>> Hello and welcome to this special CUBE update conversation, I'm John Furrier, host of theCUBE with my partner, Dave Vellante, co-host of theCUBE. Dave, lots of people are asking us what's going on with theCUBE what's happening. Obviously COVID people know that we go out to events to extract the signal from the noise. Number one leading in enterprise tech events, there's been no events. People want to know what's going on with theCUBE, theCUBE virtual. And they want to know when the events are going to come back and when it does what's theCUBE going to look like. >> Well, as you know, for a decade we were on premises at events, tech events, our great sponsors would have us there and let us do our thing. And we'd have editorial there, which is nice and have our own on discussions. But it was always at the host venue, or largely was, we've done some of our own shows but now with the virtual occurring we're driving a lot of our own events, We've got now the time to do that, and here's what I think, John, I really do believe that there's no question that in the second half of the year we're going to start to see some kind of hybrid emerge where you might see VIP's, almost like the Golden Globes, if you saw that, there may be 15, 20 people socially distant, comfortable, maybe a VIP event, 10, 20 CIO's in a room, and I think there's going to be a digital overlay to that, the virtual overlay to get greater reach. And then even in 2022, when physical comes back in a big way, I think virtual is here to stay. People are learning so much. They're learning the value of that long tail, that host event consumption that we've seen in our data and that's going to continue. And people are really learning how to fine tune that playbook. >> You know, I want to get your thoughts on this because I was explaining to someone about our CUBE virtual opportunity and events coming back. And as you know I've been an avid clubhouse user since December 30th and I've been noticing that the engagement is so high in these apps where people are collaborating. So, I want you to explain the dynamics as, as we have these cube virtual, our first event is March 24th, we've got Jerry Chen from Greylock, Michael Liebow from McKinsey, Jeff Barr from AWS, three big names, big individuals in terms of talent and start up power. But the names of the companies, McKinsey, Greylock, AWS, and me and you, you starting to see virtual as a format, Dave, where our community can come together to compliment theCUBE physical events and bring a new venue, a new format to engaging and creating content together. Can you explain what this means for audiences, our community and our sponsors? >> Well, I think a lot of companies are looking at just events in very narrow sense, we do an event, maybe it's a webinar, we're going to do an event, maybe it's small, mid-size, maybe even a large event. And then we're going onto the next one, onto the next one, so it's all about this sort of event cadence. And I think there's a much bigger picture here. And it's really about the content, the arc of content, the community, engaging with that community, over a long period of time, it's not a one-shot deal or they're not disposable, sort of events are kind of disposable in that regard. I think our philosophy is different. We really try to connect, build that community out. And then also bring that community back in, those who want to participate, it's almost like a reward system. If you participate in an event, a community event, the next one you're actually going to be featured, you're going to come on theCUBE, you're going to be participating in the program directly. And I think, John, for sponsors, it really means, we've seen that a lot of the value that the sponsors are getting really has not been replicated from the physical events. And so what we're trying to do here is give those many, many sponsors a platform in order to have their voices heard so that they can engage with broader communities and tap in to other communities. >> Dave, you know, we were just talking the other day about all these event platforms that are out there and we're a media platform and that there's a new dynamic out there where it's not about the number of events that you participated in, it's the audiences that you engage with and create content value together and sponsors that you enable, we enable, can enable to go direct to the consumer. And this is a big trend that we're seeing. Media as a service or direct to the consumer. You seeing companies like Tesla do it, Apple, even venture capital firms like Andreessen Horowitz going direct to the audience and cutting the middlemen out of being disintermediated. This is an interesting opportunity. Can you share your thoughts, because if a customer, our sponsor, is going to try to do that, they need to have media capabilities, not just event software. An event is a moment in time, media is ongoing for engaging. They're two different things but they have to work together. Can you explain what this means in basic terms to customers and audience? Why is this so important this new trend? >> I think it's really simple. The bottom line is that every company has to be in some way, shape or form a media company they're producing content, and everybody wants to control the narrative, control of the audience, except the way you do that is to produce great authentic content. And I will tell you most companies, certainly most companies in the tech business aren't really that good at it. There are a couple of standouts. You mentioned some big names like Tesla, so you see some VC firms doing it, but people are learning, and they're going to get better and better at it. But our basic premise and I think it's right on is that every company has to be a content company, a content producer. So what we want to do is help them do that. Give them tools, give them platforms, give them methodologies to really be able to in an agile fashion, produce high quality content and distribute it through a workflow and then iterate >> Agile Media, that's our opportunity and that's what we're going to try to do. And I think what I'm most excited about Dave is we can help our sponsors with a product that helps them go direct to their customer while we can at the same time increase our serving our audiences with high quality content so that they can work with us, consume or create with us. And I think that's a power dynamic that is a flywheel of innovation. This is kind of what media should be, and this is what we're trynna do. >> Well, that's a mega trend. And the other thing that I think people forget about sometime is that data, there's a data fabric that connects all these different events, all the different webinars, all the content initiatives, the content programs, et cetera, et cetera, et cetera, that data fabric flows in a distributed way throughout the year, throughout the network, throughout the community. And it's got to be a two-way street and it's fundamentally you have to put data at the core of those initiatives. >> And Dave, one of the exciting things we're doing that I'll share is on March 24th, 9:00 Pacific, we're doing theCUBE On Cloud Startups, our virtual event in conjunction with AWS, Amazon Web Services, startup showcase. We're going to showcase 10 of the hottest startups in the Amazon cloud ecosystem around data, data ops, and pre-public, the next UNICORE, the next deca-core, And these are the hottest companies that are going to be hitting the enterprise and emerging technology markets in the next year. We're going to showcase them in our format, this is theCUBE virtual, so check it out, join us, be part of our community. If you want to engage with us, definitely get on the roster. We're going to do these four times a year, and again, we do a lot more of them. And then you'll see us back in person, when the events come back, post pandemic. I'm John Furrier, Dave Vellante, thank you for your time and we'll see you on the 24th, or at our events, thank you.

