISG side, this all started with getting again, this competitive portfolio, it started with Dell technology cloud a little over a year ago, it now is in joint collaboration around the Edge. You've heard from my comments during the keynote around 5G going forward. So as we think about this new modern world playing out, we now have the infrastructure competitive. We have a great asset and capability with VMware or it now have figured out how to tightly integrate those and innovate on top of those platforms. And we think that's sort of the success for the future as we move forward. >> So it sounds like, I mean, COVID changed so many things, but it doesn't sound like it's materially changed your thinking on these leverage points or your strategy is going to pre COVID, post COVID. You kind of sort of approaching the same playbook if you will. >> Well, COVID many levels, well, it's had a huge impact on many lives around the world which that should not be lost on any of us and the impact that it's had across many businesses and in many parts of the world if you step back and what I try to mention the keynote, what COVID has done is really accelerate digital transformation. I've heard many characterizations but the way I tend to look at it is if you think of what's happened around us and the forcing of working remote, learning remote, the world, as we look at it, going forward, data driven, it's accelerated 10 years of what I thought would take us to get done into the first half of this decade in many cases, the first three years. This nomenclature that I talk about is the future is now. And what it's really done is actually reinforced the points that we thought were going to happen, brought them sooner, and has made us believe more doubled down if you will, that the path we were on is the right path. And we see our customers migrating that way rapidly. In fact, what's interesting, if you look at customers who embraced digital transformation earlier, we call them digital leaders. They are actually breaking away from the pack, so to speak from their peer set and driving differentiated performance in their sector, we think that's a great obviously proof point of digital transformation, but what all companies will have to go through to compete. >> Well, it's interesting. We saw early on in the US lockdown, worldwide lockdown, you have such a broad portfolio that yeah maybe some parts of the portfolio were, you know, directly negatively affected, certainly for instance, you know, your airline customers or your hospitality customers, et cetera. But the work from home was a tailwind for you guys. So the fact that you have that broad portfolio, somewhat, you know, one part of the business that cushioned you maybe the other part of the business, you felt it but on balance, you're able to get through that. And part of that was your supply chain. And some of your competitors struggled you know, for instance, with laptop supplies but you guys really have done a good job sort of navigating through that. Almost like you'd been through it before, but nobody's been through this before. >> No, you know, Dave, thanks for recognizing that one of the benefits of the end to end portfolio we have which no one else has the Indian portfolio that we do, we're able to weather the storm of different impacts to whether it's sectors, whether it's different parts of the business and we've been able to do that. And our supply chain has performed well. It's been unbelievably resilient. We think it's a pointed differentiation over us against anyone else in the marketplace. You couple that with our global service footprint, the two of them working together, we designated those capabilities as essential, very early in the pandemic, we protected our team members and we were able to serve our customers in a pretty non-disruptive way. Now behind the scenes, our teams were doing all sorts of things to bring that continuity of supply and those expectations we set to our customers to the forefront but I couldn't be more pleased at how we responded and it set us up to where things are going to go. When we think about the future and migrating to more integrated solutions, I suspect we may talk about as a service and the capabilities needed but that services in the supply chain play a key role. >> Yeah, I got so much to talk to you about, but I want to come back to digital transformation for a minute. I was talking to the CIO the other day and I asked them what was digital transformation mean to you? He said, "Dave, I got a 15 year old SAP system, Digital transformation means to me, my business has changed in the last 15 years but my SAP system hasn't, I got to bring it up to speed. I have to modernize." So there's a spectrum, on the other hand, if you're not digital today and you're say a restaurant, you can't do business. So what does that spectrum look like of digital transformation to you and your customers? >> Well, I think your examples were very good. I mean, our industries, has a long reputation of over hyping different constructs, the fact is the world is rapidly digitizing. It's undeniable. If you look at the cost of a sensor and how those sensors are now being placed in everything, in all of the data that's being collected as a result, that's certainly the forefront of what's happening and every business has to deal with it. You can't, I mean, we talked about hospitality, you got hotel rooms that have sensors in them, for lights, for water, for temperature. You think about what's happening in the finance sector and the amount of data that's being created on the edge that has to be processed on the edge. You think about smart factory, smart hospitals, and the amount of technology that's going in to bring those new areas to the forefront. So in my mind, digital transformation is catching up with where the world's going. We know the world is going from an analog world to a digital world. And as that acceleration goes faster and faster and faster which I absolutely, we absolutely believe is happening, companies have to change the business, they have to change their models, they have to figure out, how to take all of this data and turn data into information to drive better business outcomes. We tend to get into this digital transformation and every wants to talk about this piece of gear, or this piece of gear or this piece of gear. I actually don't spend any time on that. It's where customers are going, what are they doing to really instrument if you will, the digital world they're going to participate in and have to figure out how to overcome the obstacles and barriers with that to compete in their particular sectors. That's where we come in, we help them, help them with certainly the gear part of it, but more importantly the solution orientation to bring better business outcomes to them, to help them get to where they want to go. Does that help? >> Yes and it does. And it sort of leads me to the hybrid cloud, multi-cloud, to me, it's the edge is all part of that. And it's critical for your customers, digital transformation. What I mean by that is creating a trusted operating environment across whatever platform you're on, whether you're on prem, whether you're in a public cloud, whether you're at the edge. So multicloud is part of that. You know, I used to think a lot of this stuff was aspirational. It seems to becoming more and more real. Where do you see your customers in that maturity cycle? >> Well, I love the way you described it. What we see is the notion of cloud is much broader than perhaps we would have talked about early on, when I got this job was the public cloud. Now there's public cloud, there's private clouds and clearly The Edge is going to be a cloud operating model. In fact, we see the world of 5G, edge and cloud, those three circles intersecting to a high degree. So we're going to bring a cloud operating model to The Edge. We're going to bring new advanced connectivity, data-driven connectivity, to this edge where all of this instrumentation and all of this data is going to be created. That we'll have to have real time analytics done at the edge. We think is this opportunity to really step back and go, well, those cloud things can't be separate. They have to be a set of systems. In fact, it has to be done in an integrated system. And we think that integrated system has to be able to move data, be able to consistently manage, consistently orchestrated and consistently drive operations across those three cloud environments. I think we have gone probably the best characterization is early innings. We're certainly not in the first ending. We're not in the ninth inning but we're certainly into the ballgame here of helping customers orchestrate a multicloud hybrid cloud environment. If you think about what we've done with VMware's enablement or interaction with the public domain, the work that we've done from our private area, we have accomplished a lot in a short period of time. I'd also tell you there's a fair amount of work in front of us, as this spins very quickly and the edge of evolves, we have to connect those worlds and not leave the edge out on an island by itself. We have to bring it together or bringing into the public and private cloud domains that we have today. >> And I definitely want to hit on, as a service, but since we're on this topic, I want to, talk about 5G and telco a little bit. Let me just spiel for a bit, and then you can respond. So, I mean, there seems to be a lot of confusion around 5G, there's very high expectations. There's a lot of talk, but if it's hard to sort of identify the true impact that's tangible today anyway and then you got the telco transformation going on, and we've been hearing this for a long, long time. Meanwhile, you've got over the top providers they're living off the infrastructure of the telcos, price per bid is declining, but the usage is exploding. And so what do you make of all this? You know, that the telcos are reinventing themselves. 5G is a part of that. Consumers are waiting for that. There's a lot of, you know, mixed marketing messages going on. What's your take on this and what's Dell's role? >> Well, look, I tend to try to break it down into things at least I can understand. If I look at 5G as the next generation cellular which I believe it's far more than that. I mean, I think it's the next data fabric for the data era. I think it's going to be this intersection as I mentioned moments ago of 5G cloud and edge all coming together. But you think about it from the infrastructure side that you described. What we have is the first opportunity to bring a cloud environment to the telco space that hasn't happened before. And I think a cloud environment needs to be implemented because I think there are cost pressures in that sector. And this is going to be a way to become more competitive and to bring out new technologies and services much faster. So now if you bring a cloud operating model to this, which I believe 5G enables, there's now the opportunity to bring I think, a more standard based infrastructure rather than proprietary ones of the past. We now can bring a industry standard set of architectures with software defined layers in the stack. And for the first time in the telco space you have the RAN going through significant transformation. And on my mind the RAN is one of the significant control points in the telco or 5G stack. And that is going to be more opened. And then we have to think of 5G is just more than a cellular network. I mean, we're going to have private 5G. So to the degree that it displaces wifi will be interesting to see an unfold but there's a huge opportunity. Now, as those sensors that I talked about in the digitization of hospitals, in factories, in cities, all interconnected by a bunch of private 5G networks all working in an interactive and combined system way, I think it just lends itself to a solutions orientation, a standardizations orientation, a cloud model, and that's sort of what we do. So I get excited all in what I just said or alluded to is not solved to your point. You've been hearing this discussion for some time, but the opportunity is large for us. It's one of the single biggest opportunity that we see for Dell and VMware, and we're going to pursue it together. And we think we can take our at scale technologies that we brought to the enterprise data center and bring those to the telco providers and the private 5G build out. >> Yeah, it's amazing Jeff, when you think about the, when you and I started in this business and how far we've come, but it's just it's mind boggling, isn't it? (laughing) >> It really is. We've been at this a while and things have changed but again, it's been on this consistent technology curve, this consistent standardization curve and it's now applying to new sectors. >> I want to end with, as a service. You mentioned that before. And so you've got actually a really growing business in subscriptions. You got a lot of options for customers which is good, but sometimes it's confusing. What's the strategy around as a service? What can we expect there? >> Well, one of the things that we've done and you're right we've made a lot of progress. We launched Dell technology on demand last year, we have 2000 plus customers at $1.3 billion revenue run rate. It's growing at 30%. So we're pleased but at the same time, all the data suggests customers are going to want to deploy even at a greater rate. So I think I made reference during our keynote today about 75% of the world's data is going to be created outside of the data center, 75% of the edge build out is going to be done as a service as this half of the infrastructure. So we think we need to take this to the proverbial next level. We announced project APEC, project APEC for us to take all of the properties that we have across the company, all of the different activities and to unified them, a single effort for as a service model for the Dell company going forward, for our entire portfolio, we think the timing's right. We think we have to be able to if you will, project APEC should be translated as the easy button for our customers. It's a way to make things simpler. It's a way to give them the choice they need to drive consistency in the operating model. And that's the path we're on. We're pretty excited about this unification, if you will galvanizing across the entire organization with project APEC. >> Awesome, listen, I know you're super busy. I appreciate all the time you've given us, you're a fun executive to hang around with a mission man. I wish we were together, but hopefully sometime soon we can see each other face to face. >> I would like that very much. I miss the interactions themselves. I appreciate the time of day. Thank you Dave. >> All right we'll see you Jeff, thanks again. All right, Thank you for watching everybody. Keep it right there, will be back with our next guest at Dell technology world 2020. You're watching The Cube. (lighthearted music)

from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation [Music] hi I'm Stu manna man and welcome to a special cube conversation normally the first week of May we would be at Dell technologies world but that event has been moved to the fall but one of the major announcements from the event are going forward joining me to talk about powering up the mid-range of storage is Caitlin Gordon she is the vice president of marketing at Dell technologies Caitlin you thanks so much for joining thank you so much for having me Stu it's great to be here all right so Caitlin the last couple of years at a dtw different segments of the market as I said it's been powered up as the marketing messaging usually you've got some good t-shirts you've got a lot the labs and demos so tell us about the important announcement that you're sharing with today yeah I mean unfortunately the show is not going on but the product is still launching it actually is already started chipping and we are excited that we're still at be able to announce it this week our store is really probably the most exciting product they've ever gotten to help bring to market and all those demos and labs that you've talked about we're gonna have them all they're all going to be digital this year as well and it's really important for us as a business because it really changes what we're able to do for our customers you know we love speeds and feeds and storage but power store is so much more than that We certainly have designed it to meet the needs of all the workloads lock and file providing performance and efficiency but even more importantly what we built with this platform is something that will help our customers change the way that they're running their data centers and maybe most importantly can adapt with them as their businesses evolve yeah it's so important Caitlin I'm glad you talked about that you know you know the storage industry you know IP in general we can really get wonky and dig down to the speeds and feeds and yeah we want to understand you know how does nvm me and sports class memory and all that thing fit into but I want you to talk about you know what is that customer requirement that you're solving for in the age of AI and cloud you know what are the customers looking for what are those things that your cell for that maybe you know previous generations you go back to like the Unity ie this weren't on the table for discussion yeah I think one of the most interesting thing that's happened for us in the past few years in our conversations with customers is we do have the speeds and feeds the end-to-end nvme and octane and all that wonderful goodness but what they're really helped they're really asking for help on is how do they move towards this vision of having a truly autonomous data center how do they move to a fully self-service model so that all of their infrastructure can be treated like code and that you can automate all of those storage workflows picking out all of the additional costs and time and probably most importantly risk of manual tasks how do we have infrastructure that can be a more intelligent and helped them make more proactive and intelligent decisions that's one part of the equation the other piece is what we've heard loud and clear and this is now true more than ever before that infrastructure investments not only need to make sense for what the needs are today but also need to have the flexibility to adapt with businesses as they're going through this rapid and unpredictable transformation so that they can ensure that there are infrastructure investments today don't become technical debt tomorrow so that ability to have infrastructure that can adapt and evolve that the business is so important to our customers yes so Caitlin how is that done you know traditionally store do you think about it you know I buy a box like why did no way I write it off over 30 number years so what's different about you know the the service is and I'm guessing there's some financial pieces that make you know power store and the rest of the power family different than what I would have bought traditionally from buying a storage array yeah really the whole dynamic changes and it starts really foundationally with the flexible architecture so the product itself is built with the flexible architecture the ability the fact that it's a container based architecture were able to innovate on a container basis which makes our data services across the portfolio more consist enables us to innovate faster it also means that all of our innovation will be delivered to customers in a non disruptive way whether that's a hardware upgrade or a software upgrade all of that will happen without impacting the business that's really the flexible and adaptable architecture but when you look at the deployment that's an even bigger conversation how can we help and deliver infrastructure that gives you a solution that can support a small footprint at the edge collapse that infrastructure at the edge help with data center modernization connect into cloud and the last piece you're just touching on is that consumption more and more and then that's accelerated over the past month or so the ability to consume this as a service it's such an important part of what we're doing here in power stores available all of our Dell technologies on-demand offerings flex on-demand to give you that ability to really consume an infrastructure and an object model really interesting you talked about you know underneath the covers you know containerized architecture you know I think back the previous generations when you know EMC moved on to an intel-based architecture you know there's things where you say there's a major change in the code bases a major change in the architecture and from a customer standpoint they shouldn't have to think about it but I know there's so much work that goes through to make sure that things are rock-solid that it's still gonna provide you know X nines of capability and make sure that you can run your business on it helped us understand a little bit about you know how you know you said a lot of things have changed but we're still talking about things that you know you're running you know our business is on or you know mid-race customers for small enterprises midsize enterprise you know but what's what's still the same I guess is what I'm asking for today's storage compared to what we were looking at that yeah and if you look at it I mean the architecture itself is built as an architecture can pick conserve the broadest set of needs or the biggest set of our customer base so foundationally it supports all physical databases and applications we've got we've all support it's got performance that's really incredible compared to our previous lead mid range all flash solutions seven times faster three times better response times the efficiency of course is critical the ability to support that in a really small footprint with always-on inline data reduction four to one guaranteed the architecture not only scales up of course as a storage appliance but also can independently scale compute so they have the ability to scale up in an appliance and scale out into a cluster and of course you can't resist the buzzwords that's important and an nvme of course the ability to support nvme based flash drives or SEM and it's specifically actually the dual ported octane drive for persistent storage so when you look at it it truly is a best-in-class all flash mid-range storage array but it also does a lot more and that's part of the fun dynamic of what we've built okay so you know we talked about scaling up and scaling out you know of course you know we look at Bay's world two things that are critically important to customers it's my data and my applications obviously you know strong legacy at Dell EMC looking at the data you touched a little bit about the applications but you know tell me more how does this fit for you know my latest cloud native type environments you know how do applications fit into this environment yeah and it's really builds on what we're starting to talk about with that container based architecture so the fact that his container based is interesting and good for us because we can innovate faster it's even more important for customers and we can deliver that to them faster and more consistently what's more interesting is what we can then do for their workloads and their applications because we have this brand-new modular software operating system of course we can deploy that as a standard bare metal on purpose-built hardware or storage appliance what's even more interesting and what's really different about what we can do with our store is we can also abstract that storage OS from the underlying hardware onboard VMware ESXi and run both the storage operating system and applications natively on the appliance so able to collapse the compute and storage layers into a single piece of infrastructure and run a handful of specialized applications on that one appliance which really is game-changing in the data center at the edge to change the way that you can run and consolidate your operations okay yeah if you say specialize to applications so let let's build onion a little bit on that you know I think back obviously you know Dell has a very strong position in hyper-converged infrastructure which is scaling you know compute and storage and doing that an entire environment I remember there were a lot of efforts to say well with a virtualized environment maybe I hate storage and I can put applications on it that was there was use case with Isilon and to say you know I've got a lot of general-purpose compute if I have some excess capacity maybe I can do that it wasn't something that I heard used a lot so what sort of applications and how do kind of compare and contrast this with other things like like