>> Live, from New York City, it's theCUBE. Covering Lenovo Transform 2.0. Brought to you by, Lenovo. (electronic music) >> Welcome back to theCUBE's live coverage of Lenovo Transform, here in New York City. I'm your host, Rebecca Knight, along with my cohost Stu Miniman. We have two guests here on this segment, We have Kirk Skaugen, he is the president of Lenovo Data Center Group, and Brad Anderson, the Corporate Vice President of Enterprise Mobility for NetApp. Thanks for coming on the program. >> Thank you for having us. >> So the big news of the day, the NetApp Lenovo partnership, explain to our viewers exactly what this means. These are two global powerhouses joining forces. >> Yeah sure, so I think Lenovo has had an amazing year. Last year in our Transform 1.0 we announced the largest server portfolio in our history. And this year we announced the largest data center, data management storage portfolio in our history. With a partnership with NetApp, so we're creating a multi-billion dollar global alliance, a multi-year alliance and it has a place in a joint venture in China as well as we'll be distributing NetApp products in over 160 countries in the world. >> So tell us about the background to this partnership. How did it come about? >> Well, you know, for NetApp we were looking for expanding our reach, and there was two markets that were kind of underserved in. One being kind of the commercial SMB SME channel, and Lenovo has a high-velocity channel there, a strong position. So Lenovo made complete sense in that space as well as in China, where we have a strong brand but we're underserved there as well, so who is better in China than Lenovo? So for us this is all about global market and then the fact that they're a server vendor is just icing on the cake, because the other two server vendors in the marketplace are also our competitors. And then, Lenovo is so much more compatible and complementary to our entire business. >> Kirk, maybe you could spend a little more, because when you look at storage today, storage is really built on servers. You know, NetApp is, you know, at it's heart a software company, even back in the day NetApp was never, some of the other storage companies spent a lot of time and money on the hardware pieces. And of course had reliable, good, trustable hardware, but maybe explain how much, kind of, I.P. goes into this partnership. >> Yeah, sure. So I think today we have about 15 percent coverage of the overall storage market within Lenovo. We've grown our flash array business over 100 percent over the last four quarters. IDC had us at 30% quarter to quarter growth. So we've done well, but we've only cover 15% of the market. After this announcement, and shipping now today, we'll cover over 90% of the market in more than 160 countries. So we're using our global supply chain which is ranked number five in the world by Garner. Manufacturing in Europe, in China, in Mexico et cetera. Really expand this out through our channel partnership program. And in China we're taking a very unique approach to this joint venture. This isn't about taking global products and just trying to force fit them into China. China has unique software solutions, unique hyper scale requirements. So we're pooling our R and D there. Lenovo will be a 51% owner, NetApp a 49% owner. Brad's going to be on the board and there we're going to be delivering products in China for China. >> Yeah, is it, you've got a lot of experience with that. You talk about coming in the future there's an NFV software and hardware solution in China, so Lenovo has some experience doing this kind of engagement, you know. >> Yeah, I think we have a more than 50% growth now, year on year in China. We retooled a lot of the operations that we had there. We have a really nice, broad portfolio now since we launched Think System and Think Agile so it's a nice place to grow on. But today we talked about the joint venture with NetApp and also the fact that over the next year we'll be building out a telecom NFV company after having China Mobile and China Telecom with us as at Mobile World Congress. As well as new edge gateway and edge server solutions. >> Brad, I know cloud is in your title for what you are doing, when I hear NetApp talking, I see NetApp at all the cloud shows we go to. It's a very different world than when I think about NetApp ten years or twenty years ago as like, you know, the Nas Filer company. So bring us up to speed of kind of the NetApp today the momentum and what this brings. >> Yeah, I mean we are going through our own transformation where we were principally a storage company and now we want to be a data company, and increasingly to be a data company you got to be a cloud company. And so, we continue to develop what we think are the, you know, the best storage products in the world, but they are all cloud connected. 'Cause we want data to be able to flow from prim to cloud and customers be able to, you know. That's what really kind of fuels these digital enterprises is that data is the new oil. And so in doing that we have kind of expanded NetApp's charter significantly to being the data authority in hybrid cloud. Hybrid being both the private and the public. And so part of my business is really focused on providing products and solutions so customers can have the same experience in building their own private clouds that they enjoy in the public. And then on the public side we have partnerships with all the hyper scalers to put NetApp's in there so they can deliver native cloud data services. And so, this is a very different company where we're getting more and more cloudy every day. (Rebecca laughs). And that's part of our transformation intentionally. >> So, the transformation, it's the theme of this conference and you were up on the main stage talking about Lenovo's turning this corner and really accelerating its growth, and also talking about the transformation from within the company. Changing the look of the leadership team in particular. Can you tell our viewers a little bit more about that strategy. >> Sure, so we acquired the IBM system X business in late 2014 and we did some things really well and we did some things that we've learned from. So we spent, you know, basically the last 18 months transforming the whole company. New channel programs, new system integrator partnerships, new training certifying over 11,000 people in the world now. Tripling the number of our solution recipes. And we have transformed The management team as well. We have replaced about 19 executives because we wanted the right balance of external and internal perspectives from our competitors as well as from ex-Lenovo and ex-IBM employees. So we feel like we have a very customer-centric organization now and, again, Gardner now is saying we are growing 49% year on year in units, IDC said we are growing 87% year on year in revenues. So I think customers are responding to the new product line. Over the last year the Think System brand truly meant the highest customer performance, the highest reliability, the highest customer satisfaction. And as a result it does take a while to transform. And I think that over the last 12 months you've seen that and we're exponentially growing now as a company. >> And you see it in your results. I mean, they are outstanding. >> So Brad, bring us inside the products a little bit. So we've got, it's the Think System DE and DM. Of course the storage industry very much, they need to trust it, they need to understand it. Gives little to understand, I believe DE maybe has something to do with the >> The E series >> The E series there and tell