(upbeat music) >> Okay, welcome back everyone. CUBE's coverage here in Boston, Massachusetts, AWS re:inforce 22, security conference. It's AWS' big security conference. Of course, theCUBE's here, all the reinvent, reese, remars, reinforced. We cover 'em all now and the summits. I'm John Furrier, my host Dave Vellante. We have IDC weighing in here with their analysts. We've got some great guests here, Jay Bretzmann research VP at IDC and Philip Bues research manager for Cloud security. Gentlemen, thanks for coming on. >> Thank you. >> Appreciate it. Great to be here. >> Appreciate coming. >> Got a full circle, right? (all laughing) Security's more interesting than storage, isn't it? (all laughing) >> Dave and Jay worked together. This is a great segment. I'm psyched that you guys are here. We had Crawford and Matt Eastwood on at HPE Discover a while back and really the data you guys are getting and the insights are fantastic. So congratulations to IDC. You guys doing great work. We appreciate your time. I want to get your reaction to the event and the keynotes. AWS has got some posture and they're very aggressive on some tones. Some things that we didn't hear. What's your reaction to the keynote? Share your assessment. >> So, you know, I manage two different research services at IDC right now. They are both Cloud security and identity and digital security, right? And what was really interesting is the intersection between the two this morning, because every one of those speakers that came on had something to say about identity or least privileged access, or enable MFA, or make sure that you control who gets access to what and deny explicitly. And it's always been a challenge a little bit in the identity world because a lot of people don't use MFA. And in RSA, that was another big theme at the RSA conference, MFA everywhere. Why don't they use it? Because it introduces friction and all of a sudden people can't get their jobs done. And the whole point of a network is letting people on to get that data they want to get to. So that was kind of interesting, but as we have in the industry, this shared responsibility model for Cloud computing, we've got shared responsibility for between Philip and I. (Philip laughing) I have done in the past more security of the Cloud and Philip is more security in the Cloud. >> So yeah. >> And now with Cloud operation Super Cloud, as we call it, you have on premises, private Cloud coming back, or hasn't really gone anywhere, all that on premises, Cloud operations, public Cloud, and now edge exploding with new requirements. It's really an ops challenge right now. Not so much dev. So the sec and op side is hot right now. >> Yeah, well, we've made this move from monolithic to microservices based applications. And so during the keynote this morning, the announcement around the GuardDuty Malware Protection component, and that being built into the pricing of current GuardDuty, I thought was really key. And there was also a lot of talk about partnering in security certifications, which is also so very important. So we're seeing this move towards filling in that talent gap, which I think we're all aware of in the security industry. >> So Jake, square the circle for me. So Kirk Coofell talked about Amazon AWS identity, where does AWS leave off, and companies like Okta or Ping identity or Cybertruck pickup, how are they working together? Does it just create more confusion and more tools for customers? We know the overused word of seamless. >> Yeah, yeah. >> It's never seamless, so how should we think about that? >> So, identity has been around for 35 years or something like that. Started with the mainframes and all that. And if you understand the history of it, you make more sense to the current market. You have to know where people came from and the baggage they're carrying, 'cause they're still carrying a lot of that baggage. Now, when it comes to the Cloud Service providers, they're more an accommodation from the identity standpoint. Let's make it easy inside of AWS to let you single sign on to anything in the Cloud that they have, right? Let's also introduce an additional MFA capability to keep people safer whenever we can and provide people with tools, to get into those applications somewhat easily, while leveraging identities that may live somewhere else. So there's a whole lot of the world that is still active, directory-centric, right? There's another portion of companies that were born in the Cloud that were able to jump on things like Okta and some of the other providers of these universal identities in the Cloud. So, like I said, if you understand where people came from in the beginning, you start to say, "Yeah, this makes sense." >> It's interesting you talk about mainframe. I always think about Rack F, you know. And I say, "Okay, who did what, when, where?" And you hear about a lot of those themes. So what's the best practice for MFA, that's non-SMS-based? Is it you got to wear something around your neck, is it to have sort of a third party authenticator? What are people doing that you guys would recommend? >> Yeah, one quick comment about adoption of MFA. If you ask different suppliers, what percent of your base that does SSO also does MFA, one of the biggest suppliers out there, Microsoft will tell you it's under 25%. That's pretty shocking. All the messaging that's come out about it. So another big player in the market was called Duo, Cisco bought them. >> Yep. >> And because they provide networks, a lot of people buy their MFA. They have probably the most prevalent type of MFA, it's called Push. And Push can be a red X and a green check mark to your phone, it can be a QR code, somewhere, it can be an email push as well. So that is the next easiest thing to adopt after SMS. And as you know, SMS has been denigrated by NIST and others saying, it's susceptible to man and middle attacks. It's built on a telephony protocol called SS7. Predates anything, there's no certification either side. The other real dynamic and identity is the whole adoption of PKI infrastructure. As you know, certificates are used for all kinds of things, network sessions, data encryption, well, identity increasingly. And a lot of the consumers and especially the work from anywhere, people these days have access through smart devices. And what you can do there, is you can have an agent on that smart device, generate your private key and then push out a public key and so the private key never leaves your device. That's one of the most secure ways to- >> So if our SIM card gets hacked, you're not going to be as vulnerable? >> Yeah, well, the SIM card is another challenge associated with the older ways, but yeah. >> So what do you guys think about the open source connection and they mentioned it up top. Don't bolt on security, implying shift left, which is embedding it in like sneak companies, like sneak do that. Very container oriented, a lot of Kubernetes kind of Cloud native services. So I want to get your reaction to that. And then also this reasoning angle they brought up. Kind of a higher level AI reasoning decisions. So open source, and this notion of AI reasoning. or AI reason. >> And you see more open source discussion happening, so you have your building maintaining and vetting of the upstream open source code, which is critical. And so I think AWS talking about that today, they're certainly hitting on a nerve, as you know, open source continues to proliferate. Around the automated reasoning, I think that makes sense. You want to provide guide rails and you want to provide roadmaps and you want to have sort of that guidance as to, okay, what's a correlation analysis of different tools and products? And so I think that's going to go over really well, yeah. >> One of the other key points about open source is, everybody's in a multi-cloud world, right? >> Yeah. >> And so they're worried about vendor lock in. They want an open source code base, so that they don't experience that. >> Yeah, and they can move the code around, and make sure it works well on each system. Dave and I were just talking about some of the dynamics around data control planes. So they mentioned encrypt everything which is great and I message by the way, I love that one. But oh, and he mentioned data at rest. I'm like, "What about data in flight? "Didn't hear that one." So one of the things we're seeing with SuperCloud, and now multi-cloud kind of as destinations of that, is that in digital transformation, customers are leaning into owning their data flows. >> Yeah. >> Independent of say the control plane aspects of what could come in. This is huge implications for security, where sharing data is huge, even Schmidt on stage said, we have billions and billions of things happening that we see things that no one else sees. So that implies, they're sharing- >> Quad trillion. >> Trillion, 15 zeros. (Jay laughs) >> 15 zeros. >> So that implies they're sharing that or using that pushing that into something. So sharing is huge with cyber security. So that implies open data, data flows. How do you guys see this evolving? I know it's kind of emerging, but it's becoming a nuanced point, that's critical to the architecture. >> Well, yeah, I think another way to look at that is the sharing of intelligence and some of the recent directives, from the executive branch, making it easier for private companies to share data and intelligence, which I think strengthens the cyber community overall. >> Depending upon the supplier, it's either an aggregate level of intelligence that has been anonymized or it's specific intelligence for your environment that everybody's got a threat feed, maybe two or three, right? (John laughs) But back to the encryption point, I mean, I was working for an encryption startup for a little while after I left IBM, and the thing is that people are scared of it. They're scared of key management and rotation. And so when you provide- >> Because they might lose the key. >> Exactly. >> Yeah. >> It's like shooting yourself in the foot, right? So that's when you have things like, KMS services from Amazon and stuff that really help out a lot. And help people understand, okay, I'm not alone in this. >> Yeah, crypto owners- >> They call that hybrid, the hybrid key, they don't know how they call the data, they call it the hybrid. What was that? >> Key management service? >> The hybrid- >> Oh, hybrid HSM, correct? >> Yeah, what is that? What is that? I didn't get that. I didn't understand what he meant by the hybrid post quantum key agreement. >> Hybrid post quantum key exchange. >> AWS never made a product name that didn't have four words in it. (John laughs) >> But he did reference the new NIST algos. And I think I inferred that they were quantum proof or they claim to be, and AWS was testing those. >> Correct, yeah. >> So that was kind of interesting, but I want to come back to identity for a second. So, this idea of bringing traditional IAM and Privileged Access Management together, is that a pipe dream, is that something that is actually going to happen? What's the timeframe, what's your take on that? >> So, there are aspects of privilege in every sort of identity. Back when it was only the back office that used computers for calculations, right? Then you were able to control how many people had access. There were two types of users, admins and users. These days, everybody has some aspect of- >> It's a real spectrum, really. >> Yeah. >> Granular. >> You got the C-suite, the finance people, the DevOps people, even partners and whatever. They all need some sort of privileged access, and the term you hear so much is least-privileged access, right? Shut it down, control it. So, in some of my research, I've been saying that vendors who are in the PAM space, Privilege Access Management space, will probably be growing their suites, playing a bigger role, building out a stack, because they have the expertise and the perspective that says, "We should control this better." How do we do that, right? And we've been seeing that recently. >> Is that a combination of old kind of antiquated systems meets for proprietary hyper scale, or kind of like build your own? 'Cause I mean, Amazon, these guys, Facebook, they all build their own stuff. >> Yes, they do. >> Then enterprises buy services from general purpose identity management systems. >> So as we were talking about knowing the past and whatever, Privileged Access Management used to be about compliance reporting. Just making sure that I knew who accessed what? And could prove it, so I didn't fail at all. >> It wasn't a critical infrastructure item. >> No, and now these days, what it's transitioning into, is much more risk management, okay. I know what our risk is, I'm ahead of it. And the other thing in the PAM space, was really session monitor. Everybody wanted to watch every keystroke, every screen's scrape, all that kind of stuff. A lot of the new Privileged Access Management, doesn't really require that. It's a nice to have feature. You kind of need it on the list, but is anybody really going to implement it? That's the question, right. And then if you do all that session monitoring, does anybody ever go back and look at it? There's only so many hours in the day. >> How about passwordless access? (Jay laughs) I've heard people talk about that. I mean, that's as a user, I can't wait but- >> Well, it's somewhere we want to all go. We all want identity security to just disappear and be recognized when we log in. So the thing with passwordless is, there's always a password somewhere. And it's usually part of a registration action. I'm going to register my device with a username password, and then beyond that I can use my biometrics, right? I want to register my device and get a private key, that I can put in my enclave, and I'll use that in the future. Maybe it's got to touch ID, maybe it doesn't, right? So even though there's been a lot of progress made, it's not quote, unquote, truly passwordless. There's a group, industry standards group called Fido. Which is Fast Identity Online. And what they realized was, these whole registration passwords, that's really a single point of failure. 