HDI yeah and this is power stores apps on capability and really what it's built for is these kind of two classes of applications the first is infrastructure apps so think of these as any type of application that the infrastructure team themselves is is leveraging and wants to simplify their operations antivirus data protection things like that the other category would be what we call data intensive so a data intensive application really is more storage intensive right either has a high demand for capacity and a small demand for compute or is one of these more latency sensitive applications real-time analytics is a good example things like blink and spark the response time is really King and when we look at that in comparison to what HCI is we have been and we are in a great position right with the xrail has been leading the hyper-converged market and we know that our customers are deploying that alongside three-tier architecture and what you look at what we've done with our store what we already have with rail they're highly complementary what we've done in HCI is we've taken storage and brought it into compute what we've done with power store we've taken storage and we brought compute into it and it really solves four different is optimized for different challenges and we really think complementing those in the data center next to each other is going to be an increasingly common deployment model to have the right architecture or the right workloads and then you have VMware consistent operations across the top so you have that consistent operations within your data center whoo edge and also to the cloud all right so end-to-end portfolio is what you're saying there's options for the different applications what one of the big challenges for storage people always is you know I always used to joke it's the four-letter word its migration so customers you know there there are very few Greenfield deployments out there so the existing Dell customers people out there that have been doing things in previous ways how do they get to power store and you know once they're on power Spore what does that mean for you know future you know growth expansion you know migration discussions yeah and I've heard this before right forklifts are not a friendly thing and the good news is with power store it is truly the end of data migration we've built with power store is an architecture that enables you to non-disruptive Li upgrade the controllers when new generations come out you can destructively operate those keep all the capacity in place and don't have any an impact to your business we also know the customers need to get data to powers for now getting to the 2 power store is going to be really really seamless we have invested significantly and a number of different migration options for our portfolio and for third-party to get data to our score and what seamless means could be different to different customers that can be non disruptive it could be agent lists it also could be host based we'll have all of those solutions from day one to enable that transition that happened as seamlessly as possible and on a customer's own time we've actually optimized this to the point where we now enable you to move data from an existing platform to our store in less than 10 players okay that that's great Kaitlyn so you know III remember back when Mendell first finished the acquisition of EMC one of the things we heard loud and clear with Jeff Clarke is a simplification of the portfolio it's something we've heard throughout the ranks remember talking to Jeff Boudreau about hinting at what was happening at the in the mid-range so what does this mean for existing mid-range lines and tell us about what we expect to see as this transition rolls out yeah absolutely so power store is absolutely our lead mid-range all-flash offering we continue to have unity XD is our lead hybrid mid-range solution and we have at end of life any of our other existing mid-range platforms what we know above anything else is that transformation and transitions in the data center and on storage race takes time and the important thing for us is that we enable our customers to do that on their own time and as seamlessly as possible so we have not announced a new end of life when we do we're going to have a long service life and we've built all of these different migration tools to help support that transition so it's going to be very easy for our customers to do that move on their own time and it still enables us to deliver on what we've promised you which is a simplified portfolio great Kaitlyn last thing I want to ask you is what's challenging for people is number one they've got kind of the skill set and the rules that they have today so there needs to be you know an easy migration to go from what they have to the new on the other hand also sometimes it you you want to take a clean sheet of paper and say boy if you could just start over and do it this way it's going to make your life so much easier so tell us how you're balancing that and how you can help both that you know you're your install base as well as you know new people coming in that might not have been traditional storage industry yeah I think the reality is that they're the specialized skill as a storage administrator isn't is something that will not be a growing skill set and we need to help our customers certainly support an operating model that does work like a storage array but does so in a way that is extraordinarily simple and has a lot of intelligence built in so first and foremost this is a storage platform and has really been designed who have the most seamless and simple operating experience from an element manager with our store manager for a storage admin but at the same time we know that for a variety of reasons a lot of customers have a single team that managed their infrastructure and is really moving into more of a cloud operating model and for that we've built in all of the integrations and tools with vmware whether it's Fiero vmware cloud foundation to really help vmware administrator also be able to operate the system as well excellent so it's just on that also how do things like analytics fit into the entire monitoring discussion help us understand how that fits in with some of the rest of the Dell portfolio yeah that's exactly where I was going to go over the last piece of this is why would I Q is something that's really important is Prateek for us cloud IQ of course comes with power so it comes with all of our storage offerings today we're officially announcing it coming across our infrastructure portfolio as well and that's really game-changing for customers in a number of different ways first is it really helps produce risk in the environment because it shows you a health scare or for your data center and if it has an issue it will quickly help you pinpoint that and troubleshoot it before it ever actually becomes a problem that impacts your business you're gonna help you predict your future user needs things like predictive analytics built into cloud IQ help you do capacity forecasting and planning so that you can see exactly when you're going to get to those thresholds of 80 90 100 percent capacity and remedy that board impacts the business and with it now coming across the entire infrastructure portfolio the value it can bring is outside of just storage alone but to the entire data center and one of the biggest things our customers and partners have loved about Cloud IQ is the trusted advisor feature that allows these are our reps or partner to have the ability to be part of that cloud IQ experience he read into from a mobile application or from a web browser have that remote monitoring of the environment and add that human intelligence to the machine intelligence really manage that data center and help our customers stay on top of problems and stay ahead of them before they impact the business well Kaitlyn congratulations the whole power store team we understand a lot of hard work goes into building this and really look forward to by the time we get to Delta technology's world in the fall talking to customers that are using thanks so much for joining us and look forward to talking with you again thanks - great to see you all right be sure to check out the cube dotnet for all the upcoming events that we're doing right now of course a hundred percent remote I'm sue minimun and thank you for watching the Q [Music]

>> From the SiliconANGLE Media office in Boston, Massachusetts. It's theCUBE. (upbeat music) Now, here's your host Dave Vellante. >> Hi everybody, welcome to this Cube Conversation on data protection. You know, I've been reporting for the last several months that spending on storage is reverting back to pre-2018 levels, but at the same time, it's not falling off a cliff. Now, one area of storage that is still very, very strong is the data protection segment. In the past 18 months, we've seen about a half a billion dollars in venture funding come into the market. We've just seen a big multi-billion dollar exit. And backup specifically in data protection, data management generally is where all the action is right now. And one of the leaders in data protection is Dell EMC. The company has the largest share of the market and the new entrants, believe me, want a piece of their pie. But anyone who follows this company knows that the firm is not likely to give up it's turf very easily. So much is changing in the market today. And I want to understand how Dell EMC's data protection division is responding to both the competitive threats and the changing market dynamics. With me are two experts from Dell EMC to address these issues. Nelson Hsu is Director of Solutions, Product Marketing for the data protection division at Dell EMC, and Colm Keegan is Senior Consultant, Product Marketing at Dell EMC. Gents, welcome to theCUBE. Great to see you again. >> Thank you for having us. >> Thanks, Dave. >> So you heard my intro. You guys are the leader. You got the biggest market share. You got all the upstarts coming at ya. What's your response? >> Want me to take that? >> Sure. >> Yeah. It's interesting, so we were talking about this before we came on set, you know and often times they want to poke holes at us 'cause you know we're perceived as being the old timers, or the stodgy ones of the group out there. And play a little jiu jitsu, you move in say you know well time in market counts for something. You know we've been solving data protection challenges for customers for literally decades now. You know and so, water under the boat and knowing the experience that we've derived from that allows us to bring solutions that are mature, that are proven. What we're doing is we're taking those proven solutions and pairing them with modern capabilities. So that, you know we look at it and say, hey, look, Mr. Customer. You have significant data protection challenges today because, as you said, the world's changing. It's changing rapidly. We can help you address those while also sowing the seeds for the foundation for the future. So we think that's a compelling message and we think that while some of our competitors, in particular the upstarts, have had some interesting things to say, big picture-wise, they don't know what they don't know. 'Cause they just don't have the time in the market. Their solutions are also largely absent upmarket, you know, when you look at the enterprise. So we're comfortable. We think we're in a very good spot right now. >> So cloud obviously was the huge mega trend of the past decade. You guys said from the beginning, it's going to be a hybrid world. Some of that was we hope it's going to be a hybrid world. Well you were right, it's a hybrid world. So how is cloud, hybrid cloud affecting your customer decisions around data protection, and how are you responding? >> Well, you know, there's no doubt that the growth in cloud and the growth in hybrid cloud is real. And it's there today. As we look, and as Colm mentioned, we've been protecting data across the enterprise, across the edge and in the cloud, and that growth continues. So today, we have over 1,000 customers that we're protecting their data in the cloud. To the tone of over 2.7 exabytes of data protected in the cloud by Dell EMC data protection. So there is absolutely no doubt that that growth is there. We have a lot of innovation that we're driving on, both in various ares of cloud native, cyber security and deep integration. >> Okay, so that's good, 1,000 customers. That's a pretty good observation space. But when you think about hybrid, what I think when I talk to customers is they want that same exact cloud experience. They don't want to have to context switch. They don't want to have to buy different platforms. So how are you specifically addressing that customer requirement? >> So there's a couple ways we look at that, right? For our customers, simplicity is very key in ease of use. So that's one of our core tenants as we go across both the edge, the core and the cloud. And the other aspect of that is consistency. So giving them and allowing them to use the tools that they know today to be able to protect their data, wherever that data resides. So with the cloud, with cloud native, your data becomes very, very distributed. And you have to be able to see all that data, and control and manage that data. So the whole aspect around cloud data management has now risen to the top as a major concern. We do that in a great way in a sense that we both have a hybrid strategy and a lot of that is working with Dell Technologies cloud. And it's based upon VMware. And so we have a very good deep relationship with VMware to utilize their tools that our customers use today. Whether it be vSphere or vcontrol that they can manage their data protection from one console, from one environment itself. >> Yeah, Dave, I think when you look at the split today, the latest cut of research is that roughly 52% of VM's are in the cloud, and 48 percent are on-prems so it's already hybrid, and as Nelson said, it's largely predicated on VMware. So as organizations start consuming cloud they're going to go with the platform that they've been operating under for years now. So it'll be VMware. We've always had very tight integration with VMware. We have a very strong partnership with them. And that's both on the existing portfolio as well as the agile portfolio that we're building out today under PowerProtect. So as that hybrid world evolves for the customers obviously we want to make sure they're protected from a virtual machine standpoint. And make that, as Nelson said, very simple for them because the last thing customers need is complexity particularly as their environments are becoming inherently more complex. Because now you look at most enterprises today, they're going to have a mix of workloads. It's physical, it's virtual, containers are unaccounted for. It's cloud native apps, it's SaaS. You know we were talking earlier about multi-clouds. Oftentimes it just kind of came up organically and now you've got this huge distribution of workloads and oftentimes, customers have been just sort of reactive to that. In other words, let me find a way to protect that and I'll worry about the details later. We're looking at that and saying, we have the portfolio to help you protect all your workloads, and as importantly, we'll help consolidate the management in that environment. It's going to start with VMware, but then longer term we're planning for things like a SaaS control plane so that we can give you a complete view of that environment and allow you to assign the policies you need in terms of SLA's, in terms of compliance. You're basically hitting all the security, hitting all the key things that you need and so directionally we think starting with VMware and building from there is probably the most realistic way we can get customers protected from a hyper cloud. >> So the vision is a single point of control that is SaaS based that lives in the cloud or lives wherever you want it to live? >> Right, it can be either. >> So one of our core tendencies here, right, is that we want and deliver the ability to protect our customer's data wherever it resides. Whether it's edge, core or cloud. >> So sticking on cloud for a second, and then sort of segue into the VMware conversation that I want to have is VMware is the sort of linchpin of your multi-cloud strategy. That makes a lot of sense. VMware is going to be a leader, if not the leader in multi-cloud. We'll see how that all shakes out. It's kind of jump ball right now but VMware is in pretty good position with 500,000 customers. But your perspective on cloud is different than say, take an AWS cloud provider, it's a place. Put your data in my cloud. You guys are talking about the experience. And that's really what you're trying to drive with VMware, whether is Ron-prem, whether it's in Google, Azure, AWS, wherever. The cloud, you name it. Is that the right way to think about your strategy? Specifically as it relates to multi-cloud. >> Yeah, so I think on the area of multi-cloud, it is a multi-cloud world. Years ago I was in a SaaS startup and we had customers that were looking to deploy to the cloud. And then that was the question. Okay, do we hedge on multi-cloud or not? As a SaaS provider, we actually implemented on both AWS and Azure at the time. Which became relevant, because now our customers are asking us, yes, my primary is with this particular hyper scaler. But do you also support this second hyper scaler? So the reality started to evolve. And so for us, yes, VMware is a very strategic aspect and partner with us, especially with Dell Technologies cloud. But we also have a multi-cloud relationship with AWS, with Azure and with Google. >> Yes, so the compatibility matrix, if you will, applies now to the cloud. >> Absolutely, absolutely. So now it's having that feature and functionality across multiple clouds. >> One of the things we obviously paid attention to is Project Tanzu with inside of VMware. All around bringing kind of Kubernetes and VMware together. How does that affect data protection? >> Well, I think it affects data protection in the sense that addressing the entire aspect of still your data is distributed now. And it's going to grow that way. I think that we've seen numbers upwards of 70% of applications will be container based. Some of that will be going forward to 2022 where there'll be multiple production applications that will be container based. I think what Tanzu will bring to the table is a cohesive way to manage and control that environment itself. >> Okay, and so maybe we could sort of drill into that a little bit. Containers, it's becoming more obvious that people want to persist some of that data. It's largely stateless, but you've got to figure out how to recover. So do you have solutions in that space, is that sort of more road mapping? You can talk about that a little bit. >> No, absolutely. So definitely we have concrete solutions with our Dell EMC PowerProtect data manager for Kubernetes. It's actually one of the first that was in the market to support cloud native environments. >> It is the first. >> Yeah, the first offering out there to support Kubernetes. And so the aspect there is that as cloud native has moved from DevOps, and now into production in the mission critical applications, now becomes the aspect of originally the DNA of DevOps was my data doesn't have to be persistent. Now when you move into a mission critical environment, you're entire environment needs to be protected. And to be able to bring those workloads back up should anything happen and to be able to protect that data that is critical to those workloads. >> Okay, and so you're saying you're first, and you see this as a differentiator in the marketplace, or is everybody going to have this, or it's one of these confusing ice cream cone of solutions. So why you guys? What's your big differentiation? Let's stick to containers. I have the same questions sort of overall come back to that. >> So great question, and the matter of fact is that with our experience across the edge, core and cloud, Kubernetes and containers will be prevalent throughout. And it'll be the way that applications will be developed. It's meeting the demands of the business and being agile. And I think that with our ability internally that would move to that agile emotion. We have that ability to address the customer's needs especially in the cloud native Kubernetes space. >> I think going back to what you said too about VMware, certainly our partnership there is differentiated. We even heard some echos of that during Vmworld. Pat Gelsinger usually doesn't give call outs on the main stage very frequently. And he said that they were working with us as a best-in-class partner for data protection with Tanzu. And so there is a very tight partnership there, so if I'm a customer and I'm looking at containers, I'm probably going to want to do it within the framework of VMware to start with. But it's important to point out that we're also not dependent on VMware. So we can still deliver protection for Kubernetes containers outside of say the VMware management domain. But I would say from a differentiation standpoint there are some real tight partnering going on to make these capabilities mature. >> Well it helps that your CEO owns 80% of the company. (laughing) But it's an interesting point you're making because again, dial back 10 years ago, VMware had much more of a Switzerland strategy under Maritz, almost to, at the time, EMC's detriment. I think Michael Dell is very clearly, as is Jeff Clarke, said look, we're going to do more integration. And Pat Gelsinger has been, look, I love all my partners. It's true but we're entering sort of a new era. And that integration is key, you know, again, because of the ownership structure, and your long history there. It's got to confer some advantages in the marketplace. >> Yeah, and he's also got to remove some of the headwinds to adoption of VMware cloud. And data protection, as we discussed often times can be a headwind if customers are concerned that they're not going to be able to protect their data, chances are they're going to stand pat for a while. So I mean you need to find ways to take some of those objections off the table. >> Yeah, and not to take anything away from your competitors. Look, it's an open API world, and again, people are going to compete. But at the end of the day this stuff is still really complex and if you can do some core engineering together it's definitely an advantage. Let's talk a little bit about cyber. I often say it's become a board level topic. It's not a matter of if, it's a matter of when. SecOps teams are overtaxed. I think I put out a stat lately, I got it from Robert Herjavec actually. He said think about this. The worldwide economy is 86 trillion and we spend .014% on cyber, that's it. We're barely scratching the surface. And that's part of the problem. Okay, but with that limited resource we have to be as smart as possible. You've got this ransomware coming in. So what are your customers asking you for and how are you responding? >> So it's interesting, right, because it is top of mind, cyber and cyber attacks, and it takes many forms. The attacks can be malware, they could be encryption, they could be deletion. Which is ultimately the worst case scenario. And I think as you go forward and you look at it cyber is the number one concern for any CIO, CISO or anyone that's worried about their security infrastructure. >> Which is everybody >> Which is everybody, right, exactly. I think that we have delivered for the cloud data protection area a first and best offering with an air gap data protection solution. So inherently, we can insulate and protect our customer's data from cyber threats. So when a ransom event occurs you can recover your data without having to pay that ransom. Or not be concerned that in most severe cases your data gets deleted. I think most recently there was a healthcare provider who was threatened about their data being deleted. And that was the worst case. We were able to protect their data in the sense that with our cyber recovery offering they protected their data in an air gap vaulted solution. And they didn't have to pay for that ransom. >> So what I'm hearing from you guys is okay, cloud, very important. Hybrid cloud, multi-cloud, fundamental to our strategy. VMware, they say bet on sure things. VMware is pretty much a sure thing. Large customer base, leader in the space. And then cyber as a key concern of customers, you want to expand the notion of backup and data protection to really point it at cyber as well. >> Absolutely, in fact with this recent research, it's called the Global Data Protection Index Survey and we just refreshed it. And what customers