>>We work with and we cover some of the old guard, older companies like Dell EMC, HPE, Oracle, IBM, Microsoft. And they're doing really good work pivoting and trying to be ready for this new wave. It's not just not a blockchain. It's just how the world works. Cloud, you know, IOT, but decentralized cannot be ignored. Are they ready? Do you think they're ready? Do you think they even understand what's coming and >>No, no, they're not ready. And it's not, to me. It's not even about just blockchain. I mean, blockchain technology they can adopt. The bigger issue is digital disruption and digital disruption is all about the data at the core of the organization and, and business models that are built around data. And if you think about the history of companies, it's human expertise and data is bolted on, and we've seen this time and time again. But if you look at the top five market cap companies, Facebook, Amazon, Google, et cetera, they're data companies. Data is at the center and they take human expertise and wrap it around there. So the future is going to be about innovation with data, with artificial intelligence and cloud economics, and the old guard doesn't have those things. Blockchain fits in there. To me, blockchain is about building out a new distributed web and on top of the old web and rewarding those who are building it. So it's a new form of open source where the builders get paid.

>> Announcer: Live from San Jose. It's theCUBE. Presenting big data, Silicon Valley. Brought to you by SiliconANGLE Media and its ecosystem partners. >> Hello everyone, I'm John Furrier, co-host of theCube. I'm here with Dave Vellante, my co-host. Exclusive conversation around the role of data, data for good and bad. We always cover the role of data. We used to talk about AI and data for good but in this exclusive interview... And we have some exclusive material about data for bad. Dave, we've been talking about weaponizing data a year ago in SiliconEAGLE in theCUBE, around how data is being weaponized, and certainly in the elections. We know the Russians were involved. We know that data, you can buy journalists, you can create fake news. And for every click-bate and fake news is bad content. But also on the other side of this, there's good bate; good news. So the world's changin'. There needs to be a better place, needs to be some action taken, because there's now evidence that the role that the Russians had, using fake news and weaponizing it to sway the election and other things has been out there. So this is somethin' that we've been talkin' about. >> Yeah I mean the signature of the hacks is pretty clear. I think there is a distinct signature when you talk to the experts of when it's China or when it's Russia. Russia, very clever, about the way they target somebody whose maybe a pawn; but they try to make him or her feel like a king, grab their credentials and then work their way in. They've been doing this for decades, right? >> And the thing is to, is that now it's not just state-sponsored, there's new groups out there that they can enable open source tools. We report on theCUBE that terrorist organizations and bad actors, are taking open source tools and threats from state nations, posing as threats to democracy in the U.S. and other countries. This is a huge problem. >> And it's, in a way, it's harder than the nuclear problem. We had weapons pointed at each other, right. This is... The United States has a lot to lose. If we go on the offense, others can attack us and attack our systems, which are pretty mature. So, recently we talked to Garry Kasparov. I had an exclusive interview with him. He's very outspoken. Kasparov is the greatest chess player in history, by most accounts. And he is a political activist, he's an author. And he had a number of things to say about this. Let's listen to him, it's about a couple minute clip, and then we'll come back and talk about it. Watch this. >> Garry: Knowing Vladimir Putin and the mentality of the KGB mentality and the way he has been approaching the global problems; I had no doubt that the question was not if Putin would attack somewhere, but the question is when and where? And the attack on U.S. democracy was a surprise here but it was not surprise for us because we could see how they built these capabilities for more than a decade. Because they have been creating fake news industry in Russia to deal with Russian opposition 2004, 2005. Then they used against neighboring countries like Estonia in 2007. Then they moved to eastern Europe and then through western Europe. So when they ended up attacking the United States, they would've had almost a decade of experience. And it's quite unfortunate that, while there was kind of information about this attacks, the previous administration decided just to take it easy. And the result is that we have this case of interference; I hope there will be more indictments. I hope we'll get to the bottom of that. Because, we know that they are still pretty active in Europe. And they will never seize there-- >> Dave: Germany, France-- >> Garry: Exactly. But it's... I call Putin as: merchant of doubt. Because, unlike Soviet propaganda machine, he's not selling one ideology. All he wants is to spread chaos. So that's why it's not about and, oh this is the only, the right teaching. No, no, no. No, it's wrong, it's wrong, everything... Yeah, maybe there are 10 different ways of saying the truth. Truth is relevant. And that's a very powerful message because it's spreading these doubts. And he's very good in just creating these confusions and actually, bringing people to fight each other. And I have to say he succeeded-- >> Dave: Our president is taken a page out of that. Unfortunately. But I also think the big issue we face as a country, in the United States, is 2020. Is the election in 2020 is going to be about who leverages social media and the weaponization of social media. And the Russian attackers you talk to the black hats, very sophisticated, very intriguing how they come in, they find the credentials-- >> Garry: But look, we know, Jesus, every expert knows that in this industry, if you are trying to defend yourself, if you are on the defense all the time you