us the DM series, what's underneath there and how do people understand what's different and what's the same. >> Yeah, I mean the. We're taking platforms across our E series, our FAS and our all flash arrays. So the DE corresponds to the E series. The DM will have our FAS products as well as our all flash array products in there. So that's kind of the mapping. We're putting initially I think, ten products in there. We have the capacity to expand and I'm sure we're going to learn a lot because these are serving markets that NetApp doesn't typically serve. So I think not only is this going to give Lenovo the tools to compete, it's going to give us a lot of information to even build better products, better solutions for both NetApp and our Lenovo customers. So we're super excited about that. The second thing is, it's OnTab, it's the same core software, and all the value and performance testing and validation you get with NetApp. That all goes into the Lenovo branded products as well. And we have made it one of our hallmarks is our data fabric. All of the data services that are on top of this that you can move data and manage data between platforms, that is really important for the NetApp customer. All those values extend to the Lenovo customer. So if they also have NetApp in their environment, or vice-versa, they can share or move data between both those platforms. So that's, nowhere else in the industry is that possible across vendors let alone within. >> So how does it work when you are in the product development process. Two companies, both relentlessly focused on customers. This is part of your culture, part of your DNA. So how do you work together in terms of innovating and collaborating. >> Well, I think the first thing is you just look at the core business: our server business and NetApp branded storage, or Lenovo branded storage based on NetApp's portfolio. We're going to have a better together solution. So the first thing we're looking at is a set of solution recipes so that when you use NetApp and Lenovo together, you're going to get a better experience as a customer base. So that's why I am excited today. We've launched three times as many engineered solutions as we did a year ago. And trained these 11,000 people because we have a very solution oriented sales force and a very complementary channel. From a development perspective, we're going to be building X Clarity management into our portfolio. So the same systems management software that is mission critical for Lenovo server products will now manage the big system DE and DM products. So it's a very familiar management interface for customers, there's an engineering effort gone with that. And then on service and support, we're going to use over 10,000 people around the world that Lenovo has to go service and support these products. So we can deliver a premium customer experience. Whether you're buying the server or the storage. And back to the customer base: we're going to, especially in China, have deep engineering collaborations. Where we're walking into those customer bases and asking what's unique about the China market. >> And, and. It really helps that the two companies are very complementary. So NetApp has deep storage expertise, Lenovo has tremendous compute expertise. So they are very complementary and as customers want more and more complete solutions, we are learning, our engineers are learning from each other and it doesn't hurt the fact that we have a large engineering. We NetApp, have a large engineering population in the research triangle where Kirk's people are at. >> That's right. We're probably one kilometer away from each other in research triangle park. >> Geography matters, location location location. >> No, and our two support organizations are next door as well. So I think that proximity will only contribute to the collaboration. >> Yeah, exactly. >> Alright, so the storage industry actually has a relatively good track record of some deep, long partnerships. NetApp has had a number of them over the years. Tell us, what does success look like if we look back three years from now, what's this partnership. >> Well, what we said publicly is we plan to have a multi-billion dollar, multi-year alliance. So that's going to be fantastic as we grow in over 160 countries. We're going to use Lenovo's extensive supply chain network. So you know as one of the largest kind of procurers of componentry and things around the world, we get to leverage this global factory network to build even more value into that situation. And in China specifically, we've set a goal of being a top three storage player. So we both have probably single digit share in China but together with this collaboration we are setting sights quite high to be in the top three over the next several years. >> I think that's exactly right and I think those are all achievable goals. But right now, we want to get out the gate fast. I mean this is a partnership with two companies with a lot of momentum and I see this as a huge opportunity for both our companies to kind of amplify that momentum near term. And so while there's a lot of excitement on the future, I think success is going to look like, you know, some very exciting results that Kirk can share at Transform 3.0 next year. >> That's right. And for our customer base, we have already gone into production. Taking orders, as of today and tons of engineering, tons of manufacturing development. So we'll have a whole host of seed units and early access units. Our customers can get their hands on this stuff right away and start testing it in their environment. >> As you said, it is an audacious vision. You announced an audacious vision last year, you did another one again this year. So when you think about what you want to be talking about next year. You said what success looks like. What are some other things that you're working on? You said, this is a process, Lenovo has turned the corner and it's got a lot of momentum. But what else are you, what else do you have on tap that you're... >> Well, if we tell all of you that, (Rebecca laughs) we won't have this here next year. >> Yeah >> But I think today is about entry and midrange. About expanding Lenovo's breadth from 15 to 90% of the market and being very aggressive against our top competitors that have a combined server storage portfolio. And I think as I've gone around the world, I've been in Latin America, in India, our channel partners are incredibly excited about this. So I think while other customers might be taking business more direct, we've traditionally been very channel-centric. So, I've seen a lot of pull for choice in the market and I think that's what we're going to deliver to our channel partners. But we will have a lot more in store, that I can promise you. This is phase one of a multi-phase, multi-year plan. >> I think there's a lot of things, there's a lot of possibilities on the product development side and how we can do better products, but I think a lot of success is going to look, it's going to come in our global market. Already, Kirk, since I've been here, I've had a channel partner come up and said "Hey, this makes me rethink my channel partners all over again", because now that channel partner who's a Lenovo has the full breadth of the storage portfolio. So I think this is going to be really good for both of us. Particularly when, you know, Lenovo and NetApp are both very channel friendly partners and companies and I think this I going to be a catalyst to have more people on our side than ever before. >> Kirk, just last thing, just give you the opportunity to talk about some of