>>The cube presents HPE discover 2022 brought to you by HPE. >>Hey everyone. Welcome back to the Cube's coverage of HPE. Discover 22 live from the Sans expo center in Las Vegas. Lisa Martin, here with Dave Velante. We've an alumni back joining us to talk about high performance computing and AI, Justin ARD, EVP, and general manager of HPC and AI at HPE. That's a mouthful. Welcome back. >>It is no, it's great to be back and wow, it's great to be back in person as well. >>It's it's life changing to be back in person. The keynote this morning was great. The Dave was saying the energy that he's seen is probably the most out of, of any discover that you've been at and we've been feeling that and it's only day one. >>Yeah, I, I, I agree. And I think it's a Testament to the places in the market that we're leading the innovation we're driving. I mean, obviously the leadership in HPE GreenLake and, and enabling as a service for, for every customer, not just those in the public cloud, providing that, that capability. And then obviously what we're doing at HPC and AI breaking, uh, you know, breaking records and, uh, advancing the industry. So >>I just saw the Q2 numbers, nice revenue growth there for HPC and AI. Talk to us about the lay of the land what's going on, what are customers excited about? >>Yeah. You know, it's, it's a, it's a really fascinating time in this, in this business because we're, you know, we just, we just delivered the first, the world's first exo scale system. Right. And that's, uh, you know, that's a huge milestone for our industry, a breakthrough, you know, 13 years ago, we did the first Petta scale system. Now we're doing the first exo scale system, huge advance forward. But what's exciting too, is these systems are enabling new applications, new workloads, breakthroughs in AI, the beginning of being able to do proper quantum simulations, which will lead us to a much, you know, brighter future with quantum and then actually better and more granular models, which have the ability to really change the world. >>I was telling Lisa that during the pandemic we did, uh, exo scale day, it was like this co yep. You know, produce event. And we weren't quite at exo scale yet, but we could see it coming. And so it was great to see in frontier and, and the keynote you guys broke through that, is that a natural evolution of HPC or is this we entering a new era? >>Yeah, I, I think it's a new era and I think it's a new era for a few reasons because that, that breakthrough really, it starts to enable a different class of use cases. And it's combined with the fact that I think, you know, you look at where the rest of the enterprises data set has gone, right? We've got a lot more data, a lot more visibility to data. Um, but we don't know how to use it. And now with this computing power, we can start to create new insights and new applications. And so I think this is gonna be a path to making HPC more broadly available. And of course it introduces AI models at scale. And that's, that's really critical cause AI is a buzzword. I mean, lots of people say they're doing AI, but when you know, to, to build true intelligence, not, not effectively, you know, a machine that learns data and then can only handle that data, but to build true intelligence where you've got something that can continue to learn and understand and grow and evolve, you need this class of system. And so I think we're at, we're at the forefront of a lot of exciting innovation. H how, >>In terms of innovation, how important is it that you're able to combine as a service and HPC? Uh, what does that mean for, for customers for experimentation and innovation? >>You know, a couple things I've been, I've actually been talking to customers about that over the last day and a half. And, you know, one is, um, you think about these, these systems are, they're very large and, and they're, they're pretty, you know, pretty big bets if you're a customer. So getting early access to them right, is, is really key, making sure that they're, they can migrate their software, their applications, again, in our space, most of our applications are custom built, whether you're a, you know, a government or a private sector company, that's using these systems, you're, you're doing these are pretty specialized. So getting that early access is important. And then actually what we're seeing is, uh, with the growth and explosion of insight that we can enable. And some of the diversity of, you know, new, um, accelerator partners and new processors that are on the market is actually the attraction of diversity. And so making things available where customers can use multimodal systems. And we've seen that in this era, like our customer Lumi and Finland number, the number three fastest system in the world actually has two sides to their system. So there's a compute side, dense compute side and a dense accelerator side. >>So Oak Ridge national labs was on stage with Antonio this morning, the, the talking about frontier, the frontier system, I thought what a great name, very apropo, but it was also just named the number one to the super computing, top 500. That's a pretty big accomplishment. Talk about the impact of what that really means. >>Yeah. I, I think a couple things, first of all, uh, anytime you have this breakthrough of number one, you see a massive acceleration of applications. And if you really, if you look at the applications that were built, because when the us department of energy funded these Exoscale products or platforms, they also funded app a set of applications. And so it's the ability to get more accurate earth models for long term climate science. It's the ability to model the electrical grid and understand better how to build resiliency into that grid. His ability is, um, Dr. Te Rossi talked about a progressing, you know, cancer research and cancer breakthroughs. I mean, there's so many benefits to the world that we can bring with these systems. That's one element. The other big part of this breakthrough is actually a list, a lesser known list from the top 500 called the green 500. >>And that's where we measure performance over power consumption. And what's a huge breakthrough in this system. Is that not only to frontier debut at number one on the top 500, it's actually got the top two spots, uh, because it's got a small test system that also is up there, but it's got the top two spots on the green 500 and that's actually a real huge breakthrough because now we're doing a ton more computation at far lesser power. And that's really important cuz you think about these systems, ultimately you can, you can't, you know, continue to consume power linearly with scaling up performance. There's I mean, there's a huge issue on our impact on our environment, but it's the impact to the power grid. It's the impact to heat dissipation. There's a lot of complexities. So this breakthrough with frontier also enables us no pun intended to really accelerate, you know, the, the capacity and scale of these systems and what we can deliver. >>It feels like we're entering a new Renaissance of HPC. I mean, I'm old enough to remember. I, it was, it wasn't until recently my wife, not recently, maybe five, six years ago, my wife threw out my, my green thinking machines. T-shirt that Danny Hillis gave you guys probably both too young to remember, but you had thinking machines, Ken to square research convex tried to mini build a mini computer HPC. Okay. And there was a lot of innovation going on around that time and then it just became too expensive and, and, and other things X 86 happened. And, and, but it feels like now we're entering a, a new era of, of HPC. Is that valid or is it true? What's that mean for HPC as an industry and for industry? >>Yeah, I think, I think it's a BR I think it's a breadth. Um, it's a market that's opening and getting much more broader the number of applications you can run, you know, and we've traditionally had, you know, scientific applications, obviously there's a ton in energy and, and you know, physics and some of the traditional areas that obviously the department of energy