will lose. It's a losing proposition. So the only way to deter the aggression is to make sure that they won't be counterattacks. So that there will be devastating blows, those who are attacking the United States. And you need the political will because, technology is here; America is still the leading power in the world. But the political will, unfortunately-- >> Dave: However, I would say that, but it's different than with nuclear warheads. Robert Gates was on theCUBE, he said to me, and I asked him about offense versus defense. He said the only thing about the Unite States is we have a lot to lose. So we have to be careful. (laughter) How aggressive we can be. >> Garry: No, exactly. That is just, it's, yes. It's a great error of uncertainty: what can you lose? If you show strength. But I can tell you exactly how you are going to lose everything, if you are not-- >> Dave: Vigilant. >> Garry: If you are not vigilant. If you are not deterrent. If you are not sending the right signal to the Putins of this world that aggression against America will have the price that you cannot bear. >> So John, pretty unequivocal comments from Garry Kasparov. So a lot of people don't believe that you can actually manipulate social media that way. You've been in social for a long time, since the beginning days. Maybe you could explain how one, would a country or a state sponsored terrorism; how would they go about manipulating individuals? >> You know Dave, I've been involved in internet infrastructure from the beginning days of Web 1.0 and through search engines. Student of the data. I've seen the data. I've seen our, the data that we have from our media company. I've seen the data on Facebook and here's the deal: there's bad actors doin' fake news, controlling everything, creating bad outcomes. It's important for everyone to understand that there's an actual opposite spectrum. Which is the exact opposite of the bad; there's a good version. So what we can learn from this is that there's a positive element of this, if we can believe it, which is actually a way to make it work for good. And that is trust, high-quality data, reputation and context. That is a very hard problem. Facebook is tryin' to solve it. You know we're workin' on solving that. But here's the anatomy of the hack. If you control the narrative, you can control the meme. If you can control the meme, you can control the idea. If you can control the idea, you can control the belief system. If you can control the belief system, you can control the population. That is exactly what has happened with the election. That is what's happening now in social networks. That's why so many people are turning off to social networks. Because this is hackable; you can actually hack the brains and outcomes of people. Because, controlling the narrative, controlling the meme, controlling the idea, controlling the belief system: you can impact the population. That has absolutely been done. >> Without firin' a shot. >> Without firing a shot. This is the new cold social network wars that are goin' on. And again, that has been identified, but there's an opposite effect. And the opposite effect is having a trust system, a short cut to trust; there will be a Google in our future, Google, like what Google did to search engines. It will be for social networks. That is, whoever can nail the trust, reputation, context: what is real and what is not. Will ultimately have all the users goin' to their doorstep. This is the opportunity for news organizations, for platforms and it's all going to be driven by new infrastructure, new software. This is something we can learn from. But there is a way to hack, it's been done. I've just laid it out. That's what's happening. >> Well, blockchain solved or play a role in solving this problem of reputation in your opinion. >> Well you know that I believe centralized is bad. 'Cause you can hack a centralized database and the data. Ownership is huge. I personally believe that blockchain and this notion of decentralized data ownership will ultimately go back to the people and that the decentralized applications and cryptocurrency leads a path, it's not yet proven, there's no clear visibility yet. But many believe that the wallet is a new browser and that cryptocurrency can put the power to the people; so that new data can emerge. To vet in a person who says they're something that they're not. News that says they're somethin' that they're not. This is a trust. This is something that is not yet available. That's what I'm sayin'. You can't get it with Google, you can't get it with Facebook. You can't get it in these platforms. So the world has to change at an infrastructure level. That's the opportunity to blockchain. Aside from all the things like who's going to give the power for the miners; a variety of technical issues. But conceptually, there is a path there. That's a new democracy. This is global phenomenon. It's a societal change. This is so cutting edge, but it's yet very promising at the same time. >> This is super important because I can't tell you how many times have you've received an email from one political persuasion or the other that lays out emphatically, that this individual did that or... And you do some research and you find out it's fake news. It happens all the time. >> There's no context for these platforms. Facebook optimizes their data for advertising optimization and you're going to see data being optimized for user control, community control, community curation. More objective not subjective data. This is the new algorithm, this is what machine learning in AI will make a difference. This is the new trust equation that will emerge. This is a phenomenal opportunity for entrepreneurs. If you're in the media business and you're not thinking about this, you will be out of business. That's our opinion. >> Excellent John. Well thanks for your thoughts and sharing with us how these hacks are done. This is real. The midterm elections, 2020 is really going to be won or lost on social media. Appreciate that. >> And Facebook's fumbling and they're going to try to do good. We'll see what they do. >> Alright. >> Alright. >> That's a wrap. Good job. >> Thanks for watching.