'Cause if I can't recover my device, I'm in trouble. So they just did new extension to sort of what they were doing, which provides you with much more of like an iCloud vault that you can register that device in and other devices associated with that same identity. >> Get you to it if you have to. >> Exactly. >> I'm all over the place here, but I want to ask about ransomware. It may not be your wheelhouse. But back in the day, Jay, remember you used to cover tape. All the backup guys now are talking about ransomware. AWS mentioned it today and they showed a bunch of best practices and things you can do. Air gaps wasn't one of them. I was really surprised 'cause that's all every anybody ever talks about is air gaps and a lot of times that air gap could be a guess to the Cloud, I guess, I'm not sure. What are you guys seeing on ransomware apps? >> We've done a lot of great research around ransomware as a service and ransomware, and we just had some data come out recently, that I think in terms of spending and spend, and as a result of the Ukraine-Russia war, that ransomware assessments rate number one. And so it's something that we encourage, when we talk to vendors and in our services, in our publications that we write about taking advantage of those free strategic ransomware assessments, vulnerability assessments, as well and then security and training ranked very highly as well. So, we want to make sure that all of these areas are being funded well to try and stay ahead of the curve. >> Yeah, I was surprised to not see air gaps on the list, that's all everybody talks about. >> Well, the old model for air gaping in the land days, the novel days, you took your tapes home and put them in the sock drawer. (all laughing) >> Well, it's a form of air gap. (all laughing) >> Security and no one's going to go there and clean out. >> And then the internet came around and ruined it. >> Guys, final question we want to ask you, guys, we kind of zoom out, great commentary by the way. Appreciate it. We've seen this in many markets, a collection of tools emerge and then there's its tool sprawl. So cyber we're seeing the trend now where mon goes up on stage of all the ecosystems, probably other vendors doing the same thing where they're organizing a platform on top of AWS to be this super platform, for super Cloud capability by building a more platform thing. So we're saying there's a platform war going on, 'cause customers don't want the complexity. I got a tool but it's actually making it more complex if I buy the other tool. So the tool sprawl becomes a problem. How do you guys see this? Do you guys see this platform emerging? I mean tools won't go away, but they have to be easier. >> Yeah, we do see a consolidation of functionality and services. And we've been seeing that, I think through a 2020 Cloud security survey that we released that was definitely a trend. And that certainly happened for many companies over the last six to 24 months, I would say. And then platformization absolutely is something we talk and write about all the time so... >> Couple of years ago, I called the Amazon tool set an erector set because it really required assembly. And you see the emphasis on training here too, right? You definitely need to go to AWS University to be competent. >> It wasn't Lego blocks yet. >> No. >> It was erector set. >> Yeah. >> Very good distinction. >> Loose. >> And you lose a few. (chuckles) >> But still too many tools, right? You see, we need more consolidation. It's getting interesting because a lot of these companies have runway and you look at sale point at stock prices held up 'cause of the Thoma Bravo acquisition, but all the rest of the cyber stocks have been crushed especially the high flyers, like a Sentinel-1 one or a CrowdStrike, but just still M and A opportunity. >> So platform wars. Okay, final thoughts. What do you, think is happening next? What's your outlook for the next year or so? >> So, in the identity space, I'll talk about, Philip can cover Cloud for us. It really is more consolidation and more adoption of things that are beyond simple SSO. It was, just getting on the systems and now we really need to control what you're able to get to and who you are. And do it as transparently as we possibly can, because otherwise, people are going to lose productivity. They're not going to be able to get to what they want. And that's what causes the C-suite to say, "Wait a minute," DevOps, they want to update the product every day. Make it better. Can they do that or did security get in the way? People, every once in a while call security, the Department of No, right? >> They ditch it on stage. They want to be the Department of Yes. >> Exactly. >> Yeah. >> And the department that creates additional value. If you look at what's going on with B2C or CIAM, consumer oriented identity, that is all about opening up new direct channels and treating people like their old friends, not like you don't know them, you have to challenge them. >> We always say, you want to be in the boat together, it sinks or not. >> Yeah. Exactly. >> Philip I'm glad- >> Okay, what's your take? What's your outlook for the year? >> Yeah, I think, something that we've been seeing as consolidation and integration, and so companies looking at from built time to run time, investing in shift left infrastructure is code. And then also in the runtime detection, makes perfect sense to have both the agent and agent lists so that you're covering any of the gaps that might exist. >> Awesome, Jay Phillip, thanks for coming on "theCUBE" with IDC and sharing your- >> Oh, our pleasure- >> Perspective, commentary and insights and outlook. Appreciate it. >> You bet. >> Thank you. >> Okay, we've got the great direction here from IDC analyst here on the queue. I'm John Furrier, Dave Vellante. Be back more after this short break. (bright upbeat music)

>>Okay, welcome back everyone. Cube's coverage here in Boston, Massachusetts, AWS reinforced 22, the security conference. It's ADOS big security conference. Of course, the cubes here, all the reinvent res re Mars reinforce. We cover 'em all now and the summits. I'm John. Very my host, Dave ante have IDC weighing in here with their analysis. We've got some great guests here, Jay Brisbane, research VP at IDC and Philip who research managed for cloud security. Gentlemen, thanks for coming on. Thank you. Appreciate it. Great >>To, to be here. I appreciate the got the full >>Circle, right? Just, security's more interesting >>Than storage. Isn't it? >>Dave, Dave and Jay worked together. This is a, a great segment. I'm psyched that you guys are here. We had Crawford and Matt Eastwood on at HPE discover a while back and really the, the, the data you guys are getting and the insights are fantastic. So congratulations to IDC. You guys doing great work. We appreciate your time. I wanna get your reaction to the event and the keynotes. AWS has got some posture and they're very aggressive on some tones. Some things that they didn't, we didn't hear. What's your reaction to the keynote, share your, your assessment. >>So, you know, I managed two different research services at IDC right now. They are both cloud security and identity and, and digital security. Right. And what was really interesting is the intersection between the two this morning, because every one of those speakers that came on had something to say about identity or least privileged access, or, you know, enable MFA, or make sure that you, you know, control who gets access to what and deny explicitly. Right? And it's always been a challenge a little bit in the identity world because a lot of people don't use MFA. And in RSA, that was another big theme at the RSA conference, right? MFA everywhere. Why don't they use it because it introduces friction and all of a sudden people can't get their jobs done. Right. And the whole point of a network is letting people on to get that data they want to get to. So that was kind of interesting, but, you know, as we have in the industry, this shared responsibility model for cloud computing, we've got shared responsibility for between Philip and I, I have done in the ke past more security of the cloud and Philip is more security in the cloud, >>So yeah. And it's, and now with cloud operation, super cloud, as we call it, you have on premises, private cloud coming back, or hasn't really gone anywhere, all that on premises, cloud operations, public cloud, and now edge exploding with new requirements. Yeah. It's really an ops challenge right now. Not so much dev. So the sick and op side is hot right now. >>Yeah. Well, we've made this move from monolithic to microservices based applications. And so during the keynote this morning, the announcement around the guard duty malware protection component, and that being built into the pricing of current guard duty, I thought was, was really key. And there was also a lot of talk about partnering in security certifications. Yeah. Which is also so very important. So we're seeing this move towards filling in that talent gap, which I think we're all aware of in the security industry. >>So Jake square, the circle for me. So Kirk, Coel talked about Amazon AWS identity, where does AWS leave off and, and companies like Okta or ping identity or crock pickup, how are they working together? Does it just create more confusion and more tools for customers? We, we have, we know the over word overused word of seamless. Yeah. Yeah. It's never seamless. So how should we think about that? >>So, you know, identity has been around for 35 years or something like that started with the mainframes and all that. And if you understand the history of it, you make more sense to the current market. You have to know where people came from and the baggage they're carrying, cuz they're still carrying a lot of that baggage. Now, when it comes to the cloud service providers, they're more an accommodation from the identity standpoint, let's make it easy inside of AWS to let you single sign on to anything in the cloud that they have. Right. Let's also introduce an additional MFA capability to keep people safer whenever we can and, you know, provide people the tools to, to get into those applications somewhat easily, right. While leveraging identities that may live somewhere else. So, you know, there's a whole lot of the world that is still active directory centric, right? There's another portion of companies that were born in the cloud that were able to jump on things like Okta and some of the other providers of these universal identities in the cloud. So, you know, like I said, you, if you understand where people came from in the beginning, you start to, to say, yeah, this makes sense. >>It's, it's interesting. You talk about mainframe. I, I always think about rack F you know, and I say, okay, who did what, when, where, yeah. And you hear about a lot of those themes. What, so what's the best practice for MFA? That's, that's non SMS based. Is it, you gotta wear something around your neck, is it to have sort of a third party authenticator? What are people doing that is that, that, that you guys would recommend? >>Yeah. One quick comment about adoption of MFA. You know, if you ask different suppliers, what percent of your base that does SSO also does MFA one of the biggest suppliers out there Microsoft will tell you it's under 25%. That's pretty shocking. Right? All the messaging that's come out about it. So another big player in the market was called duo. Cisco bought them. Yep. Right. And because they provide networks, a lot of people buy their MFA. They have probably the most prevalent type of MFA it's called push. Right. And push can be, you know, a red X and a green check mark to your phone. It can be a QR code, you know, somewhere, it can be an email push as well. So that is the next easiest thing to adopt after SMS. And as you know, SMS has been denigrated by N and others saying, you know, it's susceptible to man and middle attacks. >>It's built on a telephony protocol called SS seven. Yep. You know, predates anything. There's no certification, either side. The other real dynamic and identity is the whole adoption of PKI infrastructure. As you know, certificates are used for all kinds of things, network sessions, data encryption, well identity increasingly, and a lot of the, you know, consumers and especially the work from anywhere, people these days have access through smart devices. Right. And what you can do there is you can have an agent on that smart device, generate your private key and then push out a public key. And so the private key never leaves your device. That's one of the most secure ways to, so if your >>SIM card gets hacked, you're not gonna be as at vulnerable >>Or as vulnerable. Well, the SIM card is another, you know, challenge associated with the, the older waste. But yeah. Yeah. >>So what do you guys think about the open source connection and, and they, they mentioned it up top don't bolt on security implying shift left, which is embedding it in like sneak companies, like sneak do that, right. Container oriented, a lot of Kubernetes kind of cloud native services. So I wanna get your reaction to that. And then also this reasoning angle, they brought up kind of a higher level AI reasoning decisions. So open source and this notion of AI reasoning >>Automation. Yeah. And, and you see more open source discussion happening, right. So you, you know, you have your building maintaining and vetting of the upstream open source code, which is critical. And so I think AWS talking about that today, they're certainly hitting on a nerve as, you know, open source continues to proliferate around the automated reasoning. I think that makes sense. You know, you want to provide guiderails and you want to provide roadmaps and you wanna have sort of that guidance as to okay. What's the, you know, a correlation analysis of different tools and products. And so I think that's gonna go over really well. >>Yeah. One of the other, you know, key points of what open source is, everybody's in a multi-cloud world, right? Yeah. And so they're worried about vendor lockin, they want an open source code base so that they don't experience that. >>Yeah. And they can move the code around and make sure it works well on each system. Dave and I were just talking about some of the dynamics around data control planes. So