sponsor, but, you know, we saw this with, with even the COVID pandemic, right? Our, our supercomputers were used to identify the spike protein to, to help and validate and test these vaccines and bring them to market and record time. We saw some of the benefits of these breakthroughs. And I think it's this combination of that, that we actually have the data, you know, it's, it's digital, it's captured, um, we're capturing it at, you know, at the edge, we're capturing it and, and storing it obviously more broadly. So we have the access to the data and now we have the compute power to run it. And the other big thing is the techniques around artificial intelligence. I mean, what we're able to do with neural networks, computer vision, large language models, natural language processing. These are breakthroughs that, um, one require these large systems, but two, as you give them a large systems, you can actually really enable acceleration of how sophisticated these, these applications can get. >>Let's talk about the impact of the convergence of HPC and AI. What are some of the things that you're seeing now and what are some of the things that we're gonna see? >>Yeah. So, so I, one thing I like to talk about is it's, it's really, it's not a convergence. I think it's it. Sometimes it gets a little bit oversimplified. It's actually, it's traditional modeling and simulation leveraging machine learning to, to refine the simulation. And this is a, is one of the things we talk about a lot in AI, right? It's using machine learning to actually create code in real time, rather than humans doing it, that ability to refine the model as you're running. So we have an example. We did a, uh, we, we actually launched an open source solution called smart SIM. And the first application of that was climate science. And it's what it's doing is it's actually learning the data from the model as the simulation is running to provide more accurate climate prediction. But you think about that, that could be run for, you know, anything that has a complex model. >>You could run that for financial modeling, you can use AI. And so we're seeing things like that. And I think we'll continue to see that the other side of that is using modeling and simulation to actually represent what you see in AI. So we were talking about the grid. This is one of the Exoscale compute projects you could actually use once you actually get, get the data and you can start modeling the behavior of every electrical endpoint in a city. You know, the, the meter in your house, the substation, the, the transformers, you can start measuring the FX of that. You can then build equations. Well, once you build those equations, you can then take a model, cuz you've learned what actually happens in the real world, build the equation. And then you can provide that to someone who doesn't need a extra scale supercomputer to run it, but that, you know, your local energy company can better understand what's happening and they'll know, oh, there's a problem here. We need to shift the grid or respond more, more dynamically. And hopefully that avoids brownouts or, you know, some of the catastrophic outages we've >>Seen so they can deploy that model, which, which inherently has that intelligence on sort of more cost effective systems and then apply it to a much broader range. Do any of those, um, smart simulations on, on climate suggest that it's, it's all a hoax. You don't have to answer that question. <laugh> um, what, uh, >>The temperature outside Dave might, might give you a little bit of an argument to that. >>Tell us about quantum, what's your point of view there? Is it becoming more stable? What's H HPE doing there? >>Yeah. So, so look, I think there's, there's two things to understand with quantum there's quantum hardware, right? Fundamentally, um, how, um, how that runs very differently than, than how we run traditional computers. And then there's the applications. And ultimately a quantum application on quantum hardware will be far more efficient in the future than, than anything else. We, we see the opportunity for, uh, much like we see with, you know, with HPC and AI, we just talked about for quantum to be complimentary. It runs really well with certain applications that fabricate themselves as quantum problems and some great examples are, you know, the, the life sciences, obviously quantum chemistry, uh, you see some, actually some opportunities in, in, uh, in AI and in other areas where, uh, quantum has a very, very, it, it just lends itself more naturally to the behavior of the problem. And what we believe is that in the short term, we can actually model quantum effectively on these, on these super computers, because there's not a perfect quantum hardware replacement over time. You know, we would anticipate that will evolve and we'll see quantum accelerators much. Like we see, you know, AI accelerators today in this space. So we think it's gonna be a natural evolution in progression, but there's certain applications that are just gonna be solved better by quantum. And that's the, that's the future we'll we'll run into. And >>You're suggesting if I understood it correctly, you can start building those applications and, and at least modeling what those applications look like today with today's technology. That's interesting because I mean, I, I think it's something rudimentary compared to quantum as flash storage, right? When you got rid of the spinning disc, it changed the way in which people thought about writing applications. So if I understand it, new applications that can take advantage of quantum are gonna change the way in which developers write, not one or a zero it's one and virtually infinite <laugh> combinations. >>Yeah. And I actually, I think that's, what's compelling about the opportunity is that you can, if you think about a lot of traditional the traditional computing industry, you always had to kind of wait for the hardware to be there, to really write, write, and test the application. And we, you know, we even see that with our customers and HPC and, and AI, right? They, they build a model and then they, they actually have to optimize it across the hardware once they deploy it at scale. And with quantum what's interesting is you can actually, uh, you can actually model and, and, and make progress on the software. And then, and then as the hardware becomes available, optimize it. And that's, you know, that's why we see this. We talk about this concept of quantum accelerators as, as really interesting, >>What are the customer conversations these days as there's been so much evolution in HPC and AI and the technology so much change in the world in the last couple of years, is it elevating up the CS stack in terms of your conversations with customers wanting to become familiar with Exoscale computing? For example? >>Yeah. I, I think two things, uh, one, one is we see a real rise in digital sovereignty and Exoscale and HPC as a core fund, you know, fundamental foundation. So you see what, um, you know, what Europe is doing with the, the, the Euro HPC initiative, as one example, you know, we see the same kind of leadership coming out of the UK with the system. We deployed with them in Archer two, you know, we've got many customers across the globe deploying next generation weather forecasting systems, but everybody feels, they, they understand the foundation of having a strong supercomputing and HPC capability and competence and not just the hardware, the software development, the scientific research, the, the computational scientists to enable them to remain competitive economically. It's important for defense purposes. It's important for, you know, for helping their citizens, right. And providing, you know, providing services and, and betterment. >>So that's one, I'd say that's one big theme. The other one is something Dave touched on before around, you know, as a service and why we think HP GreenLake will be, uh, a beautiful marriage with our, with our HPC and AI systems over time, which is customers also, um, are going to scale up and build really complex models. And then they'll