>> Announcer: Live from New York, it's theCUBE! Covering Machine Learning Everywhere: Build Your Ladder To AI. Brought to you by IBM. >> Well, good morning! Welcome here on theCUBE. Along with Dave Vellante, I'm John Walls. We're in Midtown New York for IBM's Machine Learning Everywhere: Build Your Ladder To AI. Great lineup of guests we have for you today, looking forward to bringing them to you, including world champion chess master Garry Kasparov a little bit later on. It's going to be fascinating. Dave, glad you're here. Dave, good to see you, sir. >> John, always a pleasure. >> How you been? >> Up from DC, you know, I was in your area last week doing some stuff with John Furrier, but I've been great. >> Stopped by the White House, drop in? >> You know, I didn't this time. No? >> No. >> Dave: My son, as you know, goes to school down there, so when I go by my hotel, I always walk by the White House, I wave. >> Just in case, right? >> No reciprocity. >> Same deal, we're in the same boat. Let's talk about what we have coming up here today. We're talking about this digital transformation that's going on within multiple industries. But you have an interesting take on it that it's a different wave, and it's a bigger wave, and it's an exciting wave right now, that digital is creating. >> Look at me, I've been around for a long time. I think we're entering a new era. You know, the great thing about theCUBE is you go to all these events, you hear the innovations, and we started theCUBE in 2010. The Big Data theme was just coming in, and it appeared, everybody was very excited. Still excited, obviously, about the data-driven concept. But we're now entering a new era. It's like every 10 years, the parlance in our industry changes. It was cloud, Big Data, SaaS, mobile, social. It just feels like, okay, we're here. We're doing that now. That's sort of a daily ritual. We used to talk about how it's early innings. It's not anymore. It's the late innings for those. I think the industry is changing. The describers of what we're entering are autonomous, pervasive, self-healing, intelligent. When you infuse artificial intelligence, I'm not crazy about that name, but when you infuse that throughout the landscape, things start to change. Data is at the center of it, but I think, John, we're going to see the parlance change. IBM, for example, uses cognitive. People use artificial intelligence. I like machine intelligence. We're trying to still figure out the names. To me, it's an indicator that things are changing. It's early innings now. What we're seeing is a whole new set of opportunities emerging, and if you think about it, it's based on this notion of digital services, where data is at the center. That's something that I want to poke at with the folks at IBM and our guests today. How are people going to build new companies? You're certainly seeing it with the likes of Uber, Airbnb, Waze. It's built on these existing cloud and security, off-the-shelf, if you will, horizontal technologies. How are new companies going to be built, what industries are going to be disruptive? Hint, every industry. But really, the key is, how will existing companies keep pace? That's what I really want to understand. >> You said, every industry's going to be disrupted, which is certainly, I think, an exciting prospect in some respects, but a little scary to some, too, right? Because they think, "No, we're fat and happy "and things are going well right now in our space, "and we know our space better than anybody." Some of those leaders might be thinking that. But as you point out, digital technology has transformed to the extent now that there's nobody safe, because you just slap this application in, you put this technology in, and I'm going to change your business overnight. >> That's right. Digital means data, data is at the center of this transformation. A colleague of mine, David Moschella, has come up with this concept of the matrix, and what the matrix is is a set of horizontal technology services. Think about cloud, or SaaS, or security, or mobile, social, all the way up the stack through data services. But when you look at the companies like Airbnb and Uber and, certainly, what Google is doing, and Facebook, and others, they're building services on top of this matrix. The matrix is comprised of vertical slices by industry and horizontal slices of technology. Disruptors are cobbling together through software and data new sets of services that are disrupting industries. The key to this, John, in my view, anyway, is that, historically, within healthcare or financial services, or insurance, or manufacturing, or education, those were very siloed. But digital and data allows companies and disruptors to traverse silos like never before. Think about it. Amazon buying Whole Foods. Apple getting into healthcare and financial services. You're seeing these big giants disrupt all of these different industries, and even smaller guys, there's certainly room for startups. But it's all around the data and the digital transformation. >> You spoke about traditional companies needing to convert, right? Needing to get caught up, perhaps, or to catch up with what's going on in that space. What do you do with your workforce in that case? You've got a bunch of great, hardworking people, embedded legacy. You feel good about where you are. And now you're coming to that workforce and saying, "Here's a new hat." >> I think that's a great question. I think the concern that one would have for traditional companies is, data is not foundational for most companies. It's not at their core. The vast majority of companies, the core are the people. You hear it all the time. "The people are our greatest asset." That, I hate to say it, but it's somewhat changing. If you look at the top five companies by market cap, their greatest asset is their data, and the people are surrounding that data. They're very, very important because they know how to leverage that data. But if you look at most traditional companies, people are at their core. Data is kind of, "Oh, we got this bolt-on," or it's in a bunch of different silos. The big question is, how do they close that gap? You're absolutely right. The key is skillsets, and the skills have to be, you know, we talk about five-tool baseball players. You're a baseball fan, as am I. Well, you need multi-tool players, those that understand not only the domain of whether it's marketing or sales or operational expertise or finance, but they also require digital expertise. They know, for example, if you're a marketing professional, they know how to do hypertargeting. They know how to leverage social. They know how to do SEO, all these digital skills, and they know how to get information that's relevant and messaging out into the marketplace and permeate that. And so, we're