the other breadth and choice and other things that Lenovo has going on. We're going to talk to some of your team about, you know, hyper converge and hyper scale and other hyper things, but yeah. (Rebecca laughs) >> Well I think the good news about our growth now is that we're doing it across multiple segments in the industry. There isn't just one part of the market that growing. So last year we set an audacious goal of being the largest supercomputer company in the world by 2020. We've now crossed that actually this year. So we are the largest supercomputer company in the world. About one in every four supercomputers now are there. And we're expanding that into a lot of AI offerings as well with our four artificial intelligence centers, from China, Germany, Taipei, Beijing. All having customers bring their AI workloads into a controlled environment with our partners where there's intel and video or the FGBA vendors. So super-computing is alive and well and we continue to innovate with our warm-water cooling technology that's going to be here on display. We think we're building one of the largest supercomputers in Europe right now using that technology. So not just helping solve global warming but being more energy-efficient while we are computing on that as well. In hyper scale we've grown to about delivering six of the top ten hyper scalers products. And we're doing that through, basically starting with a white sheet of paper with our customers and building more than thirty customized products. In the motherboard, in the system, in putting it through our entire supply chain. Versus just, in the past maybe two years ago, maybe just leveraging ODM products, so. Significant growth in hyper scale where we're bringing on new billion dollar customers on a regular basis now. And then in flash arrays, our traditional business, we were over 100% growth year on year. So we're building off of momentum. We had great products but only covering 15% of the market, now much larger. Last but not least, we did announce since Transform, new divisions in embedded and IoT as well as in telecommunications NFVF software. We think each of those can be billion dollar groups within Lenovo, so that's probably a lot of what we would be talking about next year is announcements and innovations we've had. Would be Transform 3.0 probably. (Rebecca laughs) >> Well, we're already looking forward to the next Transform. >> 3.0 will be CUBEd so we look forward to that. >> Stu, very nice. Very nice. Excellent. Well thank you so much Brad and Kirk for being on the show, I really appreciate it. >> Thank you very much. >> I'm Rebecca Knight for Stu Miniman. We will have more from Lenovo Transform and theCUBE's live coverage, just after this. (intense electronic music)

>> Narrator: From theCUBE studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> Hi, I'm Stu Miniman, and welcome to a CUBE conversation. I'm coming to you from our Boston Area studio. And we're going to be digging into some interesting news regarding networking. Some important use cases these days, in 2020, of course, AI is a big piece of it. So happy to welcome to the program. First of all, I have one of our CUBE alumni, Kevin Deierling. He's the Senior Vice President of Marketing with Nvidia, part of the networking team there. And joining him is Scott Tease, someone we've known for a while, but first time on the program, who's the General Manager of HPC and AI, for the Lenovo Data Center Group. Scott and Kevin, thanks so much for joining us. >> It's great to be here Stu. >> Yeah, thank you. >> Alright, so Kevin, as I said, you you've been on the program a number of times, first when it was just Mellanox, now of course the networking team, there's some other acquisitions that have come in. If you could just set us up with the relationship between Nvidia and Lenovo. And there's some news today that we're here to talk about too. So let's start getting into that. And then Scott, you'll jump in after Kevin. >> Yeah, so we've been a long time partner with Lenovo, on our high performance computing. And so that's the InfiniBand piece of our business. And more and more, we're seeing that AI workloads are very, very similar to HPC workloads. And so that's been a great partnership that we've had for many, many years. And now we're expanding that, and we're launching a OEM relationship with Lenovo, for our Ethernet switches. And again, with our Ethernet switches, we really take that heritage of low latency, high performance networking that we built over many years in HPC, and we bring that to Ethernet. And of course that can be with HPC, because frequently in an HPC supercomputing environment, or in an AI supercomputing environment, you'll also have an Ethernet network, either for management, or sometimes for storage. And now we can offer that together with Lenovo. So it's a great partnership. We talked about it briefly last month, and now we're coming to market, and we'll be able to offer this to the market. >> Yeah, yeah, Kevin, we're super excited about it here in Lenovo as well. We've had a great relationship over the years with Mellanox, with Nvidia Mellanox. And this is just the next step. We've shown in HPC that the days of just taking an Ethernet card, or an InfiniBand card, plugging it in the system, and having it work properly are gone. You really need a system that's engineered for whatever task the customer is going to use. And we've known that in HPC for a long time, as we move into workloads, like artificial intelligence, where networking is a critical aspect of getting these systems to communicate with one another, and work properly together. We love from HPC perspective, to use InfiniBand, but most enterprise clients are using Ethernet. So where do we go? We go to a partner that we've trusted for a very long time. And we selected the Nvidia Mellanox Ethernet switch family. And we're really excited to be able to bring that end-to-end solution to our enterprise clients, just like we've been doing for HPC for a while. >> Yeah, well Scott, maybe if you could. I'd love to hear a little bit more about kind of that customer demand that those usages there. So you think traditionally, of course, is supercomputing, as you both talked about that move from InfiniBand, to leveraging Ethernet, is something that's been talked about for quite a while now in the industry. But maybe that AI specifically, could you talk about what are the networking requirements, how similar is it? Is it 95% of the same architecture, as what you see in HPC environments? And also, I guess the big question there is, how fast are customers adopting, and rolling out those AI solutions? And what kind of scale are they getting them to today? >> So yeah, there's a lot there of good things we can talk about. So I'd say in HPC, the thing that we've learned, is that you've got to have a fabric that's up to the task. When you're testing an HPC solution, you're not looking at a single node, you're looking at a combination of servers, and storage, management, all these things have to come together, and they come together over InfiniBand fabric. So we've got this nearly a purpose built fabric that's been fantastic for the HPC community for a long time. As we start to do some of that same type of workload, but in an enterprise environment, many of those customers are not used to InfiniBand, they're used to an Ethernet fabric, something that they've got all throughout their data center. And we want to try to find a way to do was, bring a lot of that rock solid interoperability, and pre-tested capability, and bring it to our enterprise clients for