simplify them and deploy them in other places. And so there's a number of examples. We see them, you know, we see them in places like oil and gas. We see them in manufacturing where I've gotta build a really complex model, figure out what it looks like. Then I can reduce it to a, you know, to a, uh, certain equation or application that I can then deploy. So I understand what's happening and running because you, of course, as much as I would love it, you're not gonna have, uh, every enterprise around the world or every endpoint have an exit scale system. Right. So, so that ability to, to, to really provide an as a service element with HP GreenLake, we think is really compelling. >>HP's move into HPC, the acquisitions you've made it really have become a differentiator for the company. Hasn't it? >>Yeah. And I, and I think what's unique about us today. If you look at the landscape is we're, we're really the only system provider globally. Yeah. You know, there are, there are local players that we compete with. Um, but we are the one true global system provider. And we're also the only, I would say the only holistic innovator at the system level to, to, you know, to credit my team on the work they're doing. But, you know, we're, we're also very committed to open standards. We're investing in, um, you know, in a number of places where we contribute the dev the software assets to open source, we're doing work with standards bodies to progress and accelerate the industry and enable the ecosystem. And, uh, and I think that, you know, ultimately the, the, the last thing I'd say is we, we are so connected in, um, with, through our, through the legacy or the, the legend of H Hewlett Packard labs, which now also reports into me that we have these really tight ties into advanced research and that some of that advanced research, which isn't just, um, around kind of core processing Silicon is really critical to enabling better applications, better use cases and accelerating the outcomes we see in these systems going forward. >>Can >>You double click on that? I, I, I wasn't aware that kind of reported into your group. Yeah. So, you know, the roots of HP are invent, right? Yeah. HP labs are, are renowned. It kinda lost that formula for a while. And now it's sounds like it's coming back. What, what, what are some of the cool things that you guys are working on? Well, >>You know, let me, let me start with a little bit of recent history. So we just talked about the exo scale program. I mean, that was a, that's a great example of where we had a public private partnership with the department of energy and it, and it wasn't just that we, um, you know, we built a system and delivered it, but if you go back a decade ago, or five years ago, there were, there were innovations that were built, you know, to accelerate that system. One is our Slingshot fabric as an example, which is a core enable of, of acceler, you know, of, of this accelerated computing environment, but others in software applications and services that allowed us to, you know, to really deliver a, a complete solution into the market. Um, today we're looking at things around trustworthy and ethical AI, so trustworthy AI in the sense that, you know, the models are accurate, you know, and that's, that's a challenge on two dimensions, cuz one is the, model's only as good as the data it's studying. >>So you need to validate that the data's accurate and then you need to really study how, you know, how do I make sure that even if the data is accurate, I've got a model that then, you know, is gonna predict the right things and not call a, a dog, a cat, or a, you know, a, a cat, a mouse or whatever that is. But so that's important. And, uh, so that's one area. The other is future system architectures because, um, as we've talked about before, Dave, you have this constant tension between the fabric, uh, you know, the interconnect, the compute and the, and the storage and, you know, constant, constantly balancing it. And so we're really looking at that, how do we do more, you know, shared memory access? How do we, you know, how do we do more direct rights? Like, you know, looking at some future system architectures and thinking about that. And we, you know, we think that's really, really critical in this part of the business because these heterogeneous systems, and not saying I'm gonna have one monolithic application, but I'm gonna have applications that need to take advantage of different code, different technologies at different times. And being able to move that seamlessly across the architecture, uh, we think is gonna be the, you know, a part of the, the hallmark of the Exoscale era, including >>Edge, which is a completely different animal. I think that's where some disruption is gonna gonna bubble up here in the next decade. >>So, yeah know, and, and that's, you know, that's the last thing I'd say is, is we look at AI at scale, which is another core part of the business that can run on these large clusters. That means getting all the way down to the edge and doing inference at scale, right. And, and inference at scale is, you know, I, I was, um, about a month ago, I was at the world economic forum. We were talking about the space economy and it's a great, you know, to me, it's the perfect example of inference, because if you get a set of data that you know, is, is out at Mars, it doesn't matter whether, you know, whether you wanna push all that data back to, uh, to earth for processing or not. You don't really have a choice, cuz it's just gonna take too long. >>Don't have that time. Justin, thank you so much for spending some of your time with Dave and me talking about what's going on with HBC and AI. The frontier just seems endless and very exciting. We appreciate your time on your insights. >>Great. Thanks so much. Thanks. >>Yes. And don't call a dog, a cat that I thought I learned from you. A dog at no, Nope. <laugh> Nope. <laugh> for Justin and Dave ante. I'm Lisa Martin. You're watching the Cube's coverage of day one from HPE. Discover 22. The cube is, guess what? The leader, the leader in live tech coverage will be right back with our next guest.

>>from around the globe. It's the Cube covering HP. Discover Virtual experience Brought to you by HP. >>Hello, everyone. Welcome to the Cube's coverage we're covering HP Discover Virtual experience. 2020. I'm John Furrier, host of the Cube. Great online experience. Check it out. A lot of content go poke around a lot of Cube interviews. A lot of content from HP. It's their virtual conference. HP Discover virtual experience. We have Cube alumni Justin Hotard, who's now s VP and general manager of HP Japan. Justin, great to see you virtually here for the virtual experience. How you doing >>Doing well, John. Great to see you again. A swell and really glad to be here. >>You know, just reminiscing about our previous interview a couple times. You know Jeff Frick is interviewed. I've interviewed HP Discover a couple years ago. Um, service provider Edge now is booming. Everyone's working at home. Everyone is seeing the global pandemic play out on a global stage and impacting our lives. But anyone in the in the I T. Business or technology business is seeing the massive gaps and the areas that need to be worked on. This is something that we're gonna dig into it, I think is really interesting conversation as someone who's in Japan. Honestly, Big telco presence, but also part of the global stage. So I want to get into that. But before we do, tell us about your new role at HP. What are you working on and what are you doing? >>Yes. So, John, currently, I'm the president of HP Japan. I'm responsible is the managing director of Japan and also the managing managing director. Our business in China as well. So keeping myself busy these days. >>A pack your own a lot of zoom calls, conference calls, could imagine the work. You're doing pretty big disruptions. I want to get your thoughts as an industry participant and who's seen these ways before. What is some of the disruptions that you're seeing right now? I see there will document in terms of VM or video, um, VPNs under