entering, again, this whole new world that's highly scalable, highly intelligent, pervasive, autonomous. We're going to talk about that today with a lot of their guests, with a lot of our guests, that really are kind of futurists and have thought through, I think, the changes that are coming. >> You can't have a DH anymore, right, that's what you're saying? You need a guy that can play the field. >> Not only play the field, not only a utility player, but somebody who's a utility player, but great. Best of breed at all these different skillsets. >> Machine learning, we haven't talked much about that, and another term, right, that certainly has different definitions, but certainly real specific applications to what's going on today. We'll talk a lot about ML today. Your thoughts about that, and how that squares into the artificial intelligence picture, and what we're doing with all those machines out there that are churning 24/7. >> Yeah, so, real quick, I know we're tight on time here. Artificial intelligence to me is the umbrella. Machine learning is the application of math and algorithms to solve a particular problem or answer a particular question. And then there's deep learning, which is highly focused neural networks that go deeper and deeper and deeper, and become auto-didactic, self-learning, in a manner. Those are just the very quick and rudimentary description. Machine learning to me is the starting point, and that's really where organizations really want to start to learn and begin to close the gap. >> A lot of ground to cover, and we're going to do that for you right here on theCUBE as we continue our coverage of Machine Learning Everywhere: Your Ladder To AI, coming up here, IBM hosting us in Midtown, New York. Back with more here on theCUBE in just a bit. (fast electronic music)

>> Announcer: Live from Las Vegas, it's the CUBE covering HPE Discover 2017. Brought to you by Hewlett Packard Enterprise. >> Hello, everyone, and welcome to the CUBE's special presentation of HPE Hewlett Packard Enterprise Discover 2017. I'm John Furrier and my cohost Dave Vellante. For three days of wall to wall coverage. This is our intro section of our three days of Hewlett Packard Enterprises transformation and coverage. This is our seventh year covering HPE Discover, formerly HP Discover after the split. Lot of commentary today. We have seen HP over the years transform. We've been watching this, sort of a front row seat to HP, now HPE, really getting hammered in stock market their last earnings again didn't meet expectations, but this is not a quick turn around. I mean, this is a market place that's shifting. HP's had their plan now for multiple years. We're going to cover it for three days. But interesting. The world is turning. You had tweeted this morning on a Twitter storm you put together @dvellante, twitter.com. So it's Dvellante. Everyone should check it out. But it really highlights it. True private cloud, or private cloud, cloud has impacted everything. HP's kind of shifted their cloud strategy. It's becoming clear what they're doing, but private cloud, true private cloud, is legit. It's a 250 plus billion dollar market opportunity, as you guys have put it out on wikibond. Hybrid cloud is very relevant, and on the horizon is multi-cloud, the ability for customers to use multiple clouds. And on top of that we have machine learning, AI, and a myriad of things. Marketplace is shifting significantly, HP has been transforming significantly over the past five plus years. Your thoughts this year at HPE Discover and marketplace conditions and are they poised for success? >> Well, John, we're in the fifth year now of the turnaround that Meg Whitman initiated, and I think it's the light at the end of the tunnel year. HPE-- We've said many times at theCUBE that HP has the strength to grow. Well, it's certainly shrunk. They're about a 50 billion dollar company with a 26 billion dollar market cap, and there's a way to eek out some growth. If you separate all-- Call it Remain Co. Like the remaining company. Take out the software, take out EDS, take out actually tier one, tier one customer who's-- who's not buying as many servers as possible, or as they had previously, and the company grew about one percent. So what you're seeing, John, is some quarters HP grows a little bit, some companies it shrinks a little bit, but essentially it's facing what most legacy hardware companies are facing. Legacy hardware's down, everybody's scrambling to what we call true private cloud, which is essentially hybrid IT, trying to mimic the public cloud. And then HP adds in a dose of IOT at the edge, and then, really importantly, services. Services have never been more important for this company, and that is what I called earlier Remain Co. The remaining HP. Once it jettisons the software business this fall, that's what will be left, basically a 50 billion dollar company with about 55,000 employees. >> I was looking at a-- some IOT stories just last night, and a Business Insider article came up. It was an image, and it had listed the companies that-- by average age. And you had, obviously, Facebook, average age like 28. HP was at the highest end, like 39. And I want to bring up this notion of changing market because HP has always been customer focused, so the question is, if they are truly customer focused, as is Amazon, for instance, we talked to Andy Chasey, he talks about that all the time. And the context of where you've been and where you're going, historical legacy, declining markets, say servers for instance. And where you're going. It brings up an interesting point. And notable is recently Amazon web services hired Gosling, the founder of Java, which had a big conversation on the internet around age. A lot of the winners are older systems guys. So what's interesting is I actually look at that Business Insider article and saying actually age is a wisdom point now, because right now HP's got to solve customer problems. In addition to transforming themselves, they're looking at a customer base that's changing their requirements, so having experience is actually a good thing, as pointed out by some of the big leaders right now in hyperscale are old m systems guys. This is an opportunity for HP, and I think that's where I want to get your thoughts on. Are they customer focused in your mind, and if they are going to be, continue to be, what should their customer focus be? >> Let's talk about what customers are doing. So, first and foremost, customers are deinvesting in non-differentiated, you know, hardware maintenance and provisioning, okay. So they're shifting IT labor from provisioning luns and servers into digital transformation initiatives, so that's sort of one piece. The other pieces there as they're shifting those resources in places up the value stack. So it's applications; it's, as