>> Live, from Miami Beach, Florida it's theCUBE covering VeeamON 2019. Brought to you by Veeam. >> Welcome back to Miami everybody, sunny Miami. Dave Vellante here with Peter Burris. You're watching theCUBE, the leader in live tech coverage. We go out to the events, we extract the signal from the noise, and there's a lot of noise here, and there's a lot of signal here. VeeamON 2019, this is theCUBE's third year doing Veeam's big customer show. We started doing NOLA, last year was Chicago, a very hip location here at the Fountainebleau Hotel. Carey Stanton is here. He is the Vice President of business development and corporate dev, corp-dev at Veeam and Jeff Kalat, a CUBE alum, >> Yep, you bet. >> long-time friend of theCUBE, senior director of strategic alliances at Hewlett-Packard Enterprise. Gentlemen, welcome to theCUBE, good to see you. >> Thanks for having us. >> You're very welcome. Carey let me start with you. Uh, I really want to talk about sports with you, but anyway, we won't. We'll hold that off. (laughter) >> (Carey) One day. >> Momentum. You're relatively new to Veeam. But you've been here now a couple years. Where's this momentum coming from, from your perspective, as a recent Veeam entrant. >> Yeah, no, the momentum's coming from across the board, but I think a big momentum is coming from new product innovation that we're doing with Office 365, and we're just driving up subscription business momentum that we have for the pent-up demand that we had for Euphor. But a big part is coming from our relationships like we have with HPE. We invested heavily a few years ago when we announced that joint reseller agreement. What we've done is not just continued to sell but add a plethora of new solutions to it Jeff's going to talk about what we're doing with GreenLake adding SimpliVity, adding the overall solutions that we have. But that's a team that started two years ago with two people that we now have over 20 people just working, dedicated with HPE on co-selling. And I'm happy to say that our business in first half, or I should say year-to-date is up 50% year over year on a global reseller business. >> Well Jeff, theCUBE as you know, has been documenting the ebbs and flows of HP and HPE over the last, better part of a decade. And when HP split in two, to HPE and HP Inc. One of the things that-- And then sold the software business, or a large portion of it. One of the things that went was data protection. >> (Jeff) You got it. >> (Dave) And that just opened up a whole new set of opportunities and Veeam was obviously one of those. And it's starting to pay dividends. >> You got it, yeah, to that point, that evolution through HPE.nex, we were able to focus on our core. And the benefit, the inherit benefit is that we can partner with the best of class in the marketplace. And Veeam is considered best of class. So when it comes to data availability, data protection, we're all in. And we're actually, as a company, we're actually doubling down now in our partnership with Veeam. We've actually taken them from, maybe a traditional storage alliance, and taken them to be one of our top global strategic alliances in the line of the Microsoft's, the Veeam, or as the SAP's. Because we see great momentum, we see great customer adoption and interest and we see great innovation at the product level, but also in the whole global market chain. >> Well talk a little more about that because it was, the move allowed you to form new partnerships that dramatically expanded your TAM but, I'm interested in the nature of the partnership. Is it, just go to market, is there engineering integration? Talk about that a little bit. >> Our first step when we came together and said okay let's take this to the next level, we realized we need to narrow our focus to the core customer values and we really settled on three core areas of this relationship. One is first, data protection for, around our intelligence storage, as you know, our storage portfolio 3 Par, Nimble, we've had a great relationship there, we continue to drive co-innovation at the road map level, but also drive go-to-market activities and marketing and we have feet on the street actively selling. So the first one's really expanding our work with storage. Now we're taking it, we're extending, if you will, through consumption based data management, using, well HPE has GreenLake, Greenlake we see 40% of customers by 2020 are going to be consuming their data center IT more in a consumption model. There are inherent benefits of that. What we now have offered and launched just recently Backup,is a service through our flex capacity coming out of GreenLake, providing customers the choice, if you will, to move from a, not from a capital expenditure, but, by the drink, if you will, consumption base. So that's the second core area. And the third core area is new for us, and that's around our HCI portfolio. As you know, we purchased SimpliVity. Well, SimpliVity has a lot of inherent backup, dedupe compression in line, but there actually are some Zivik use cases that we're deploying out there that show how Simplivity in a Veeam environment can actually, customers can see actually incremental values. So, those are the three key areas we're focused on as we up-level this whole relationship and partnership. >> (Dave) So Carey, please. >> I was just going to say if you think of, we talk a lot about we go after the technical decision maker in all these, hundreds of people here at the conference. And then going towards the executive, the enterprise. And it's through relationships with HPE on this, the flex capacity, being able to go to a customer and offer a true enterprise solution that they're looking for, everyone wants as a service. And so we've closed multiple deals this year thanks to having the Greenlake. So, our relationship with HPE continues to elevate and the enterprise is a result of the solutions that we're doing. Not just selling storage, but selling a complete solution. >> Rathmeyer was kind of tongue-in-cheek this morning at the analyst and media event. He was talking about how in 2013 he predicted that Veeam would be a billion dollar company by 2018. And he said he missed it by six months. One of the reasons was because you know, you got the subscription model. So that's, you know GreenLake obviously is part of that, maybe not the predominant part yet but I think you said you have 40% you're saying will consume, as a service by 2020. >> 2020, actually soon. >> (Dave) Okay so pretty substantial. >> Yeah. >> What's driving that? Is it just CFO's want to go to opex? Or is it-- >> I think it's a, there are many, the value you get without