identified as the most compelling reasons to adopt cloud is for better performance, better data protection, and better security. Not necessarily in that order but those were the top three. So we look at that and say, you know we've got plays there. Certainly we have capabilities protecting workloads in the cloud whether they be virtual machines, cloud native, containers. But the security aspect of it is huge. Because oftentimes customers, and Dave, you and I were talking about this, they make some broader assumptions about once data is in the clouds they can kind of wash their hands and walk away. Not so fast, because certainly there is a shared responsibility model that extends not only to data protection, but also to security. Look, don't get me wrong, the cloud service providers have fantastic security capabilities, have a great perimeter. But as you said, it's not a question of if, it's a question of when. And when something happens, are you ready for it? So these solutions extend not only to on-prem but into the cloud. So it's that ability wherever the workload lives that you can get the right protection and what we're really now referring to as safeguarding data. Because it's a combination of data protection and security that's embedded and doing it wherever the workload resides. >> I'm glad you brought that up Colm. I have a follow up on that, but Nelson, did you want to add something? >> Well, I just want to mention that one of the biggest concerns is making sure that that data you vaulted is actually clean and safe. So we have a cyber sense capability within our cyber recovery product, that when you vault that data it does about 100 analytics on that data to make sure that there's no malware. That it's not infected. And it does it automatically and even on incremental using machine learning. >> That's really important because mistakes happen really fast. (laughing) So if you're vaulting corrupted data, >> What do you do? >> Oops. >> Yeah, exactly. >> I want to come back, I think the shared responsibility model is not well understand and there's a lot of confusion in the industry. At a conference this year, AWS' CISO Stephen Schmidt was saying, look all this talk about security is broken it's not really productive. The state of security in the cloud is actually really good and to your point Colm, yeah, he's right about that. Then you hear Pat Gelsinger saying, he's told me many times in theCUBE security is a do-over. To my point, you know the 86 trillion. And so I kind of lean, when I talk to IT people what Pat is saying. So you say okay, where is the dissidence there? Well, the reality is is the cloud service providers and the shared security model, they'll secure the physical infrastructure. But it's up to the customer to be responsible for everything else. You know, the edicts of the organization are applied. We were talking to the CISO of a large insurance company and she said to us, oh no, shared responsibility means it's our responsibility. So you're not going to go after the cloud service provider, you're going to go after the insurance company, or the financial service institution. Their brand is the one that's going to get hurt. So that's misunderstood. My question, very long winded rant, but what role do you guys play in that shared responsibility model? >> Well, ultimately it comes down to the customer. And the shared responsibility model really is admissible, as you mentioned, right? And so at the end of the day, you as the customer own and are responsible to protect that data. So your data protection strategy, your cyber resilience strategy has to be sound. And it has to be secured by those that can actually do it across multiple distribution models and platforms, whether it's edge, core or cloud. Whether it's VM's, containers. It doesn't change. You're still ultimately responsible for it. >> I think maybe what you might be driving at the question, Dave, is empowering the customers to maintain control of their data. And having the tools in place so that they feel comfortable. And part of it too is moving more towards automation. Because as their applications grow, and as Nelson said, become more distributed, as the data grows exponentially, this just fundamentally isn't a task that humans can manage very much longer. >> I'm glad you brought that up, because you ask a CISO, what's your number one problem? And he or she will tell you the skill sets to keep up with all this complexity. And that's where automation comes in. >> Correct, it does. So that's where we're taking it. Is trying to make things more automated and take tasks away from humans that they just can't keep up with. >> All right guys, I'll give you the last word. We go back a decade or so ago and backup was a whole different situation. And we saw the rise of virtualization and now cloud and all these other things that we have been talking about. Edge, the cyber threats, et cetera. So bring us home, where do you see the future and how does Dell EMC data protection fit in? >> It's an exciting time, it really is. It's kind of like the coming of that second storm as you mentioned. Businesses have that demand of needing more services to load more quickly in an agile fashion. And as they pair that with the growth of their data which is distributed, they really have that challenge overall of how do I manage this environment? So you have to have the observability to understand where your data is and to be able to monitor it. You have to be able to orchestrate your workloads so that they're automated, and the data protection of those workloads are automated as well. And so the imperative that aspects like Tanzu are addressing with cloud native, that Kubernetes brings to the table to deliver containerized applications. That's really quite honestly is the biggest evolution I've seen in my last 20 to 30 years. This is definitely a different paradigm shift. >> Yeah, you know, six months ago I was with a competitor and was taking a look at EMC, sorry, I should say Dell EMC, and I was wondering, should I make a move over here? And really what convinced me was the fact that the company was willing to basically solve internally the innovator's dilemma. You're making so much money on your existing portfolio, now you're going to start investing in what appears to be almost internal competition to your portfolio. It's not, it's complimentary. So that's what drove the decision for me to come here, but I will also say it's great to be a part of an organization that has a long-term vision. You remember, I think the phrase that was being used, being held captive to the 90-day shot clock. You know, the earnings reports and stuff. And that drives behavior. Well, if your organization is looking at decade-long goals, that means that you can actually plan to do things that over time are going to actually bring real value to customers. So I think we're doing the right things. We're obviously innovating, we're on this agile software development cadence gives us the ability to solve the problems incrementally over time so customers can see that value instead of waiting for large batch releases. But is also gives us the ability to say, hey, when we've made mistakes or when we hadn't seen certain things come around the corner, we're agile enough to change with that. So I think the combination of having that vision and putting in the investments, and we've kind of likened ourselves to the biggest startup in the industry with the backing of a Fortune 50. And so from a customer standpoint you got to look at that and think, you know, that's interesting, because I need to solve my current problems today. I need to have a path forward for the future. And who am I betting on to deliver that? And the other thing I'll leave on is customers are trying to work with fewer suppliers, not more suppliers. Because they want to reduce the complexity. Well who has the ability to not only bring data protection to bear, but a whole portfolio of technology is really end to end. That can snap into those environments to again reduce complexity and drive more business value. >> That's a really interesting point you make about consolidations. Ever since I've been in this industry people want to deal with less suppliers and reduce the complexity. But you still see startups and VC's funding things. And what's happened is this consolidation, the big guys, you guys are the biggest consolidator. And I always say the rich get richer. There's always this tension between sort of, do I go out and buy the spoke, best of breed tools, or do I get them from somebody who can help me across the portfolio? That's really where your strength is. Guys, thank you so much. This is really a very important topic. Data protection is one of the most important areas that we've been covering. I've been reporting on it a lot. As I said, a lot of venture money has been flowing in. So I really appreciate you guys coming in, sharing your perspectives. And best of luck in the marketplace. >> Appreciate it, Dave. >> Thanks, this was great. >> You're welcome. All right, and thank you for watching, everybody. This is Dave Vellante for theCUBE. We'll see you next time. (upbeat music)

>> From the SiliconANGLE Media Office in Boston, Massachusetts, it's theCUBE! Now here's your host, Dave Vellante. >> Hi, everybody, welcome to this Cube Insights, powered by ETR. In this breaking analysis I want to talk to you about what I learned this week at Dell Technology's financial analyst meeting in New York. They gathered all the financial analysts, Rob Williams hosted it, he's the head of IR, Michael Dell of course was there. They had Dennis Hoffman who is the head of strategic planning, Jeff Clarke who basically runs the business and Tom Sweet, of course, who was the star of the show, the CFO, all the analysts want to see him. Dell laid out its longterm goals, it provided much clearer understanding of its strategic direction, basically focused on three areas. Dell believes that IT is getting more complex, we know that, they want to capitalize on that by simplifying IT. We'll talk about that. And then they want to position for the wave of digital transformations that are coming and they also believe, Dell believes, that it can capitalize on the consolidation trend, consolidating vendors, so I'll talk about each of those. And so let me bring up the first slide, Alex, if you would. The takeaways from the Dell financial analyst meeting. Let me share with you the overall framework that Tom Sweet laid out. And I have to say, the messaging was very consistent, these guys were very well-prepared. I think Dell is, from a management perspective, very well-run company. They're targeting three to 5% growth on what they're saying is a 4% GDP forecast. Or sorry, 4%, I have GDP here, it's really 4% industry growth. GDP's a little lower than that obviously. So this is IDC data, Gartner data, 4% industry growth. So that's an error on my part, I apologize. The strategies to grow relative to their competition. So grow share on a relative basis. So whatever the market does, again, not GDP, but whatever the market does, Dell wants to grow faster than the market. So it wants to gain share, that's its primary metric. From there they want to grow operating income and they want to grow that faster than revenue, that's going to throw off cash. And then they're going to also continue to delever the balance sheet. I think they paid down 17 billion in debt since the EMC acquisition. They want to get to a two X debt to EBITA ratio within 18 months. And what they're saying is, you know, they talked about, Tom Sweet talked about this consistent march toward investment-grade rating. They've been talkin' about that for awhile. He made the comment, we don't need to have a triple A rating but we want to get to the point where we can reduce our interest expense, and that will, 'cause they'll drop right into the bottom line. So they talked about these various levers that they can turn, some of them under the P and L, gaining share, some are their operating structure and their organizational structure, and one big one is obviously their debt structure. The other key issue here is will this cut the liquidity discount that Dell faces? What do I mean by that? Well, VMware has about a $60 billion valuation. Dell owns about 80% of VMware, which would equate to 48 billion. But if you look at Dell's market cap, it's only 37 billion. So it essentially says that Dell's core business is worth minus 11 billion. We used to talk about this when EMC owned VMware. Its core business only comprised about 40% of the overall value of the company, in this case because of the high debt, Dell has a negative value. And it's not just the high debt. Michael Dell has control over the voting shares, it's essentially a conglomerate structure, there's very high debt, and it's a relatively low margin business, notwithstanding VMware. And so as a result, Dell trades at a discount relative to what you would think it should trade at, given its prominence in the market, $92 billion company, the leader in every category under the sun. So that's the big question is can Dell turn these levers, drop EBITA or cash to the bottom line, affect operating income, and then ultimately pay down its debt and affect that discount that it trades at? Okay, bring up, if you would, Alex, the next slide. Now I want to share with you the takeaways from the Dell line of business focus. This really was Jeff Clarke's presentations that I'm going to draw from. Servers, we know, they're softer demand, but the key there is they're really faced tough compares. Last year, Dell's server business grew like crazy. So this year the comparisons are lessened. But there's less spending on servers. I'll share with you some of the ETR data. Storage, they call it holding serve, you saw last quarter I did an analysis, I took the ETR data and the income statement, it showed Pure was gaining share at like 22% growth from the income statement standpoint. Dell was 0% growth but is actually growing faster than its competitors. With the exception of Pure. It's growing faster than the market. So Dell actually gained share with 0% growth. Dell's really focused on consolidating the portfolio. They've cut the portfolio down from 80, I think actually the right number is 88 products, down to 20 by May of 2020. They've got some new mid-range coming, they've just refreshed their data protection portfolio, so again, by May of next year, by Dell Technologies World they'll have a much, much more simplified portfolio. And they're gaining back share. They've refocused on the storage business. You might recall after the acquisition, EMC was kind of a mess. It was losing share before the acquisition, it was so distracted with all the Elliott Management stuff goin' on. And kind of took its eye off the ball, and then after the acquisition it took awhile for them to get their act together. They gained back about 375 basis points in the last 18 months. Remember a basis point is 1/100th of 1%. So gaining share and their consistent focus on trying to do that. Their PC business, which is actually doin' quite well, is focused on the commercial segment and focused on higher margins. They made the statement that the PCs are kind of undersupply right now so it's helping margins. There's a big focus in Jeff Clarke's organization on VMware integration. To me this makes a lot of sense. To the extent that you can take the VMware platform and make Dell hardware run VMware better, that's something that is an advantage for Dell, obviously. And at the same time, VMware has to walk the fine line with the ecosystem. But certainly it's earned the presence in the market now that it can basically do what I just said, tightly integrate with Dell and at the same time serve the ecosystem, 'cause frankly, the ecosystem has no choice. It must serve VMware customers. The strategy, essentially, is to, as I say, capitalize on vendor consolidation, leverage value across the portfolio, so whether it's pivotal, VMware integration, the security portfolio, try to leverage that and then differentiate with scale. And Dell really has the number one supply chain in the tech business. Something that Dave Donatelli at HP, when he was at HP, used to talk about. HPE doesn't really talk about that supply chain advantage anymore 'cause essentially it doesn't have it. Dell does. So Jeff Clarke's reorganization, he came in, he streamlined the organization, really from the focus on R and D to product to collaboration across the organization and the VMware integration. I actually was quite impressed with when I first met Jeff Clarke I guess two years ago now, what he and the organization have accomplished since then. No BS kind of person. And you can see it's starting to take effect. So we'll keep an eye on that. The next slide I want to show you, I want to bring in the ETR data. We've been sharing with you the ETR spending intention surveys for the last couple of weeks and months. ETR, enterprise technology research, they have a data platform that comprises 4,500 practitioners that share spending data with them. CIOs, IT managers, et cetera. What I'm showing here is a cut off of the server sector. So I'm going to drill down into server and storage. So these are spending intentions from the July survey asking about the second half of 2019 relative to the first half of 2019. And this is a drill-down into the giant public and private firms. Why do I do that? Because in meeting the ETR, this is the best indicator. So it's big, big public companies and big private companies. Think Uber. Private companies that spend a ton of dough on IT. UPS before it went public, for example. So those companies are in here. And they're, according to ETR, the best indicators. What this chart shows, so the bars show, and I've shared this with you a number of times, the lime green is we're adding, we're new to this platform, we're new adoption. The evergreen is we're spending more, the gray is we're spending the same, the light red or pink is we're spending less, and the dark red is we're leaving the platform. So if you subtract the red from the green you get what's called a net score, and that's that blue line. And this is the overall server spending intentions from that July survey. The end is about 525 respondents out of the 4,500. And this is, again, those that just answered the question on server. So you can see the net score on server spend is dropping. And you can see the market share on server is dropping. The takeaway here is that servers, as a percentage of overall IT spend, are on a downward slope, and have been for quite some time. Back to the January '16 survey. Okay, so that's going to serve us. Let's take a look at the same data for storage. So if, Alex, if you bring up the storage sector slide, You can see kind of a similar trend. And I would argue what's happening here, a couple of things. You've got the CLOB effect, I'll talk about that some more, and you've also got, in this case, the flash, all-flash array effect. What happened was you had all-flash arrays and flash come into the data center, and that gave performance a huge headroom. Remember, spinning disk was the last bastion of mechanical movement and it was the main bottleneck in terms of overall application performance. IO was the problem. Well you put a bunch of flash into the system and it gives a lot of headroom. People used to over-provision capacity just for performance reasons. So flash has had the effect of customers saying, hey, my performance is good, I don't need to over-provision anymore, I don't need to buy so much. So that combined with cloud, I think, has put down the pressure on the storage business as well. Now the next slide, Alex, that I want you to bring up is the vendor net scores, the server spending intentions. And what I've done is I've highlighted Dell EMC. Now what's happening here in the slide, and I realize it's an eye chart, but basically where you want to be in this chart is in the left-hand side. What it shows is the spending intentions and the momentum from the October '18, which is the gray, the April '19, which is the blue, and then the July '19 which is the most recent one. Again, the end is 525 in the servers for the July '19 survey. And you can see Dell's kind of in the middle of the pack. You'd love to be in the left-hand side, you know, Docker, Microsoft, VMware, Intel, Ubuntu. And you don't want to be on the right-hand side, you know, Fujitsu, IBM, is sort of below the line. Dell's kind of in the middle there, Dell EMC. The next slide I want to show you is that same slide for storage. And again, you can see here is that on-- So this is vendor net scores, the storage spending intentions. On the left-hand side it's all the high growth companies. Rubrik, Cohesity, Nutanix, Pure, VMware with vSAN, Veeam. You see Dell EMC's VxRail. On the right-hand side, you see the guys that are losing momentum. Veritas, Iron Mountain, Barracuda, HitachiHDS, Fusion-io still comes up in the survey after the acquisition by Western Digital. Again, you see Dell EMC kind of holding serve in the middle there. Not great, not bad. Okay, so that's kind of just some other ETR data that I wanted to share. All right, next thing we're going to talk about is the macros market summary. And Alex, I've got some bullet points on this, so if you bring up that slide, let me talk about that a little bit. So five points here. First, cloud continues to eat away at on-prem, despite all this talk about repatriation, which I know does happen. People try to throw everything to the cloud and they go, whoa! Look at my Amazon bill, yeah, I get that. That's at the margin. The main trend is that cloud continues to grow. That whole repatriation thing is not moving the on-prem market. On-prem is kind of steady eddy. Storage is still working through that AFA injection. Got a lot of headroom from performance standpoint. So people don't need to buy as much as they used to because you had that step function in performance. Now eventually the market will catch up, all this digital transformation is happening, all this data is flowing through the system and it will catch up, and the storage market is elastic. As NAN prices fall, people will, I predict, will buy more storage. But there's been somewhat of a lull in the overall storage market. It's not a great market right now, frankly, at the macro level. Now ETR does these surveys on a quarterly basis. They're just about to release the October survey, and they put out a little glimpse on Friday about this survey. And I'll share some bullet points there. Overall IT spending clearly is softening. We kind of know that, everybody kind of realizes that. Here's the nuance. New adoptions are reverting to pre-2018 levels, and the replacements are rising. What does this mean? So the number of respondents that said, oh yes, we're adopting this platform for the first time is declining, and the replacements are actually accelerating. Why is that? Well I was at ETR last week and we were talking about this and one of the theories, and I think it's a good one, is that 2016, 2017 was kind of experimentation around digital transformation. 