you say, digital transformation services; it's new IOT activity. So they're only investing-- from the HP standpoint, HP's an infrastructure company. They're only investing in infrastructure that looks like public cloud and can focus on hybrid. So are they customer focused? Yes. And what are they doing there? So they're investing in MMA, they're doing some MMA tuck ins. They're focused on develop-- delivering platforms with an API that are essentially programmable infrastructure. And very importantly, they're in a low margin business now. It's sort of low 30 percent gross margin business. So they have to get volume. How do they get volume? How do they reach those customers? Partners. So you are seeing a new partner emphasis. You know, are they customer focused? Yes, but they're really right now partner focused to reach those customers and increase their scale and coverage. That is a critical difference between the new HP, not that they always didn't have partners, now partners are critical to their success. >> One of the things that's the theme here is simplifying hybrid IT and I think from a customer standpoint, simplifying that is going to be critical. At the same time, creating new services opportunities. So I want to get your thoughts on the top story, at least from my perspective, here at the show at HPE Discover, and that is, is it better to be big or small? And HP has a strategy of a collection of small, nimble, agile business units. Dell EMC, for instance, has a strategy of being big and using leverage and supply chain and what not. Two different strategies. We pointed that out on the web. Certainly we've heard a lot of different approaches. Your thoughts on HP's strategy vis a vis bigger and better, or smaller and nimbler is better. >> Well, HP's not small. Hewlett Packard Enterprises is still big. I mean, it's a, it's a company that's twice the size, or more, than EMC was at its peak. So it's still a very, very large company. The difference is, John, I think they're focused. So they really are focused on hardware and infrastructure, the support, you know, the digital transformation, whatever you want to call it. The big question I have, John, is now that HP is getting rid of its software business, its outsourcing and EDS business, what is HP going to do with regard to software and services. So, they reinvented the whole services organization. The big question mark for me is software. Will they get into this, what you call inter-clouding business? Software to manage multiple clouds. It's a wide open space, everybody's going after it, and I haven't heard much from HP there. So what is their software strategy? Now, the other thing I'll add, is the good thing about being smaller is that it's going to generate cash for them. So they're going to get, going to get cash out of the spin merge with CSC. They're going to get cash out of the spin merge with MicroFocus. And you've already seen HP become more aquisitive with the Simplivity acquisition, certainly with Nimble recently, previously the Aruba acquisition, and some other tuck ins. That's critical in order for HP to reposition and continue to grow. >> Yeah, and my take on HP right now is they got to be more assertive. Their voice in the marketplace, at an industry level, has to be very assertive and relevant. I think that's something you've got to put the stake in the ground and hammer that home. I think we got the piece parts, and I think the spin merge is not a "they're getting out of that business." They're just decoupling from the monolithic entity that was HPE and creating kind of cohesive entities. And I think there's a strategy, in my opinion, that looks really strong there in the sense that, hey, at the end of the day, it's going to be a services game. And if you look at the IOT Edge, to me that's the tell sign of the marketplace. As the value shifts from IT-- So, simplifying IT, having true private cloud, having some hybrid pathways for IT, maybe a declining market from a service perspective, but simplifying that and operationalizing that and shifting the value to the Edge with services is a huge opportunity for HP. This is something that not a lot of people on Wall Street are kind of rocking at this point. But the value shift from IT, centralized IT, to a distributed kind of network effect is a really interesting play. And I think this a bet I think HP's making from my standpoint, and that's where the intelligent Edge piece comes in. If they could nail that, and layer on the services, and bring real value paths for customers with outcomes that are, not pie in the sky-- Sure, they throw some AI in there, machine learning, it's all relevant. Getting into open source. Taking that labs machine and memster technology and bringing that out at an appropriate timing. With the services in place. I think that's a good strategy for HP. >> Well, you mentioned Wall Street. Look, Wall Street is very tactically focused on the quarter and the margin decline, and, you know, D-Ram prices doubled in January, okay? So a company like HPE is going to get hurt by that. So that's head winds for these guys, these currency head winds. The stock, the price will go up and down. But the point I want to make, John, is there's a new competitive reality. CIOs have woken up to open source and cloud. And as a result, we've emerged into a new competitive dynamic where HPE is competing with Dell. It's competing with China, and it's competing with AWS. And it's one different-- Two differentiable advantages or services, you know, clearly HP's doubling down on services. I'll actually add a third. The second is partnerships, and the third big one, which is green field, is an ecosystem around IOT and what they call the intelligent edge. >> Well, Dave, great commentary. My, again, my feeling is customer focus at an industry level, having the right product mix that's relevant in the, for the solutions customers want. And also their partners. Leveraging that partner network. Really going to be a two pivot points for me. I see that as great leverage for HP. At the end of the day, everyone talking about declining market of servers and storage. I actually don't see that. There's more computers available now, more storage available. The key is can that shift to true private cloud, which again is a 250 billion dollar market, partly declining. And hybrid cloud is certainly growing. So, declining and growing, I mean they're all different perspectives, and I think HP's messaging here-- Come the end of the show, we're going to look at that and understand and impact and unpack that, that analysis. So, I'm Jeff Furrier, Dave Vellante. Day one of coverage, of three days of wall to wall coverage at HPE Discover 2017. More live coverage after this short break. (upbeat music)