these AI workloads. Anything high performance GPUs, lots of inner internode communications, worries about traffic and congestion, abnormalities in the network that you need to spot. Those things happen quite often, when you're doing these enterprise AI solutions. You need a fabric that's able to keep up with that. And the Nvidia networking is definitely going to be able to do that for us. >> Yeah well, Kevin I heard Scott mention GPUs here. So this kind of highlights one of the reasons why we've seen Nvidia expand its networking capabilities. Could you talk a little bit about that kind of expansion, the portfolio, and how these use cases really are going to highlight what Nvidia helped bring to the market? >> Yeah, we like to really focus on accelerated computing applications. And whether those are HPC applications, or now they're becoming much more broadly adopted in the enterprise. And one of the things we've done is, tight integration at a product level, between GPUs, and the networking components in our business. Whether that's the adapters, or the DPU, the data processing unit, which we've talked about before. And now even with the switches here, with our friends at Lenovo, and really bringing that all together. But most importantly, is at a platform level. And by that I mean the software. And the enterprise here has all kinds of different verticals that are going after. And we invest heavily in the software ecosystem that's built on top of the GPU, and the networking. And by integrating all of that together on a platform, we can really accelerate the time to market for enterprises that wants to leverage these modern workloads, sort of cloud native workloads. >> Yeah, please Scott, if you have some follow up there. >> Yeah, if you don't mind Stu, I just like to say, five years ago, the roadmap that we followed was the processor roadmap. We all could tell you to the week when the next Xeon processor was going to come out. And that's what drove all of our roadmaps. Since that time what we found is that the items that are making the radical, the revolutionary improvements in performance, they're attached to the processor, but they're not the processor itself. It's things like, the GPU. It's things like that, especially networking adapters. So trying to design a platform that's solely based on a CPU, and then jam these other items on top of it. It no longer works, you have to design these systems in a holistic manner, where you're designing for the GPU, you're designing for the network. And that's the beauty of having a deep partnership, like we share with Nvidia, on both the GPU side, and on the networking side, is we can do all that upfront engineering to make sure that the platform, the systems, the solution, as a whole works exactly how the customer is going to expect it to. >> Kevin, you mentioned that a big piece of this is software now. I'm curious, there's an interesting piece that your networking team has picked up, relatively recently, that the Cumulus Linux, so help us understand how that fits into the Ethernet portfolio? And would it show up in these kind of applications that we're talking about? >> Yeah, that's a great question. So you're absolutely right, Cumulus is integral to what we're doing here with Lenovo. If you looked at the heritage that Mellanox had, and Cumulus, it's all about open networking. And what we mean by that, is we really decouple the hardware, and the software. So we support multiple network operating systems on top of our hardware. And so if it's, for example, Sonic, or if it's our Onyx or Dents, which is based on switch def. But Cumulus who we just recently acquired, has been also on that same access of open networking. And so they really support multiple platforms. Now we've added a new platform with our friends at Lenovo. And really they've adopted Cumulus. So it is very much centered on, Enterprise, and really a cloud like experience in the Enterprise, where it's Linux, but it's highly automated. Everything is operationalized and automated. And so as a result of that, you get sort of the experience of the cloud, but with the economics that you get in the Enterprise. So it's kind of the best of both worlds in terms of network analytic, and all of the ability to do things that the cloud guys are doing, but fully automated, and for an Enterprise environment. >> Yeah, so Kevin, I mean, I just want to say a few things about this. We're really excited about the Cumulus acquisition here. When we started our negotiations with Mellanox, we were still planning to use Onyx. We love Onyx, it's been our IB nodes of choice. Our users love, our are architects love it. But we were trying to lean towards a more open kind of futuristic, node as we got started with this. And Cumulus is really perfect. I mean it's a Linux open source based system. We love open source in HPC. The great thing about it is, we're going to be able to take all the great learnings that we've had with Onyx over the years, and now be able to consolidate those inside of Cumulus. We think it's the perfect way to start this relationship with Nvidia networking. >> Well Scott, help us understand a little more. What you know what does this expansion of the partnership mean? If you're talking about really the full solutions that Lenovo opens in the think agile brand, as well as the hybrid and cloud solutions. Is this something then that, is it just baked into the solution, is it a reseller, what should customers, and your your channel partners understand about this? >> Yeah, so any of the Lenovo solutions that require a switch to perform the functionality needed across the solution, are going to show up with the networking from Nvidia inside of it. Reasons for that, a couple of reasons. One is even something as simple as solution management for HPC, the switch is so integral to how we do all that, how we push all those functions down, how we deploy systems. So you've got to have a switch, in a connectivity methodology, that ensures that we know how to deploy these systems. And no matter what scale they are, from a few systems up, to literally thousands of systems, we've got something that we know how to do. Then when we're we're selling these solutions, like an SAP solution, for instance. The customer is not buying a server anymore, they're buying a solution, they're buying a functionality. And we want to be able to test that in our labs to ensure that that system, that rack, leaves our factory ready to do exactly what the customer is looking for. So any of the systems that are going to be coming from us, pre configured, pre tested, are all going to have Nvidia networking inside of them. >> Yeah, and I think that's, you mentioned the hybrid cloud. I think that's really important. That's really where we cut our teeth first in InfiniBand, but also with our Ethernet solutions. And so today, we're really driving a bunch of the big hyper scalars, as well as the big clouds. And as you see things like SAP or Azure, it's really important now that you're seeing Azure stack coming into a hybrid environment, that you have the known commodity here. So we're something that we're built in to many of those different platforms, with our Spectrum ASIC, as well as our adapters. And so now the ability with Nvidia, and Lenovo together, to bring that to enterprise customers, is really important. I think it's a proven set of components that together forms a solution. And that's the real key, as Scott said, is delivering a solution, not just piece parts, we have a platform, that software, hardware, all of it integrated. >> Well, it's great to see you. We've had an