2018, people started to put things into production or closer to production, they were running systems in parallel, and now they're making their bets, they're saying, hey, this test worked, let's put this heavy into production in 2019, and now we're going to start replacing. So we're not going to adopt as much stuff 'cause we're not doing as much experimentation. We're going to now focus and narrow in on those things that are going to drive our business, and we're going to replace those things that aren't going to drive our business. We're going to start unplugging them. So that's some of what's happening. Another big trend is Microsoft. Microsoft is extending its presence throughout. They're goin' after collaboration, you saw the impact that they had on Slack and Slack stock recently. So Slack Box, Dropbox, are kind of exposed there. They're goin' after security, they've just announced a SIM product. So Splunk and IBM, they're kind of goin' after that base. The application performance management vendors. For instance, New Relic. Microsoft goin' after them. Obviously they got a huge presence in cloud. Their Windows 10 cycle is a little slower this time around, but they've got other businesses that are really starting to click. So Microsoft is one of the few vendors that really is showing accelerated spending momentum in the ETR data. Financial services and telcos, which are always leading spender indicators, are actually very weak right now. That's having a spillover effect into Europe, which is over-banked, if I can use that term. Banking heavy, if you will. So right now it's not a pretty picture, but it's not a disaster. I don't want to necessarily suggest this as like going back to 2007, 2008, it's not. It's really just a matter of things are softening and it's, you know, maybe taking a little breath. Okay, so let me summarize the meeting overall. Again, it was a very well-run meeting. Started at 9:00, ended at 12:00, bagged lunch, go home. Nice and crisp. So these guys are very well-prepared. I think, again, Dell is a extremely well-managed company. They laid out a much clearer vision for Wall Street of its strategy, where it's headed. As they say, they're going after IT complexity. I want to make a comment on this. You think about Legacy EMC. Legacy EMC was not the company that you would expect to deal with complexity. In fact, they were the culprit of complexity. One of the things that Jeff Clarke did when he came in, he said, this portfolio's too complex, needs to be simplified. Joe Tucci used to say, overlap is better than gaps. Jeff Clarke said we got too much overlap. We don't have a lot of gaps so let's streamline that portfolio. Taking advantage of vendor consolidation, this is an interesting one. Ever since I've been in this business, which has been quite a long time now, I've been hearing that buyers want to consolidate the number of vendors that they have. They've really not succeeded in doing that. Now can they do that now 'cause there are less vendors? Well, in a sense, yes, there are less sort of on-prem big vendors. EMC's no longer in the market, you don't have companies like Sun and Digital anymore, Compact is gone. HP split in two, but still. You're not seeing a huge number of new vendors, at scale, come into the market. Except you've got AWS and Google as new players there. So I think that injects sort of a new dynamic that a lot of people like to put cloud aside and kind of ignore it and talk about the old on-prem business, but I think that you're going to see a lot of experimentations and workload ins and outs, particularly with AWS and Google and of course Azure, which is in itself, their cloud is almost a separate force. So we'll see how that shakes up. As I say, servers right now, Dell's got a very tough compare. I think Dell will be fine in the server space. Storage, it's all about simplifying the portfolio, they've got a refreshed portfolio focused on regaining share. They've rebranded everything Power, so their whole line is going to be Power by, if it's not already, by May of next year, Dell Technologies World. It's a much more scalable portfolio. And I think Dell's got a lot of valuation levers. They're a $92 billion company, they've got their current operations, their current P and L, their share gains, their cross-company synergies, particularly with VMware, they can expand their TAM into cloud with partnerships like they're doing with AWS and others, Google, Microsoft. The Edge is a TAM expansion opportunity to them. And also corporate structure. You've seen them. VMware acquired Pivotal. They're cleaning that up. I'm sure they could potentially make some other moves. Secureworks is out there, for example. Maybe they'll do some things with RSA. So they got that knob to turn and they can delever. Paying down the debt to the extent that they can get back to investment grade, that will lower their interest rates, that'll drop right to the bottom line, and they'll be able to reinvest that. And Tom Sweet said, within 18 months, we'll be able to get there with that two X ratio relative to EBITA, and that's when they're going to start having conversations with the rating agencies to talk about you know, hey, maybe we can get a better rating and lower our interest expense. Bottom line, did Wall Street buy the story? Yes. But I don't think it's going to necessarily change anything in the near term. This is a show me from Missouri, prove it, execute, and then I think Dell will get rewarded. Okay, so this is Dave Vellante, thanks for watching this Cube Insights powered by ETR. We'll see ya next time. (electronic music)

>> live from San Francisco, celebrating 10 years of high tech coverage. It's the Cube covering Veum World 2019. Brought to you by VM Wear and its ecosystem partners. >> Welcome back, everyone. Day three Q coverage here in San Francisco for V emerald. 2019. I'm just for a student, Um, in here with David Lan. Take days free kick off. We have two sets wall to wall coverage. Guys, this is the time where we get to take a deep breath two days under our belts look and reflect on all the news we've covered in a dark to last analysis sessions but also kind of riff on. We got two nights in hallway conversations we learned a lot of the party means do. I learned a lot last night. Dave. I know you. You learned a lots, do you, Thomas? When things that the chatter Certainly twittersphere hashtag the emerald. A lot of action on there, but it's the hallway conversations. It's the party that people have a few cocktails in them day that you start to hear the truth. The real deal comes out, >> No doubt. And and again Jon Stewart, there's real concern over from the from the practitioners we talked to about this acquisition spree. Are they going to be integrated? Are they going to just throw all this stuff at us and keep jamming products and service is down our throats? Or is this going to be a coherent set of solutions that solves our problem? We also had a little little interesting side conversation about, you know, Snowflake, Frank's lumens new company and how basically Frank is bringing back the Pirates from Data Domain and from service. Now Mike Scarpelli is over there. He's a rock star. CFO Beth White is eventually is back over there. And Frank's Lupin. He's the guy who takes companies from, you know, 100 million to a billion, so that's gonna be >> very serious money making him going on there. >> We have been following his career for a number of years now. We watched him take data domain. We watched him pull that that rabbit out of his hat with the sale with net app, and then the emcee swooped in. And then we saw what he did service. Now we've documented this is an individual to watch, you know, >> he's a world class management team member I mean, he's executes. >> Oh, yeah, no doubt. And >> he has >> a formula that's been proven and in time and time again. And to me, the biggest testament salute Min is the success of the continued success of Data Domain. After he left Hey, he really helped clean up the emcees data protection mess. Um, and then the second thing is, look at service now is performance after he left, I haven't missed a beat. And, yeah, John Donahoe, great executive and all, but it's because Frank's Lubin had everything in place and that was a really well run >> dry. And they got a nice little oracle like business model. >> Yeah. No, you're right. They kind of, you know, the big complaint now as well. Your price is too high that Oracle. >> What have you learned? What you hear in the hallways? I mean, a lot of chatter. >> Yes, John, we We've been reflecting back a lot. It's 10 years in 10th year of the Cube here and back here in San Francisco. The new Mosconi, our third show that I've been at this year in Mosconi and we always track year to year. But since it's been what 45 years since we were here for VM World. When I talked to the average vendor. When I talk to you know, the analysts here were like, Oh, thank goodness we're not in Vegas. When I talked to the average attendee, they're like, Oh my God, what happened to San Francisco since last time we were here? It is too expensive. And the experience walking around San Francisco has really not nearly as nice as it might have been five or 10 years ago. And many of them we were talking to, Ah, woman that runs an event that has been Vegas in San Francisco. And she said, Oh, we did in San Francisco and got tremendous feedback. Don't do it there again. Brings back to Vegas both for costs and the enjoyment of being around the environment. >> Where was a shit show here in San Francisco is horrible right now, I got to say to your right eye was walking this morning from my hotel. Literally. A homeless person passed out the middle of the sidewalk. Um, your smells like urine. It's P, and it's It's just I mean, it's really bad this tense now. I mean City of San Francisco is gonna do some. Mosconi, by the way, has been rebuilt. Awesome. So, you know, in terms of the new Mosconi stew, that's a serious upgrade. Hotel rooms are scarce and just the homeless problem. It's just ridiculous. I don't know what they're >> doing. So one of the other big things when I was reflecting coming into here two years ago when VM wear really started down right before the war on AWS announcement, they made a big announcement. IBM because they had sold off the cloud air toe Oh, VH And for two years Oh, VH was a big partner, Talked about that transition, said we handed off this great asset over h isn't here at the show. I was like, Oh, my gosh, you know, that was, you know, such a big story and other companies like New >> 12. That's good. One lets someone who's not at the show and why. Yeah, oh, VH wired to hear >> They aren't here because, well, they've got customers. More of them are in Europe That was supposed to be a big entry into the United States. Obviously, it wasn't as valuable for them to be here, even though I'm sure they're still part of that service provider ecosystem. They have other big one for us, and we've had on the Cube Nutanix. You know, we've had Dheeraj Pandey. First time we had him on was that this show is still the majority of Nutanix. Customers are VM where customers I've talked to lots of Nutanix customers at the event, even part of the analyst event. Some of the customers I talked to were like, Oh, yeah, my hardware stacks Nutanix and amusing NSX. And I'm using other things there. But they are not here. They're not allowed to be at the show. And I >> mean, they were blatantly told they can't come. >> They can't come here. They can't come to the regional things. They can't do the partner things. So that that that relationship is definitely >> from red hat. What kind of presence have you seen from Red s? >> So their number companies like red Hat that they're kept at a lower level of sponsorship. So they're here. They participate, you know. Open shift, of course, is you know, big enemy for cloud native. Lots of open shift runs on V sphere. So many of those companies that are part of the ecosystem, but not the ones that they want to celebrate and put front and forward. So it's always interesting kind of walk around on those. Even Microsoft is an interesting relationship for, you know, decades with the M wear. You know, of course, azure they partner with. But hyper V was long a competitors. So, you know, we understand those competitive relationships >> could be interesting. Stew and Dave on the ecosystem Jerry Chan Day when we just doing my interview yesterday on the other set mentioned that the ecosystem reinvents itself the community. The question now is with Delhi emceeing Del Technologies obviously heard Michael Dell essentially laying out his plan, which is he's got. He's trying to keep people distracted, but the bottom line is going to top people putting together the cloud right well service provider model. So you know, that's what he's gonna be a big impact. VM wear the crown jewel of Del Technologies certainly is looking more and more like It's >> well and yesterday remember the first VM world we did in 2010? It was It was del I mean course and see only the time Who's Del? It was H p Yes, the emcee was there, but it was net app. I mean, everybody could've had equal standing yesterday at the keynotes. It was Project Dimension of V M, where cloud on Delhi emcee and long keynotes >> data protection into the VM were >> also it's It's all very heavily, you know, Jeff Clarke has his his thumb on, you know, the the deli emcee folks pushing that through Veum where Michael is orchestrating the whole thing. Pat obviously is allowing it. I was sitting in the audience Next next, Some folks from Netapp they're like, you know, this kind of a bummer. Calvin Sito from h p e tweeted Wow how to stick it in the face of your ecosystem partners. He then later went on Facebook saying, Hey, I love this ecosystem, so sort of balancing it out because, you know, he wants to be a good, good citizen, but clearly the ecosystem partners who basically brought VM where you know, to the the position where it's in through distribution, our little ruffled. Right now you can't blame him, But at the same time, the mandate is clear. Michael Dell is driving his products and his solutions through VM were period the end. And, you know, if you don't like it, leave >> right. They had such great success with V San and VX rail in that joint product development and go to market. If they can replicate that with a number of other solutions, they get that the synergies. If >> you don't like it, don't leave. That leave is worse than that. They say you don't like it, you know, invited you. But >> how about what Pat said yesterday in the Cube about when they announced on Gwen heavily leaned into V san. He said publicly that Joe Tucci was pissed and I hate her. They were going at it so that so that shows you the change, right? I mean, so so so e m. C. When it owned VM where was very cautious about allowing Veum wears a software company to drive value somewhere Now is just acting like a software company. >> Well, I think I mean, I learned last night's do, um and you can appreciate this. I learned that the top executives of'em where are looking heavily and working hard at understanding and drive them kubernetes cloud native thing because this is not a throwaway deal. This is not a you know, far anything that they are investing. They get their top brass tech execs on kubernetes fto. Two big players job. Ada, Craig McCaw calumnies. We know interviews since day one, but I think the cloud native thing is going to be interesting. And I think it's gonna be evolution. I think there's gonna be a very dynamic road thing's gonna be a series, of course, corrections, but directionally they're all in on. They're going for it, they're not. >> And actually, I had a, you know, good discussion with Chad Attack. It's a good friend of the program now working at GM, where for the first time, but came from AMC worked at Pivotal. He said, culturally, such a gap between VM wear don't have to touch your app, you know, move everything along lifted shift is nice and easy versus pivotal, you know must go completely You know, dual programming, you know, agile everything there, so bridging those because there's multiple paths and the rail pharaoh announcement is that would be cloud native stuff that won't necessarily go to the EMS. We're going to retool V EMS to now be a platform for kubernetes so that they have a few passed to bridge or to build towards the future. Here's the >> answer strategy. Discussion That and Rayo Farrell was now running Cloud native. Think this is just really >> ties in the interesting discussion that I had with some folks was that you've essentially got well, Jerry Chen brought this up last time we had him on it and reinventing because >> we have >> a conversation all the time about this Amazon have to go up the stack. And Jerry Chen made a really he said, Look, it they're not They're not gonna become an e r peace offer company. What they're gonna do is give tools to the builders so that they can disrupt Europea. They can disrupt service. Now they can disrupt Oracle. That's their strategy, at least for now. Okay, so what does that say? I think the strategy discussion inside of'em were and and l is about by whatever clouds gonna be 35 to 50% of the market. Fine. And the cloud native abs. Great. But you got this mission critical. E r p is an example. Database saps that are on Prem. What we have to do is keep them there. So we're going to sell to the incumbents and we're going to give them cloud native tools, toe modernize. Those APS have build new acts on Prem, and that's the that is the collision course that's coming. So the big question is, can the cloud native guys and AWS disrupt that >> huge? I've always said I'm is on and like the way they're coming in, a tsunami is coming in. And who's gonna build that sea wall to stop it right? And that's essentially only hope that these guys have. You look at all the competitive strategy. Was Oracle. Whoever just gotta stop it? You can't like >> the sea >> wall. That's a great building. A sea wall I was, I would say, is Is that you know, they're only hope at this point is to, you know, get in the game because see Amazon is the stack. They're not really moving up the stack. You hear that from Cisco and Dale and other people? That's where it's a game of musical chairs. Right now, the music's you know, there's still a lot of shares left, but soon chairs getting pulled away and Cisco Deli emcee VM, where they're all fighting for these big chairs. And one >> thing >> we talked about yesterday is that VM wears very directional, product driven. Otherwise they pick a direction, is a statement of direction and don't really have a lot of meat on the bone. In the product side, Sister is actually in market with service providers there in market with NETWORKINGS to this no vapor there that's installed basis and incumbent business. You have developers Esso Baton talks about suffered to find data center, suffer defined networking. I mean, come on, Really. I mean, they're getting there, but it didn't have the complete solution. Cisco >> Coming into this week, I expected here a bit more about the progress and all the customers of'em wear on AWS and feel like Vienna actually downplayed the AWS. We know what a strong partnership it is at every Amazon show we go to, and we got a lot of them Now there's a big presence there, and I can talk to customers that are starting to roll out and move there, but it felt like it was David's. You pointed out there are some messaging differences when you talk about multi cloud and how they're positioning it. So, you know, put those >> here Amazon. If your Amazon you're not happy with Microsoft Dell Technologies World The big announcement that was positioned a cloud foundation Although it wasn't a joint engineering, But the press picked it up as though the Amazon deal has been replicated with Microsoft and Google. I mean, you gotta be gotta be hurt if your Amazon >> So I've I've just been taking notes this this event, there's I've noted at least five major points of difference between a W s what they're saying and their philosophy and the anywhere so eight of us. We know they they don't talk multi cloud. They've told their partners, If you're doing joint marketing with us, you cannot say multi cloud aws that reinforce John. We saw this. Steven Schmidt said that this narrative that security is broken doesn't help the industry. Security's not broken, you know, we're doing great. The state of the nation is wonderful. Aws Matt. Not really. I agree. By the way. Uh, that's not the case. I agree with Pat saying Security's broken. It's a do over VM where wants to be the best infrastructure and developer software company. Who's the best infrastructure and software development platform. Eight of us. The M one wants to be the security cloud. Who's the security cloud? Eight of us. And then, uh, they talked about 10,000 cloud data Listeners are those really cloud data centers at Vienna. And the last one was this was a little nuanced Veum was talking about We know about migrating, modernize, lifted ship shift and then modernize The empire's not talking about modernize and then migrate. If you want to. I totally in conflict >> as a collision course. That's got Look, look, look at the data center was Look, it looks like we're going. We're going away, right to the data center. Staying. That's music to Michael Dell's VM. Where's years they live in the Data City? Do you pointed out yesterday? Data Senate goes away. So does begin. Where's business? >> One of things. I'm surprised. I'm wondering you both have talked to some of the service fighter telco pieces of'em, where they're doing that project dimension, which is the VM where stack on del that looks just like outposts on. And I know they had deployments on this for months. If I was them, you know, it's everybody's hearing about Outpost to talk about it, being more like we're already doing it in. This has you in that Amazon ecosystem. It might be a little strong for the Amazon story, but have you been hearing any about that this week? >> I think they keep a lot of cards close to the chest, but it's clear from the announces that they're doing certainly del the VM, where on Delhi Emcee Cloud or whatever it's called, it's not a cloud but their their infrastructure that is essentially a managed service. That's gonna be really strong for I t. People, because I think that the value proposition of going toe i t and saying we have this, you don't need to do anything. It's very strong, I mean, because I didn't want him >> and justified because this the project to mention it is that single, that thinner stack like what we saw on Outpost in the Amazon video, as opposed to Veum, where cloud on AWS, which is the full C i r h d. I stack. >> I haven't heard anything still on >> well, but the conversation I had from from Vienna, where standpoint, they could make money on that manage service. That's why it's the preferred partnership, right? And so that's their part of their cloud play. If you don't have a public cloud, I said this yesterday, you have to redefine Cloud and you have to get into cloud service. And that's what's happening. And that's exactly what's happening. And what I like about what V M where is doing is they are transitioning their model to a sass based model. Now it's only 12 and 1/2 percent of the revenues today. But both pivotal and carbon black are gonna add, you know, ah, $1,000,000,000 next year to that subscription based $3 billion in year two. Um, and so you know, Pat said the other day, I think we could get to 50 50. I don't necessarily think in the near term we're gonna go beyond that. It's not the Adobe >> way could be critical. Critical of'em were in some areas, but I gotta tell you their core strength that they went to a software operators on the data center friend of prices. That's been a great strategy. Focusing on their core building from there is Jerry 10 point out adding other products so their software company, So I think they're really got a good solution. And you? The data shows that people are increasing their spending, John. Just one based on >> that. Because I had a couple of really good conversation with customers, customers that would deploy VCF So they've got the full stack on there. So using H C I, but not necessarily on Dell hardware, could be Cisco Hardware. Could be HB hardware in the like or they're buying NSX. But the virtual ization team owns it, and they get kind of put in. A box storage team says That's not the array I'm used to buy. Well, maybe I'll put a pure storage box and put it in between. The networking team says I'm refreshing my Cisco hardware. You know, we're like, but we have NSX, and it's great. Well, you can use NSX over there. We're going to use a C I over here. So the term I heard from a number of customers is organizations still have hardware to find roles, and they're trying to figure out how to move to that software world. Which hurts me, cause I spent years trying to get beyond silos and helping people you know, move through those environments. And still, in 2019 it's a big challenge. That organizational shift is we know how tough that is. >> So just couple points in the data, because you're right. There are some countervailing trends, though. So, yes, people are spending Maurin VM where in the second half. But at the same time, the data shows that cloud is hurting VM wear spend. So this that's kind of gets interesting. Our containers gonna kill VM where? No, there's no evidence that container's air hurting VM where spend. But there's clearly risks there, you know, as we've talked about who's best position of multi cloud. Well, it turns out three guys with the public cloud are best positioned in multi Google and Microsoft on, and so and then the pivotal thing is interesting, and ties ties all this in so that the data is actually really interesting. It's like you're seeing tugs at both sides, and I think your your notion about the seawall is dead on. That's exactly what they're doing. >> You see that with Oracle's trying to stop jet. I just want they can't win this one to stop Amazon just on the tracks gave great data. Great reporting, Stoop. Good observations. Get all the day that night and parties we're gonna certainly keep doing that. Day three of wall to wall coverage here. You bringing to the insights and interviews here live from the Emerald Twin 19. Stay with us for more after this short break.