>> Live from New York, it's The Cube, covering The Cube New York City 2018 brought to you by SiliconAngle Media and its Ecosystem partners. >> Okay, welcome back everyone, here live in New York City for Cube NYC, formally Big Data NYC, now called CubeNYC. The topic has moved beyond big data. It's about cloud, it's about data, it's also about potentially blockchain in the future. I'm John Furrier, Dave Vellante. We're happy to have a special guest here, Arun Murthy. He's the cofounder and chief product officer of Hortonworks, been in the Ecosystem from the beginning, at Yahoo, already been on the Cube many times, but great to see you, thanks for coming in, >> My pleasure, >> appreciate it. >> thanks for having me. >> Super smart to have you on here, because a lot of people have been squinting through the noise of the market place. You guys have been now for a few years on this data plan idea, so you guys have actually launched Hadoop with Cloudera, they were first. You came after, Yahoo became second, two big players. Evolved it quickly, you guys saw early on that this is bigger than Hadoop. And now, all the conversations on what you guys have been talking about three years ago. Give us the update, what's the product update? How is the hybrids a big part of that, what's the story? >> We started off being the Hadoop company, and Rob, our CEO who was here on Cube, a couple of hours ago, he calls it sort of the phase one of the company, where it were Hadoop company. Very quickly realized we had to help enterprises manage the entire life cycle data, all the way from the edge to the data center, to the cloud, and between, right. So which is why we did acquisition of YARN, we've been talking about it, which kind of became the basis of our Hot marks Data flow product. And then as we went through the phase of that journey it was quickly obvious to us that enterprises had to manage data and applications in a hybrid manner right which is both on prem And public load and increasingly Edge, which is really very we spend a lot of time these days With IOT and everything from autonomous cars to video monitoring to all these aspects coming in. Which is why we wanted to get to the data plan architecture it allows to get you to a consistent security governance model. There's a lot of, I'll call it a lot of, a lot of fight about Cloud being insecure and so on, I don't think there's anything inherently insecure about the Cloud. The issue that we see is lack of skills and our enterprises know how to manage the data on-prem they know how to do LDAP, groups, and curb rows, and AAD, and what have you, they just don't have the skill sets yet to be able to do it on the public load, which leads to mistakes occasionally. >> Um-hm. >> And Data breaches and so on. So we recognize really early that part of data plan was to get that consistent security in governance models, so you don't have to worry about how you set up IMRL's on Amazon versus LDAP on-prem versus something else on Google. >> It's operating consistency. >> It's operating, exactly. I've talked about this in the past. So getting that Data plan was that journey, and this week at Charlotte work week we announced was we wanted to take that step further we've been able to kind of allow enterprise to manage this hybrid architecture on prem, multiple public loads. >> And the Edge. >> In a connected manner, the issue we saw early on and it's something we've been working on for a long while. Is that we've been able to connect the architectures Hadoop when it started it was more of an on premise architecture right, and I was there in 2005, 2006 when it started, Hadoop's started was bought on the world wide web we had a gigabyte of ethernet and I was up to the rack. From the rack on we had only eight gigs up to the rack so if you have a 2000 or cluster your dealing with eight gigs of connection. >> Bottleneck >> Huge bottleneck, fast forward today, you have at least ten if not one hundred gigabits. Moving to one hundred to a terabyte architecture, for that standpoint, and then what's happening is everything in that world, if you had the opportunity to read things on the assumptions we have in Hadoop. And then the good news is that when Cloud came along Cloud already had decoupled storage and architecture, storage and compute architectures. As we've sort of helped customers navigate the two worlds, with data plan, it's been a journey that's been reasonably successful and I think we have an opportunity to kind of provide identical consistent architectures both on prem and on Cloud. So it's almost like we took Hadoop and adapted it to Cloud. I think we can adapt the Cloud architecture back on prem, too to have consistent architectures. >> So talk about the Cloud native architecture. So you have a post that just got published. Cloud native architecture for big data and the data center. No, Cloud native architecture to big data in the data center. That's hyrid, explain the hybrid model, how do you define that? >> Like I said, for us it's really important to be able to have consistent architectures, consistent security, consistent governance, consistent way to manage data, and consistent way to actually to double up and port applications. So portability for data is important, which is why having security and governance consistently is a key. And then portability for the applications themselves are important, which is why we are so excited to kind of be, kind of first to embrace the whole containerize the ecosystem initiative. We've announced the open hybrid architecture initiative which is about decoupling storage and compute and then leveraging containers for all the big data apps, for the entire ecosystem. And this is where we are really excited to be working with both IBM and Redhat especially Redhat given their sort of investments in Kubernetes and open ship. We see that much like you'll have S3 and EC2, S3 for storage, EC2 for compute, and same thing with ADLS and azure compute. You'll actually have the next gen HDFS and Kubernetives. So is this a massive architectural rewrite, or is it more sort of management around the core. >> Great question. So part of it is evolution of the architecture. We have to get, whether it's Spark or Kafka or any of these open source projects, we need to do some evolution in the architecture, to make them work in the ecosystem, in the containerized world. So we are containerizing every one of the 28 animals 30 animals, in the zoo, right. That's a lot of work, we are kind of you know, sort of do it, we've done it in the past. Along with your point it's not enough to just have the architecture, you need to have a consistent fabric to be able to manage and operate it, which is really where the data plan comes in again. That was really the point of data plane all the time, this is a multi-roadmap, you know when we sit down we are thinking about what we'll do in 