locking yourself into every three years needing to do a total forklift upgrade of your infrastructure, that's one thing. The second thing is moving it from a capital expenditure to an opex expediture. It can be planned, it can be budgeted as well. The third thing is the customer doesn't have to mess with all the technology, updating the firmware, the drivers and all that. We will do it on their behalf, right? We give them the economics of cloud on prem and that's the beauty of that. So we believe, and lock-step in alignment with Veeam, the world is hybrid in the future. So on prem is here to live forever, but increasingly we need to leverage the assets in the cloud and this is providing the ability of doing it in a consumption model. >> And it's not just the economics it's the experience as well. >> Oh totally, if you want to, if you live in a house and you're a home owner, and you want a new bathroom, you put in a bathroom. If you're a renter you end up in a long, laborious negotiation that you're going to lose. And the same kind of notion is here as people realize there's greater strategic opportunities and options from how to use their data differently. They want access to those options. And that's the basis of agility. The opex to capex is good but you've got to put it in business context. It's how you create additional options in your data oriented investments. So, as you guys are moving forward are you starting to have that conversation with customers? And relating data, data value, asset management, Backup, Restore, to this broader picture, this broader strategic union you're putting together? >> Yeah and that is a key imperative of how we get even stronger in traction is telling the bigger picture. And you look at the world of yesterday, where it's just backup and recovery, look at the advent of edge devices and the amount of data that's being put at the edge. Now look at AI and machine learning where, the data is inherently needed to project the changes and the needs that are in the future. So, I think these all tie in to the play and I believe at GreenLake our consumption model can provide great benefits, above and beyond the traditional backup and recovery. >> And I was just going to add to it, is that it also brings in our ecosystems, so the relationship, that tier one relationship we both have within Microsoft. So when you start looking at a solution that the business owner wants, they want to be able to say I need cloud, I need on prem, I need backup recovery, and so by going through GreenLake they can encompass, we have a broader ecosystem that we're able to bring in versus just single thread in these discussions where you're going in and selling a data protection story and leaving but you didn't solve that broader customer problem, and with GreenLake, they are solving that overall problem. >> Yeah, I'd just like to say nothing really happens until you make a sale. You talked about some of the growth earlier. But why Veeam? Obviously you're getting some traction in the market but there's a lot of players out there that you could partner with. And you do partner with others. But why Veeam? What makes Veeam so special? >> I think one, inherently we are lock-step in agreement of the over-arching strategy, we talked about hybrid, we talked about portfolio. Two is we've got the engagement at all levels of our organization, which all stems truly from having a unified roadmap. Innovation has to happen at the roadmap level and you need to be lock-step aligned through the value chain in the way you take it to market, the way you align your sellers, the way you deliver a value proposition that truly is valuable to our customers. It's proven from our IDC research that customers who are deploying and purchasing HPE and Veeam solutions are seeing a 250 plus percent ROI on that investment. So there's this huge customer benefit, and why not go bigger and go bigger and go bigger with them. >> (Dave) Same question to you Carey. So why HPEE, why is HPEE so special as a partner? >> I think HPE first and foremost, being that first partner that came to us to want to go all in, as Jeff was talking about, from day one, and top down. So we're not just working with a department of HPE we have it from Antonio, from Jim Jackson down the stack in the organization. We were aligned from day one. They lead with data protection, it's no longer, it's a a nice to have, it's a requirement in every one of their sales processes. We're their lead partner that they have in data protection. And what we'd been able to do and have that enterprise visibility by them assisting us on our journey. So, from across the board, whether it's through management, through technology, or just in true go-to-market, they're by far our number one partner that we have on our sell-with motion. >> So Jeff, I want to talk to the group about GreenLake. And Carey, I'd love to hear your thoughts on it as well. What are the challenges that go into a consumption-based model for a company that's traditionally sold products. As part of this overall move in all industries, all sectors, from a product to a services orientation. How do introduce metrics that are associated with the service? Because it used to be you just sold a product. And the metrics for storage are different from the metrics from backup, different from the metrics from compute. So as you've gone to GreenLake, because I love GreenLake, what kind of specialized, or specific types of things, how are you selling it to try to tie that service into the business outcomes that your customers are trying to see? >> Well clearly, I believe, some of our first wins, early wins we were able to monitor and metric the value the customers were getting, the service levels they've received and so we have a number of different methods of capturing the data, the empirical data, on the service levels and being able to use that to then, use that in the selling motion to be able to articulate the experience and the expectations that come with that. >> What are some of the harder problems that your customers are asking you to solve? And how are you approaching it together? >> Well I think that what we're talking about with GreenLake here is a real hard problem to solve, right? Consumpton based across geographic regions, across different technologies, on prem, off prem, hybrid. And we don't have another partner that we can go to market with when we hear this from the customer. So when we hear it, we know that we can lean in. And we truly are, to follow up from your question, is the fact is that HPEE is solving all this and then bringing us in as their number one partner, is the