>> From the Silicon Angle Media office in Boston Massachusetts, it's theCUBE. Now here's your host, Dave Vellante. (upbeat music) >> Hello everybody, this is Dave Vallante with Stu Miniman and we're going to take a look back at ten years of theCUBE at VMworld and look forward to see what's coming next. So, as I say, this is theCUBE's 10th year at VMworld, that's VMworld, of course 2019. And Stu, if you think about the VMware of 2010, when we first started, it's a dramatically different VMware today. Let's look back at 2010. Paul Maritz was running VMware, he set forth the vision of the software mainframe last decade, well, what does that mean, software mainframe? Highly integrated hardware and software that can run any workload, any application. That is the gauntlet that Tucci and Maritz laid down. A lot of people were skeptical. Fast forward 10 years, they've actually achieved that, I mean, essentially, it is the standard operating system, if you will, in the data center, but there's a lot more to the story. But you remember, at the time, Stu, it was a very complex environment. When something went wrong, you needed guys with lab coats to come in a figure out, you know, what was going on, the I/O blender problem, storage was a real bottleneck. So let's talk about that. >> Yeah, Dave, so much. First of all, hard to believe, 10 years, you know, think back to 2010, it was my first time being at VMworld, even though I started working with VMware back in 2002 when it was like, you know, 100, 150 person company. Remember when vMotion first launched. But that first show that we went to, Dave, was in San Francisco, and most people didn't know theCUBE, heck, we were still figuring out exactly what theCUBE will be, and we brought in a bunch of our friends that were doing the CloudCamps in Silicon Valley, and we were talking about cloud. And there was this gap that we saw between, as you said, the challenges we were solving with VMware, which was fixing infrastructure, storage and networking had been broken, and how were we going to make sure that that worked in a virtual environment even better? But there were the early thought leaders that were talking about that future of cloud computing, which, today in 2019, looks like we had a good prediction. And, of course, where VMware is today, we're talking all about cloud. So, so many different eras and pieces and research that we did, you know, hundreds and hundreds of interviews that we've done at that show, it's definitely been one of our flagship shows and one of our favorite for guests and ecosystems and so much that we got to dig into at that event. >> So Tod Nielsen, who was the President and probably COO at the time, talked about the ecosystem. For every dollar spent on a VMware license, $15 was spent on the ecosystem. VMware was a very, even though they were owned by EMC, they were very, sort of, neutral to the ecosystem. You had what we called the storage cartel. It was certainly EMC, you know, but NetApp was right there, IBM, HP, you know, Dell had purchased EqualLogic, HDS was kind of there as well. These companies were the first to get the APIs, you remember, the VASA VAAI. So, we pushed VMware at the time, saying, "Look, you guys got a storage problem." And they said, "Well, we don't have a lot of resources, "we're going to let the ecosystem solve the problem, "here's an API, you guys figure it out." Which they largely did, but it took a long time. The other big thing you had in that 2010 timeframe was storage consolidation. You had the bidding war between Dell and HP, which, ultimately, HP, under Donatelli's leadership, won that bidding war and acquired 3PAR >> Bought 3PAR >> for 2.4, 2.5 billion, it forced Dell to buy Compellent. Subsequently, Isilon was acquired, Data Domain was acquired by EMC. So you had this consolidation of the early 2000s storage startups and then, still, storage was a major problem back then. But the big sea change was, two things happened in 2012. Pat Gelsinger took over as CEO, and VMware acquired Nicira, beat Cisco to the punch. Why did that change everything? >> Yeah, Dave, we talked a lot about storage, and how, you know, the ecosystem was changing this. Nicira, we knew it was a big deal. When I, you know, I talked to my friends that were deep in networking and I talked with Nicira and was majorly impressed with what they were doing. But this heterogeneous, and what now is the multi-cloud environment, networking needs to play a critical role. You see, you know, Cisco has clearly targeted that environment and Nicira had some really smart people and some really fundamental technology underneath that would allow networking to go just beyond the virtual machine where it was before, the vSwitch. So, you know, that expansion, and actually, it took a little while for, you know, the Nicira acquisition to run into NSX and that product to gain maturity, and to gain adoption, but as Pat Gelsinger has said more recently, it is one of the key drivers for VMware, getting them beyond just the hypervisor itself. So, so much is happening, I mean, Dave, I look at the swings as, you know, you said, VMware didn't have enough resources, they were going to let the ecosystem do it. In the early days, it was, I chose a server provider, and, oh yeah, VMware kind of plays in it. So VMware really grew how much control and how much power they had in buying decisions, and we're going through more of that change now, as to, as they're partnering we're going to talk about AWS and Microsoft and Google as those pieces. And Pat driving that ship. The analogy we gave is, could Pat do for VMware what Intel had done for a long time, which is, you have a big ecosystem, and you slowly start eating away at some of that other functionality without alienating that ecosystem. And to Pat's credit, it's actually something that he's done quite well. There's been some ebbs and flows, there's pushback in the community. Those that remember things like the "vTax," when they rolled that out. You know, there's certain features that the rolled into the hypervisor that have had parts of the ecosystem gripe a little bit, but for the most part, VMware is still playing well with the ecosystem, even though, after the Dell acquisition of EMC, you know, we'll talk about this some more, that relationship between Dell and VMware is tighter than it ever was in the EMC days. >> So that led to the Software-Defined Data Center, which was the big, sort of, vision. VMware wanted to do to storage and networking what it had done to compute. And this started to set up the tension between with VMware and Cisco, which, you know, lives on today. The other big mega trend, of course, was flash storage, which was coming into play. In many ways, that whole API gymnastics was a Band-Aid. But the other big piece if it is Pat Gelsinger was much more willing to integrate, you know, some of the EMC technologies, and now Dell technologies, into the VMware sort of stack. >> Right, so Dave, you talked about all of those APIs, Vvols was a huge multi-year initiative that VMware worked on and all of the big storage players were talking about how that would allow them to deeply integrate and make it virtualization-aware storage your so tense we come out on their own and try to do that. But if you look at it, VVols was also what enabled VMware to do vSAN, and that is a little bit of how they can try to erode in some of the storage piece, because vSAN today has the most customers in the hyperconverged infrastructure space, and is keeping to grow, but they still have those storage partnerships. It didn't eliminate it, but it definitely adds some tension. >> Well it is important, because under EMC's ownership it was sort of a let 1,000 flowers bloom sort of strategy, and today you see Jeff Clarke coming in and consolidating the portfolios, saying, "Look, let's let VMware go hard with vSAN." So you're seeing a different type of governance structure, we'll talk about that. 2013 was a big year. That's the year they brought in Sanjay Poonen, they did the AirWatch acquisition, they took on what the industry called VDI, what VMware called EUC, End-User Computing. Citrix was the dominant player in that space, VMware was fumbling, frankly. Sanjay Poonen came in, the AirWatch acquisition, now, VMware is a leader in that space, so that was big. The other big thing in 2013 was, you know, the famous comment by Carl Eschenbach about, you know, if we lose to the book seller, we'll all lose. VMware came out with it's cloud strategy, vCloud Air. I was there with the Wall Street analyst that day listening to Pat explain that and we were talking afterwards to a number of the Wall Street analysts saying, "This really doesn't make a lot of sense." And then they sort of retreated on that, saying that it was going to be an accelerant, and it just was basically a failed cloud strategy. >> And Dave, that 2013 is also when they spun out Cloud Foundry and founded Pivital. So, you know, this is where they took some of the pieces from EMC, the Greenplum, and they took some of the pieces from VMware, Spring and the Cloud Foundation, and put those together. As we speak right now, there was just an SEC Filing that VMware might suck them back in. Where I look at that, back in 2013, there was a huge gap between what VMware was doing on the infrastructure side and what Cloud Foundry was doing on the application modernization standpoint, they had bought the Pivotal Labs piece to help people understand new programming models and everything along those lines. Today, in 2019, if you look at where VMware is going, the changes happening in containerization, the changes happening from the application down, they need to come together. The Achilles heel that I have seen from VMware for a long time is that VMware doesn't have enough a tie to or help build the applications. Microsoft owns the applications, Oracle owns the applications. You know, there are all the ISVs that own the applications, and Pivotal, if they bring that back into VMware it can help, but it made sense at the time to kind of spin that out because it wasn't synergies between them. >> It was what I called at the time a bunch of misfit toys. And so it was largely David Goulden's engineering of what they called The Federation. And now you're seeing some more engineering, financial engineering, of having VMware essentially buy another, you know, Dell Silver Lake asset, which, you know, drove the stock price up 77% in a day that the Dow dropped 800 points. So I guess that works, kind of funny money. The other big trend sort of in that mid-part of this decade, hyperconverged, you know, really hit. Nutanix, who was at one point a strong partner of both VMware and Dell, was sort of hitting its groove swing. Fast forward to 2019, different situation, Nutanix really doesn't have a presence there. You know, people are looking at going beyond hyperconverged. So there's sort of the VMware ecosystem, sort of friendly posture has changed, they point fingers at each other. VMware says, "Well, it's Nutanix's fault." Nutanix will say it's VMware's fault. >> Right, so Dave, I pointed out, the Achilles heel for VMware might be that they don't have the closest tie to the application, but their greatest strength is, really, they are really the data center operating system, if you will. When we wrote out our research on Server SAN was before vSAN had gotten launched. It was where Nutanix, Scale Computing, SimpliVity, you know, Pivot3, and a few others were early in that space, but we stated in our research, if Microsoft and VMware get serious about that space, they can dominate. And we've seen, VMware came in strong, they do work with their partnerships. Of course, Dell, with the VxRail is their largest solution, but all of the other server providers, you know, have offerings and can put those together. And Microsoft, just last year, they kind of rebranded some of the Azure Stack as HCI and they're going strong in that space. So, absolutely, you know, strong presence in the data center platform, and that's what they're extending into their hybrid and multi-cloud offering, the VMware Cloud Solutions. >> So I want to get to some of the trends today, but just real quick, let's go through some of this. So 2015 was the big announcement in the fall where Dell was acquiring EMC, so we entered, really, the Dell era of VMware ownership in 2016. And the other piece that happened, really 2016 in the fall, but it went GA 2017, was the announcement AWS and VMware as the preferred partnership. Yes, AWS had a partnership with IBM, they've subsequently >> VMware had a partnership >> Yeah, sorry, VMware has a partnership with IBM for their cloud, subsequently VMware has done deals with Google and Microsoft, so there's, we now have entered the multi-cloud hybrid world. VMware capitulated on cloud, smart move, cleaned up its cloud strategy, cleaned that AirWatch mess. AWS also capitulated on hybrid. It's a term that they would never use, they don't use it necessarily a lot today, but they recognize that On Prem is a viable portion of the marketplace. And so now we've entered this new era of cloud, hybrid cloud, containers is the other big trend. People said, "Containers are going to really hurt VMware." You know, the jury's still out on that, VMware sort of pushes back on that. >> And Dave, just to put a point on that, you know, everybody, including us, spent a lot of time looking at this VMware Cloud on AWS partnership, and what does it mean, especially, to the parent, you know, Dell? How do they make that environment? And you've pointed out, Dave, that while VMware gets in those environments and gives themselves a very strong cloud strategy, AWS is the key partner, but of course, as you said, Microsoft Azure, Google Cloud, and all the server providers, we have a number of them including CenturyLink and Rackspace that they're partnering with, but we have to wait a little while before Amazon, when they announced their outpost solutions, VMware is a critical software piece, and you've got two flavors of the hardware. You can run the full AWS Stack, just like what they're running in their data center, but the alternative, of course, is VMware software running on Dell hardware. And we think that if VMware hadn't come in with a strong position with Amazon and their 600,000 customers, we're not sure that Amazon would have said, "Oh yeah, hey, you can run that same software stack "that you're running, but run some different hardware." So that's a good place for Dell to get in the environment, it helps kind of close out that story of VMware, Dell, and AWS and how the pieces fit together. >> Yeah, well so, by the way, earlier this week I privately mentioned to a Dell executive that one of the things I thought they should do was fold Pivotal into VMware. By the way, I think they should go further. I think they should look at RSA and Dell Boomi and SecureWorks, make VMware the mothership of software, and then really tie in Dell's hardware to VMware. That seems to me, Stu, the direction that they're going to try to gain an advantage on the balance of the ecosystem. I think VMware now is in a position of strength with, what, 5 or 600,000 customers. It feels like it's less ecosystem friendly than it used to be. >> Yeah, Dave, there's no doubt about it. HPE and IBM, who were two of the main companies that helped with VMware's ascendancy, do a lot of other things beyond VMware. Of course, IBM bought Red Hat, it is a key counterbalance to what VMware is doing in the multi-cloud. And Dave, to your point, absolutely, if you look at Dell's cloud strategy, they're number one offering is VMware, VMware cloud on Dell. Dell as the project dimension piece. All of these pieces do line up. I'll say, some of those pieces, absolutely, I would say, make sense to kind of pull in and shell together. I know one of the reasons they keep the security pieces at arm's length is just, you know, when something goes wrong in the security space, and it's not of the question of if, it's a question of when, they do have that arm's length to be able to keep that out and be able to remediate a little bit when something happens. >> So let's look at some of the things that we're following today. I think one of the big ones is, how will containers effect customer spending on VMware? We know people are concerned about the vTax. We also know that they're concerned about lock-in. And so, containers are this major force. Can VMware make containers a tailwind, or is it a headwind for them? >> So you look at all the acquisitions that they've made lately, Dave, CloudHealth is, from a management standpoint, in the public cloud. Heptio and Bitnami, targeting that cloud native space. Pair that with Cloud Foundry and you see, VMware and Pivotal together trying to go all-in on Kubernetes. So those 600,000 customers, VMware wants to be the group that educates you on containerization, Kubernetes, you know, how to build these new environments. For, you know, a lot of customers, it's attractive for them to just stay. "I have a relationship, "I have an enterprise licensing agreement, "I'm going to stay along with that." The question I would have is, if I want to do something in a modern way, is VMware really the best partner to choose from? Do they have the cost structure? A lot of these environments set up, you know, it's open source base, or I can work with my public cloud providers there, so why would I partner with VMware? Sure, they have a lot of smart people and they have expertise and we have a relationship, but what differentiates VMware, and is it worth paying for that licensing that they have, or will I look at alternatives? But as VMware grows their hybrid and multi-cloud deployments they absolutely are on the short list of, you know, strategic partners for most customers. >> The other big thing that we're watching is multi-cloud. I have said over and over that multi-cloud has largely been a symptom of multi-vendor. It's not necessarily, to date anyway, been a strategy of customers. Having said that, issues around security, governance, compliance have forced organizations and boards to say, "You know what, we need IT more involved, "let's make multi-cloud part of our strategy, "not only for governance and compliance "and making sure it adheres to the corporate edicts, "but also to put the right workload on the right cloud." So having some kind of strategy there is important. Who are the players there? Obviously VMware, I would say, right now, is the favorite because it's coming from a position of strength in the data center. Microsoft with it's software state, Cisco coming at it from a standpoint of network strength. Google, with Anthos, that announcement earlier this year, and, of course, Red Hat with IBM. Who's the company that I didn't mention in that list? >> Well, of course, you can't talk about cloud, Dave, without talking about AWS. So, as you stated before, they don't really want to talk about hybrid, hey, come on, multi-cloud, why would you do this? But any customer that has a multi-cloud environment, they've got AWS. And the VMware-AWS partnership is really interesting to watch. It will be, you know, where will Amazon grow in this environment as they find their customers are using multiple solutions? Amazon has lots of offerings to allow you leverage Kubernetes, but, for the most part, the messaging is still, "We are the best place for you, "if you do everything on us, "you're going to get better pricing "and all of these environments." But as you've said, Dave, we never get down to that homogeneous, you know, one vendor solution. It tends to be, you know, IT has always been this heterogeneous mess and you have different groups that purchase different things for different reasons, and we have not seen, yet, public cloud solving that for a lot of customers. If anything we often have many more silos in the clouds than we had in the data center before. >> Okay. Another big story that we're following, big trend, is the battle for networking. NSX, the software networking component, and then Cisco, who's got a combination of, obviously, hardware and software with ACI. You know, Stu, I got to say, Cisco a very impressive company. You know, 60+% market share, being able to hold that share for a long time. I've seen a lot of companies try to go up against Cisco. You know, the industry's littered with failures. It feels, however, like NSX is a disruptive force that's very hard for Cisco to deal with in a number of dimensions. We talked about multi-cloud, but networking in general. Cisco's still a major player, still, you know, owns the hardware infrastructure, obviously layering in its own software-defined strategy. But that seems to be a source of tension between the two companies. What's the customer perspective? >> Yeah, so first of all, Dave, Cisco, from a hardware perspective, is still going strong. There are some big competitors. Arista has been doing quite well into