existing partnership for a while. I want to give you both the opportunity, anything specific, you've been hearing kind of the customer demand leading up this. Is it people that might be transitioning from InfiniBand to Ethernet? Or is it just general market adoption of new solutions that you have out there? (speakers talk over each other) >> You go ahead and start. >> Okay, so I think that there's different networks for different workloads, is what we've seen. And InfiniBand certainly is going to continue to be the best platform out there for HPC, and often for AI. But as Scott said, the enterprise frequently is not familiar with that, and for various reasons, would like to leverage Ethernet. So I think we'll see two different cases, one where there's Ethernet with an InfiniBand network. And the other is for new enterprise workloads that are coming, that are very AI centric, modern workloads, sort of cloud native workloads. You have all of the infrastructure in place with our Spectrum ASICs, and our Connectx adapters, and now integrated with GPUs, that we'll be able to deliver solutions rather than just compliments. And that's the key. >> Yeah, I think Stu, a great example, I think of where you need that networking, like we've been used to an HPC, is when you start looking at deep learning in training, scale out training. A lot of companies have been stuck on a single workstation, because they haven't been able to figure out how to spread that workload out, and chop it up, like we've been doing in HPC, because they've been running into networking issues. They can't run over an unoptimized network. With this new technology, we're hoping to be able to do a lot of the same things that HPC customers take for granted every day, about workload management, distribution of workload, chopping jobs up into smaller portions, and feeding them out to a cluster. We're hoping that we're going to be able to do those exact same things for our enterprise clients. And it's going to look magical to them, but it's the same kind of thing we've been doing forever. With Mellanox, in the past, now Nvidia networking, we're just going to take that to the enterprise. I'm really excited about it. >> Well, it's so much flexibility. We used to look at, it would take a decade to roll out some new generations. Kevin, if you could just give us latest speeds and feeds. If I look at Ethernet, did I see that this has from n gig, all the way up to 400 gig? I think I lose track a little bit of some of the pieces. I know the industry as a whole is driving it. But where are we with the general customer adoption of some of the some of the speeds today? >> Yeah indeed, we're coming up on the 40th anniversary of the first specification of Ethernet. And we're about 4000 times faster now, 40,000 times faster at 400 gigabits, versus 10 megabits. So yeah, we're shipping today at the adapter level, 100 gig, and even 200 gig. And then at the switch level, 400 gig. And people sort of ask, "Do we really need all that performance?" The answer is absolutely. So the amount of data that the GPU can crunch, and these AI workloads, these giant neural networks, it needs massive amounts of data. And then as you're scaling out, as Scott was talking about, much along the lines of InfiniBand Ethernet needs that same level of performance, throughput, latency and offloads, and we're able to deliver. >> Yeah, so Kevin, thank you so much. Scott, I want to give you a final word here. Anything else you want your customers to understand regarding this partnerships? >> Yeah, just a quick one Stu, quick one. So we've been really fortunate in working really closely with Mellanox over the years, and with Nvidia. And now the two together, we're just excited about what the future holds. We've done some really neat things in HPC, with being one of the first watercool an InfiniBand card. We're one of the first companies to deploy Dragonfly topology. We've done some unique things where we can share a single IP adapter, across multiple users. We're looking forward to doing a lot of that same exact kind of innovation, inside of our systems as we look to Ethernet. We often think that as speeds of Ethernet continue to go higher, we may see more and more people move from InfiniBand to Ethernet. I think that now having both of these offerings inside of our lineup, is going to make it really easy for customers to choose what's best for them over time. So I'm excited about the future. >> Alright, well Kevin and Scott, thank you so much. Deep integration and customer choice, important stuff. Thank you so much for joining us. >> Thank you Stu. >> Thanks Stu. >> Alright, I'm Stu Miniman, and thank you. Thanks for watching theCUBE. (upbeat music)

>> Voiceover: Live, from Washington, DC. It's the Cube covering .NEXT Conference. (upbeat music) Brought to you by Nutanix. >> We're back at Nutanix .NEXT, everybody. This is the Cube, the leader in live tech coverage. This is day two of our wall-to-wall coverage of .NEXT Conf. Kirk Skaugen is here, he's the president of the Lenovo Data Center Infrastructure Group. Sudheesh Nair is the president of Nutanix. Gentlemen, welcome to the Cube. I'm Dave Vellante, this is Stu Miniman. We're part of the nerd herd here at the conference. So Kirk, let's start with you. We've been talking to Nutanix all week. You guys got the great booth, we've been looking at your booth all week. Transform, last week you guys had a big conference. Lenovo, obviously undergoing major transformations, as are your customers and your partners. Give us the update, how's it going? >> Well, it was a big event for us. We've been working for about two and a half years since the acquisition, the IBM X-Series team. So we launched basically our biggest data center portfolio in history, about 14 new servers, seven new storage boxes, five new network machines, and, probably more importantly to our relationship, we announced two big new brands. So Think System is kind of for the traditional infrastructure and then Think Agile, and our appliances with Nutanix for hyper-converge infrastructure. >> You guys have been talking to analysts and your community about what I call choice. You know, you've got a lot of different choices of partners, of even now processor types, hyper-visors, etc. So talk about how that's important to your partnership strategy, generally and specifically unpack some of the Lenovo specifics. >> I think it is important to have a point of view, when you're talking to customers nowadays. The problem is: is the point of view about your own company's thought process, Wall Street expectations or the point of view's doing by what is right for the customer. Take it for example, an SSD, a commodity SSD from Samsung or Toshiba. If you take that SSD and put it inside a Solar and try to sell it, you probably will get X dollars for it. That same SSD, if you put it inside a high-end SAN, you can probably take like 10X more that, right? Where do you you are-- >> Those were the days. (laughing) >> The thing is where do you think you will be going first? What will you be trying to sell first? The thing I like about Lenovo is that they're made to be efficient. That it is going to be a software defined world. But hardware does matter, the library matters, support matters and along with Lenovo, we are able to go to customers and completely re-transform, you know sort of change their architecture without being caged by any sort of Wall Street expectation that goes counter to what is right for customers. >> Kirk, I know there are many milestones you talked about at Lenovo Transform. I think if I remember it, one of them was