proficient. Where are you seeing the big disruption? Because those are the obvious low hanging fruit. But it's certainly being an impact. The disruptions or creating opportunities, but major challenges right now. What's your thoughts? >>You >>know, I think I think specific and, uh John and we're seeing in Japan, and a big pillar is, you know, this is really a big inflection point in terms of how people work, and as you as you know, you think about Japan. The culture and the economy has been very reliant on face to face in relation, relationship driven. It's also there's been some traditional paper based activity in that space, as well as things like the Hong Kong stamp away. You sign documents to get you're not just for government approval, but even in private transactions. So all of that is actually under a great way to change. And so the obvious part is, we talk about virtualization and VD I It's really forcing people to rethink, um, you know, work flows and it's not, you know, it's not just one thing. Generally, it's across many, many parts. Education, manufacturing, obviously, obviously traditional enterprise. You touched on Zoom and other virtualization and beady eye, but it's it's I think it's coming across all industries right now. Based on this change, >>what's going on in Japan? Specifically, I know that some GDP numbers were coming in pre covert. I'll see when Covic it's given some of the things you were just talking about how they do business. The culture there must be impacted by the covert 19. What do you what you're seeing there, and how do they move forward? What is some of the changes that need to happen? What do you see? >>Yeah, I mean, I think you touched on. I think the economy that was already under pressure. Um, then you have Cove. It hit. Um, you know, Japan has a huge has had a huge tourism business booming based on the growth in Asia and obviously particularly in China, all of that gets hit. And, uh huh. And then, obviously, you know, the traditional way of doing business has been challenged over the past few months, but it's actually creating quite a bit of opportunity. And some of it is some of it is similar to what you see in other parts of the world. But, you know, we've seen many of the Japanese companies and medical devices and pharmaceuticals jump into innovation and everything from masks toe, um, you know, investment in, you know, in virology and other and, you know, in other areas and testing and all the things that you see, but beyond that we're also seeing is a lot, a lot more discussion around innovation. One place that we're seeing it immediately is education. There's a huge initiative around connecting uh, schools, primary schools, great schools and bringing technology into those schools is a way to accelerate the learning experience. I think obviously in this in this new world in the short term help manage on and ensure continuity of learning through through social distancing and some of the challenges that and everybody has, you know, in in primary education. >>It's interesting, you know, those traditional things like you mentioned just signatures converting at the digitally signatures of the stamping thing you mentioned. Also, the face to face with education, every vertical up is going to be disrupted and an opportunity. So that's what you guys see. That transformation is part of that. What are some of the patterns you see emerging so that your customers and prospects can capture it? What is some of the highlights? What's the big picture? >>Yeah, I think I think at a high level we talk a lot about digital transformation and remote work. These, by the way, were discussed before Covic hit, so I think it's It's just an acceleration. The other one is really around edge, and I ot, um Japan. Obviously great tradition of manufacturing this actually is gonna probably create new investment around manufacturing. Is Japan looks to build its manufacturing base is part of what we expect from the government stimulus programs out there. Um, but they're investing in. And I don't think the factory that will be built tomorrow is gonna is going to start off with a traditional labour view. In fact, it's going to start very, very organized against robotics AI using using i O. T. Using sensors to drive greater levels of automation. A lot of that exists today, but I think this this event just creates more opportunities for acceleration, particularly Greenfield. So we're having conversations with customers around all those areas right now. >>You know, one of the biggest observations I would say in the past 10 years, looking at the wave we've been on and looking at the massive wave coming in now is culture is always a part of the blocker of adoption, and you're kind of getting at some of this with the world you're in now, >>where >>the culture has to shift pretty radically fast. Whether it's the remote workforce, the remote workplace, workloads with robotics and AI everything work related workplace workloads, workflow was with the work. We're forced. I mean, always changing, right? So this is a critical cultural thing. Your thoughts on this because this has to move faster. What are you seeing as catalysts? Any kind of technology? Enablement. What's the What's the What's the data tell you? >>Yeah, yeah, I think I think a couple of things were, you know, we're seeing I think, one that we're seeing that given that we've obviously seen in the rest of the world for a number of years now is a is a shift, that consumption. And we've seen that grow from customers, right? So they're looking at How do we accelerate this experience, how they stand it up? How did they get it? Running and consumption as a service, you know, as a service, models are becoming even more attractive, and so we're seeing new interest in that as a way to build things, to scale things, to create flexibility for future growth. And it's not, you know, it's not just public cloud, it's it's public cloud and on premise applications. It's integration into the virtualization stack, obviously, with, um, you know, with players like VM Ware and Nutanix and Red Hat, it's ah, you know, with open shift containers. It's bringing all of that, you know, bringing all of that scale and flexibility and the other good place. Honestly, we're still seeing it is even in some of our traditional businesses, and we had a very large consumption model in a traditional transaction processing business and for that customer was about creating the flexibility for growth. Um, and so I think we're you know, I think we really are on the brink of a very different I t model in, you know, certainly in Japan to enable a lot of this innovation and to provide more more flexibility and more automation for, you know, for companies there in the businesses. >>And I just want to just validate that by seeing the day that we're looking at in the interviews we've had and even our internal conversation with our editorial Cuban research teams is, is it's happening now in the change you can't ignore it. You could ignore in the past were not ready for it. People process technology. Three pillars of transformation with Cove ID and we've seven, which is having this debate with our team this past month where it's not so much an acceleration in the future. The future got pulled to today, and people are now seeing it and saying, Wow, I need to move because the consequences of not changing are obvious. It's not like a hypothetical. You're starting to see specific use cases where the folks that under invested or didn't make the right bets might be on the wrong side of history coming out of covitz. So to your point about growth is a really key point. This >>is what >>everyone is thinking about right now. So I got to ask you, what solutions do you guys have ready to help customers? Because right now, solutions Walk are really all that matters. It walks that fine line between making it and not making it's having the right solutions is key. >>Yeah, and actually, you know, I think one of things you mentioned a great example of what you're talking about in transformation right in the airline industry. You know, we're