yeah. They mentioned encrypt everything, which is great. And I message, by the way, I love that one, but oh. And he mentioned data at rest. I'm like, what about data in flight? Didn't hear that one. So one of the things we're seeing with super cloud, and now multi-cloud kind of, as destinations of that, is that in digital transformation, customers are leaning into owning their data flows. >>Yeah. >>Independent of say the control plane aspects of what could come in. This is huge implications for security, where sharing data is huge. Even Schmidt on Steve said we have billions and billions of things happening that we see things that no one else else sees. So that implies, they're >>Sharing quad trillion, >>Trillion, 15 zeros trillion. Yeah. 15 >>Zeros, 15 zeros. Yeah. >>So that implies, they're sharing that or using that, pushing that into something. So sharing's huge with cyber security. So that implies open data, data flows. What do, how do you guys see this evolving? I know it's kind of emerging, but it's becoming a, a nuanced point that's critical to the architecture. >>Well, I, yeah, I think another way to look at that is the sharing of intelligence and some of the recent directives, you know, from the executive branch, making it easier for private companies to share data and intelligence, which I think strengthens the cyber community overall, >>Depending upon the supplier. Right? Yeah. It's either an aggregate level of intelligence that has been, you know, anonymized or it's specific intelligence for your environment that, you know, everybody's got a threat feed, maybe two or three, right. Yeah. But back to the encryption point, I mean, I was working for an encryption startup for a little while. Right after I left IBM. And the thing is that people are scared of it. Right. They're scared of key management and rotation. And so when you provide, >>Because they might lose the key. >>Exactly. Yeah. It's like shooting yourself in the foot. Right. So that's when you have things like, you know, KMS services from Amazon and stuff, they really help out a lot and help people understand, okay, I'm not alone in this. >>Yeah. Crypto >>Owners, they call that hybrid, the hybrid key, they call the, what they call the, today. They call it the hybrid. >>What was that? The management service. Yeah. The hybrid. So hybrid HSM, correct. >>Yeah. What is that? What is that? I didn't, I didn't get that. I didn't understand what he meant by the hybrid post hybrid, post quantum key agreement. Right. That still notes >>Hybrid, post quantum key exchange, >>You know, AWS never made a product name that didn't have four words in it, >>But he did, but he did reference the, the new N algos. And I think I inferred that they were quantum proof or the claim it be. Yeah. And AWS was testing those. Correct. >>Yeah. >>So that was kind of interesting, but I wanna come back to identity for a second. Okay. So, so this idea of bringing traditional IAM and, and privilege access management together, is that a pipe dream, is that something that is actually gonna happen? What's the timeframe, what's your take on that? >>So, you know, there are aspects of privilege in every sort of identity back when, you know, it was only the back office that used computers for calculations, right? Then you were able to control how many people had access. There were two types of users, admins, and users, right? These days, everybody has some aspect of, >>It's a real spectrum, really >>Granular. You got the, you know, the C suite, the finance people, the DevOps, people, you know, even partners and whatever, they all need some sort of privileged access. And the, the term you hear so much is least privileged access. Right? Shut it down, control it. So, you know, in some of my research, I've been saying that vendors who are in the Pam space privilege access management space will probably be growing their suites, playing a bigger role, building out a stack because they have, you know, the, the expertise and the, and the perspective that says we should control this better. How do we do that? Right. And we've been seeing that recently, >>Is that a combination of old kind of antiquated systems meets for proprietary hyperscale or kind of like build your own? Cause I mean, Amazon, these guys, they Facebook, they all build their own stuff. >>Yes. They >>Do enterprises buy services from general purpose identity management systems. >>So as we were talking about, you know, knowing the past and whatever privileged access management used to be about compliance reporting. Yeah. Right. Just making sure that I knew who accessed what and could prove it. So I didn't fail in art. It wasn't >>A critical infrastructure item. >>No. And now these days, what it's transitioning into is much more risk management. Okay. I know what our risk is. I'm ahead of it. And the other thing in the Pam space was really session monitor. Right. Everybody wanted to watch every keystroke, every screen's scrape, all that kind of stuff. A lot of the new privilege access Mon management doesn't really require that it's nice to have feature. You kind of need it on the list, but is anybody really gonna implement it? That's the question. Right. And then, you know, if, if you do all that session monitor, does anybody ever go back and look at it? There's only so many hours in the day. >>How about passwordless access? You know? Right. I've heard people talk about that. Yeah. I mean, that's as a user, I can't wait, but >>It's somewhere we want to all go. Yeah. Right. We all want identity security to just disappear and be recognized when we log in. So the, the thing with password list is there's always a password somewhere and it's usually part of a registration, you know, action. I'm gonna register my device with a username password. And then beyond that, I can use my biometrics. Right. I wanna register my device and get a private key that I can put in my enclave. And I'll use that in the future. Maybe it's gotta touch ID. Maybe it doesn't. Right. So even though there's been a lot of progress made, it's not quote unquote, truly passwordless, there's a group industry standards group called Fido. Right. Which is fast identity online. And what they realized was these whole registration passwords. That's really a single point of failure. Cuz if I can't recover my device, I'm in trouble. Yeah. So they just did a, a new extension to sort of what they were doing, which provides you with much more of a, like an iCloud vault, right. That you can register that device in and other devices associated with that same iPad that you can >>Get you to it. If you >>Have to. Exactly. I had >>Another have all over the place here, but I, I want to ask about ransomware. It may not be your wheelhouse. Yeah. But back in the day, Jay, remember you used to cover tape. All the, all the backup guys now are talking about ransomware. AWS mentioned it today and they showed a bunch of best practices and things you can do air gaps. Wasn't one, one of 'em. Right. I was really surprised cuz that's all, every anybody ever talks about is air gaps. And a lot of times that air gaps that air gap could be a guess to the cloud. I guess I'm not sure. What are you guys seeing on ransomware >>Apps? You know, we've done a lot of great research around ransomware as a service and ransomware and, and you know, we just had some data come out recently that I think in terms of spending and, and spend and in as a result of the Ukraine, Russia war, that ransomware assessments rate number one. And so it's something that we encourage, you know, when we talk to vendors and in our services, in our publications that we write about taking advantage of those free strategic ransomware assessments, vulnerability assessments, right. As well, and then security and training ranked very highly as well. So we wanna make sure that all of these areas are being funded well to try and stay ahead of the curve. >>Yeah. I was surprised that not the air gaps on the list, that's all everybody >>Talks about. Well, you know, the, the old model for air gaping in the, the land days, the Noel days, you took your tapes home and put 'em in the sock drawer. >>Well, it's a form of air gap security and no one's gonna go there >>Clean. And then the internet came around >>Guys. Final question. I want to ask you guys, we kind zoom out. Great, great commentary by the way. Appreciate it. As the, we've seen this in many markets, a collection of tools emerge and then there's it's tool sprawl. Oh yeah. Right? Yeah. So cyber we're seeing trend now where Mon goes up on stage of all the E probably other vendors doing the same thing where they're organizing a platform on top of AWS to be this super platform. If you super cloud ability by building more platform thing. So we're saying there's a platform war going on, cuz customers don't want the complexity. Yeah. I got a tool, but it's actually making it more complex if I buy the other tool. So the tool sprawl becomes a problem. How do you guys see this? Do you guys see this platform emerging? I mean, tools won't go away, but they have to be >>Easier. Yeah. We do see a, a consolidation of functionality and services. And we've been seeing that, I think through a 20, 20 flat security survey that we released, that that was definitely a trend. And you know, that certainly happened for many companies over the last six to 24 months, I would say. And then platformization absolutely is something we talk 'em right. About all the time. So >>More M and a couple of years ago, I called the, the Amazon tool set in rector set. Yeah. Because it really required assembly. Yeah. And you see the emphasis on training here too, right? Yeah. You definitely need to go to AWS university to be competent. It >>Wasn't Lego blocks yet. No, it was a rector set. Very good distinction rules, you know, and, and you lose a few. It's >>True. Still too many tools. Right. You see, we need more consolidation. That's getting interesting because a lot of these companies have runway and you look, you look at sale point, its stock prices held up cuz of the Toma Bravo acquisition, but all the rest of the cyber stocks have been crushed. Yeah. You know, especially the high flyers, like a Senti, a one or a crowd strike, but yeah, just still M and a opportunity >>Itself. So platform wars. Okay. Final thoughts. What do you thinks happening next? What's what's your outlook for the, the next year or so? >>So in the, in the identity space, I'll talk about Phillip can cover cloud force. You know, it really is more consolidation and more adoption of things that are beyond simple SSO, right. It was, you know, just getting on the systems and now we really need to control what you're able to get to and who you are and do it as transparently as we possibly can because otherwise, you know, people are gonna lose productivity, right. They're not gonna be able to get to what they want. And that's what causes the C-suite to say, wait a minute, you know, DevOps, they want to update the product every day. Right. Make it better. Can they do that? Or did security get in the way people every once in a while I'll call security, the department of no, right? Yeah. Well, >>Yeah. They did it on stage. Yeah. They wanna be the department of yes, >>Exactly. And the department that creates additional value. If you look at what's going on with B to C or C IAM, consumer identity, that is all about opening up new direct channels and treating people like, you know, they're old friends, right. Not like you don't know 'em you have to challenge >>'em we always say you wanna be in the boat together. It sinks or not. Yeah. Right. Exactly. >>Phillip, >>Okay. What's your take? What's your outlook for the year? >>Yeah. I think, you know, something that we've been seeing as consolidation and integration, and so, you know, companies looking at from built time to run time investing in shift left infrastructure is code. And then also in the runtime detection makes perfect sense to have both the agent and agentless so that you're covering any of the gaps that might exist. >>Awesome. Jerry, Phillip, thanks for coming on the queue with IDC and sharing >>Your oh our pleasure perspective. >>Commentary, have any insights and outlook. Appreciate it. You bet. Thank you. Okay. We've got the great direction here from IDC analyst here on the queue. I'm John for a Dave, we're back more after this shirt break.