differentiator that we love. So solving those problems at an enterprise level, and at a commercial level and doing it with one partner is easy, right? We're shortening the sales cycle, increasing the value to the customer. >> Yeah, one thing I have to say and it's always, complexity is always a problem and an issue, right? So it will always be a problem and an issue and we will always be striving to improve and improve the complexity. But you know, Veeam, we're super simple, right? And we, especially when you look in our HCI portfolio and that's all about driving simplicity, if you will, in a way you can deploy IT, you can scale it. So I think complexity is, and will always be a problem. But it's a given too and it will always be there. And we will always be striving to make it even easier and easier for our joint customers. >> Well one of the challenges that you face, especially as you go to a sevices-only model, is how do you put a price on the outcomes that you're delivering as opposed to the price on the assets that the person is taking? So I think one of the biggest challenges, and it sounds like you guys are pretty close to getting this together, but it's part of a broader portfolio, is where does this, let's put it slightly differently. We've talked about this before in some of the other interviews. backup is moved from a have to have it, for maybe compliance or it just makes good sense to have it, to a strategic business capability for a company that's increasingly differentiating itself on it's data assets. That moves this conversation about, as a service, into a different group and a different, different level. And that's what I'm wondering. Those metrics have got to be a big part of the conversation. Because the entire organization is now recognizing backup is more than just a bolt-on. >> Yeah. One example, one of our close partners, we're here with them, Island. So, disaster recovery as a service, right? They standardize on Nimble and Veeam and together, that combination to them was good enough to build their business on. So there's inherent value and we expect to continue to grow and be able to expose that value. 'Cause we believe more and more customers, not just your pure enterprises but, from your mid-market all the way up, can be able to utilize and see that value and experience it. >> Just a point of clarification if I could on the HCI piece. Specifically around SimpliVity. So SimpliVity was known for it's backup use cases. >> (Jeff) Sure. Still is. >> So where does Veeam and SimpliVity fit, versus Simplivity solo. >> Yeah, yeah. Well first and foremost yes, Simplivity has inherent, great data availability features, inherent in it. That's core to it. But in reality, for customers, let's say a mixed environment, whether it be virtualized, non-vitrualized, there are inherent benefits to having Veeam in addition to SimpliVity. Another example would be customers who want to really have the access to be able to do specific file restores. So we see capabilities in running Veeam in parallel with SimpliVity. Actually I see a lot of customers that are deploying SimpliVity are also deploying Veeam and there, it's an additive value that they're seeing. And they're able to parse out features and functionality and be able to increase their level of value that couldn't be done, just purely from a Simplivity standpoint alone. >> All right Carey, we'll give you the final word. >> The final word is-- >> Bumper sticker on VeeamON. >> (laughing) >> Bumper stickers. >> I would say that, what we're doing here with HPEE, we would say we're in the first inning. What we're seeing on the innovations that we have coming out later this year with HPEE, coming into next year, and we're just thrilled to be having them a platinum sponsor of VeeamON and look forward to another successful year. >> Awesome. Guys thanks so much for coming on. I got to ask you, Boston-based person, Bruins fan? >> (Carey) Bruins, yes. >> You worried about Tuulka, at all, a 12 day layoff? >> (Carey) Nope. >> No problem. >> (Carey) Nope, Chara's going to be nice and rested and-- >> (Dave) Chara, more Chara or less Chara? >> I'm going to, yes well. I got to take more thanks. >> Okay, all right, good. We'll see, we'll see. Go Bruins. All right guys thanks so much for coming out and thank you for watching. Keep it right there we'll be back with our next guest shortly right after this break. You're watching theCUBE from VeeamON, 2019 from Miami. Be right back.

>>live from Madrid, Spain. It's the Q covering HP Discover Madrid 2017 Brought to you by Hewlett Packard Enterprise >>Welcome back to Madrid, Spain. Everybody, this is cute. The leader in live tech coverage And we have a day to HP discover Madrid. My name is Dave Volonte with my co host for the week Peter Verse. Jeff, Carla is here. He's the senior director of solutions. Go to market system integrators at Hewlett Packard Enterprise and Kalyan Gara Mela. Who is the i o t manager? Deloitte. Yes, Gentlemen, welcome to the Cube. Thanks for coming on, You bad love too deep here. It's always a great time. Yes. So you know, when you come on with Deloitte, we always sort of mentioned you guys. One of the top system integrators in the planet. You got deep expertise and vertical industries. You guys bring the technology expertise. Last time we were talking about manufacturing. This time we're gonna talk about retail. Yes. Why? Retail, You know, retails in turmoil. Everybody's got numbers on war room. But you guys are going after that, helping some of your customers so to take advantage of their physical presence, bringing in an online presence move into digital. Is there hope there's hope, their retail dead? You know, >>I hear all the time about this retail apocalypse retail is dead, and in reality, it's not dead at all. Still, 85 to 90% of purchases were being going through a brick and mortar store problem here, and the apocalypse will happen to those brick and mortar retailers that don't change. They don't digitize and change to the changing demands of a consumer and the way they want purchase something, give you an example, my son or even myself. Now I increasingly want to do things through an experience. My computer, my mobile phone. I do research. I I want to understand. I want recommendations. I want personalization. I want to be catered to. I don't want to go stand in line. Well, that experience can be done but are unique. Ability. Is taking that experience in a planet into a brick and mortar environment? >>Well, I got to say I love going Cabela's with my kid with my wife. I mean, I could spend all day. Hey, get that on Callie and tell us about your you're rolling. The