seeing that we're going to see this in in Japan, right? This is a place where based if a service was considered a premium experience where you go to kiosks and automation. But now I think we're going to see now we're seeing already interested complete and an automation right bag check bag drop. And that stuff's been talked about for many years. But now it's an acceleration of the experience, and the difference is going to be no longer is it going to be a premium to talk to someone? It's actually about speed. So that's a place where, you know, obviously that's a heavily impacted industry. But as we see it come back in Japan and probably throughout Asia, I think we're gonna see a very different model. And to your question on, uh, you know, to your question on technologies, when I see us doing is really kind of three pieces I think you've got You've got solutions like VD. I were literally out of the box and we built a partners so that customers that are small, medium or large that wants something standard that they could just take into it quickly. We have a platform for also things like SD wan to our business, and we're seeing significant growth there, obviously, you know, mobile access, wireless access, Another place where we're seeing demand, just building on our core business and really seeing healthy growth. I mentioned education is one vertical, but we're seeing it in, obviously in places like manufacturing and on. I'm expecting this even more broken enterprise there as this customer, Aziz, many of our customers come back to the office and bring employees back in. And you can't. You can't have a traditional, you know, just density of desks, right? You've really got to think about how people have mobility and have flexibility to make being distancing and and even even kind of the in and out of office, right? How do I mean by that? That work experience in the productivity, whether I'm in the office for a couple days and how so? I think those are places where we see the technology. Then we talk about consumption service. So the flexibility consume it as a service which in all of those solutions we have offers around and then ultimately even a pop it out or hp fs our financial services, giving customers flexibility and payment options, which for many people that are cash strapped solves a real challenge, right? We talk a lot about the technology but fundamental business challenge of saying yes, I want to invest today. I need to get my work, my workforce up in productive with beady eye. But so they can start generating revenue and cash flow, but one of the cash flow to invest in that productivity. And so this becomes a place where, you know, we're just seeing a lot of traction with our customers. We can help them actually get that up and running, not not created huge cash flow outlay upfront and making get productive and get back on their feet. And definitely in the mid market and the smaller businesses, we're seeing a lot of a lot of activity there. >>That's a huge point, because right now, more than ever, that need is there because of the financial hardships that we're seeing that's evident and well reported. Having that financial flexibilities primary, that's a key thing. So that's great. So good to hear that. The second thing I want to ask you on the business side that's important is not just a financing because you want to have that consumption buy as you go from a cloud technology like standpoint as a service. But now you've got the financial support check. Next step is ecosystem. What are you guys doing on the ecosystem side? If I'm trying to rebuild my business or have a growth strategy check technology check. I'm gonna get some business help on the finance side. Third is partners. What's the status there? >>Yeah, yeah, I think there's I think there's a couple things. One is there's obviously the global relationships we have, you know, close relationship with VM Ware. You know that Nutanix relationship red hat, others that were standing up solutions that some of things I mentioned like me. I literally packaged out of the box experience with a complete turnkey solution, right? So so our partners don't even have to. You don't have to optimize that they can. They can just deploy and enable their their customers. I think the other place in Japan, it's you know what? We didn't touch on it earlier, but one of the really important things and is most of our customers depend on their vendors, depend on their partners, actually do a lot of their I t work. It's a little bit unique in Japan versus the rest of the world. And so this is a place to We're spending a lot of time with our partners with our entire partner ecosystem to make sure they're ready. And I was just actually in a conversation yesterday with a partner talking about the investments they're bringing their they're putting in to really bring that that core innovation around, um around beady eye and around around SD win for as an example and working with them to make sure that they've got all the tools they need from us so that what they can deliver into their into their ecosystem is very turnkey and easy. And I think I think that's really, really, really important. So it's not just the, you know, the global technology relationships that we talked about certainly in Japan, it's also about it's about stitching together. That entire ecosystem that, you know that allows the the end customer toe have ah have a turnkey experience and everybody that's involved in that delivery, you know, to have to have a seamless experience to get these customers up and running. >>And it's great to you guys had that foundational services, but also now with some great acquisitions. You got the cloud native experience across environments and then the reality of the edge Actually, work force in workplaces are changing. VD I etcetera. But you've got edge exploding. You guys also made a great has been years of investments and edge. So with telco and WiFi, all kind of coming together kind of sets up for a nice kind of front end piece with the APP development piece going on. You're seeing that in Japan as well. >>Yeah, I think all of our major telcos there have you have announced five G projects projects and launch is we've got a new you know, we've got a new entrant in the telco space Pakatan launched just a couple months ago. Therefore G solution. But I think all of that is very favorable to driving greater levels of connectivity. And I think you know, it's a lot of times we talk about five G. We talk about kind of the next mobile hands when we think about the next mobile device or handset. But it's also a lot of the private lt and connectivity, and I think we'll see that actually, the intersection of five G and WiFi. In some cases, we're having conversations about, you know, are there opportunities in five G and as the back whole and actually using WiFi in a smaller medium sized office home? And so there's a number of things like that that I think will be compelling and great opportunities for growth, because Japan's an incredibly A. So you know, John is incredibly well connected society and a lot of connectivity, but but I think this is also creating new demand. I mean, people weren't working at home all the time and way. Obviously, you see that in other countries where maybe media streaming and video conferencing we're working on the plans where people got their original Internet service. I think in Japan that's even more so because this tradition, if I go to the office at work and I know when I'm home, I'm relaxing. I mean, this is fundamentally under a huge shift right now, and so I think it's gonna be a you know, a really significant wave of growth and five g n and wife by as this this new. Imagine this new, this new remote work experience this new mobile work experience happens a >>lot of architecture to really work a little bit. Not radical, but certainly transforming. And its benefits. Exciting time, tough environment. Right now, let people working hard have to come out of it. But it's super exciting from a tech perspective. What it can enable. Really appreciate. Of course, we're here in