getting in, especially, a high performance, high speed environments, you know, Jayshree Ullal and that team, you know, very impressive public company that's doing quite well. >> Service providers that do really well there. >> Absolutely, but, absolutely, software is eating the world and it is impacting networking. Even when you look at Cisco's overall strategy, it is in the future. Cisco is not a networking company, they are a software company. The whole DevNet, you know, group that they have there is helping customers modernize, what we were talking about with Pivotal. Cisco is going there and helping customers create those new environments. But from a customer standpoint, they want simplicity. If my VMware is a big piece of my environment, I've probably started using NSX, NSX-T, some of these environments. As I go to my service providers, as I go to multi-cloud, that NSX piece inside my VMware cloud foundation starts to grow. I remember, Dave, a few years back, you know, Pat Gelsinger got up on a stage and was like, "This is the biggest collection of network administrators that we've ever seen!" And everybody's looking around and they're like, "Where? "We're virtualization people. "Oh, wait, just because we've got vNICs and vSwitches "and things like that." It still is a gap between kind of a hardcore networking people and the software state. But just like we see on storage, Dave, it's not like vSAN, despite it's thousands and thousands of customers, it is not the dominant player in storage. It's a big player, it's a great revenue stream, and it is expanding VMware beyond their core vSphere solutions. >> Back to Cisco real quickly. One of the things I'm very impressed with Cisco is the way in which they've developed infrastructures. Code with the DevNet group, how CCIEs are learning Python, and that's a very powerful sort of trend to watch. The other thing we're watching is VMware-AWS. How will it affect spending, you know, near-term, mid-term, long-term? Clearly it's been a momentum, you know, tailwind, for VMware today, but the questions remains, long-term, where will customers place their bets? Where will the spending be? We know that cloud is growing dramatically faster than On Prem, but it appears, at least in the near- to mid-term, for one, two, maybe three more cycles, maybe indefinitely, that the VMware-AWS relationship has been a real positive for VMware. >> Yeah, Dave, I think you stated it really well. When I talked to customers, they were a bit frozen a couple of years ago. "Ah, I know I need to do more in cloud, "but I have this environment, what do I do? "Do I stay with VMware, do I have to make a big change." And what VMware did, is they really opened things up and said, "Look, no, you can embrace cloud, and we're there for you. "We will be there to help be that bridge to the future, "if you will, so take your VMware environment, "do VMware cloud in lots of places, "and we will enable that." What we know today, the stat that we hear all the time, the old 80/20 we used to talk about was 80% keeping the lights on, now the 80% we hear about is, there's only 20% of workloads that are in public cloud today. It doesn't mean that that other 80% is going to flip overnight, but if you look over the next five to ten years, it could be a flip from 80/20 to 20/80. And as that shift happens, how much of that estate will stay under VMware licenses? Because the day after AWS made the announcement of VMware cloud on AWS, they offered some migration services. So if you just want to go on natively on the public cloud, you can do that. And Microsoft, Google, everybody has migration services, so use VMware for what I need to, but I might go more native cloud for some of those other environments. So we know it is going to continue to be a mix. Multi-cloud is what customers are doing today, and multi- and hybrid-cloud is what customers will be doing five years from now. >> The other big question we're watching is Outposts. Will VMware and Outposts get a larger share of wallet as a result of that partnership at the expense of other vendors? And so, remains to be seen, Outposts grabbed a lot of attention, that whole notion of same control plane, same hardware, same software, same data plane On Prem as in the Data Center, kind of like Oracle's same-same approach, but it's seemingly a logical one. Others are responding. Your thoughts on whether or not these two companies will dominate or the industry will respond or an equilibrium. >> Right, so first of all, right, that full same-same full stack has been something we've been talking about now, feels like for 10 years, Dave, with Oracle, IBM had a strategy on that, and you see that, but one of the things with VMware has strong strength. What they have over two decades of experiences on is making sure that I can have a software stack that can actually live in heterogeneous environments. So in the future, if we talk about if Kubernetes allows me to live in a multi-cloud environment, VMware might be able to give me some flexibility so that I can move from one hardware stack to another as I move from data centers to service providers to public clouds. So, absolutely, you know, one to watch. And VMware is smart. Amazon might be their number one partner, but they're lining up everywhere. When you see Sanjay Poonen up on stage with Thomas Kurian at Google Cloud talking about how Anthos in your data center very much requires VMware. You see Sachi Nodella up on stage talking about these kind of VMware partnerships. VMware is going to make sure that they live in all of these environments, just like they lived on all of the servers in the data center in the past. >> The other last two pieces that I want to touch on, and they're related is, as a result of Dell's ownership of VMware, are customers going to spend more with Dell? And it's clear that Dell is architecting a very tight relationship. You can see, first of all, Michael Dell putting Jeff Clarke in charge of everything Dell was brilliant, because, in a way, you know, Pat was kind of elevated as this superstar. And Michael Dell is the founder, and he's the leader of the company. So basically what he's created is this team of rivals. Now, you know, Jeff and Pat, they've worked together for decades, but very interesting. We saw them up on stage together, you know, last year, well I guess at Dell Technologies World, it was kind of awkward, but so, I love it. I love that tension of, It's very clear to me that Dell wants to integrate more tightly with VMware. It's the clear strategy, and they don't really care at this point if it's at the expense of the ecosystem. Let the ecosystem figure it out themselves. So that's one thing we're watching. Related to that is long-term, are customers going to spend more of their VMware dollars in the public cloud? Come back to Dell for a second. To me, AWS is by far the number one competitor of Dell, you know, that shift to the cloud. Clearly they've got other competitors, you know, NetApp, Huawei, you know, on and on and on, but AWS is the big one. How will cloud spending effect both Dell and AWS long-term? The numbers right now suggest that cloud's going to keep growing, $35, $40 billion run-rate company growing at 40% a year, whereas On Prem stuff's growing, you know, at best, single digits. So that trend really does favor the cloud guys. I talked to a Gartner analyst who tracks all this stuff. I said, "Can AWS continue to grow? It's so big." He said, "There's no reason, they can't stop. "The market's enormous." I tend to agree, what are your thoughts? >> Yeah, first of all, on the AWS, absolutely, I agree, Dave. They are still, if you look at the overall IT spend, AWS is still a small piece. They have, that lever that they have and the influence they have on the marketplace greatly outweighs the, you know, $30, $31 billion that they're at today, and absolutely they can keep growing. The one point, I think, what we've seen, the best success that Dell is having, it is the Dell and VMware really coming together, product development, go to market, the field is tightly, tightly, tightly alligned. The VxRail was the first real big push, and if they can do the same thing with the vCloud foundation, you know, VMware cloud on Dell hardware, that could be a real tailwind for Dell to try to grow faster as an infrastructure company, to grow more like the software companies or even the cloud companies will. Because we know, when we've run the numbers, Dave, private cloud is going to get a lot of dollars, even as public cloud continues its growth. >> I think the answer comes down to a couple things. Because right now we know that 80% of the spend and stall base is On Prem, 20% in the cloud. We're entering now the cloud 2.0, which introduces hybrid-cloud, On Prem, you know, connecting to clouds, multi-cloud, Kubernetes. So what it comes down to, to me Stu, is to what degree can Dell, VMware, and the ecosystem create that cloud experience in a hybrid world, number one? And number two, how will they be able to compete from a cost-structure standpoint? Dell's cost-structure is better than anybody else's in the On Prem world. I would argue that AWS's cost-structure is better, you know, relative to Dell, but remains to be seen. But really those two things, the cloud experience and the cost-structure, can they hold on, and how long can they hold on to that 80%? >> All right, so Dave here's the question I have for you. What are we talking about when we're talking about Dell plus VMware and even add in Pivotal? It's primarily hardware plus software. Who's the biggest in that multi-cloud space? It's IBM plus Red Hat, which you've stated emphatically, "This is a services play, and IBM has, you know, "just got, you know, services in their DNA, "and that could help supercharge where Red Hat's going "and the modernization." So is that a danger for Dell? If they bring in Pivotal, do they need to really ramp up that services? How do they do that? >> Yeah, I don't think it's a zero sum game, but I also don't think there's, it's five winners. I think that the leader, VMware right now would be my favorite, I think it's going to do very well. I think Red Hat has got, you know, a lot of good market momentum, I think they've got a captive install base, you know, with IBM and its large outsourcing business, and I think they can do pretty well, and I think number three could do okay. I think the other guys struggle. But it's so early, right now, in the hybrid-cloud world and the multi-cloud world, that if I were any one of those five I'd be going hard after it. We know Google's got the dollars, we know Microsoft has the software state, so I can see Microsoft actually doing quite well in that business, and could emerge as the, maybe they're not a long-shot right now, but they could be a, you know, three to one, four to one leader that comes out as the favorite. So, all right, we got to go. Stu, thanks very much for your insights. And thank you for watching and listening. We will be at VMworld 2019. Three days of coverage on theCUBE. Thanks for watching everybody, we'll see you next time. (upbeat music)

>> live from Las Vegas. It's the queue covering del Technologies. World twenty nineteen, brought to you by Del Technologies and its ecosystem partners. >> Okay, welcome back. Everyone's cubes. Live coverage. Day three wrap up of Del Technologies World twenty nineteen Java is Dave a lot. There's too many men on set one. We get set to over there blue set, White said. We got a lot of content. It's been a cube can, in guise of a canon of content firing into the digital sphere. Great gas. We had all the senior executive players Tech athletes. Adele Technology World. Michael Dell, Tom Sweet, Marius Haas, Howard Ally As we've had Pat Kelsey, rco v M were on the key partner in the family. They're of del technology world and we had the clients guys on who do alien where, as well as the laptops and the power machines. Um, we've had the power edge guys on. We talked about Hollywood. It's been a great run, but Dave, it's been ten years Stew. Remember, the first cube event we ever went to was DMC World in Boston. The chowder there he had and that was it wasn't slogan of of the show turning to the private cloud. Yeah, I think that was this Logan cheering to the private cloud that was twenty ten. >> Well, in twenty ten, it was Cloud Cloud Cloud Cloud Cloud twenty nineteen. It's all cloud now. That difference is back then it was like fake cloud and made up cloud and really was no substance to it. We really started to see stew, especially something that we've been talking about for years, which is substantially mimicking the public cloud on Prem. Now I know there are those who would say No, no, no, no, no. And Jessie. Probably in one of those that's not cloud. So there's still that dichotomy is a cloud. >> Well, Dave, if I could jump in on that one of the things that's really interesting is when Veum, where made that partnership with a ws It was the ripple through this ecosystem. Oh, what's that mean for Del you know Veum, wherein Del not working together Well, they set the model and they started rolling out bm where, and they took the learnings that they had. And they're bringing that data center as a service down to the Dell environment. So it's funny I always we always here, you know, eight of us, They're learning from their partners in there listening and everything like that. Well, you know, Dylan Veum where they've been listening, they've been learning to in this, and it brings into a little bit of equilibrium for me, that partnership and right, David, you said, you know that you could be that cloud washing discussion. And today it's, you know, we're talking about stacks that live in eight of us and Google and Microsoft. And now, in, you know, my hosted or service lighter or, you know, my own data center. If that makes sense, >> I mean, if you want to just simplify the high order bit, Dave Cloud. It's simply this Amazon's trying to be enterprised everyone, the enterprise, trying to claw Amazon, right? And so what? The what that basically means is it's all cloud. It's all a distributed computer system. OK, Scott McNealy had it right. The network is the computer. If you look at what's going on here, the traditional enterprise of vendors over decades of business model and technology, you know, had full stack solutions from mainframe many computers to PC the local area networking all cobble together wires it up creates applications, services. All that is completely being decimated by a new way to roll out storage, computing and networking is the same stuff. It's just being configured differently. Throw on massive computer power with Cloud and Moore's Law and Data and A. I U have a changing of the the architecture. But the end of the day the cloud is operating model of distributed computing. If you look at all the theories and pieces of computer science do and networking, all those paradigms are actually playing out in in the clouds. Everything from a IIE. In the eighties and nineties you got distributed networking and computing, but it's all one big computer. And Michael Dell, who was the master of the computer industry building PCs, looks at this. Probably leg. It's one big computer. You got a processor and subsystems. So you know this is what's interesting. Amazon has done that, and if they try to be like the enterprise, like the old way, they could fall into that trap. So if the enterprise stays in the enterprise, they know they're not going out. So I think it's interesting that I see the enterprise trying to like Amazon Amazon trying to get a price. So at the end of the day, whoever could build that system that's scalable the way I think Dell's doing, it's great. I was only scaleable using data for special. So it's a distributed computer. That's all that's going on in the world right now, and it's changing everything. Open source software is there. All that makes it completely different, and it's a huge opportunity. Whoever can crack the code on this, it's in the trillions and trillions of dollars. Total adjustable market >> well, in twenty ten we said that way, noted the gap. There's still a gap between what Amazon could do and what the on Prem guys Khun Dio, we'd argue, is a five years is seven years, maybe ten years, whatever it is. But at the time we said, if you recall, lookit, they got to close the gap. It's got to be good enough for I t to buy into it like we're starting to see that. But my view, it's still not cloud. It doesn't have to scale a cloud, doesn't have the economics cloud. When you peel the onion, it doesn't certainly doesn't have the SAS model and the consumption model of cloud nowhere close yet. Well, and you know, >> here's the drumbeat of innovation that we see from the public cloud. You know where we hit the shot to show this week, the public have allowed providers how many announcements that they probably had. Sure, there was a mega launch of announcements here, but the public lives just that regular cadence of their, you know, Public Cloud. See a CD. We're not quite there yet in this kind of environment, it's still what Amazon would say is. You put this in an environment and it's kind of frozen. Well, it's thought some, and it's now we can get data set. A service consumption model is something we can go. We're shifting in that model. It's easier to update things, but you know, how do I get access to the new features? But we're seeing that blurring of the line. I could start moving services that hybrid nature of the environment. We've talked a few times. We've been digging into that hybrid cloud taxonomy and some of the services to span because it's not public or private. It's now truly that hybrid and multi environment and customers are going to live in. And all of >> the questions Jonah's is good enough to hold serve >> well. I think the reality is is that you go back to twenty ten, the jury in the private cloud and it's enterprises almost ten years to figure out that it's real. And I think in that time frame Amazon is absolutely leveled. Everybody, we call that the tsunami. Microsoft quickly figures out that they got to get Cloud. They come in there, got a fast followers. Second, Google's trying to retool Oracle. I think Mr Bo completely get Ali Baba and IBM in there, so you got the whole cloud game happening. The problem of the enterprises is that there's no growth in terms of old school enterprise other than re consolidate in position for Cloud. My question to you guys is, Is there going to be true? True growth in the classic enterprise business or, well, all this SAS run on clouds. So, yes, if it's multi cloud or even hybrid for the reasons they talk about, that's not a lot of growth compared to what the cloud can offer. So again, I still haven't seen Dave the visibility in my mind that on premises growth is going to be massive compared to cloud. I mean, I think cloud is where Sassen lives. I think that's where the scale lives we have. How much scale can you do with consolidation? We >> are in a prolonged bull market that that started in twenty ten, and it's kind of hunger. In the tenth year of a of a decade of bull market, the enterprise market is cyclical, and it's, you know, at some point you're going to start to see a slowdown cloud. I mean, it's just a tiny little portion of the market is going to continue to gain share cloud can grow in a downturn. The no >> tell Motel pointed out on this, Michael Dell pointed out on the Cubans, as as those lieutenants, the is the consolidation of it is just that is a retooling to be cloud ready operationally. That's where hybrid comes in. So I think that realization has kicked in. But as enterprises aren't like, they're not like Google and Facebook. They're not really that fast, so So they've got to kind of get their act together on premises. That's why I think In the short term, this consolidation and new revitalisation is happening because they're retooling to be cloud ready. That is absolutely happen. But to say that's the massive growth studio >> now looked. It is. Dave pointed out that the way that there is more than the market growth is by gaining market share Share share are areas where Dell and Emcee didn't have large environment. You know, I spent ten years of DMC. I was a networking. I was mostly storage networking, some land connectivity for replication like srd Evan, like today at this show, I talked a lot of the telco people talk to the service of idle talk where the sd whan deny sirrah some of these pieces, they're really starting to do networking. That's the area where that software defined not s the end, but the only in partnership with cos like Big Switch. They're getting into that market, and they have such small market share their that there's huge up uplift to be able to dig into the giant. >> Okay, couple questions. What percent of Dell's ninety one billion today is multi cloud revenue. Great question. Okay, one percent. I mean, very