Lloyd, obviously specializing in the retail practice. What, Your background? >>Yes, my name's Kalyan. Gotta Mila being a coyote manager from the >>delight you >>practice based out of San Francisco, and we have been working with our partners and friends. Hitch be Aruba over the past year or so, helping them dollar, I ot go to market projects, products that can be that we can take to market on Dhe. Recently. We're just working with manufacturing and retail industry. >>So what's the conversation >>like with your customers? As I said, everybody's got an Amazon war room they're trying to figure out. Okay, >>how do we leverage our physical presence as an advantage? What were the conversations like with clients with >>our clients? Mostly that talking about How did the mimic our online channels? Right. If I go to an online retailer, you know, if I go open, say amazon dot com, they know exactly what item I am for chasing where I'm going next. What? How much time I'm spending. So in order to differentiate the brick and mortars in order to differentiate themselves from the fellow retailers, they have to offer that customized shopping experience in order to get given a reason for the customers to come in store and make that purchase. So they're trying to look at what new technologies that we can can we can help with. What are some of the new processes that we can help with? And that's where most of our conversations have been going on, >>Really experience. Problem >>it is. And you talk about the bells and I moved into a new house, ready to buy my big >>lazy boy chair and watch Sunday >>football, and I'm not gonna go online just by here. I want to touch and feel that I was late and I want to understand. Well, that is a perfect opportunity of providing an experience. Allows me to do the research, get suggestions, go into a brick and mortar store. Try it out, then guess what? I'm getting personalized. Hey, you know what? There's a nice beer stand that I could put right next to that table. Be calm, perfectly complemented. Hey, there's a light that can look over So we have that ability of actually tying together and experience, actually predicting in advance what the customer really doesn't know they want next. But they really do want example. We just walked out of a client engagement. Beautiful example. Plan Engagement sells high end women's fashions, right dresses and shoes and accessories. Everything. And he's He basically said, We're dabbling around with R F I. D tags, um, inventory management, but we don't know what to do, right? Bingo. We now have a proven, referenced architecture called the Connected Consumer. This is a preview to be announced to be soon, but that can allow, actually that client to integrate and optimized and digitized the solution for a number of different use cases that spans a unique customer experience in store operations and efficiencies, and then providing insights through analytics in store analytics to make decisions quickly. So you've got by using this architecture building of solutions based with Deloitte Competence season capabilities in HPD Aruba technology. We can deliver that to increase top line revenue, increase basket side, decrease inventory costs, lost inventory and provide much greater brand loyalty to those customers by having a nice, personalized teachers. They know me by name. They know what I'm looking for in advance. Beautiful solution. >>So the online retail world did two crucial things. One is provided new way of customer to buy something and number two, it provided a new way for the retailer to learn something about the customer. Very, very powerful. But as you said, we're still last time. I checked physical things that move through space that used physical senses, too. Make decisions, Tactile. Do I like the color? You know the experience. I mean, I remember having arguments with people about whether the Apple stores are ever gonna have any impact in the world. And, boy, did they prove that experience of physically being there matters. So in many respects we're talking about, We're talking about creating spaces, the correspond to the experience that a customer wants in a way that doesn't force them into another channel. >>I think that is excellent. Thank you will hear security and character talks about who these are Aruba team. And they are renowned for taking a space and providing using technology and I, t and software and security to provide a total experience, an immersive experience for those that are occupying that. >>But that's not how retailers used to think. What they used to think was this is the space where I put my inventory where I show my product and then I'll put the catch register over here. What you guys I presume we're trying to do is show how. Show them how they could turn that physical space into a place that can bring in the online digital elements, complimented in a way that makes that door a source of different jack >>experience in the brick and mortar store and allows the comfort of Yeah, you know >>that makes it differentiated so that someone wants to go there, because that is a valuable experience in and of itself. >>And sadly, retailers of the past 40 years have always relied on big brand names to attract customers. If I have the best brands in the world, customers will come to me back. That scenario doesn't hold true anymore. You need to give them a reason. A personalized, curated experience for them to come in >>well, not least of which is the digital technology allows us to spin up new brands like overnight and so also so there's a there's it's having an erosion of effect on the other side of the inventory. So tell us a little bit about where you think over the next few years that differentiated in store experience is gonna be what is going to constitute great retail. >>I'll start enough shit. >>First and foremost, the expectations of millennials and other generations is more of that online experience. So I think I think retailers of the future have to be able to provide that customized experience. To be able to provide predicted people are not waiting in line is not an option in the future, right? I mean, even you. You look a waiting in line is not an option. I think that ability of you have to have more instantaneous gratification but allowing, if you will, the personalization being covered. I think that one expectation for those that want to sustain a business in retail in the future >>and add on to that right. I mean, the marketing managers are the store managers of the past have always relied on opinions rather than data and insights to make this better business stations. Where do I place my