the HP Discover virtual experience bringing you the best content. So I have to ask you, what sessions? Um, do you think people should turn into for the virtual experience? >>Well, you know, it's of course, the one that I think everyone has to make. And I never liked the missus is the keynote is that obviously Antonio always gives us not only, you know, some of the great technologies and launches, but but also really a vision of where we see the industry going to. I think Tom ones foundational. But we've got some great sessions on consumption and as a service that are actually set up for some of our customers and partners in Japan and across Asia. And I think those will be really good discussions, you know, with, uh, you know, with folks like our CTO commercial coffee and our our global general manager for green like white. So I'd encourage folks to turn into, you know, to really learn about as a service because I think a lot of times we talk about the cloud and we think about public Cloud only. Um and I think for certainly for many of my customers and partners in Japan, um, I think with everything we just talked about, the cloud is gonna be an inevitable reality. But the cloud is an architecture, and that's where some of these new technologies and services that we're bringing out will be will be really, really valuable, whether it's in storage or it's in compute virtualization, enabling collaboration or some things that we're doing right now, John. But be a video video conference, but but also also even just in automating the data center and bringing, you know, being a new levels of productivity back into some of the traditional data center. A swee as we need to do that in order to enable the new edge and some of these new applications around AI and machine learning that are necessary, Teoh to support the growth of the economy. But you know net net. I think this is going to be. These are all things they're going to support growth and recovery. So I think it's a great opportunity and discover for our customers and partners to learn what they could do to help accelerate that and and and accelerate the recovery. >>Certainly, Cloud has shown the way it's operating model. It's not just public, it's on premise. It's an edge is so it's not just multi cloud either. It's multi environment. This is where the market's going. So you guys are on the right track. Justin really appreciate the time. But I want to ask the final question. I want you to complete this sentence for me as we end this out on our virtual experience, Our competitive advantage HP HP is competitive advantage to our clients is that we are blank. >>Our competitive advantage is that we are the best partner, deeply understanding their needs and bringing them the right innovation and value that they need to deliver their business outcomes and in this case, obviously recover and get back to growth. >>There's a whole chart. Managing director of President of HP Japan great to see you. Congratulations on your new role over there on Asia Pacific. Um, and thanks for checking in on the virtual experience. Thanks for coming in. And good to see you again. >>Great. Great to see you, John. Thanks again for having time for me. And best of luck for a successful discover virtual experience. >>Awesome. Okay, I'm John Furry here in the Cube studios, getting the remote injuries for this virtual experience for HP Discover. Thanks for watching. >>Yeah. Yeah, yeah, yeah.

>> Narrator: Live from Las Vegas. It's theCUBE, covering HPE Discover 2017. Brought to you by Hewlett Packard Enterprise. >> Welcome back everyone. We are here live in Las Vegas for SiliconANGLE Cube's exclusive coverage of HPE Discover 2017. I'm John Furrier with my co-host Dave Vellante. Our next guest is Justin Hotard, Vice President and General Manager of the Service Provider and OEM Solutions for HPE, Hewlett Packard Enterprise and Curt Belusar, Senior Director of Service Provider Engineering. We got the trends, we got the market leader, the go-to market leader, as well as the engineering. Guys, welcome to the CUBE. >> Thanks, great to be here. >> Thank you. >> So, obviously the service providers is an interesting marketplace. We've been covering it for a long time and we know how hot NFV is and all the great stuff going on with the network moving up the stack, applications over the cloud. You name it, it's a crazy world. But you look at the trends around smart cities, autonomous vehicles, and movie and media entertainment, smart home, Apple announcing a home pod. Internet of things. This is a right market for service providers, so my first question is, with 5G over the top, these kinds of trends, to power these transformative use cases. Is it really putting even more pressure on the service providers? So, what's the deal? Where are they at? What are you guys doing with the business? Give us a quick taste of the landscape and some of the forcing functions that are helping your business. >> Yeah absolutely, and I think you hit on a lot of the trends driving the growth in service providers. What we see is a very dynamic market where everybody is trying to figure out their business model and build their services and respond to all these changes. What we see is a lot of customers, our customers as service providers, need a lot of flexibility. They need to be able to respond to these changes. They also need to be able to scale. Globalization is a huge trend because I launched something in the U.S. and Uber or Lyft is a good example. I launch in the U.S. Everybody expects to have that service everywhere else in the world. >> And guess what, they say "Whoa, hold on." >> Exactly, exactly. Then you've got issues with data sovereignty, and security, and privacy, and you have to factor all of those things in. These businesses, our service provider customers, don't have time to wait. So, they really see us as a core partner to them, to enable speed and delivery. Curt, you probably can add a few points cause you've seen this market evolve over the last, almost decade. >> I think what we're seeing is a transition to where there's more data out at the edge, and so you're growing both edge data centers and you're growing central data centers at the same time. The percentage of operating expense that these customers are spending on their IT gear is just a very large percent, and so they are all trying to optimize their spend in that space. That means that they're looking at ways to optimize the gear. They're looking at ways to optimize how they deliver the gear out to the data centers. They're looking at reducing servicibility costs and trying to attack it across the board. >> Let's talk consolidation for a bit because early on everybody said "It's just going "consolidate to a few providers," and the exact opposite has happened. >> Yep. >> It's logical. Services have always been decentralized and local and that's exactly what you're describing. How do you look at the market? How do you segment it, and what's you're thinking in terms of the explosion or contraction of this market, in terms of number of players? >> A lot of what we see in the press or what's discussed is, we talk a lot about the infrastructure of service providers, and the largest service providers. The reality is that the market is fragmenting because more and more businesses are moving to an as-a-service model. There's business as a service, software as a service, and each of these customers has a unique business model. How they make money, where they extract value, how they respond to their customers. We really see that trend, and I don't think it's going to change. That's not to say that the largest players in the market won't continue to grow in scale. As we've seen, they've been doing that pretty consistently, but we're still going to see those different services and different values because it is local, it's customized. You think about autonomous driving. There's going to be, you brought that up earlier, right? There's the people that are going to provide autonomous vehicles for consumers. There's going to be people that provide it as a service. There's going to be