>>The cube presents HPE discover 2022 brought to you by HPE. >>Welcome back to the Cube's coverage. We're wrapping up day two, John furrier and Dave ante. We got some friends and colleagues, longtime friends, Crawford Del Pret is the president of IDC. Matt Eastwood is the senior vice president of infrastructure and cloud guys. Thanks for coming on spending time. Great to you guys. >>That's fun to do it. Awesome. >>Cravin I want to ask you, I, I think this correct me if I'm wrong, but this was your first physical directions as, as president. Is that true or did you do one in 2019? >>Uh, no, we did one in 20. We did, we did one in 20. I was president at the time and then, and then everything started, >>Well, how was directions this year? You must have been stoked to get back together. Yeah, >>It was great. I mean, it was actually pretty emotional, you know, it's, it's a community, right? I mean, we have a lot of customers that have been coming to that event for a long, long time and to stand up on the stage and look out and see people, you know, getting a little bit emotional and a lot of hugs and a lot of bringing people together. And this year in Boston, we were the first event really of any size that kind of came back. And when I kind of didn't see that coming in terms of how people, how ready people were to be together. Cause >>When did you did it April >>In Boston? Yeah, we did it March in March. Yeah, it was, it was, it was, it was a game day decision. I mean, we were, we had negotiated it, we were going back and forth and then I kind of made the call at the last minute, say, let's go and do it. And in Santa Clara, I felt like we were kind of opening up the crypt at the convention center. I mean, all the production people said, you know what? You guys were really the first event to be back. And attendance was really strong. You know, we, we, we got over a thousand. It was, it was really good. >>Good. It's always a fun when I was there. It was, it's a big deal. You guys prepare for it. Yeah. Some new faces up on the stage. Yeah. So, so Matt, um, you've been doing the circuit. I take it like, like all top analysts, super busy. Right. This is kind of end of the spring. I mean, I know it's summer, right. That's right. But, um, how do you look at, at discover relative some, some of the other events you've been at? >>So I think if you go back to what Crawford was just talking about our event in March, I mean, March was sort of the, the reopening and there was, I think people just felt so happy to be, to be back out there. You still get a little bit at, at these events. I mean, cuz for each, each company it's their first time back at it, but I think we're starting to get down what these events are gonna feel like going forward. Um, and it, I mean, there's good energy here. There's been a good attendance. I think the, the interest in getting back live and having face to face meetings is clearly strong. >>Yeah. I mean, this definitely shows that hybrids, the steady state, both events cloud. Yeah. Virtualization remotes. So what are you guys seeing with that hybrid mode? Just from a workforce, certainly people excited to get back together, but it's gonna continue. You're starting to see that digital piece. How is that impacting some of the, some of the customers you're tracking, who's winning and who's losing, coming out of the pandemic. What's the big picture look like? >>Yeah. I mean, if you, if you take a look at hybrid work, um, people are testing many, many, many different models. And I think as we move from a pandemic to an em, we're gonna have just waves and waves and waves of people needing that flexibility for a lot of different reasons, whether they have, uh, you know, preexisting conditions, whether they're just not comfortable, whether they have people who can't be vaccinated at home. So I think we're gonna be in this hybrid work for a long, long time. I do think though that we are gonna transition back into some kind of a normal, um, and I, and I think the big difference is that I think leaders back in the day, a long time ago, when people weren't coming into work, it was kind of like, oh, I know nothing's going on there. People aren't getting worked. And I think we're over that stage. Yeah. I think we're now into a stage where we know people can be productive. We know people can effectively work from home and now we're into the reason to be in the office. And the reason to be in the office is that collaboration, it's that mentoring it's that, you know, think about your 25 year old self. Do you wanna be staring at a windshield all day long and not kind of building those relationships? People want face to face, it's difficult. They want face >>To face and I would, and you guys had a great culture and it's a young culture. How are you handling it as an executive in terms of, is there a policy for hybrid or >>Yeah, so, so, so at IDC, what we did is we're in a pilot period and we've kind of said that the summertime is gonna be a pilot period and we've asked people, we're actually serving shocker, we're >>Serving, >>But we're, but we're, but, but we're actually asking people to work with their manager on what works for them. And then we'll come up with, you know, whether you are in, out of the office worker, which will be less than two days a hybrid worker, which will be three days or, uh, in, in the office, which is more than three days a week. And you know, we all know there's, there's, there's limitation, there's, there's, there's variability in that, but that's kind of what we're shooting for. And we'd like to be able to have that in place in the fall. >>Are you pretty much there? >>Yeah, I am. I, I am there three days a week. I I, Mondays and Fridays, unless, >>Because you got the CEO radius, right? Yeah. >><laugh>, <laugh> >>The same way I'm in the office, the smaller, smaller office. But so, uh, let's talk a little bit about the, the numbers we were chatting earlier, trying to squint through you guys are, you know, obviously the gold standard for what the market does, what happened in, you know, during the pandemic, what happened in 2021 and what do you expect to happen in, in 2022 in terms of it spending growth? >>Yeah. So this is, this is a crazy time, right? We've never seen this. You and I have a long history of, uh, of tracking this. So we saw in, in, in, in 2020, the market decelerated dramatically, um, the GDP went down to a negative like it always does in these cases, it was, you know, probably negative six in that, in that, in that kind of range for the first time, since I've been tracking it, which goes back over 30 years, tech didn't go negative tech went to about just under 3%. And then as we went to 2021, we saw, you know, everything kind of snap back, we saw tech go up to about 11% growth. And then of course we saw, you know, GDP come back to about a 4%, you know, ki kind of range growth. Now what's I think the story there is that companies and you saw this anecdotally everywhere companies leaned into tech, uh, company. >>You know, I think, you know, Matt, you have a great statistic that, you know, 80% of companies used COVID as their point to pivot into digital transformation, right. And to invest in a different way. And so what we saw now is that tech is now where I think companies need to focus. They need to invest in tech. They need to make people more productive with tech and it played out in the numbers now. So this year what's fascinating is we're looking at two Fastly different markets. We've got gasoline at $7 a gallon. We've got that affecting food prices. Uh, interesting fun fact recently it now costs over $1,000 to fill an 18 Wheeler. All right. Based on, I mean this just kind of can't continue. So you think about it, don't put the boat >>In the wall. Yeah. Yeah. >>Good, good, good, good luck. It's good. Yeah, exactly. <laugh> so a family has kind of this bag of money, right? And that bag of money goes up by maybe three, 4% every year, depending upon earnings. So that is sort of sloshing around. So if food and fuel and rent is taking up more gadgets and consumer tech are not, you know, you're gonna use that iPhone a little longer. You're gonna use that Android phone a little longer. You're gonna use that TV a little longer. So consumer tech is getting crushed, you know, really it's very, very, and you saw it immediately and ad spending, you've seen it in meta. You've seen it in Facebook. Consumer tech is doing very, very it's tough enterprise tech. We haven't been in the office for two and a half years. We haven't upgraded whether that be campus wifi, whether that be, uh, servers, whether that be, uh, commercial PCs, as much as we would have. So enterprise tech, we're seeing double digit order rates. We're seeing strong, strong demand. Um, we have combined that with a component shortage and you're seeing some enterprise companies with a quarter of backlog. I mean, that's, you know, really unheard at higher >>Prices, which >>Also, and therefore that drives that >>Drives. It shouldn't be that way. If there's a shortage of chips, it shouldn't be that way, >>But it is, but it is, but it is. And then you look at software and we saw this, you know, we've seen this in previous cycles, but we really saw it in the COVID downturn where, uh, in software, the stickiness of SaaS means that you just, you're not gonna take that stuff out. So the, the second half of last year we saw double digit rates in software surprise. We're seeing high single digit revenue growth in software now, so that we think is gonna sustain, which means that overall it demand. We expect to be between five and 6% this year. Okay, fine. We have a war going on. We have, you know, potentially, uh, a recession. We think if we do, it'll be with a lower case, R maybe you see a banded down to maybe 4% growth, but it's gonna grow this. >>Is it, is it both the structural change of the disruption of COVID plus the digital transformation yeah. Together? Or is it, >>I, I think you make a great point. Um, I, I, I think that we are entering a new era for tech. I think that, you know, Andrew's famous wall street journal oped 10 years ago, software is even world was absolutely correct. And now we're finding that software is, is eing into every nook and cranny people have to invest. They, they know disruptors are coming around every single corner. And if I'm not leaning into digital transformation, I'm dead. So >>The number of players in tech is, is growing, >>Cuz there's well, the number of players in tech number >>Industry's coming >>In. Yeah. The industry's coming in. So I think the interesting dynamic you're gonna see there is now we have high interest rates. Yeah. Which means that the price of funding these companies and buying them and putting data on is gonna get higher and higher, which means that I think you could, you could see another wave of consolidation. Mm-hmm <affirmative> because tech large install based tech companies are saying, oh, you know what? I like that now >>4 0 9 S are being reset too. That's another point. >>Yeah. I mean, so if you think about this, this transformation, right. So it's all about apps, absent data and differentiating and absent data. What the, the big winner the last couple years was cloud. And I would just say that if this is the first potential recession that we're talking about, where the cloud service providers. So I think a cloud as an operating model, not necessarily a destination, but for these cloud service providers, they've actually never experienced a slowdown. So how, and, and if you think about the numbers, 30% of, of the typical it budget is now quote, unquote cloud and 30% of all expenditures are it related. So there's a lot of exposure there. And I think you're gonna see a lot of, a lot of focus on how we can rationalize some of those investments. >>Well, that's a great point. I want to just double click on that. So yeah, the cloud did well during the pandemic. We saw that with SAS, have you guys tracked like the Tams of what got pulled forward? So the bit, a big discussion about something that pulled forward because of the pandemic, um, like zoom, for instance, obviously everyone's using zoom. Yeah, yeah, yeah. Was there fake Tams? There was one, uh, couple analysts who were pointing out that some companies were hot during the pandemic will go away that that Tam doesn't really exist, but there's some that got pulled forward early. That's where the growth is. So is there a, is there a line between the, I call fake Tam or pulled forward TA that was only for the pandemic situationally, um, devices might be like virtual event, virtual event. Software was one, I know Hoppin got laid a lot of layoffs. And so that was kind of gone coming, coming and going. And you got SAS which got pulled forward. Yep. And it's not going away, but it's >>Sustaining. Yeah. Yeah. But it's, but, but it's sustaining, um, you know, I definitely think there was a, there was a lot of spending that absolutely got pulled forward. And I think it's really about CEO's ability to control expectations and to kind of message what it, what it looks like. Um, you know, I think I look, I, I, I think virtual event platforms probably have a role. I think you can, you can definitely, you know, raise your margins in the event, business, significantly using those platforms. There's a role for them. But if you were out there thinking that this thing was gonna continue, then you know, that that was unrealistic, you know, Dave, to, to your point on devices, I'm not necessarily, you know. Sure. I think, I think we definitely got ahead of our expectations and things like consumer PCs, those things will go back to historical growth >>Rates. Yeah. I mean, you got the install base is pretty young right now, but I think the one way to look at it too, is there was some technical debt brought in because people didn't necessarily expect that we'd be moving to a permanent hybrid state two years ago. So now we have to actually invest on both. We have to make, create a little bit more permanency around the hybrid world. And then also like Crawford's talking about the permanency of, of having an office and having people work in, in multiple modes. Yeah. It actually requires investment in both the office. And >>Also, so you're saying operationally, you gotta run the company and do the digital transformation to level up the hybrid. >>Yeah. Yeah. Just the way people work. Right. So, so, you know, you basically have to, I mean, even for like us internally, Crawford was saying, we're experimenting with what works for us. My team before the pandemic was like one third virtual. Now it's two third virtual, which means that all of our internal meetings are gonna be on, on teams or zoom. Right. Yeah. They're not gonna necessarily be, Hey, just coming to the office today, cuz two thirds of people aren't in the Boston area. >>Right. Matt, you said if you see cloud as an operating model, not necessarily a place. I remember when you were out, I was in the, on the, on the, on the zoom when, when first met Adam Celski yeah. Um, he said, you were asking him about, you know, the, the on-prem guys and he's like, nah, it's not cloud. And he kind of was very dismissive of it. Yeah. Yeah. I wanna get your take on, you know, what we're seeing with as Azure service GreenLake, apex, Cisco's got their version. IBM. Fewer is doing it. Is that cloud. >>I think if it's, I, I don't think all of it is by default. I think it is. If I actually think what HPE is doing is cloud, because it's really about how you present the services and how you allow customers to engage with the platform. So they're actually creating a cloud model. I think a lot of people get lost in the transition from, you know, CapEx to OPEX and the financing element of this. But the reality is what HPE is doing and they're sort of setting the standard. I think for the industry here is actually setting up what I would consider a cloud model. >>Well, in the early days of, of GreenLake, for sure it was more of a financial, you >>Know, it was kind of bespoke, right. But now you've got 70 services. And so you can, you can build