product? Where are my customer spending most of my time? It's just guess it's most of it was guessing. Now there is a technology out there where we can actually monitor what's happening inside your retail store and dead. While you can make better business nations to help you with your customer journeys, >>traffic, foot traffic, you know through video analytics and the data someone's hanging around the Nike booth or whatever you know financially, and you can purposely point them and give them suggestions of 20% off. And so you can personalize that experience. >>So wait. See Io client on DDE that's in the retail space on the way he described it is, you gotta break the whole thing down. Let me test you guys. You have a period of I want the experience of shopping on. The example that he gave me was a bike company a number of years ago who used flexible manufacturing to collapse the time high end bike to collapse, a time from order in the bike, getting the bike down to a few days. And they failed because the customer like waiting the process of buying, reducing time. Simple, straightforward, but also what they said. And this is the kind of flexibility we're talking about is some people don't wanna walk out of the store with the product they want to deliver to their home, so the store is again, not the place where the inventory is. It's the place where you experience the product and that they create an option. How would you like that? I like to be delivered to my house. No problem. There you go. Is that the kind of thing that we're talking about in the future? >>Absolutely. We call it the unified commerce of the Arm and channel shopping experience. You want to give the customer all the options available. Like you said, I could buy online shipping in store O. R. I can buy in store get into my house all the different options that a customer is looking for. A non online channel, which is easy and convenient. We want to do that in a brick and mortar as well, and our solution can help you do that as well. So you >>guys encounter a client that is, you know, declining same store sales management is concerned about, You know, the future. It seems like it's a tired sort of experience and, you know, that's sort of the end of the spectrum. And you want, you know, the to be his future. Stefano, the talk about where do you start so >>who brings what experts is. >>Actually, I'm gonna repeat what I said last time. Our mantra is First off, you gotta think big. Then you start small and then you scale fast. And what I mean, that what we mean by that is with the Lloyds capability. It's been a week and jointly come in and help a retailer. Let's think it through. Let's think you have how many branches looking to wear? What are your problems? What your inventory leak age. You know what your current experience, but you're in store WiFi. We can build a plan on what we can do. But the next big problem that we see is not about the technology is about the people in the process. How do you convince its How do you commit? Some who invest to change well, this through our proof of concept capabilities, we have the ability of starting small. Let's just go in and we can do through this architect modular proven architecture. We could do a starting Well, let's just start with some R F I. D tags and tags and start small. We can deliver the business value and calculate that and extrapolate that out if we apply that to your all your stores and scale fast. So we're making it. This be an on ramp for those retailers because they're saying what I do. I know I need to change, but what do I >>So you do like a test store model, right? Okay. And then what? That's your POC is actual. >>Yeah, And then So I wanna go back a little bit on this whole coyote offering. It's a composite offering, right? It takes a lot of technologies coming together and a lot of SMEs subject matter experts to come in and help you to build a whole solution. And that's where I think our solution is where it's ready to go, where all the pieces have been put together and can be easy from day one. The time to market has been drastically reduced because of this. Right? So we see a lot of value in that. >>So So you're able to say Okay, what kind of target customer? What kind of inventory? What's the cost of it? What's the turn? Take all those business attributes and then say we can map that back into a set of physical and system components that you can scale fast >>really comes around you. Three buckets were doing this to optimize an increase revenue, basket size conversions, everything timed revenue, decrease costs, efficiencies and inventory logistics people, uh, labor. And then providing a much greater experience of brand loyalty, which will also affect both costs and >>capture and capture additional data. So, for example, returns means two things costs, but also, somebody had a problem. >>So, uh, we're out of time, but so summarize kind of where you guys were at, >>uh, your solutions when it's gonna be available, you go to market, give us the >>tickets. That right now we're here at HP discovered we're previewing this connected consumer architecture. We're will deploy it. Calendar quarter one of next year will be the full announcement. We have contact information. We would love to engage in clients and start that discussion now around doing proof of concepts on dhe. We're going to be not only driving this collective retail solution that could be extrapolated into different use. Cases in markets were also continued to drive the Moorman industrial Internet of things and manufacturing offering around predicting maintenance, asset monitoring, maintenance that we talked about in Vegas. >>Great. Well, I hope next next Vegas come back with some examples and some a customer, and we could go through so that one of impact you've had, maybe you'll be through a POC. At that point. I'd >>love to get the cube into one of their poc >>a well loved. All right, guys. Thanks very much for coming on the Cube. All right. Good >>to see you. See? All right. Thanks. Keep it right there, >>buddy. We'll be back with our next guest day. Volonte for Peter Burke alive from Madrid 17.