22, and 23. But we really have to execute on a multi-roadmap. >> And Data plane was a lynch pin. >> Well it was just like the sharp edge of the sword. Right, it was the tip of the sphere, but really the idea was always that we have to get data plan in to kind of get that hybrid product out there. And then we can sort of get to a inter generational data plan which would work with the next generation of the big data ecosystem itself. >> Do you see Kubernetes and things like Kubernetes, you've got STO a few service meshes up the stack, >> Absolutely are going to play a pretty instrumental role around orchestrating work loads and providing new stateless and stateful application with data, so now data you've got more data being generated there. So this is a new dynamic, it sounds like that's a fit for what you guys are doing. >> Which is something we've seen for awhile now. Like containers are something we've tracked for a long time and really excited to see Docker and RedHat. All the work that they are doing with Redhat containers. Get the security and so on. It's the maturing of that ecosystem. And now, the ability to port, build and port applications. And the really cool part for me is that, we will definitely see Kubenetes and open shift, and prem but even if you look at the Cloud the really nice part is that each of the Cloud providers themselves, provide a Kubenesos. Whether it's GKE on Google or Fargate on Amazon or AKS on Microsoft, we will be able to take identical architectures and leverage them. When we containerize high mark aft or spark we will be able to do this with kubernetes on spark with open shift and there will be open shift on leg which is available in the public cloud but also GKE and Fargate and AKS. >> What's interesting about the Redhat relationship is that I think you guys are smart to do this, is by partnering with Redhat you can, customers can run their workloads, analytical workloads, in the same production environment that Redhat is in. But with kind of differentiation if you will. >> Exactly with data plane. >> Data plane is just a wonderful thing there. So again good move there. Now around the ecosystem. Who else are you partnering with? what else do you see out there? who is in your world that is important? >> You know again our friends at IBM, that we've had a long relationship with them. We are doing a lot of work with IBM to integrate, data plane and also ICPD, which is the IBM Cloud plane for data, which brings along all of the IBM ecosystem. Whether it's DBT or IGC information governance catalogs, all that kind of were back in this world. What we also believe this will give a flip to is the whole continued standardization of security and governance. So you guys remember the old dpi, it caused a bit of a flutter, a few years ago. (anxious laughing) >> We know how that turned out. >> What we did was we kind of said, old DPI was based on the old distributions, now it's DPI's turn to be more about merit and governance. So we are collaborating with IBM on DPI more on merit and governance, because again we see that as being very critical in this sort of multi-Cloud, on prem edge world. >> Well the narrative, was always why do you need it, but it's clear that these three companies have succeeded dramatically, when you look at the financials, there has been statements made about IBM's contribution to seven figure deals to you guys. We had Redhat on and you guys are birds of a feather. [Murhty] Exactly. >> It certainly worked for you three, which presumably means it confers value to your customers. >> Which is really important, right from a customer standpoint, what is something we really focus on is that the benefit of the bargain is that now they understand that some of their key vendor partners that's us and Ibm and Redhat, we have a shared roadmap so now they can be much more sure about the fact that they can go to containers and kubernetes and so on and so on. Because all of the tools that they depend on are and all the partners they depend on are working together. >> So they can place bets. >> So they can place bets, and the important thing is that they can place longer term bets. Not a quarter bet, we hear about customers talking about building the next gen data centers, with kubernetes in mind. >> They have too. >> They have too, right and it's more than just building machines up, because what happens is with this world we talked about things like networking the way you do networking in this world with kubernetes, is different than you do before. So now they have to place longer term bets and they can do this now with the guarantee that the three of us will work together to deliver on the architecture. >> Well Arun, great to have you on the Cube, great to see you, final question for you, as you guys have a good long plan which is very cool. Short term customers are realizing, the set-up phase is over, okay now they're in usage mode. So the data has got to deliver value, so there is a real pressure for ROI, we would give people a little bit of a pass earlier on because set-up everything, set-up the data legs, do all this stuff, get it all operationalized, but now, with the AI and the machine learning front and center that's a signal that people want to start putting this to work. What have you seen customers gravitate to from the product side? Where are they going, is it the streaming is it the Kafka, is it the, what products are they gravitating to? >> Yeah definitely, I look at these in my role, in terms of use cases, right, we are certainly seeing a continued push towards the real-time analytics space. Which is why we place a longer-term bet on HDF and Kafka and so on. What's been really heartening kind of back to your sentiment, is we are seeing a lot of push right now on security garments. That's why we introduced for GDPR, we introduced a bunch of cable readies and data plane, with DSS and James Cornelius wrote about this earlier in the year, we are seeing customers really push us for key aspects like GDPR. This is a reflection for me of the fact of the maturing of the ecosystem, it means that it's no longer something on the side that you play with, it's something that's more, the whole ecosystem is now more a system of record instead of a system of augmentation, so that is really heartening but also brings a sharper focus and more sort of responsibility on our shoulders. >> Awesome, well congratulations, you guys have stock prices at a 52-week high. Congratulations. >> Those things take care of themselves. >> Good products, and stock prices take care of themselves. >> Okay the Cube coverage here in New York City, I'm John Vellante, stay with us for more live coverage all things data happening here in New York City. We will be right back after this short break. 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