people that provide services into those vehicles. >> Data services? >> Data services. Content services. We think all of those models will continue, and the economics of one-size-fits-all just don't work. When you look at our product strategy, our solution strategy, including point next and how we go to market. It's recognizing that. We have customers in Europe, for example, that buy what we might consider more traditional data infrastructure gear. A lot of the core products we have in market today. We have customers that want customized, we talk about white-box a lot, but customized solutions, the latest technology. Integrated, optimized for their workload, for their scale, and we run the gamut. A lot of that is because one size just doesn't fit all in this environment. Let alone what Curt was talking about with where they're deploying their technology. >> Yeah, I see the same trends. I think that both the large, public cloud providers are going to continue to grow, and then you're going to see the next tier down is also going to continue to grow. It's everything as-a-service is starting to explode. >> How are the requirements, are they dramatically different? I mean the large guys, they've got massive scale and gimme the stuff and get out of my way sort of attitude. But the second and third tier, there's a lot of customization required. Where do you see HPE being able to add value in that space? >> We're going to see customization at both ends. It's just going to be more customization with the top-tier customers. It's interesting, what you've seen is a lot of the IT skill-sets and people have migrated from some of the top-tier providers down to the second tier and so you see them wanting to employ a lot of the same techniques to go save cost and optimize their environment. When we say customize, there's a very good reason why they customize. They will customize to the extent that it allows them to go lower their total cost of ownership. >> Well that's a great point. Dave mentioned in an earlier segment that all companies are becoming technology companies. Jim Jackson was talking about the digital technology issues, so you have a power law going on. You're going to have it at the head and the long tail of the service providers. Some enterprises, you say enterprise market. You can almost say, okay there's a line. You guys are now the service providers, and the rest are traditional enterprises. In a way, they're SMBs from that old classical definition. The point is, the definition's changing. >> Yeah. >> How does that impact your business and your product offering? >> It's really interesting. I think your point is every company is a service provider, and so we also see this even within our Enterprise customers. They have workloads that are running on Enterprise. They run mission critical workloads, and then they run service provider platforms, and they're looking for that flexibility. They don't want to be bucketized. In order to compete, in order to have a service that might deliver content into their products or provide conductivity into their products for intelligence or AI, they need to have the same cost advantages, the same technology advantages, the same forward planning. Because a big thing we see in the service provider's space, is they buy ahead on technology because they're trying to run the life cycle of what they might need and get that return on investment. We see those same behaviors across our Enterprise customers that are buying as service providers. So there is a bit of a blending of the business. >> Is there a pattern that you can talk to in the marketplace? This is interesting cause if you believe that, which I do, and I think you guys would agree, that everyone's becoming a service provider. But service providers have had a legacy business that had completely different dimensions than say, a classic enterprise. A lot of online. A lot of hyper-scaler's upfront. Now you have data tsunami coming, so are there patterns that this is a little service provider like, that now the enterprises have to deal with. Can you share insight into some of the things that you guys are doing to solve that, and I mean I know the flexibility thing is a key message. Composability, I get that. What are the core customer problems that now look like service provider problems? >> Well, there are a lot of Enterprise customers that are going and starting to stand up environments that look like service provider environments. There's different reasons why they do that. They could need an internal cloud for some reason. They could actually be standing up a service now that they're offering out to the public. The answer is they are all looking for some of the same things in their cloud-like environment. They want consistency in the way that they want to go and deploy and talk to the servers. They want to have lowest cost, total cost of ownership, and that's both on a capital expense side, in terms of what they pay to go buy the actual equipment, but also on the operating expense side. The more that they can make their cloud or their grid look uniform, it becomes easier to service, it becomes easier to maintain. You're starting to see them on a smaller scale perhaps, but employ a lot of the same techniques that are used in the large clouds. >> The business model question too comes up. In the old days, the ones who were online, highly big procurers of gear, servers and storage. Financial services, healthcare, I mean, these are highly online, transactional businesses, and service providers also fell in that bucket, but now as everyone sassifies. Hello! Your revenue model is tied to those services. >> Yep, and it's interesting too because we put a lot of emphasis, I mean by virtue of being a technology company, we've put a lot of emphasis on the tech and making sure we've got the right systems and configurations we're delivering to the customer. The other thing is, it turns out that there's some laws around physics. So power matters, real estate matters, footprint matters. >> Distance? >> Distance. All those things for latency and proximity, and we talked about some of the other elements. But those are actually huge operating costs, huge value points for our customers. So, helping them make sure that they're balancing all those choice points. Because if we get the operating expense right on the tech, but then they can't handle the power, they can't handle the footprint, they've got a different issue. >> Scale's a huge issue. >> They can't scale, exactly. That actually puts a limit on their growth, so there's all these different things that we balance and where we bring value, and it's not just the technology, but that total solution. >> The service provider space has always been a harbinger for what's going to happen in the Enterprise. If you looked 10 years back it was virtualization, and then DevOps and containers, and all that stuff that's hitting the Enterprise now was being done years ago. What are the tech trends that are driving the service provider space now? What are you seeing there that might show us a glimpse as to what's coming in the future? Where are they focused? >> I think that we're seeing continuation and furthering of some of the technologies that we've seen the public clouds rolling out starting to happen with the Enterprise, but when I think from a technology trend standpoint, things that folks are looking at today. We're seeing alternate processors become available this year. ARM 64, we're getting into the second generation of that. We're seeing trends coming like NVMe drives, the ability to pull data off of a drive much quicker. If you're a financial services industry company that wants to transact data real quick, that's helping out there. We're seeing NVDIMM technology that's coming into play, and that's shifting everything. Storage and memory is starting to come together, and so the way that they move around and cache data is something that's going to change. Applications are going to have to change. >> John: Architectures are changing, big time. >> Absolutely. >> What are the drivers behind that? Because you brought up data