the 20 millionth x86 server is going to be shipping sometime in the next couple weeks. >> That's right. >> To think Agile line to kind of look at software defined, how does Nutanix fit into that? You've been OEM-ing them since before you went into this branding so tell us how that came together to the new line. >> So I think we're celebrating this year 25 years an x86 servers and so you're right, we are looking at a software defined world and what I constantly hear is that Lenovo is getting pulled in because we don't have a legacy infrastructure of a big SAN business or a big router business, so we're kind of unencumbered by that but we're shipping our 20 millionth x86 server in July, next month. But with Nutanix, what we're basically doing is we're tightly integrating our management software with their prism software, we're looking at integrating some of the network topology work now with innovation because rather than kind of a legacy network that people are used to now, well we moved to a hyper-converge infrastructure, some of those pain points move onto networking but we've been innovating together now for almost two years and I think we're crossing almost 300 customer deployments now, almost 200% growth since we've started. At least Lenovo's goal is we're going to be Nutanix's largest growing OEM partner this year. >> So talk more about that innovation strategy because, you know, the general consensus is well, it's x86, they're all the same. How do you guys differentiate from an innovation standpoint? >> Well, what we talked about at Transform is our legacy now is we're number one in customer satisfaction in Lenovo on x86 systems in actually 21-22 categories. And that's a third party survey that's done across like 700 customers in 20 countries. Number one in reliability. So we're building off of this infrastructure, off of a really strong customer base. What we're trying to do on Think Agile is completely redefine the customer experience. From the way you configure the system, we can now do configure to order in three weeks. Which we think is about half of what anyone else in the industry can do relative to our competitors. And then we're innovating down the the manageability layer, the networking stack, all of those pieces to really build the best solutions together. >> Sudheesh, there's an interesting two differing things if I look at Lenovo and your partnership. Number one is Kirk says they don't have any legacy, but one of the reasons you're in OEM with them is because they do have history, they've got brand, they've got channel, how do those come together in the partnership? >> So remember, I think before XEI, servers used to be a stateless machine, being they would move the VM's back and forth because the data lives somewhere else in the storage system. So what you expect out of the server, when it comes to reliability and serviceability are very different. What we did with XEI when we came on for the first time, we took the liable storage piece, sharded into small segments and move them inside the servers. All of a sudden, the library of the server has become exponentially more important. Affordability, serviceability, how you do things like form guard management, all those things become important now because your entire core banking application is running inside a bunch of servers, there is no SAN sitting behind protecting all of this. One of the reasons why Lenovo's ex-clarity project is one of the first apps on our app store is because we want to make sure that customers have a fully integrated souped enough experience of not just managing the product but also experiencing the day one and day two. Upgrades, replacements, failure replacement, all of those things. So between our relationship with Lenovo's hardware and engineering, plus the support, we are able to deliver a one plus one equals three experience for our customers. >> So Sudheesh, I heard almost 300 customers you're at. Could you give us a little bit of kind of either verticals or geography that you're being successful? >> What we've seen with Lenovo that is a little different from the rest of the business that we do is that majority of the business is coming from large customers and second, I would say financial sectors were the biggest initial moment it seem to be. And the repeat business is following the same pattern that the customers who buy are coming back and buying again. In fact, one of the largest financial institutions in the country, New York, bought last quarter a decent size, a seven figure plus deal, and they'll probably come back and buy again this quarter. So that pick-up is happening really fast and customers are happy with the overall experience. And it's also about the courting process, the shipping process that he talked about, these are all simple things but these are extremely important in the customer buying experience. >> I think from our perspective, we operate in over 160 countries, a lot of people don't realize we have over 10,000 support specialists that call with more than a 90% customer sat rating. So when we're bringing in Think Agile, what we're bundling now with Think Agile and the Nutanix appliances is premiere customer support so you don't even go to an automated system, you go directly to a local language speaking person on the phone immediately and you get one vendor to support you across your server, your storage, your networking in the whole configuration. That has gotten customers like for us, Jiffy Lube, Holloway, Beam Suntory who's the third largest premium spirits vendor in the world, one of the largest Japanese auto-manufacturers, I mean, I think it's been across all verticals that we've seen success together. >> I was in Asia last week, two weeks ago, and the business there is tremendously picking up speed. It goes through the story, you know, they have local language support, local marketing, local channel enablement, those things matter significantly. Lenovo's very strong in all those areas. >> We live in a world that's data driven. Data is the new oil. You've got to montage your data. You guys have big volumes, you have a lot of data. In relation to partnerships, in this day and age, what role does the data play? Is there an integration of data, is there a way to get more value, how are you getting more value out of the data that you share with your customers? >> I started maybe working China as well in one of the areas, this is an extremely important question, don't think of this as a hardware and infrastructure software play, this is about what customers want. In one area, for example, SAP. One of the largest SAP's partner is Lenovo and by partnering with Lenovo, we are now able to deliver, in fact, there is a specific product CD's that we've built for Lenovo HANA customers called Bridge to HANA where we deliver certified HANA platform on Lenovo along with the Nutanix software as a prediction and testing and wiring IB's next to that. By lapping the Lenovo SAP expertise, the hardware expertise, and the Nutanix's infrastructure expertise, the customers can have a single one-stop shop for analytics, ERT, and everything. Those kind of experiences are what customers are looking for. >> I think one of the reasons people are coming to Lenovo is we're not trying to compete with them necessarily far up the stack like we would think some of our competitors are doing. But if you look at SAP, we're excited because we've had a relationship in software defined with SAP since probably eight years ago. We were actually blazing the trail, I think, with them on software defined and we got rid of the legacy SAN out of that