small. Okay. Very small hero. Okay? And is that multi cloud revenue all incremental growth isat going to cannibalize the existing base? These? Well, these are the fundamentals weighs six local market that I'm talking to >> get into this. You led the defense of conversations. We had Tom Speed on the CFO and he nailed us. He said There's multiple levers to shareholder growth. Pay down the debt check. He's got to do that. You love that conversation. Margin expansion. Get the margins up. Use the client business to cover costs. As you said, increased go to market efficiency and leverage. The supply chain that's like their core >> fetrow of cash. And that all >> these. The one thing he said that was mind blowing to me is that no one gets the valuation of how valuable Del Technologies is. They're throwing off close to seven billion dollars in free cash flow free cash flow. Okay, so you can talk margin expansion all you want. That's great, but there got this huge cash flow coming in. You can't go out of business worth winning if you don't run out of cash >> in the market. When the market is good, these guys are it is good a position is anybody, and I would argue better position than anybody. The question on the table that I'm asking is, how long can it last? And if and when the market turns down and markets always cyclical we like again. We're in the tenth year of a bull market. I mean, it's someone >> unprecedented gel can use the war chest of the free cash flow check on these levers that they're talking about here, they're gonna have the leverage to go in during the downturn and then be the cost optimizer for great for customers. So right now, they're gonna be taking their medicine, creating this one common operating environment, which they have an advantage because they have all the puzzle pieces. You A Packer Enterprises doesn't have the gaping holes in the end to end. They can't address us, >> So that is a really good point that you're making now. So then the next question is okay. If and when the downturn turn comes, who's going to take advantage of it, who's going to come out stronger? >> I think Amazon is going to be continued to dominate, and as long as they don't fall into the enterprise trap of trying to be too enterprising, continue to operate their way for enterprises. I think jazz. He's got that covered. I think DEL Technologies is perfectly positioned toe leverage, the cash flow and the thing to do that. I think Cisco's got a great opportunity, and I think that's something that you know. You don't hear a lot of talk about the M where Cisco war happening. But Cisco has a network. They have a developer ecosystem just starting to get revitalized. That's an opportunity. So >> I got thoughts on Cisco, too. But one of things I want to say about Del being able to come out of that stronger. I keep saying I've said this a number of times and asked a lot of questions this week is the PC business is vital for Del. It's almost half the company's revenue. Maybe not quite, but it it's where the company started it. It sucks up a lot of corporate overhead. >> If Hewlett Packard did not spin out HP HP, they would be in the game. I think spinning that out was a huge mistake. I wrote about a publicly took a lot of heat for it, but you know I try to go along with the HPD focus. Del has proven bigger is better. HP has proven that smaller is not as leverage. And if it had the PC that bee have the mojo in gaming had the mojo in the edge, and Dale's got all the leverage to cross pollinate the front end and edge into the back and common cloud operate environment that is going to be an advantage. And that's going to something that will see Well, let me let me >> let me counter what you just said. I agree. You know this this minute. But the autonomy was the big mistake. Once hp autonomy, you know what Meg did was almost a fatal complete. They never should've bought autonomy >> makers. Levi Protector he was. So he was there. >> But she inherited that bag of rocks. And then what you gonna do with it? Okay, so that's why they had to spend out and did create shareholder value. If they had not purchased autonomy, then he would return much better shape, not to split it up. And they would be a much stronger competitor. >> And I share holder Pop. They had a pop on value. People made some cash with long game. I think that >> going toe peon base actually done pretty well for a first year holding a standalone PC company. So, but again, I think Del. With that leverage, assuming pieces, it's going to be really interesting. I don't know much about that market. You were loving that PC conversation, but the whole, you know, the new game or markets and and the new wayto work throwing an edge in there, I don't know is ej PC and edges that >> so the peanut butter. And so the big thing that Michael get the big thing, Michael Dell said on the Cube was We're not a conglomerate were an integrated company. And when you have an integrated company like this, with the tech the tech landscape shifting to their advantage, you have the ability to cross subsidize. So strategy game. Matt Baker was here we'd be talking about OK, I can cross subsidize margin. You've brought it up on the client side. Smaller margins, but it pays a lot of the corporate overhead. Absolutely. Then you got higher margin GMC business was, you know, those margins that's contributing. And so when you have this new configuration. You can cross, subsidize and move and shift, so I think that's a great advantage. I think that's undervalued in the market place. And I think, you know, I think Del stock price is, well, undervalue. Point out the numbers they got VM wear and their question is, What what point is? VM where blink and go All in on del technology stew. Orcas Remember that Gus was gonna partner. You don't think the phone was ringing off the hook in Palo Alto from their parties? What? What's this as your deal? So Vienna. There's gotta be the neutral party. Big problem. The opportunity. >> Well, look, if I'm a traditional historical partner of'Em are, it's not the Azure announcement that has me a little bit concerned because all of them partner with Microsoft to it is how tightly combined. Del and Veum, where are the emcee, always kept them in arms like now they're in the same. It's like Dave. They're blending it. It's like, you know Del, from a market cap standpoint, gets fifty cents on the dollar. VM wears a software company, and they get their multiples. Del is not a software company, but VM where well, people are. Well, if we can win that a little bit, maybe we could get that. >> Marty still Isn't it splendid? No, no, I think the strategy is absolutely right on. You have to go hard with VM wear and use it as a competitive weapon. But, Stuart, your point fifty cents and all, it's actually much worse than that. I mean the numbers. If you take out of'Em, wears the VM wear ownership, you take out the core debt and you look at the market value you're left with, like a billion dollars. Cordell is undervalued. Cordell is worth more than a billion or two billion dollars. Okay, so it's a really cheap way to buy Veum. Where Right that the Tom Sweet nailed this, he said. You know, basically, these company those the streets not used to tech companies having such big debt. But to your point, John, they're throwing off cash. So this company is undervalued, in my view. Now there's some risks associated with that, and that's why the investors of penalizing them for that debt there, penalizing him from Michael's ownership structure. You know, that's what this is, but >> a lack of understanding in my opinion. I think I think you're right. I just think they don't understand. Look at Dale and they think G You don't look a day Ellen Think distributed computing system with software, fill in those gaps and all that extra ten expansion. It's legit. I think they could go after new market opportunities as as a twos to us as the client business. I mean mere trade ins and just that's massive trillions of dollars. It's, I think I think that is huge. But I'm >> a bull. I'm a bull on the value of the company. I know >> guys most important developments. Del technology world. What's the big story that you think is coming out of the show here? >> Well, it's definitely, you know, the VM wear on del I mean, that is the big story, and it's to your point. It's Del basically saying we're going to integrate this. We're going to hard, we're going to go hard and you know Veum wear on Dell is a preferred solution. No doubt that is top for Dell and PacBell Singer said it. Veum wearing eight of us is the first and preferred solution. Those are the two primary vectors. They're going to drive hard and then Oh, yeah, we'Ll listen to customers Whatever else you want Google as you're fine, we're there. But those two vectors, they're going to Dr David >> build on that because we saw the, um we're building out of multi cloud strategy and what we have today is Del is now putting themselves in there as a first class citizen. Before it was like, Oh, we're doing VX rail and Anna sex and, you know, we'LL integrate all these pieces there, but infrastructure, infrastructure, infrastructure now it is. It is multi cloud. We want to see that the big table, >> right, Jeff, Jeff Clarke said, Why are you doing both? Let's just one strategy, one company. It's all one Cash registers that >> saying those heard that before. I think the biggest story to me is something that we've been seeing in the Cuban laud, you know, been Mom. This rant horizontally scaleable operating environment is the land grab and then vertically integrate with data into applications that allow each vertical industry leverage data for the kind of intimate, personalized experiences for user experiences in each industry. With oil and gas public sector, each one has got their own experiences that are unique. Data drives that, but the horizontal and tow an operating model when it's on premises hybrid or multi cloud is a huge land grab. And I think that is a major strategic win for Dell, and I think, as if no one challenges them on this. Dave, if HP doesn't go on, emanate change. If H h p e does not do it em in a complete changeover from strategy and pulling, filling their end to end, I think that going to be really hurting I think there's gonna be a tell sign and we'LL see, See who reacts and challenges Del on this in ten. And I think if they can pull it off without being contested, >> the only thing I would say that the only thing I would say that Jonah's you know, HP, you know very well I mean, they got a lot of loyal customers and is a huge market out there. So it's >> Steve. Look at economic. The economics are shifting in the new world. New use cases, new step function of user experiences. This is this is going to be new user experiences at new economic price points that's a business model. Innovation, loyal customers that's hard to sustain. They'Ll keep some clutching and grabbing, but everyone will move to the better mousetrap in the scenario. So the combination of that stability with software it's just this as a big market. >> So John twenty ten Little Table Back Corner, you know of'em See Dylan Blogger World double set. Beautiful says theatre of present lot of exchange and industry. But the partnership in support of this ecosystem. It's something that helped us along the way. >> You know, when we started doing this, Jeff came on board. The team has been amazing. We have been growing up and getting better every show. Small, incremental improvements here and there has been an amazing production, Amazing team all around us. But the support of the communities do this is has been a co creation project from day one. We love having this conversation's with smart people. Tech athletes make it unique. Make it organic, let the page stuff on on the other literature pieces go well. But here it's about conversations for four and with the community, and I think the community sponsorship has been part of funding mohr of it. You're seeing more cubes soon will be four sets of eight of US four sets of V M World four sets here. Global Partners sets I'm used to What have we missed? >> Yeah, it's phenomenal. You know, we're at a unique time in the industry and honored to be able to help documented with the two of you in the whole team. >> Dave, How it Elias sitting there giving him some kind of a victory lap because we've been doing this for ten years. He's been the one of the co captains of the integration. He says. There's a lot of credit. >> Yeah, Howard has had an amazing career. I I met him like literally decades ago, and he has always taken on the really hard jobs. I mean, that's I think, part of his secret success, because it's like he took on the integration he took on the services business at at AMC U members to when Joe did you say we're a product company? No services company. I was like, Give me services. Take it. >> It's been on the Cube ten years. Dave. He was. He was John away. He was on fire this week. I thought bad. Kelsey was phenomenal. >> Yeah, he's an amazing guest. Tom Tom Suite, You know, very strong moments. >> What's your favorite Cuban? I'LL never forget. Joe Tucci had my little camera out film and Joe Tucci, Anna. One of the sessions is some commentary in the hallway. >> Well, that was twenty ten, one of twenty eleven, I think one of my favorite twenty ten moments I go back to the first time we did. The cue was when you asked Joe Tucci, you know why a storage sexy. Remember that? >> A He never came on >> again. Ah, but that was a mean. If you're right, that was a cube mean all for the next couple of years. Remember, Tom Georges, we have because I'm not touching. That was >> so remember when we were critical of hybrid clouds like twenty, twelve, twenty, thirteen I go, Pat is a hybrid cloud, a halfway house to the final destination of public loud. He goes to a halfway house, three interviews. This was like the whole crowd was like, what just happened? Still favorite moment. >> Oh, gosh is a mean so money here, John. As you said, just such a community, love. You know, the people that we've had on for ten years and then, you know, took us, you know, three or four years to before we had Michael Dell on. Now he's a regular on our program with luminaries we've had on, you know, but yeah, I mean, twenty ten, you know, it's actually my last week working for him. See? So, Dave, thanks for popping me out. It's been a fun ride, and yeah, I mean, it's amazing to be able to talk to this whole community. >> Favorite moment was when we were at eighty bucks our first show. We're like, We still like hell on this. James Hamilton, Andy Jazzy Come on up, Very small show. Now it's a monster, David The Cube has had some good luck. Well, we've been on the right waves, and a lot of a lot of companies have sold their companies. Been part of Q comes when public Unicorns New Channel came on early on. No one understood that company. >> What I'm thrilled about to Jonah's were now a decade, and we're documenting a lot of the big waves. One of one of the most memorable moments for me was when you called me up. That said, Hey, we're doing a dupe world in New York. I got on a plane and went out. I landed in, like, two. Thirty in the morning. You met me. We did to dupe World. Nobody knew what to do was back then it became, like, the hottest thing going. Now nobody talks about her dupe. So we're seeing these waves and the Cube was able to document them. It's really >> a pleasure. The Cube can and we got the Cube studios sooner with cubes Stories with Cube Network too. Cue all the time, guys. Thanks. It's been a pleasure doing business with you here. Del Technologies shot out the letter. Chuck on the team. Sonia. Gabe. Everyone else, Guys. Great job. Excellent set. Good show. Closing down. Del Technologies rose two cubes coverage. Thanks for watching

>> Live from Las Vegas, it's theCUBE! Cover Dell Technologies World 2019. Brought to you by Dell Technologies and its ecosystem partners. >> Welcome back to theCUBE! Lisa Martin, day three of Dell Technologies World coverage on theCube. Two sets, lots of CUBE coverage, we're excited to welcome to theCUBE for the first time Andy Anglin, the Director of Cloud Strategies at Halliburton Landmark. Andy, thanks for joining me on theCUBE this afternoon. >> Oh, you're welcome. Thanks for having me. >> So Halliburton, everybody knows the Halliburton name. In fact, Halliburton's celebrating their 100th year anniversary this year. >> That's right, it's a big year. >> It is a big year. Halliburton Landmark, talk to us about what that is. >> So Halliburton is obviously an upstream oil and gas services provider. Landmark is the business unit within Halliburton that provides petrotechnical software solutions to our customers. >> Okay, so customers all across the country, all across the world. >> All across the world. We work with NOCs, with work with independents, we work with the majors, we work with everybody. >> Okay, so, here we are at Dell Technologies World. How is Halliburton Landmark working with Dell Technologies? We're talking about digital transformation of your business, enabling your customers. >> So we're helping our customers through their digital transformation and one of the things that we're helping them do is move their petrotechnical workloads to the cloud. So we're leading the way right now in providing petrotechnical solutions in the cloud. We do that both on public cloud and on private cloud. And for our private cloud solution, which we call Landmark Earth, we've been partnering with Dell EMC for about four years now on building that solution. >> And this is a co-engineered solution. >> That's correct. >> Talk to us about that. What does that entail? >> So what we did was we worked with the Dell EMC engineers. Originally it was the VxBlock technology, but we've since moved it to the VxRail technology. We took that technology and we built the solution, built an appliance and took our blueprint, put that on top of that and then had the two groups work together to co-engineer that, to bring optimal performance and reliability. We're then able to deploy that anywhere in the world. So initially, most of the customers that were interested in it were the customers that were in locations where you couldn't find any public cloud. But now, because of the performance and the reliability that it's able to deliver, we have customers even in places like North America, where most people were originally looking to go to public cloud, now they're looking for the solution. >> So this sounds like it's giving you quite the competitive advantage. >> Absolutely, yeah. We were a little bit ahead of the competition in putting the solution together. We're looking to push to the cloud quickly. >> That's a good place to be, is ahead of the competition. You talked about kind of the speed, reliability, performance. What are some of the other really key values, business values, that your customers are gleaning from this solution already? >> So, couple things. One of things that we can deliver is faster time to value. So a lot of our customers have tried to go do something on their own, and generally speaking, they've met with a lot of challenges trying to do that. They try to build something themselves. It takes a long time. Ultimately it doesn't really work, and so what we can give them is a proven solution that we can stand up very quickly and deliver value to them very fast. The second thing that I would say is that we can significantly lower their total cost of ownership. >> That's always good. >> So our petrotechnical workloads are a little bit unique from some other industries. They're very heavily dependent on GPUs. So our customers are used to having these really massive, powerful workstations, with heavy duty GPUs in them. And in order to manage that type of environment, not only do you have the upfront cost of buying all these workstations, but you now have to go and manage all these workstations individually with these petrotechnical solutions that you've deployed on them, by leveraging a hyper converged infrastructure like we have with the VxRail. With the Landmark Earth appliance, we can provide all of that in a single hyper converged environment, so now you can manage it in one place. So the total cost of ownership, for ongoing operations, is drastically reduced. We also see performance increases that are pretty significant, like we mentioned before, because one of the major things that we do is we load massive amounts of data. And when you're in a client/server environment, that mass of data is coming from a database that's somewhere else. But when you're in a hyper converged environment, your compute and your data are sitting right next to each other, so we can significantly reduce the time to load that data. >> So, how much of this is sort of a cultural shift for the upstream oil and gas industry? >> Absolutely. So oil and gas industry has