>> Announcer: Live from Las Vegas, it's theCUBE, covering HPE Discover 2017. Brought to you by Hewlett Packard Enterprise. (upbeat techno music) >> Welcome back everyone, we're here live in Las Vegas for theCUBE's exclusive three days of coverage for Hewlett Packard Enterprise's Discover 2017, also known as HPE Discover, I'm Jeff Furrier siliconANGLE, here is my co-host, David Villante with Wikibon.org Our next guests are Jeff Carlat, Senior Director, Solutions Good Market for HPE, Internet of Things and Tushar Halgali, who's the IoT Senior Manager at Deloitte these guys putting together all the solutions. Welcome back to theCube, great to meet you, thanks for joining us. >> Jeff: You bet, it's great to be here. Great to see you guys again. >> So one of the things, actually, digital transformation which is really overblown we all know we are in this digital transformation wave. But the thing that we've been hearing on the queue over the past, I'd say 6 months of event coverage, the consistent theme with digital transformation is business transformation, and really people putting it into action. And that really is whether it's a service provider we've heard from earlier, and also just businesses trying to get their value chains and reconstruct their architectures at a business level but then having their infrastructure be responsive to that. And that's cool, but really IoT has kind of changed the equation, right, that's what you guys are doing so I want just dig right into it, IoT wave that's hitting here. >> Jeff: Right >> John: Your thoughts on the impact to customers in real time to their world. I mean obviously they have refresh cycles they're going through all kinds of infrastructure they had apps, Cloud-native on the horizon, Hybrid Cloud what's the impact to their business? How has IoT changed the game for the customers? >> Jeff: Well I'll start it, you can add on. First off, IoT brings the promise of changing the game, but not everyone is really realizing that yet, first-off because right now there's still many, many business challenges for companies of all sizes. Ya know the lack of internal corporate sponsorship to do a massive transformation and change, or the organization and the culture within. Cause you're talkin' a full life cycle digitization rather than, ya know investing or dropping new applications technology wise we've got problems, IoT represents IT merging with OT, so you've got this partnership and your solutions and offerings need to transcend your core data center and your IT technologies with the traditional operational technologies. You're talking companies that have been, Bosch and National Instruments, and folks that have been in the marketplace for some time so it's harder, it's heavy lifting, and there're limitations in the customer environment around the current IT architecture, so first and foremost to get the benefit, you've got to get them across the chasm to be able to deliver that new transformation. >> John: Tushar, I want you to weigh-in on this because the question also kind of digging in here a bit kind of subtext of the original question, where's the mindset of the customer? Are they having a wake-up call moment, are they beyond that? Where are they in the progress bar, if you will, on the IoT? Yeah, they've had some pre-existing infrastructure, operational technologies, sensors. Is it a wake-up call? Where are they? >> Tushar: Yeah, so I mean I think what is happening really is that a lot of organizations are now beginning to look into business outcomes and what technology does for them, right. A lot of them are saying "Well why should we invest on anything else?" So, companies are becoming really focused on top line growth ya know, bottom line cost optimization, and ultimately margin improvement for their shareholders. So, as industry lines are blurring, as new entrants are coming into markets, and new threats are being created there is more pressure from shareholders to come up with new growth opportunities. IoT as a field is sort of encapsulates, and takes all these different technology domains and puts it all together. Case and example, I mean, since 1970 to 2010 the worldwide productivity for manufacturing was about four percent every year, and then it just dropped to one percent. Now that's a really big deal, right. Manufacturing costs are about 18-20 percent of the costs of goods sold for a manufacturing client, so how do you increase the productivity because any impact on the productivity, or reduced down time for a manufacturing client, not only has cause on revenue but also a lot on the profit margin, right. The same thing around retailers. Because of the online presence, and because of the sales are increasing over there retail margins have reduced from 10.5 percent to about 9 percent. So retailers are asking "Well, how do we increase our sales in the in-store channel?" Where 85 percent of their sales are coming. So IoT is a huge component in delivering that. >> John: You bring up a good point. What I love about the IoT, and some of the stuff you guys are doing, is that it's the confluence of big data meets real infrastructure, and what you're referring to we hear this in the ad business all the time. "I don't know where my spins going." It's an instrumentation game, right. So talk about that impact because now actually not an art it's actually science as well. You can actually instrument it and focus on those areas. >> Tushar: I mean absolutely, just to build on the marketing story that you just talked about, that's a huge piece in retail, right. So if you have a multi-brand retailer you want to be able to not only see what your customers are doing, but also try and monetize the data. So one channel is to look into who your marketers are, advertisers are, and then be able to place the ad at the right place, in the right context with the consumer that you might have in your store. And a lot of this is about in-store data attribution right. What is the ROI that marketers and the advertisers are getting back for the spin that they have. And so ROI with the help of, Beacons and Colts and wifi all these technologies, is able to sort of capture all of that location data the contextual data, the behavioral data of the clients along with wireless infrastructure data. Put it all together and create that picture. >> Jeff: And what I'm seeing customers are kind of one of two camps. Those that understand a grocket, but they don't know where to start. How do I truly start digitizing? Then the other ones are they don't fully realize the value and the necessity to start transforming, or their going to be out of business. >> Tushar: Yep. >> Jeff: I mean go look at a lot of examples, your brick and mortars >> Tushar: Yep. >> Jeff: talk about your retails. I think this is where we're coming together to really deliver and make it easier for those clients... >> John: It's the classic case of early adopters. Believers and non-believers, and the believers kind of go jump in the deep end, waffle around, learn how to swim. And then the non-believers become believers cause they get bitten in the butt with cost >> Jeff: Yeah. >> John: or