that out. But >>You know, we were talking to Keith Townsend right after the keynote and we were sort of UN unpacking it a little bit. And I, I asked the question, you know, if you, if you had to pin this in terms of AWS's maturity, where are we? And the consensus was 2014 console filling, is that fair or unfair? >>Oh, that's a good question. I mean, um, I think it's, well, clouds come a long way, right? So it'd be, I, I, I think 20, fourteen's probably a little bit too far back because >>You have more modern tools I Kubernetes is. Yeah. >>And, but you also have, I would say the market still getting to a point of, of, of readiness and in terms of buying this way. So if you think about the HP's kind of strategy around edge, the core platform as a, as a service, you know, we're all big believers in edge and the apps follow the data and the data's being created in new locations and you gotta put the infrastructure there. And for an end user, there's a lot of risk there because they don't know how to actually plan for capacity at the edge. So they're gonna look to offload that, but this is a long term play to actually, uh, build out and deploy at the edge. It's not gonna happen tomorrow. It's a five, 10 year play. >>Yeah. I mean, I like the operating model. I'd agree with you, Matt, that if it's, if it's cloud operations, DevSecOps and all that, all that jazz it's cloud it's cloud operating and, and, and public cloud is a public cloud hyperscaler on premise. And the storage folks were presented. That's a single pane of glass. That's old school concepts, but cloud based. Yep. Shipping hardwares, auto figures. Yeah. That's the kind of consumption they're going for now. I like it. Then I, then they got the partner led thing is the partner piece. How do you guys see that? Because if I'm a partner, there's two things, wait a minute, am I at bottleneck to the direct self-service? Or is that an enabler to get more cash, to make more money? If I'm a partner. Cause you see what Essentia's doing with what they do with Amazon and Deloitte and et C. Yeah. You know, it's interesting, right? Like they've a channel partner, I'm making more cash. >>Yeah. I mean, well, and those channel partners are all in transition too. They're trying to yeah. Right. Figure out. Right, right. Are they, you know, what are their managed services gonna look like? You know, what kind of applications are they gonna stand up? They're they're not gonna just be >>Reselling, bought a big house in a boat. The box is not selling. I wanna ask you guys about growth because you know, the big three cloud, big four growing pick a number, I dunno, 30, 35% revenue big. And like you said, it's 30% of the business now. I think Dell's growing double digits. I don't know how much of that is sustainable. A lot of that is PCs, but still strong growth. Yep. I think Cisco has promised 9% >>In, in that. Right, right. >>About that. Something like that. I think IBM Arvin is at 6%. Yep. And I think HPE has said, Hey, we're gonna do three to 4%. Right. Which is so really sort of lagging and which I think a lot of people in wall street is like, okay, well that's not necessarily so compelling. Right. What does HPE have to do to double that growth? Or even triple that growth. >>Yeah. So they're gonna need, so, so obviously you're right. I mean, being able to show growth is Tanem out to this company getting, you know, more attention, more heat from, from investors. I think that they're rightly pointing to the triple digit growth that they've seen on green lake. I think if you look at the trailing, you know, 12 month bookings, you got over, you know, 7 billion, which means that in a year, you're gonna have a significant portion of the company is as a service. And you're gonna see that revenue that's rat being, you know, recognized over a series of months. So I think that this is sort of the classic SAS trough that we've seen applied to an infrastructure company where you're basically have to kind of be in the desert for a long time. But if they can, I think the most important number for HPE right now is that GreenLake booking snow. >>And if you look at that number and you see that number, you know, rapidly come down, which it hasn't, I mean off a very large number, you're still in triple digits. They will ultimately start to show revenue growth, um, in the business. And I think the one thing people are missing about HPE is there aren't, there are a lot of companies that want to build a platform, but they're small and nobody cares. And nobody let's say they throw a party and nobody comes. HP has such a significant installed base that if they do build a platform, they can attract partners to that platform. What I mean by that is partners that deliver services on GreenLake that they're not delivering. They have the girth to really start to change an industry and change the way stuff is being built. And that's the be they're making. And frankly, they are showing progress in that direction. >>So I buy that. But the one thing that concerns me is they kind of hide the ball on services. Right. And I, and I worry about that is like, is this a services kind of just, you know, same wine, new bottle or, >>Or, yeah. So, so I, I, I would argue that it's not about hiding the ball. It's about eliminating confusion of the marketplace. This is the company that bought EDS only to spin it off <laugh>. Okay. And so you don't wanna have a situation where you're getting back into services. >>Yeah. They're the only one >>They're product, not the only ones who does, I mean, look at the way IBM used to count and still >>I get it. I get it. But I think it's, it's really about clarity of mission. Well, I point next they are in the Ts business, absolutely. Point of it. It's important prop >>Drive for them at the top. Right. The global 50 say there's still a lot of uniqueness in what they want to buy. So there's definitely a lot of bespoke kind of delivery. That's still happening there. The real promise here is when you get into the global 2000 and yeah. And can start them to getting them to consume very standardized offers. And then the margins are, are healthy >>And they got they're what? Below 30, 33, 30 3%. I think 34% last quarter gross margin. Yeah. That that's solid. Just compare that with Dell is, I don't know. They're happy with 20, 21% of correct. You get that, which is, you know, I I'll come back. Go ahead. I want, I wanna ask >>Guys. No, I wanna, I wanna just, he said one thing I like, which was, I think he nailed it. They have such, um, big install base. They have a great channel. They know how to use it. Right. That's a real asset. Yeah. And Microsoft, I remember when their stock was trading at 26 when Baltimore was CEO. Yep. What they did with no, they had office and windows, so a little bit different. Yep. But similar strategy, leverage our install base, bring something up to them. That's what you're kind of connecting the >>Absolutely. You have this velocity, uh, machine with a significant girth that you can now move to a new model. They move that to a new model. To Matt's point. They lead the industry, they change the way large swath the customers buy and you will see it in steady revenue growth over time. Okay. So I just in that, well, >>So your point is the focus and there the right it's the right focus. And I would agree what's >>What's the other move. What's their other move, >>The problem. Triple digit booking growth off a number that gets bigger >>Inspired. Okay. >>Whats what's the scoreboard. Okay. Now they're go at the growth. That's the scoreboard. What are the signals? Are you looking at on the scoreboard Crawford and Matt in terms of success? What are the benchmarks? Is it ecosystem growth, number of services, triple growth. Yeah. What's the, what are some of the metrics that you guys are gonna be watching and we should be watching? >>Yeah. I mean, I dunno if >>You wanna jump in, I mean, I think ecosystem's really critical. Yeah. You want to, you want to have well and, and you need to sell both ways like HPE needs to be selling their technology on other cloud providers and vice versa. You need to have the VMs of the world on, you know, offering services on your platform and, and kind of capturing some, some motion off that. I think that's pretty critical. The channel definitely. I mean, you have to help and what you're gonna see happen there is there will be channel partners that succeed in transforming and succeeding and there'll be a lot that go away and that some, some of that's, uh, generational there'll be people that just kind of age outta the system and, and just go home. >>Yeah. Yeah. So I would argue it's, it's, it's, it's gonna be, uh, bookings growth rate. It's gonna be retention rate of the, of, of, of the customers, uh, that they have. And then it's gonna be that, that, um, you know, ultimately you're gonna see revenue, um, growth, and which is that revenue growth is gonna have to be correlated to the booking's growth for green lake cross. >>What's the Achilles heel on, on HPE. If you had to do the SWAT, what's the, what's the w for HPE that they really need to pay >>Attention to. I mean, they, they need to continue their relentless focus on cost, particularly in the, in the core compute, you know, segment they need to be, they need to be able to be as cost effective as possible while the higher profit dollars associated with GreenLake and other services come in and then increase the overall operating margin and gross margin >>Picture for the, I mean, I think the biggest thing is they just have, they have to continue the motion that they've been on. Right. And they've been consistent about that. Mm-hmm, <affirmative> what you see where others have, have kind of slipped up is when you go to, to customers and you present the, the OPEX as a service and the traditional CapEx side by side, and the customers put in this position of trying to detangle what's in that OPEX service, you don't wanna do that obviously. And, and HP has not done that, but we've seen others kind of slip up. And, but >>A lot of companies still wanna buy CapEx. Right. Absolutely liquid. And, and I think, >>But you shouldn't do a, you shouldn't do that bake off by putting those two offers out. You should basically ascertain what they want to do. >>What's kind of what Dell does. Right. Hey, how, what do you want? We got this, we got >>This on one hand, we got this, the, we got that, right. Uh, the two hand sales rep, no, this CapEx. Thing's interesting. And if you're Amazon and Azure and, and GCP, what are they thinking right now? Cause remember what, four years ago outpost was launched, which essentially hardware. Yeah. This is cloud operating model. Yep. Yeah. They're essentially bringing outpost. This is what they got basically is Amazon and Azure, like, is this ABL on the radar for them? How would you, what, what are they thinking in your mind if we're on, if we're in their office, in their brain trust, are they laughing? Are they like saying, oh, they're scared. Is this real threat >>Opportunity? I, I, I mean, I wouldn't say they're laughing at all. I, I would say they're probably discounting a little bit and saying, okay, fine. You know, that's a strategy that a traditional hardware company is moving to. But I think if you look underneath the covers, you know, two years ago it was, you know, pretty basic stuff they were offering. But now when you start getting into some, you know, HPC is a service, you start getting into data fabric, you start getting into some of the more, um, sophisticated services that they're offering. And, and I think what's interesting about HP. What my, my take is that they're not gonna go after the 250 services the Amazon's offering, they're gonna basically have a portfolio of services that really focus on the core use cases of their infrastructure set. And, and I think one of the danger things, one, one of the, one of the red flags would be, if they start going way up the stack and wanting to offer the entire application stack, that would be like a big flashing warning sign, cuz it's not their sweet spot. It's not, not what they have. >>So machine learning, machine learning and quantum, okay. One you can argue might be up the stack machine learning quantum should be in their wheelhouse. >>I would argue machine learning is not up the stack because what they would focus on is inference. They'd focus on learning. If they came out and said, machine learning all the way up to the, you know, what a, what, what a drug discovery company needs to do. >>So they're bringing it down. >>Yeah. Yeah. Well, no, I think they're focusing on that middle layer, right? That, that, that data layer. And I think that helping companies manage their data make more sense outta their data structure, their data that's core to what they wanna do. >>I, I feel as though what they're doing now is table stakes. Honestly, I do. I do feel like, okay, Hey finally, you know, I say the same thing about apex, you >>Know, we finally got, >>It's like, okay guys, the >>Party. Great. Welcome to the, >>But the one thing I would just say about, about AWS and the other big clouds is whether they might be a little dismissive of what's truly gonna happen at the edge. I think the traditional OEMs that are transforming are really betting on that edge, being a huge play and a huge differentiator for them where the public cloud obviously have their own bets there. But I think they were pretty dismissive initially about how big that went. >>I don't, and I don't think anybody's really figured out the edge yet. >>Well, that's an, it's a battleground. That's what he's saying. I think you're >>Saying, but on the ecosystem, I wanna say up the stack, I think it's the ecosystem. That's gotta fill that out. You gotta see more governance tools and catalogs and AI tools and, and >>It immediately goes more, it goes more vertical when you go edge, you're gonna have different conversations and >>They're >>Lacking. Yeah. And they, but they're in there though. They're in the verticals. HP's in the, yeah, >>For sure. But they gotta build out an ego. Like you walk around here, the data, the number of data companies here. I mean, Starburst is here. I'm actually impressed that Starburst is here. Cause I think they're a