historically kind of lagged a little bit behind in terms of keeping up with the latest technology. The oil and gas downturn that we went through in the last couple years has really been an impetus to drive that technology transformation, and so a lot of customers are looking for digital transformation strategies in general. And as part of that, this is something that a lot of them are looking into. A lot of the customers that we go talk to are still using that legacy client/server environment, then this is something new to them. And, you know, they don't expect that they would be able to take something and virtualize it somewhere else and get better performance than what they're used to seeing on the front end. >> How is it also, I've mentioned a few minutes ago, this is Halliburton's 100th year. >> Yep. >> Partnership with Dell EMC. How is what you're doing with them and with the Landmark Earth appliance, how is that changing Halliburton's business as well, and even from a cultural perspective? >> So one of the things that's changed in our business model and how we do this, is that we actually leverage the same environment internally. So as our R&D teams are building the solutions, they actually will build and test them on the same type of appliance, which means that when we go deploy it to a customer, the customer's actually deploying the solution on the same environment that it was tested on in the first place. >> That must give them a lot of confidence. >> It does. >> That you've done this. You've established high performance, the results that they have to get. >> Absolutely, yeah. Because a lot of times, when you download software and install it somewhere, a lot of the typical problems that you may run into may just be from nuances or differences in the environment that you're deploying to. So by deploying in the exact same environment that it was built and tested in, it gives you a level of confidence that it's going to perform. >> So, speaking of confidence, how has your confidence changed over the last three days? Lot of announcements from Dell Technologies. We heard, even on the first day, Michael and Pat and Jeff and Satya Nadella from Microsoft. A lot of collaboration, a lot of integration as well >> Absolutely. >> Give me your perspectives on that and how you think it will influence the direction that you guys are going in. >> Quite honestly, I'm really excited to see where things are going. I mentioned before, we deliver solutions but in the public cloud and in the private cloud. And so one of the challenges that we face is being able to manage these workloads across these different types of environments, and a lot of the announcements that they've made have been about they can simplify that process and make it where I can manage workloads, and even move workloads, across different cloud platforms, without having to go build that capability myself. So I'm kind of excited to see where this is all going. >> What are some of the things personally that you're going to be taking away from this? >> Personally, for me, I'm going to go back and have some of my technical folks talk a little bit more about what we can do with the Dell Technologies Cloud and the VMware Cloud solutions that have been announced. >> And also with the announcement to VxRail, looking at it really as a foundational component of the Dell Technologies Cloud, which was just announced a couple of days ago, how does that potentially impact the appliance that you've built, leveraging that technology? >> So I think what it does, is it gives us the opportunity to integrate that into our broader solution around, with the different cloud platforms. Since we already leverage the VxRail technology today, we already leveraged the VMware software stack on top of that, but now what we can do is we can layer on another management layer on top of that, that would allow us to look at that across multiple cloud platforms, and that's pretty exciting. >> And then in terms of market opportunities, how does this open the door even wider for you? As we talked about, you've got a lot of customers, you've been around for a long time, it's a well-established industry, who are still using a lot of legacy practices. What you've heard this week, how do you think that kind of kicks the door open for Halliburton Landmark? >> That's actually a great question. I mentioned before that, initially, most of the customers that were interested in the private cloud solution were in places where we didn't have public cloud And now, we're seeing more customers, even where there are public cloud capabilities, coming back to the private cloud because of either data privacy concerns or performance concerns or whatever, which we can deliver. But if we can actually manage this across multiple cloud platforms, then that enables you to create a hybrid cloud approach, where you could have some workloads in the private cloud and some workloads not in the private cloud, and could span out to public cloud for different things. So, for example, if you have workloads that are temporary in nature, so you don't have something that's permanent. You want something that you can send it out to public cloud and, you know, run a large scenario, some type of simulation on it, get some results back, and bring that back, but then use your private cloud environment to actually visualize the results of that. So, it creates some really cool opportunities. >> And the conversations around emerging technologies, AI machine learning, where are your customers, in the upstream oil and gas industry, where are they, with respect to embracing, acknowledging that there's a lot of potential there, I mean, the power of the cloud to harness the power of AI. Where are they with some of those emerging technologies? Is it still pretty early? >> It's something that everybody is looking into right now, right? So everybody is looking into how can these various digital transformation technologies be leveraged within the oil and gas industry. And there's a lot of opportunity, there's a lot of places where you can plug it in. For example, there's a lot of physics-based modeling that happens in the petrotechnical workflows, but using AI, now you can start doing some AI-based workflows in places where you need a faster solution, such as at the edge. So at the edge, where you might need some kind of a result quickly, and you don't have time to wait 'cause you have to make a decision at the well, you can now do that with artificial intelligence, and you can couple the two together. >> And speaking of edge, one of the things that Jeff Clarke said yesterday, and I have to say this in a Game of Thrones accent, the edge is comin'. But a lot of people have said to us the last couple of days the edge is already here. In the oil and gas industry, there's so much remote, where are customers in terms of embracing what Dell Technologies are saying, it's edge, core, cloud. >> So, the edge is absolutely here, the edge is real, and everybody has varying levels of sophistication at the edge today, and that's another place where there's a lot of effort going on to understand what's the best value for what we can do. So there are places where you need a solution that may not be as expensive, because of the existing investment that you have. There are places where you may be willing to go out and completely overhaul everything, put something new in. There's also greenfield opportunities, where you're building it from scratch and you have opportunities to put things in place. So everybody's looking into the best way to leverage that right now, and that's something that we're working with our customers on. >> So it's already here, it's not coming. Last question, Andy, for you. How does being a partner with Dell Technologies, how is that enabling your business? How do they help you deliver the solutions that you need to to impact your industry? >> So we've worked very closely together from the very beginning, from initially co-engineering the solution. You know, Dell would bring resources out, we would work together to optimize the solution to make it work. But even the sales motions, I mean, we worked together on marketing efforts, we worked together on our sales efforts. We have global teams that work together, we have regional teams that work together, and we bring all those groups together for every opportunity to make the best of it and provide a solution that works best for the customer. >> Sounds like a pretty collaborative relationship. >> It has been. >> Andy, thank you you so much for joining us on theCUBE today and telling us what you're doing at Halliburton Landmark. Pretty cool stuff. >> You're welcome. Thanks for having me. >> Oh, our pleasure. I'm Lisa Martin. You're watching theCUBE live from Dell Technologies World 2019. Thanks for watching. (synthetic rhythmic music)

>> live from Las Vegas. It's the queue covering del Technologies. World twenty nineteen. Brought to you by Del Technologies and its ecosystem partners. >> Welcome back to the party The Cube Live Day two of our coverage of Del Technologies World. I'm Lisa Martin with one of the best men in TV Dressed man Dave Alon Today that Ty is awfully dapper today. Always a pleasure to be with you. And we're pleased to welcome back to the Cube tight Schmidt, VP and fellow of extreme skill infrastructure from Delhi and see, we're all kind of color coordinator here. Somebody sent us a memo Happy to be back. Thank you. Great to have you here. So we've We've been having great conversations the last day and a half. Lots of energy, lots of excitement. This is the first doll Technologies World sensed all returned to the stock market a few months ago. Talk on all things. Lots of buzzwords. Hybrid multi cloud partnerships edge One of the things that Jeff Clarke said this morning in his key Now that I think needs to be said in a game of thrones Voice is the edges coming? Just coming. What is the edge meat isn't like digital transformation, where it means five things to two different people. >> Yes, so the edges coming. Some would say the edge has been here, but now it's being at least, uh called something that we could try to get her head's wrapped around. Right? So, uh, the edges has been here. It's here. It's It's continuing to manifest itself. I'm gonna give you a couple of examples what we're hearing from customers. You know, human nature is I want this thing to be defined. I want it to be something stable, bounded that I can then go and create a work force or a product line. And I know exactly what we're doing. Well, I've got news for those folks. It's not that it's, Ah, it's chaotic. It's dynamic. It's disruptive. Um, I'll bucket ties it into a few big level buckets that we're seeing, but the thing I'm trying to get people to get their heads wrapped around is that the edges not defining usage models the edges, not defining products. The usage model is defining the edge, and so there's thousands and thousands of different usage models, But I'll talk about a few of them right. Um, I think most people would be in their minds. They're thinking about a distributed network and distributed data set or something outside of my traditional data center space. And I need compute storage, Something to facilitate my business. I'm calling that the private edge still a little bit from the private cloud, calling it the private edge. And basically it is, um, it's a It's a direct ingest or usage of compute that I'm buying storage that I need. It's at a location typically follows the data. So where I'm collecting data, my my array of sensors and cameras and you name it I ot type devices where that data is that I need to have on prem Data center capacity to collect that data, do something with that data, and then action. Do something actionable at that facility. And, you know, uh, minds and construction centres and retail stores. People talk about autonomous vehicles. Reality is is leading up to the autonomous vehicle. There's a need for data collected off of these cars as they're experimenting >> with different terrain and weather conditions and driving conditions, and we are providing those types of edge data center capabilities for those automotive companies to drive their cars around, stop into these depots, download their data, get updates, and off they go to collect more data. And that's an example of the private edge. So we've seen everybody been data centers, face floor, pristine, beautiful. You know, physical security. The edge could be a truck, a police car, doc. But it could be anything. So how are you seeing customers deal with the physical security aspects of the edge? That's a great question. So there and there's a physical in logical component to it, right, So they're all over the place. So these first, these first examples of where we're seeing EJ being actually adopted outside of a traditional data center space, tremendous sensitivity, toe physical security. Some of them are taking care of it themselves. So they have, uh, courtyard or a building that they're wanting to simply put a device in. And they're handling security, physical security at that location, others are Listen, I'm trying to understand the cost trade offs of building this fortress, which kind of his counter counter productive to what I'm trying to accomplish here. Can you provide that as part of your data center? solution. And so, looking at things like ballistic protection, overall theft protection, these things air smaller. They can be hold off, so we have to anchor them to the ground. We have to have wave to think differently about how these things are connected so that somebody can come up and cut through a wall or cut through a pipe and get access to this critical data. So how we approach that physically eyes is a tremendous, tremendous concern to customers. And we're addressing that through the solutions were providing ballistics bombproof flameproof intrusion proof different types of biometric sensors. In some cases, we hide them in plain sight, painted with graffiti, puts a bullet holes on him, make it look like they're not worth anything. You're it. So you do have some serious stress testing as well. Which was what? Your favorite stress test. >> There's a lot of shock and vibe testing, so we have a way to protect against seismic. We have to >> protect against wind loads. You we may have a thousand pounds of snow on top of, and we have to test these things against those type of environmental conditions. Way haven't, uh, we have it yet back. You try to drive over one with a bulldozer or some type of a vehicle, but we do do impact testing, ballistic test sting. And there's there's a lot of fun testing, and I don't mean to minimize the logical security. A lot of this is critical infrastructure, right? So, you know, if it talks about the threat matrix and so, uh, what do you see in there? What's what's Del bringing to the table? I mean, are are, you know, wonderful array of security elements with our company right now are implying that I think we're having to do with customers. This is an early part of the journey is how is this data being protected? And the logical component, at least what we're seeing today doesn't necessarily differ as much from the traditional data center. But things like, um, you can automatically detect whether an intrusion of physical deters has been made and decide to do something actionable, like lock hard drives where even if somebody was to steal a server or the hard drive, they can't do anything with it. GPS type sensors and devices that can track the valuable components in the solution and not allow them to be turned back on unless they are connected into that network. A za proofpoint. So there are a number of things that are that are being driven that somewhat looks like the traditional data center, by essence of where they're located and how these things are remote way have to. We have to think about that >> when you're talking >> with customers who are on everybody's on a journey of many different types. Digital transformation. I t. Security Workforce We've talked about all of those things last year's Del Tech world and, of course, this week as well. How do you advise them of Where do I start if I have Like, for example, when dehl was talking about the latitude devices this morning and all of this really cool tech built and even with train protection, for example, were all, and John Reese even talked about the edge of people the end, the edge of Io ti and centers, which makes sense. But where does a company like Adele stirred these conversations with customers who have a tonne? Probably People edges and io ti edges are yeah, so with where do we start? Kind of raining this all ends, we get the data out on it in real time, process it as close to where it's being generated as possible in a way that we can we can actually understand. >> This's the world I live in, right? So fundamentally, it helps us understand that that most companies, >> um, >> you know, lots of different organizations. But when it comes to a data center type of solution, you have the group who are trying to do something transformational the software writers, the applications and workload developers who are trying to take advantage of next generation it to do something transformational, you have the also you have the facility side. So this is the data center, the real estate, and the two don't necessarily, you know, talk about strategy in a line on how they're going to facilitate transformation. It's ultimately it starts with having deep discussions with both of those organisations. What are you trying to do to transform your business? How does that translate to the types of gear storage networking that you're going to require? What if you weren't constrained by your facility? What could you do and paint that picture for them? It also in parallel involves deep discussions with the facility and corporal estate side of of a company. What do you have? What are your challenges many companies do have on I .'LL speak for the telco space. They have a landscape of what you could consider edge data centers. There, the central office's, uh, extend out to the cell tower. These are pieces of real estate that they're trying to monetize, and but what comes with that are the constraints and the variability from site to site regulation requirements, cost of construction, labor flavor rates. You know, whether it's union or not. >> There's just a tremendous amount of variability. The end of the >> day where Dell comes in and helps is one week. We are a great thickener of things because we can. We can I would say force. But really, it's enable the discussion between the and the facility teams. We do have that understanding, and we are looking at it objectively through both of those lenses at the end of the day, creating a cost model, something that customers can use to look att, tradeoffs, locations, types of technology. Looking at those trade offs to help them make decisions is we're spending a lot of our time doing. It's a real cultural dichotomy. You've got the, you know, technology team, trying to move fast and break things. You got the facilities and let's keep it stable and safe, and they're both critical. They were absolutely both critical on They have deep ownership and governance on those respective sides of the business. And so these edge data centers the part of the world that I own. It really forces that discussion happen. It's the collision between it and facilities where those decisions have to be made in a real estate level, a ten infrastructure facility level and at a ninety networking security level on all those things have to be understood and accomplished, solved at the same time >> and quickly. They don't have the luxury of time to really sit and battled this, you know, swan it back and forth like a tennis match. >> They don't I will say that >> majority the industry right now, this is a big play for them. You can't push all of your chips in without having a lot of this information. So what we're seeing is a lot of I would call crawl, walk, run where they are starting with modeling techniques. Then they're going with proof of concepts to test out. What does this mean from a non pecked standpoint? What does this mean from a Catholics? How much I'm going have to spend visit scale, you know, from one to a thousand or ten thousand? And so getting this data and helping them build the models to help them understand that allows him to plan big and understand what they need to do at a higher level? >> Wow. So much to dig into it, just like the edge dot dot dot to be continued. Ty, Thank you so much for joining David Lee on the queue next year. Can't wait to hear all the more stories should be more stories. Awesome. Ty, Thank you very much for Dave Volonte. I Lisa Martin. You're watching us on the Cube Live in Las Vegas. Day two of the Cubes coverage. Abd el Technology, World twenty nineteen. Thanks for watching