solution probably in 2010, started eliminating some of the costs associated with that. And now we're proud that SAP runs Lenovo, and Lenovo runs SAP. We're starting to pull some big customers together like V-Grass which is one of the largest, fastest growing clothing manufacturers in China, but we're not trying to like hoard the data and use the data, or compete with our customers on data. >> Alright, guys, we're out of time. But just to sort of last questions relates to the future. Where do you guys want to take this? A couple years down the road, where are we going to see this partnership, what's your shared vision? >> You saw today, we moved from that hyper-converge to a multi-cloud world. A multi-cloud world where we are redefining what hybrid cloud really means. There's a lot of work to be done to bring applications, infrastructure, and uses togethers. And partners like Lenovo is how we are going to get there. >> Yeah, absolutely, I think this is just the beginning. We're looking to a transposable world, hyper-convergence is one path along the way. We've been participating in public cloud and now the world is moving into hybrid cloud. We've got great partnerships I think we'll see strong growth with both companies for the next few years. >> Can't do it alone. Kirk and Sudheesh, thanks very much for coming to the Cube, I really appreciate it. >> Thanks so much. >> You're welcome. Keep right there, buddy, Stu and I will be back with our next guest right after this short break. We're live from Nutanix .NEXT, we'll be right back. (upbeat music)

>> Narrator: Live from Boston, Massachusetts, it's The Cube, covering Red Hat Summit 2017, brought to you by Red Hat. >> Welcome back to The Cube's coverage of the Red Hat Summit here in Boston, Massachusetts. I'm your host, Rebecca Knight, along with my cohost, Stu Miniman. We are joined by Kirk Skaugen, he is the Executive Vice President and President of Lenovo Data Center group, Lenovo. So thanks so much for joining us, Kirk. >> Thanks for having me. >> I want to start out by talking about Lenovo's commitment to open source, right. We're hearing a lot about this in this summit, It's the real deal! >> Yeah, well I was at for 24 years and had a long partnership with Red Hat there so as I moved over to Lenovo on that, open source is a key aspect of our strategy. Kind of foundational for us and where we sit with the days in our company, because we don't have this legacy. We're not someone who's trying to protect an old router business or an old storage business. So as we look at open source as part of our, kind of, open partnerships commitment, it's pretty foundational to what we're doing. >> Kirk, could you help us unpack that a little bit? We heard in Keynote this morning they talked about open source hardware. I know you guys have been involved in OCP. How much is software, how much is hardware? Where do you guys put commitment in? How much of it is partners? >> Yeah, so I think we're in about over 30 different standards bodies now committed to open source. It really happened after our acquisition of the IBM xSeries server business, so now we're the third largest x86 server provider in the world and we're expanding ahead in the data center, so we're participating about 30 standards bodies. We have about 12 open source projects going on with Red Hat, and we're really at the base level, announcing today something called Open Platform at Lenovo. It's something we said we would do a year ago at this conference, and now here at the Red Hat summit we're showing it in our booth actually there. It's a base open platform with an optimized stack which you can put NFE and other solutions on top of, so that's one example of things we said we were going to do a year ago today and then are doing today. It's really about, from our perspective, optimizing the base hardware for all these platforms. >> Interesting, we look at things. I hear people look at open source and there's more transparency. It's not like '08; there's a secret project we're working on and here it is. You worked at Intel. Everybody kind of understood the tick-tock that went on there, how does open source influence the planing that you guys go into and do you feel the road maps at a company like Lenovo are more transparent since you're part of open source? I mean, again, what you should expect from us is we're a leader in x86 system technology but we've also acquired assets like blade network technologies in the past as well. We're expanding as a company out of our server routes into networking and storage. We think containerization is going to be the future. Today we're sitting with, something like 32 world record benchmarks and our theme is kind of "different is better" which means it's the little things that we're doing with all these partners to tune out the best performance of these systems working with our partners. We're not trying to go far up the stack and compete with our partners. I think that makes us a little bit unique. We're in trying to be the best x86 system provider in the world. Expand that into storage and networking as we get the software defined. >> Great, and absolutely. It would be useful to kind of explain your role in the data center group itself. As you said, you've got in some pieces. >> Some came from the IBM, there's various acquisitions. >> Kirk: Mmmhmm. >> Lay out a little bit more of what you guys do and what your partner does. >> Sure, so I think a lot of people know Lenovo as being number one in PCs. This is the 25th year of ThinkPad and we look at our Think Server brand today and our X series brand that we acquired from IBM. >> So we're, again, the third largest server provider but expanding that into storage and networking and then we acquired the Motorola phone business, so we just crossed to be number four in the world outside of China, with a presence in India. So we basically have three businesses within Lenovo but Data Center group, we believe, is a big growth driver for the future. A lot of people I think, 25 years ago, would have never thought Lenovo would be number one in PCs worldwide. I think we're kind of sitting there as a server provider with number one in customer satisfaction, number one in server reliability, number one in quality by all these third party measures. Our biggest issue is people don't realize we acquired this amazing asset from IBM so we're here at the summit basically showing and promoting our brand, but also promoting the proof points underneath that. >> This event is very global, multicultural. Lenovo's also a global company. Maybe speak a little bit to that; where your teams live, where development happens and what your customer base looks like. >> I live in Raleigh. We have a dual headquarters in Raleigh and Beijing, but we operate in over 160 countries. We have over 10,000 IT professionals now within the data center group. We have manufacturing in the United States, in Mexico, in Hungary, in China, so we can basically globally ship everywhere. When I looked at moving from Intel to another company, number one this enabled me to get one step closer to the customer, but I thought Lenovo's one of the best companies I saw that we're partnering. I think in the data center group, you look at our list of partners and it's unprecedented partly because we don't have a legacy business, so almost every startup and everybody who wants to do something new ends up wanting access to our presence in China, being number one in China, but also because we're not protecting a legacy so they see us as someone interesting and unique to partnership with. So open source is one of those areas