forward thinking company. I wanna see that times a hundred. Right. I mean, that's >>You see HP's in all the verticals. That's I think the point here, >>So they should be able to attract that ecosystem and build that, that flywheel that's the, that's the hallmark of a cloud that marketplace. >>Yeah, it is. But I think there's a, again, I go back to, they really gotta stay focused on that infrastructure and data management. Yeah. >>But they'll be focused on that, but, but their ecosystem, >>Their ecosystem will then take it up from there. And I think that's the next stage >>And that ecosystem's gotta include OT players and communications technologies players as well. Right. Because that stuff gets kind of sucked up in that, in that edge play. Do >>You feel like HPE has a, has a leg up on that or like a little, a little bit of a lead or is it pretty much, you know, even raced right now? >>I think they've, I think the big infrastructure companies have all had OEM businesses and they've all played there. It's it's, it's also helping those OT players actually convert their own needs into more of a software play and, and not so much of >>Physical. You've been, you've been following and you guys both have been following HP and HPE for years. They've been on the edge for a long time. I've been focused on this edge. Yeah. Now they might not have the product traction that's right. Or they might not develop as fast, but industrial OT and IOT they've been talking about it, focused on it. I think Amazon was mostly like, okay, we gotta get to the edge and like the enterprise. And, and I think HP's got a leg up in my opinion on that. Well, I question is can they execute? >>Yeah. I mean, PTC was here years ago on stage talking >>About, but I mean, you think about, if you think about the edge, right. I mean, I would argue one of the best acquisitions this company ever did was Aruba. Right. I mean, it basically changed the whole conversation of the edge changed the whole conversation. >>If >>Became GreenLake, it was GreenLake. >>Well, it became a big department. They gave a big, but, but, but I mean, you know, I mean they, they, they went after going selling edge line servers and frankly it's very difficult to gain traction there. Yeah. Aruba, huge area. And I think the March announcement was when they brought Aruba management into. Yeah. Yeah. >>Totally. >>Last question. Love >>That. >>What are you guys saying about the, the Broadcom VMware acquisition? What's the, what are the implications for the ecosystem for companies like HPE and just generally for the it business? >>Yeah. So >>You start. Yeah, sure. I'll start, I'll start there. So look, you know, we've, you know, spent some time, uh, going through it spent some time, you know, speaking, uh, to the, to the, to the folks involved and, and, and I gotta tell you, I think this is a really interesting moment for Broadcom. This is Broadcom's opportunity to basically build a different kind of a conversation with developers to, uh, try to invest in. I mean, just for perspective, right? These numbers may not be exact. And I know a dollar is not a dollar, but in 2001, anybody, remember what HP paid for? Compact >>8,000,000,020, >>So 25 billion, 25 billion. Wow. VMware just got sold for 61 billion. Wow. Okay. Unbill dollars. Okay. That gives you a perspective. No, again, I know a dollar is not a dollar 2000. >>It's still big numbers, >>2022. So having said that, if you just did it to, to, to basically build your DCF model and say, okay, over this amount of time, I'll pay you this. And I'll take the money out of this period of time, which is what people have criticized them for. I think that's a little shortsighted. I, yeah, I think this is Broadcom's opportunity to invest in that product and really try to figure out how to get a seat at the table in software and pivot their company to enterprise software in a different way. They have to prove that they're willing to do that. And then frankly, that they can develop the skills to do that over time. But I do believe this is a, a different, this is a pivot point. This is not >>CA this is not CA >>It's not CA >>In my, in my mind, it can't be CA they would, they would destroy too much. Now you and I, Dave had some, had some conversations on Twitter. I, I don't think it's the step up to them sort of thinking differently about semiconductor, dying, doing some custom semi I, I don't think that's. Yeah. I agree with that. Yeah. I think I, I think this is really about, I got two aspiration for them pivoting the company. They could >>Justify the >>Price to the, getting a seat at the adults table in software is, >>Well, if, if Broadcom has been squeezing their supplies, we all hear the scutle butt. Yeah. If they're squeezing, they can use VMware to justify the prices. Yeah. Maybe use that hostage. And that installed base. That's kind of Mike conspiracy. >>I think they've told us what they're gonna do. >><laugh> I do. >>Maybe it's not like C what's your conspiracy theory like Symantec, but what >>Do you think? Well, I mean, there's still, I mean, so VMware there's really nobody that can do all the things that VMware does say. So really impossible for an enterprise to just rip 'em out. But obviously you can, you can sour people's taste and you can very much influence the direction they head in with the collection of, of providers. One thing, interesting thing here is, was the 37% of VMware's revenues sold through Dell. So there's, there's lots of dependencies. It's not, it's not as simple as I think John, you you're right. You can't just pull the CA playbook out and rerun it here. This is a lot more complex. Yeah. It's a lot more volume of, of, of distribution, but a fair amount of VMware's install >>Base Dell's influence is still there basically >>Is in the mid-market. It's not, it's not something that they're gonna touch directly. >>You think about what VMware did. I mean, they kept adding new businesses, buying new businesses. I mean, is security business gonna stay >>Networking security, I think are interesting. >>Same >>Customers >>Over and over. Haven't done anything. VMware has the same customers. What new >>Customers. So imagine simplifying VMware. Right, right. Becomes a different equation. It's really interesting. And to your point, yeah. I mean, I think Broadcom is, I mean, Tom Crouse knows how to run a business. >>Yeah. He knows how to run a business. He's gonna, I, I think it's gonna be, you know, it's gonna be an efficient business. It's gonna be a well run business, but I think it's a pivot point for >>Broadcom. It's amazing to me, Broadcom sells to HPE. They sell it to Dell and they've got a market cap. That's 10 X, you know? Yes. Yeah. All we gotta go guys. Awesome. Great conversation guys. >>A lot. Thanks for having us on. >>Okay. Listen, uh, day two is a, is a wrap. We'll be here tomorrow, all day. Dave ante, John furrier, Lisa Martin, Lisa. Hope you're feeling okay. We'll see you tomorrow. Thanks for watching the cube, your leader in enterprise tech, live coverage.

>> From theCUBE studios in Palo Alto in Boston. This is an episode in the remote works, Citrix virtual series. >> Hey, welcome back everybody. Jeff Frick here with theCUBE, we're in our Palo Alto studio here on this ongoing leadership series that we've been doing, reaching out to people in the community to get their take on what's going on with the COVID situation, what are best practices, what can we learn and specifically today, really the whole new way to work, and working from home. And we're really excited to have two guests on for this segment. The first one is Amy Hayworth. She is the Chief of Staff for HR for Citrix, joining us from Florida. Amy, great to see. >> Great to see you, Jeff. >> And also Tamara McCleary, who's been on many, many times coming to us from Denver. She is a well respected speaker, you've probably seen her doing more speaking than anything else, and also the CEO of Thulium. Tamara, great to see you. >> Thank you, I'm so excited for this conversation. >> Well, let's just jump into it. So it's so funny and doing a little homework, Amy, I came across a Professional Change Management executive conference, 2015 and you were talking about building change management as a profession and working from home was part of that and that was like five years ago and things creep along and then we have a light switch moment where there's no time to plan, there's no time to think, there's no time to implement things, it's, everyone must now stay at home. And so, outside the human tragedy, that is the COVID situation, we're not going to really speak to that here. But from a business point of view, suddenly with no warning, everyone had to work from home. From someone who's been in the profession of trying to drive change management through a process over time, what does that do for you? How do you digest that suddenly oh my goodness, we've got this light switch moment which is a forcing function that may have never come, but now we have to go? I wonder what your take is. >> I think the thing that get me most excited about this light switch moment is it is showing all of us that we are capable beyond what we ever thought we were when it comes to change. We've been called to take a leap, and for much of my experience in the organizational change management field, we spend a lot of time talking about managing resistance and the pushback about change and there's even this thing that drives me crazy, which is change is hard. I don't know why we tell ourselves that message. And I think what this is showing us is that number one, change is inevitable, it's going to happen. There is very little control that we actually have, but also we are more resilient, more adaptable. We're capable of change than many of us knew that we were. And it is calling up for me, what do we need to put in place within organizations to cultivate resilience? Because one of the things I think this is making all of us very aware is how volatile the world actually is. And it's also laid bare where we are strong individually and able to cope and where we also may need to do a little bit of practice and some very intentional resilience building. Though I think the conversation around the whole change management field is about to change and my hope is that focus turns more to resilience than it is to managing change. >> It's interesting 'cause a lot of just the chatter that's out there, is about Zoom. Do I use Zoom? Do I not use Zoom? Is it secure? All this other, people like to jump into the technology piece. But really, we had your boss on the other day, Donna Kimmel, the EVP and Chief People Officer, Citrix and she broke it down into three buckets. Culture was number one, physical space is number two and digital space was number three. And I thought it was really interesting that she really leads with empathy and human factors and I think that it's easy to forget those, but bringing up simple things that not only are you working from home, but guess what, your kids are home too and your spouse is home too. And they have meetings and they have Zoom calls, they have to do it or the other dog is still running around and all the other kinds of distractions. So the human factors are so, so important. Tamara, one of your early keynotes about your early development was in your early career working with people who are at the end of their life. And I know it helped you develop an empathy and really a prioritization that I think a lot of people are probably getting today that maybe they haven't thought about, what is truly important, what is truly meaningful. And this again, is this forcing function to say let's pump the brakes a little bit, take a step back and think about what's really important and the human factors. Again, your take on this crazy situation. >> I think you're absolutely right Jeff, and the fact that really what this has done, to Amy's point, yes we are very capable of change, but we're mostly so resistant and unwilling to change. And it's not because we don't want to, it's because we fear what will happen if we do change. And sometimes it's like the devil you know is better than the devil you don't. And right now what has been forced upon us is to really think about critical issues. So when you're faced with a lack of toilet paper and uncertainty about your survival rate, you start to think about things in terms of say Maslow's hierarchy of needs. You're looking at that base level, that safety piece. And when people go to safety, they have really left that area of self actualization in what do I want to be, what do I want to do? And it's more about, oh no, what have I done? Do I like my life? I'm stuck here at home, wherever you're sheltering in place and am I really enjoying my life? Am I experiencing my life? And what we really have experienced through being forced to get on to video conferencing, how many of you out there are doing video conferencing like a billion times a day? We're being forced to really see each other as human beings. And that means whether you're the CEO or you're the EVP of global blah, blah, it doesn't matter. What matters is your dog is still barking, your child is still running around and needs something from you in that moment when you happen to be on a call. Because as we all know, with kids, when you say, I can't be bothered for the next 30 minutes, what do you think is going to happen? That's exactly the time when they need more grapes. So I think that what it does is it levels the playing field and it shows us all how human we are. It shows us our strengths as Amy pointed out, and it also shows us our communal frailty. >> So let's get into some of the specifics about what people are feeling. Citrix just commissioned this report put on by one pole, pretty timely, comes out in April, 2020, about working from home. And I think there was really some interesting stuff, still connectivity and bandwidth, still the biggest challenge that people have. Can I even get online, was the number one problem. And when they do, their wifi is slow and there's single sign on. All these things that we've been talking about for years and years and years. I mean, why, why Amy, have we still not gotten it done? It's fascinating to me that in 2020, we still