some sort of impact. >> Jeff: Exactly right. >> Tushar: Or their out of business. >> David: But it's a really hard problem for organizations. So and you mentioned it before, is that companies have to go through their digital transformation, but they have to fund it. And it's hard to fund it if your having to grow your top-line, and cut the cost of your legacy systems. Okay so part of the problem is you talk about digital transformation, it's all about technology, it's all about data certainly IoT plays into that as John pointed out but people really don't understand the value of their data. The accounting industry doesn't recognize value of data on the balance sheet. There's really no standards. People don't know how to monetize data. So how can you guys help customers through those really gnarly problems? Where do you start? >> Tushar: Well I mean what we started with was an industry focused view, right. So Deloitte goes to the market by industry, so let's take retail and manufacturing, whichever the case might be, and what we really are looking into is an industrial digital value chain transformation story. So we'll take the value chain off an industry, break it down into processes, and then break that down further into use cases. We'll look at a use case, look at the value drivers of the use case. See what economic impact, or the business outcomes that might be derived of those use cases. And then when you aggregate all of them it starts creating a shareholder value impact, and that becomes really interesting. So case and example, for a retailer you can look at improving the basket size, or in-store conversion improving the the foot fall traffic. All of that improves the growth, increases the revenue. You talk about asset efficiency or improving the resources or the associates, their utilization to store the supply chain operations improvement. All of that improves the cost optimization and together impacts the margin. So we put that picture together for our clients to see in real economic terms. >> David: And data sits at the center of that analysis, right? >> Tushar: Well, correct. So the enablement of the use cases happen through technology and as the various facets of technology, the ERB system, the CRM the point-of-sales, the Beacons, the wifi all work together. The data generated will create 360 degree views of the customer, which then leads to all of these outcomes. >> John: Tushar talk about the value chain piece on that. Because I think that's indicative of IoT's impact as well as other things that are digitally connected. What is the difference between the digital value chain, in terms of its configuration its value, verus non-digital? How they used to approach it from a management perspective, and obviously digital is a little bit different. Is there any characteristics you can point out that you've seen in your observations, and with your engagement with customers, that jump out? >> Tushar: Sure, I mean the traditional value chain I think is very linear, right. If you take a manufacturing value chain for example a lot of it was let's do R&D, come up with a product, then let's go procure the product, the raw materials. Then make the product, then you ship it, logistics, and then you do after sale services. It's very linear one after the other. With the admit of data and the way you capture at every stage of the value chain. Well different stages now talk to one another. So as a machine is about to break you can create a new order, and then it improves the production. So it's less linear and more interrelated, and so the value chain is no longer very simple it's very complex, but by showing visibility into each stage of the value chain, that's where value created and captured from. >> David: And the data model is very complex, >> Tushar: Absolutely. >> David: Before you've got external data and now you've got a whole new data quality challenge >> Tushar: That's right. >> David: and data access challenge. Okay so back to John's question about where are we on the maturity meter? Is it sort of second inning here or the game is just starting, national anthem? >> Jeff: Well, hey for certain industries I think we're on second inning. You go look at areas like oil and gas, I mean there is a lot of historical work going on around machine learning, AI. Go and look at automotive, autonomous vehicles semi-autonomous vehicles, I think that's advancing and advancing rapidly. But I'll guarantee there are many, many industries that they don't even realize how much data they have. And yes there may be tag in two to three percent of that. This is a new wave. This is a really, really exciting time. >> John: So Jeff, on that point are you finding that, that makes a lot of sense actually if people have existing operational technologies, they have some legacy experience in some systems. It may not be connected to IT so they have some legacy with respect to that piece. >> Jeff: Perfect, perfect example. Part of our joint partnership and the announcement that we're making together around IoT is not only deliver the consulting the advisory services, but we're delivering prepackaged offerings specifically for vertical use margins. Asset maintenance and monitoring, we're coming together, bringing together our edge line capabilities we're bringing together PTC and National Instruments from the center. Bringing all this together in consortium, building an appliance and its going through consulting of nature of proof of concept to show and prove through proof of concepts the value that a customer can achieve by harnessing all that data, and being able to actually drive predictive analytics and then well once they see the benefits of that the value, the proof in the pudding, they will expand that across their entire production line, then its just going to go skyrocket. >> John: Alright talk about the relationship with Deloitte. I'd like you guys to just take us through a day in the life of a use case and how someone would envision and engage with you guys. Obviously Deloitte well known on the services side you guys got great credibility and track record, also with you guys IoT new market, how do you guys engage? What does a joint relationship look like? Take us through an example. >> Jeff: Well I'll start. First off we're building off of twenty years of joint partnership together, and a day in the life is we strategically sit down and we take the assets we can bring to the table as the new HPE, and that spans heavily the infrastructure and some of the support, point next services capability and we bring that in with the capabilities of Deloitte and we build these offerings, and we build a