and memory, and then also, we just had talking to the server, options, lead, and this is a big deal. Memory used to be a constraint that you have to program around. Swapping out, back in the old days, but now it's almost limitless, with the persistent SSDs, speed, and that gives app developers huge flexibility, so this should change the game on the service providers. >> It's all about the data. There is just more and more and more data being stored for different reasons, and the data sets that people want to operate on are just getting larger and larger. And to the extent that we can pull those in and operate on them in a faster way in memory, it helps. >> You guys have a very dynamic market, so I've got to ask the question, what is the biggest way that you guys are riding on the go-to market? And from a technology standpoint because if you believe this conversation we're having, what is happening is, a service provider, of a service provider, of a service provider, is going on because someone may be a specialist in say big data analytics service provider for cars. Or I am a healthcare service provider that's out of scale, so scale becomes now the new differentiation. >> Yep. >> That's the locked-in aspect, but I mean it's not really locked in, it's just they have scale. You can almost envision this channel of service providers. How would that play out, I mean, that would be certainly game-changing. How do you guys rationalize that trend? What is the wave that you're riding? >> I think it all goes back to our customers, and we're doing a few different things. So one is deep-direct engagement with these customers, especially the ones on the cutting edge. To have a early dialogue with them, make sure we're delivering the right solutions. The other thing is actually bringing value, so we do some things through it. We have a program called Partner Ready Service Provider. We bring in, actually from our service provider customers, and this is a global program. We actually then deliver those services cause we have certain customers that might, again back to that mix in a CIO's environment, they might look like an enterprise, they might look like a hyper-scale service provider customer, they may also look like they're a consumer of service providers. >> All three? >> Exactly. Actually being able to do all of that is really important, and we think when we wrap all of that with our service delivery, our global footprint, our supply chain, the ability to deliver products anywhere in the world. Those are all things that give us a solution advantage for our customers. >> Curt, talk about open, the cloud line server portfolio, fast grow in the cloud age is here, open infrastructure. I was just talking to some of the guys in the labs. You've seen some of the stuff at the network layer becoming open-source projects. You almost take the network stack and say, "Oh wow, there's like six open-source projects "that make up HP, Arista, Juniper, and Cisco." Core technologies, yet you have to build your own proprietary stuff around that to differentiate. How does open fit into all of this because at the end of the day, it's going to be an open-source driven software world with the cloud? >> I think there's open-source software pieces, and I think we will get to the point where we have more open standards around hardware too. You've seen OCP, you've seen Open19 launch a couple weeks ago and you're starting to see standards around the hardware as well. I think the open's critical. I think that it is the way of the future. In this space, I think that we, again back to the comment about what the large grids or large service provider customers need. They need uniformity in their data center to a certain extent. It makes it easier to manage and easier to operate. If you just start with that principle, that implies that we're going to have open standards. They're going to want open standards around the rack, they're going to want open standards around the gear, open standards around some of the options that go in the gear. There's going to be open standards from a software standpoint, and it's going to be the companies that go and sell that gear responsibility to make those bullet proof, to make them to the point where they're secure, to make them on the hardware side to the point where you can distribute it worldwide and service it. Open is here to stay. >> We've been predicting on the theCube, I know Dave's got a question, but I want to get this point out. We've been predicting, it hasn't yet come true, and most of our predictions come true, so we're kind of waiting for the signals. Since open compute, we're seeing a maker culture going on, where we believe there's going to be a hardware renaissance, and when I say open hardware, there's really a driver on that. Thoughts on that? Because, this certainly would change the game. You see people trying to do their own servers, but yet they can't get a fab plan opened up, they can't do this. Interesting trend. If software's eating the world, then data's going to eat software, which we believe. Then you might see a really big shift to soft, I mean the hardware. We had Microsoft's Ballmer say at the conference last week, we should have got in the hardware business earlier. I mean, what is that all about? So again, this points to a renaissance. Do you agree? >> Totally. I think you hit it dead on. We see the same thing, and it's a business model shift. It's a different business model than where we're been, but the opportunity to deliver value in open, around platforms, around making sure there's inter-operability, quality, security, exposing performance. Those are all things that are enabled through hardware, and they make a difference, and Curt talked earlier about some of these technology trends. They're very hardware centric because that's actually what delivers the difference in software and data. >> And systems too, and having systems experience is now the new IP. Not necessarily having the fastest board. >> Yeah. >> Yeah, that's right. Having that ability to integrate it and deliver an experience and performance. Those are things that make the difference. >> Curt, your thoughts. >> Like I said, I think that we are going to see more and more open standards around it, and I think it's going to help people scale. It's about putting the systems together, in a open-scalable way. It's also about getting more work done out of the systems. It's kind of a, if you think about through Capex and Opex, there's going to be a work per watt per dollar done. How can I get that best done in the most standard way? And standards are going to have to be there, to enable all these pieces to go together and come together with a uniform look in the data center, which is what anybody who's deploying the cloud needs. >> So Justin, put a bow on this segment. Summarize from your perspective Hewlett Packard Enterprise's cloud service provider strategy. Where can you add the most value? Where's the sweet spot, and where you going to make the money? >> I think what we add the most value in is being able to be a comprehensive provider for all of our customer's solutions, and that's not just the product. It's being able to deliver the specific product or that specific workload or application. Being able to provide that global footprint and supply chain, the services on top of it. So that a customer, when a customer makes a decision that they need help, they've got one partner to go to, and I think ultimately that's where we'll make the value. >> Justin Hotard, who's the VP GM Service Provider, of OEM Solutions, and Curt Belusar, Senior Director of Service Provider Engineering. Guys, thanks for this insight. Great conversation. We love it, we love hardware. We all love software too. All that machine learning out there, there's going to be more and more power available. This is theCUBE, bringing you all the action here at HPE Discover, doing our job delivering a bunch of great services around data and video. Of course, bringing you live stream here. I'm John Furrier with Dave Vellante. We'll be right back after this short break. (techno music)