where I think, now that we separated from IBM we're clearly an x86 provider committed to open source and the way we're getting into telecom, where we hadn't been, and competing with our big customers is because we're open and ideally we're more agile and partner better. >> I'm wondering if you could comment on the culture of these culture of these various places. As you said, you've been in Portland for a long time. You're now new to Raleigh. Your company is Beijing and Raleigh and you do business all over the world. How do you experience how these engineers, are they different in different parts of the world? Or is open source really transcending that and there is a much more of an openness and a transparency? >> Yeah, I thought I'd fit really well into the Lenovo culture. I think six months into the job, I feel like it's exceeded my expectations. If you look at the executive staff at Lenovo there's something like seven different nationalities on there from Italy, and Switzerland, and Australia, and the U.S., and China, Hong Kong, Singapore, India. >> Rebecca: And that's by design. >> Yeah, by design. So I think it provides a really unique perspective as you're looking at market trends, and then customers and things like that. When you look at the engineering aspect of it I'm looking at this efficiencies of the PC, the cost economics of the PC, having some of these factors. We're actually one of the last companies who's designing our own systems and putting them in our own factory, so from that perspective we get the efficiencies of being part of a larger PC company, but listen, data center's very different, right? We have a completely autonomous data center group now but we get the efficiencies of that, so we can kind of get the best of all the cultures that we participate in with development in Romania, in India, in China, Raleigh and again, we can manufacture in any place the customer wants us to manufacture pretty much. >> You mentioned that you're one of the last companies that's designing your own systems and putting them into your machines. Is that going to go by the wayside? You're one of the last, so all these other companies have decided it's just not sustainable. Can you comment on that? >> Well I think consolidation is absolutely key. If you look at the PC industry, and I managed the PC business at Intel the last three years. There's absolutely been consolidation in that market. You should look at some of the Japanese suppliers going away, but that's what enabled Lenovo to continue to grow in a multi-hundred million unit market. Today we ship about 100 servers a minute. A hundred servers an hour, rather, about one a minute. If you look at the consolidation trends I think still going to be a lot of consolidation in the market around that, so we believe we can grow in that market. PCs through consolidation, and if the PC market flattens out, even in the data center space where I think there'll be fewer and fewer players that will be able to compete. It really gets down to just uber-efficiency. When you're running in a factory that's building as the number one PC company, you get manufacturing efficiencies that other people can't do at our subscale. So as an example, when we look at things like supercomputing we're now the fastest growing supercomputing company on the planet. 99 of the top 500 supercomputers. That's because we can build very, very efficient products in a market that typically runs on razor-thin margins, right. >> Kirk, we talk about that huge volume of servers. Can you speak to where Lenovo's playing in the service provider and cloud marketplace? >> Sure, I think we just reorganized into kind of, four customer-centric markets. So first is in hyperscale, we participate with Baidu, Alibaba, Tencent and we're expanding across some of the largest hyperscale providers in the West Coast. We believe designing our own board, putting in our own factories gives us the cost economics to compete with the largest data centers in the world, just 'cause we can make money in PC desktop towers which is a pretty commoditized business. We think we can make money there. Software-defined, I think what we're seeing is because of our lack of legacy hardware whether it's a legacy SAN or a legacy routing business, we can leap ahead there both through our own stack but also our partner's stack. Third is supercomputing, so this is something where we brought a lot of that application knowledge over from IBM to the acquisition, and our goal is to continue to be the fastest growing supercomputing company on the planet and right now we're number two in the world, so we're building our Barcelona supercomputer right now to be 12 times more powerful that what it is today. With the University of Adelaide, 30 times more powerful than their last computer. Supercomputing's the third, and then the fourth is just traditional data center. So there you look at things like SAP HANA, where we were solutions-lead. We're trying to not just ship the hardware, but deliver optimized solutons so we feel like the little things don't mean a lot, the little things mean everything. So why does Lenovo have 32 worldwide per benchmarks? 'Cause we're tuning things with SAP, and now, for example, SAP just went public that they're running their own internal HANA on Lenovo. So I think it's a testament, it's the fine tuning of the application. It's hyperscale, software-defined, supercomputing, and then legacy data center infrastructure lead by solutions. Those are our four segments. >> Kirk, you talked about, it was 25 years for ThinkPad. As I look out towards the future, the data center group, what's kind of the touchstone? What are people going to really understand and know that group for in the future? >> Well, I think we want to be most trusted from a data center provider, right. We're not trying to contain anyone in a legacy thinking. We want to leap ahead into software-defined. We think we have the base hardware, customer satisfaction, reliability to do that. So I think, number one, we want to be most trusted. Number two, we're trying to be incredibly agile. Much faster than companies that are larger than us. That's been an innovation culture that's lead us to be number one in PCs, not through cost, but through innovation. We want to be known for innovation and being faster to deploy innovation both with us, but as well was with our partners. So if you go into our both, you showcasing with Intel. We're showcasing with Juniper. We're showcasing with Red Hat. So that's a very decent foundation. I think we can leap ahead, not be encumbered by the past, and be trusted, innovative, cost-effective, and make a lead to software-defined. What's interesting to me is, I think when I joined Intel in 1992, there was something like 100 gigabytes a day. When I joined Lenovo 24 years later, it was like 250 million gigabytes a day of data, if I have my numbers correctly. It's going to leapfrog up just in a massive way over the next 10 years with 5G and the whole internet buildup so you hear that from almost every keynote speaker, but what it means to me is that, we're just at the beginning of cloud transformation. A company like Lenovo, we didn't invent the PC, we just became number one in it over 25 years. We didn't invent servers, but we acquired amazing people. They can then leap us ahead over the next, now, 25 years. (laughing) >> Well Kirk, thank you so much for joining us. Thank you for your time. >> Yeah. Thank you It's a pleasure, it's a great event. So thank you. >> I'm Rebecca Knight for Stu Miniman. We'll be more with the Red Hat summit after this. (electronic music)