comprehensive program to take it to market, and have those discussions at the right level of the organization and hold their hand through this whole transformation process. Don't worry we got ya covered. We can help you get through this, and we can demonstrate the value on the returns. >> Tushar: So yeah, I'll just build on this. Some of the offerings that we have built together now, so as we get a client who's let's say interested in IoT what we'd actually do is sort of work with them and say let's do an IoT workshop, right. It might be a one day workshop, we might get our industry experts that are very focused on the vertical. We might get our technology experts. We might get our ecosystem partners who are doing startups and things of that sort, so they kind of know what is going on in the marketplace. We're together then we'll sit down we'll figure out what's a value chain transformation story. What are the things, let's say a manufacturing client just take for example, needs to do to go from a modern factory to connected factory to a smart factory to do that manufacturing transformation story. What are those 50 60 use cases that they need to go through. And out of that what are the one or two use cases that they need to do today that'll deliver near term tangible value. So for those 50-60 let's create the business case that delivers the enterprise shareholder return. Today what do they need to do to get that quick win. Take those two-three use cases, the offerings that Jeff spoke about, let's take those offerings and within 8 weeks let's deliver a proof of concept that shows the client I can take one of your assets, connect them, get the data out, show the inside, and then create the roadmap for scaling it out to make it a reality. >> Jeff: Start small, think big, and scale fast. That's what we say. >> John: Alright that's a great point I'm glad you brought that up because I want to ask the tough question. Cause this is the bottom line, we hear a lot of customers through our research Wikibon team, and we get a lot of "There's tons of barriers in front of me." So I want to ask you what are the barriers and how do they get over those obstacles, but also privately a lot of CXOs say to us, "Look it, this is like a four year sports contract, if I'm not up and running in four years, I'm out of job." So the notion of bringing the consultant, and HP, and we're going to do a focus group, and we're going to lay this out. The old days, back in the early ERP days, those time cycles were 18 months just to get going, and do the organizational transformation. They need proof on the table immediately. >> Tushar: That's right. >> John: So the Ford CEO was replaced, not sayin that was because of this, but people have short tenure, they need to see results immediately. >> Tushar: That's right. >> John: So the psychology of the pressure, with the work that needs to get done are two huge issues. What are the obstacles? And then the psychology of showing the results immediately. >> Tushar: I think in terms of the sort of business challenges we have a lot of centers around leadership and sponsorship. Do you have a tech focused culture in the company? Right. Is there collaboration between business and IT? Do you have expertise for IoT within the business, or within the enterprise and outside? Right. Those are some very basic, it's people, people, people all the time. From a technology stand point a lot of this is around the whole IT OT convergence piece of things. Right, it's this very complex domain. Nobody has all the knowledge base, so how do you get that to work? And traditionally IT hasn't played well with OT and vice versa. So how do you get that? Standards are evolving around security, privacy things of that sort, so how do you keep up with that? And finally, there are so many different solutions. How you do make sense out of that? Procurement is painful, right. And that's where some of the solutions like Jeff talked about were made. The solutions were at the procurement cycle becomes really simple. >> John: So tons of choices out there, >> Tushar: Right, >> John: That's an obstacle init of itself. >> Tushar: Exactly >> Jeff: Yeah >> Tushar: So how do we deal with these challenges, and how do we jumpstart the story. If you take the principle of agile and software development that's what we have pulled into our offerings, right. Instead of spending three, four, six months in trying to figure out what the universe is going to look like, and how things will change, it's not like that. We've taken sprint approaches to our delivery, like I shared earlier it's about that one day IoT journey workshop, quickly get that done, get it out of the way. >> John: Not a lot of waterfall, which that prolongs that organizational transformation piece >> Tushar: Correct. And then its constant recalibration, that's what we want to focus on. Let's show some quick wins in eight week increments. >> Jeff: And I'll guarantee as we are showing the quick wins in certain verticals, their dropping like dominoes because when they see their competition all of sudden gain efficiencies and providing greater experience for their clients or their customers, believe me everyone wants a piece of that. >> John: Bottom line there's obstacles to point. Move fast, start small, think big, move fast, I love that. And again there's a psychology out there it's real, and being agile, the waterfall takes too long. Alright guys thanks so much for sharing the inside of IoT, congratulations. Event here, what do you think, what's going on for you guys real quick we'll end the segment, final words. >> Jeff: Final words? >> John: 2017 Discover, what's your take away so far? >> Tushar: Well my take away is we are just at the cusp here. In IoT we are still in the, I'd call it the crawl stages of this. IoT's going to be huge, very exciting times coming, and it's going to impact every industry. >> Jeff: Yeah my parting word, I love to see the partner first mentality we have in here. The fact that we are here with all SIs our OT partners. I also love to see we are now building and designing innovations, such as the HP Edgeline Conversion systems from the ground up, specifically for IoT, same thing with Aruba Portfolios. We got a great set of tools and a great set of partners to work with. >> John: We didn't bring up Aruba, we had a big conversation on that earlier. Tushar, Jeff thanks so much for sharing the insight. Internet of Things, Industrial of Things. This theCube, the video of things here at HPE Discover 2017 I'm John Furrier, Dave Villante. We'll be back with more coverage after this short break. Stay with us. (upbeat techno music)