have internet connectivity issues and people don't know how to turn on their microphone on their Zoom call, we're so far behind. >> Yeah, Jeff, I think what we're seeing is number one, it takes practice, then the need to be familiar with all these tools. I also have talked to many parents who first day of homeschool, my son tells me I can't call it homeschool 'cause it's different, it's virtual school, he says it's very different. But that first day, especially families with multiple children trying to get onto a Zoom call with their class, Heron is trying to work, possibly two parents in the house are connected. Our home WiFi networks just haven't taken this kind of load before, but very quickly I think we needed to realize as an organization that this is not work from home, this is working at home during the global pandemic and it is very different. So you mentioned that need to lead with empathy and to really understand what's going on, and I think that's so true and just that the humanness of what we've experienced, that one full research really talked about a few epic moments of mishap, whether it's taking a call from the garage, I have a colleague who would take from the car on the street, still sheltering in place, but the only quiet place to go to take a call. We have a legend in our Singapore office. There's a salesperson who made record numbers working from his garage for a month. So there are all sorts of heroics taking place to balance than in the midst of that when technology isn't acting as we would hope it would under normal circumstances, having to adjust quickly, whether that means staggering schedules, working through accommodations, teachers, however it needs to happen but I think the reality and the acceptance, going back to that humanness and empathy is that we all have to shift our mindset about what work means and even are at work. We've built up a lot of these polishished buttoned up personas and when we are able to actually let some of that down, I think what we're starting to see is connection on a much deeper level amongst teams and among colleagues. >> I'm just looking at the survey at how few people think that this is going to roll over into a little bit more of a permanent form. Only 37% think my organization in general will be more relaxed about remote working. I think staff will be allowed to work from home more regularly, 36%. We had Marten Mickos on and he ran MySQL before it got bought by Sun many moons ago. He talked that he had a distributed team from day one and he laughed. He said, "It's so much easier to fake it at the office, "to look busy versus when you're remote." As you just said Amy, you're only judged by your deliverables. And I thought it was so funny in your blog posts from earlier this year that when managers start managing by outcome and deliverable rather than assuming as good work's getting done because someone showed up at the office, I mean this is ridiculous that people are still judging things based on activity, not outcome. And we're even seeing now all these new tools that people are introducing in the marketplace. I can tell you how often your people are on Zoom and how many hours on the VPN. What are we measuring? We should be measuring outcomes and the piece that comes up over and over is trust. And if I can't trust you to deliver outcomes, I probably have a bigger problem than managing your day to day. Tamara, you see this all the time in terms of the trust and how important this is to relationships. >> I do and in fact our workforce at Thulium has always been a remote workforce. And for the way that I've built our organization is treat everybody like an adult and get your work done. And we do base everything upon productivity versus FaceTime. And I think that the reason some of these larger organizations have had this concept of show up having that FaceTime means that whoever gets there the earliest and leaves the latest somehow has been a better employee, it's not true. It is about productivity. And I think those wise organizations that look at how much they can save with the costs of like AC heat, the building cost, having a brick and mortar for everyone to come into it is very costly. And it's an old paradigm that a lot of middle managers have, which is this control piece. And that if the people are there in the office, they've got more control. And actually what we find is you don't need that control, especially when you look at the younger generational cohort coming up, how they have a totally different view of work. And we've talked a lot about the future of work and the gig economy, and what this COVID pandemic has done for us is to show us that actually work does get done at home. And in fact in some respects, more work gets done at home because it's harder to stop working when your work is happening right there at home. And so it does blur the lines and the boundaries between the work life than the home life. And so I think you get a lot more out of your employees when they work from home. >> It's funny, when Donna was on, she brought up a really interesting topic. She said, "Every time somebody pushes back on that, "can't be done from home." This job, this person, this type of task can't be done from home. The question should always be like, why? It almost sounds like when you move the whole cloud conversation that we've been tracking, went from, when should I move stuff to cloud, to why shouldn't you move to cloud? And it's not, does it work on a mobile, it should be mobile first. And now this conversation is moving this to, why can't somebody do it from home, as opposed to it has to be done from the office? So I think even just the relative flip of the context of setting up the question seems to be changing. That's why it surprised me that so few people think that it's going to go back. It clearly, especially as this goes on for a while, new behaviors become habits and they become normalized and hopefully, the senior management pays attention to the outcome and again, not this activity which is really not, that's not what you want people to do, you want them to actually get stuff done. >> Jeff and Amy, the other thing I was going to say is, Amy, when you look at the report that Citrix has put out, how many people are even going to be able to go back to work when kids aren't going back to school? And then we have summer, piggybacking onto that, so now you've got parents who have kids at home, what is that outlook? To me, it's not just this simple, okay, it's over, let's get back to work guys, because the rest of our life has completely shifted as well. >> That was actually my conversation today, is starting to really think about holistically when it comes to policies, programs, what are we putting in place for the summer? And not only that, but even some of our employees who have been alone through this, I think at the beginning, there was a very large shift on those who had children or elder care to think about. And at some point, at least in this half of the world, about last week, we really started to hear, worried about this person who's been alone by themselves in their apartment sheltering for over a month. So I think if they start to look at the variety of experiences people are having, really being sensitive to different personas in the organization, different needs, different emotions that are happening and we even start to think about, what does that mean to come back to work? And I know countries and organizations are being very cognizant about doing that. safely, in a very gradual  way of thinking about it, but it starts to get very, very complex very quickly and also from just let's do this well because there's a whole new set. Jeff, you bring up all new set of questions of employees asking, I wasn't allowed to work from home prior, I would like to do that more often now, new conversations with managers about, well, how are we going to measure results? There's a lot of work to be done between now and then, whatever what then is, to really ensure that we help everyone be successful. And I think the conversation we're having, it's likely not going to be one or the other. The new normal is not the old normal and we're not sure what it is but most likely, there's going to be some sort of hybrid working arrangement. Right now, the playing field is leveled and that in and itself is a very different work from home experience. What happens when it's hybrid again and there are some who are remote, some who are in the office, how do we make sure that it's equitable and all the voices have equal opportunity to chime in? Because when people are in the office and their colleague or two is remote, it's not a level of conversation in an organization. So whether that's establishing norms or really just starting to create behaviors where if one person's remote, then everybody's remote no matter if you're in the office or not, you dial in via go to meeting or whatever collaboration tool you're , so all sorts of things to think about, but I guess that is our ecosystem of work is going to change for sure. >> It was so funny in your blog posts, you talked a little bit about that as well. And one of the little paragraphs was, who gets to do it? It's like this binary decision, you can either work from home or you can't. And there's this whole second order impacts that we see on infrastructure, there's nobody in the trains or there's nobody on the freeways. You think, wow, we actually have a lot of freeways if everyone is not on them at the same time. So, begs a lot of questions are why is everybody driving to work at 8:30 in the morning to work on their laptop? Now clearly if you're in construction or service trades and you've got a truck and you got to go do something on site, they have to be there. But I think hopefully what this will do is help people as you're discussing, look at those who can. And even if it's one day a week, two days a week, one day a week, every couple of weeks. The impact on infrastructure, the impact on traffic, the environment, mental health, Amy, you talked about mental health, sitting in a car for an hour each way, every day certainly is not helping anybody feel better about themselves or get more work done. So I think there are so many benefits if you just look at it in the right context, focused on who can, not who can't and the how and the why and the enabler. But it's really interesting, we've talked a lot about the physical space and the cultural space. Imagine if this happened in 2006, before the iPhone came out, the smartphone. Think of the crazy amount of tools that we do have. I mean right now, we're talking and we spread out all over the country. So we're actually in a really fortunate space in terms of the digital infrastructure that we have in place to enable these things. And I know Citrix, you guys have been in the lead of supporting this forever, now even have a whole set up of resources, what's it called, the Citrix Remote Work Hub for people to get resource to figure out everything from the mental health to the WiFi connectivity, to all these other little things as Tamara said, how do you manage the kids and the dog and your significant other that also has Zoom meetings that they have to attend? So it's so many resources that people need to use and not feel uncomfortable that they're alone and could use a little bit of an assist. >> Absolutely well said. When this quickly became a forced experiment to work remote, Citrix has 30 years of history helping enable successful remote work in a secure way and the first thing that we wanted to do was be of service. So pulling together these resources has been a big project and we're so glad to be able to provide this tool set and we truly do hope that it makes this transition stronger, better, it will continue to grow and to evolve even as our own experiences evolve, new challenges arise, but we definitely want to keep it fresh and keep meeting the need that's out there, both internal for Citrix as much as in as long as we've been doing, we don't have it all figured out, we are learning too, this is unchartered territory for everyone, but also to take what we are learning and put it out there in a very transparent way. >> Right, I want to-- >> You know, I was-- >> Go ahead, Tamara. >> Sorry, but there was just something so crazy, Jeff, about the study that Citrix put out. And Amy, I wanted to bring this up to you because you said they're coworkers like, well, so-and-so lives alone, I wonder if they're okay or if they're lonely. But in the study, barely a quarter of the individuals reported any loneliness. I find that to be pretty shocking. >> It is shocking and I think it really speaks to how quickly those happy hours, the Zoom Happy Hours or the gatherings and some of the creativity that started to pop up, but yeah, you made a great point, Tamara, that was surprising and I'm curious if that will continue to be the case. (murmurs) >> But I guess maybe some of us when we got home, we were like, wow, this isn't so bad after all. And then can you imagine? So Jeff, if only 28% of people experienced any loneliness, imagine when you can have peace and quiet in your home again and still work. I think that this really is a lot more delicious than a lot of us anticipated it would be. And, what a grand social science experiment this has been! It's phenomenal. >> The fact that everyone is experiencing it at the same time globally just blows my mind. I was here for the earthquake, I was in Portland for Mount Saint Helens, I've been through a few little things here and there, but those are still regional, there's still a safe space, there's still people that don't have that story. Everyone, six or 7 billion people will have a where were you in March, 2020 story, which is fascinating. And then as you said, it's not only the work from home, there's no time to plan and no time to put infrastructure and, oh by the way, the kids are home too, and school is also from home. So in terms of an accelerant, it's just gasoline on the fire. But I want to jump in a little bit about one of the things you talked about Amy and you'll take camera 'cause you're doing it in your own company, and is in terms of establishing norms. I think people are maybe not thinking about the fact that they either need to establish new norms or they need to be very clear on the communication of what the norms are so that everybody is as you said Amy, feels comfortable in this new space because we have norms at work and now we have to have these new norms and there's all kinds of funny stuff going on in terms of we talked about dogs and kids, that this and that dressed, you're not dressed, you put makeup on, it's funny in the survey, do you take a shower? Only 30 some odd people take a shower every day, which I thought was kind of-- unexpected >> What about the shoe comment? Did you believe that, Jeff, where people actually would wear their shoes to their death? Well, I'll tell you, they didn't ask the women because the women would not be wearing high heels at home if they didn't have. >> They didn't specify which shoes, Tamara, they just said shoes. So maybe the more comfortable flats were the ones that were coming out. But I'm just curious on establishing social norms. Tamara, I'll let you go first, how did you establish them? Was it hard to do? Did they self self-generate and as a leader, do you have to police it or is it self policing? How's that working? And then Amy, from your point in terms of formal communication in a much bigger organization and being part of the HR office, one might say, isn't that already part of HR's charter? But how's that different now? Tamara, I'll let you go first. >> Sure, it's a great question because since we do have a remote workforce, one of the most salient things that I found to be critically important for productivity and collaboration and even cohesion and decreasing those silos between business unit is making sure that we form a community. And so what I mean by that is we have and always have had, we've been using video conferencing since before the pandemic and we have video conferencing meetings where video is on, so that's one of the parameters, is everybody needs to see everyone else's faces, and we have a morning kickoff meeting, an all hands meeting and then we have an end of week one as well and part of that piece, we call a standup where people either share something that's either a challenge within their workplace or with a customer or even in their own personal life, and then they end on something to celebrate because I think it's really important for us to cultivate that. But it really helps the teams to get to know one another. So just because someone in this business unit doesn't work with someone in this business unit, they know one another because of these team meetings that we have. And so I think creating a culture of positivity and collaboration versus competition and creating a culture where people feel a part of a team and a part of something bigger and where they see that their contribution makes a difference to the whole, creates a really delicious community that helps people feel valued at work. And I think with a remote workforce, you have got to pay attention to how you are creating that community and that feeling and sense of value to each and every individual within the organization. >> It's a very different kind of a challenge. Amy, your thoughts on more of a formal approach to establishing social norms to some of these big organizations, or do you treat it differently as a big organization or is it just a bunch of small little clusters of people that work together? >> I have so many thoughts on this, so I would love to have a two hour dialogue with both of you on this topic. Couple thoughts, there's implicit norms that develop organically, and then there's the explicit ones which for whatever reason we seem more hesitant to have very explicit conversations about norms. I don't know if people think it's tedious or something like that, I'm not sure, I haven't done that research yet. But in times of transition, it's so incredibly important just even for efficiency to add certainty, to make sure that everyone has the same message, same expectation to lean a little more heavily on the exquisite norms. Talking about how do we want to begin our meeting, let's reserve the first 10 minutes and just catch up like we would in the hallway. Some of that is a shift to how those meetings probably were happening two months ago. So making sure that everyone understands is that expectation and even little bit more of a warmup question. How's everybody feeling today? And even getting more specific, there is a couple of organizational gurus who I have been following quite a bit lately, Aaron Dignan and Rodney Evans, Aaron wrote a book called "Brave New Work" and they also have a podcast, but they really talk about the organization as an operating system. And when we look at norms, the norms are so much a part of that operating system and getting really clear about who does what here. There're things like how are not taken, how are we following up, in our current climate, who's checking on who? And so having some of those explicit conversations I think are incredibly important. And also for me with some of the work that I've been doing over the last six weeks is trying to harness goodness across the globe. So we have a group of site leaders who meet twice a week, their charge is to look after their location. So every location in the Citrix ecosystem that has more than 20 employees has a designated site leader during this time. And in bigger sites, they have pulled together committees, they're doing things that are local level to keep that site engaged, but what we're also looking to do is harness the best of the best. Some really amazing things, I did a radio calisthenic last night with our team in Tokyo. So something very true and personal to the Japanese culture but other sites, they're doing coffee chats and having drop-ins, celebrity guests, organizational leaders that are pretty high profile just popping in and out actively to have a very authentic Q&A conversations. There's some really inventive ideas to keep people engaged and also possibly establish new norm and I think that the question for me is, what do people like so much that they decide that it stays in place? When we do have of that thing and people are in the office more often, what level of connectivity will we keep? Even, will people start showering every day again? Some of these things, who knows what's going to happen? >> You make me want to go down to a to RNB and look in the meeting rooms at Intel, they used to have a very defined meeting, culture meeting, process meeting establishment, super efficient just like they're making chips. I wonder if they've changed a little bit in light of what's going on, but final note in terms of frequency and variety of communications. Both of you now have mentioned in the communications with your people and what you're hearing about is one is, you got to increase the frequency just period. And in fact, you might actually be communicating more frequently 'cause you don't necessarily chat all the time in the hallways when you're physically together. And the other thing that strikes me is the variety. It's not just the meeting, it's not just information exchange, it's touching base with community, it's establishing deeper relationships, it's doing some social things that, kind of the variety and the frequency of direct communication person to person, just not necessarily closer than six feet within one another has to go up dramatically, and is, as you're seeing in best practices in this new world. Amy, why don't you go first? >> I'm seeing a lot more Slack usage, we are an organization that has a multitude of tools to choose from, Slack being one of them, but highly engaged Slack community. The other thing that's become very clear as an insight is the more authentic the communication, the better. So our CEO, David Henshall has been doing video pieces and they had become increasingly more personal about whether it's his space where he exercises what he's doing for exercise, and the employee response has been deep appreciation for feeling several degrees more connected to our senior leadership. Other senior leaders on the team have profiled their own work from home antic in a very humorous way and so just finding inventive ways to leverage the communication vehicles we have, but at a level that is very true to the situation we're in and very human at their core. >> So Tamara, let me ask you a followup on that. You're big on social, it's a big part of your business helping other companies do better at social and engage in social, and it strikes me, especially in the real senior leadership ranks, there are those who tweet just to pick a platform, like Michael Dell, Sanjay Poonen, some CUBE alumni that you know, and then there's some that don't. And again, we talked about the contrast of IBM now, Ginny didn't tweet now, the new CEO announces it on LinkedIn. When you talk to CEOs and leaders about getting involved in social, I'm sure a lot of them that don't do it, just say the risk reward is not there, why am I going to expose some little personal tidbit of myself when the potential harm is great? But as we just heard from Amy, people like to know who the person is, people want to relate to who the person is. That's kind of part of the whole CUBE thing that we figured out a long time ago, is people are interested in the people that are behind the technology in the companies in the implementation. So how do you advise people, what do you see to convince them that, hey, it's actually in your best interest to show a little vulnerability, to show a little humanity, to maybe be scared sometimes and not necessarily have the right answer? How do you help coach them that these are good things, not bad things? >> It's so brilliant you brought this up, Jeff, because with the pandemic, a lot of the executives that were not on social media all of a sudden wanted to be on social media, and how do I do this, and how do I set up my thought leadership? Because this was a very primary mode of communication. And I think what we're seeing is that you do see a lot of the progressive CEOs and executive members on social media and then what you've outlined is there was a hesitancy by a lot of the CEOs who come from a different paradigm in which the hierarchal structure was such that they got to this level and why do I need to be on social media? And what we're seeing is that this push from the younger generational cohorts, which is they don't really see that hierarchal structure at all, and they want to be able to communicate with their CEO as much as they want to communicate with their manager. And when they can't, there is this distrust and you brought up the trust piece, which is huge. And I do know that a lot of global business leaders in highly regulated industries have been afraid, like in the financial services industry because there are a lot of rules and regulations. So I can understand and appreciate their hesitancy to be on social media, which is like a bit of the wild West. And you see those that are really pretty insulated from anything that they do, you can see like Elon Musk can tweet whatever he wants to tweet, and a lot of executives don't feel that they have that same sort of freedom. And so how we work with them, we work in the B2B and enterprise space is about what is it that you want to be known for? What is it that you're passionate about that would, Amy's point, be uplifting to those who not only work internally, your internal stakeholders, but to even your customers or those on the external, and stick to that? So no, you don't need to tweet about your political feelings, you don't need to tweet about sensitive subjects. We always say stay away from politics and religion, but you can absolutely establish a very authentic transparent, vulnerable thought leadership about the things that you care about. And we say pick three things. What three things do you want people to think of when you're not in the room? Pick three adjectives and then construct your editorial calendar, what you're doing on social media around how those three things are going to come to life. Through all of your email? Through your videos that you share with your community? And also what you're talking about on LinkedIn, Twitter and no, I'm not advising any of the executives to get on TikTok, but I do advise them to be on LinkedIn and Twitter. >> Matt Eastwood is starting to play with TikTok, so I don't know if you follow him on that, but he's a budding Casey Neistat. So I think he's getting into the TikTok thing, or even just TikTok edits, it's great. We could go on and on and on, and I really appreciate the time and it's just interesting again, pulling from Amy's blog post about leadership and you lead with trust, accountability, vulnerability, inclusion and communication. I think those are all human things and I think are so important. So final word, assuming things are going to get better in let's just say a year from now, we get back together and talk about how the new way to work has changed in a post COVID world, what do you hope that we'll be talking about that's different a year from now than we are today? Beyond obviously the COVID itself? Amy, you first. >> Wow. To narrow that down, I hope we are talking about how organizations have invested in helping our people find their strengths and feed with resilience and to understand what it is that helps them operate at their best, no matter what situation that you're in. >> That's great. Tamara? >> Me, Jeff, I'm going to hope that we are talking about the technology that's available a year from now that's going to help us have a much more immersive experience remotely working. So we'll be talking about hopefully things like the haptic internet, well that haptic interface with tactile internet and how AR, VR and mixed reality settings will help us as remote authors to feel like we're actually in meetings and having the same sort of experience that oftentimes we think we get only when we're at the building with everybody else. So I hope we're talking about how technology is really moving the needle forward to helping our remote workforce have that same experience and camaraderie and team building that they do in the physical space. >> Great. Well and again, there's this digital is different than physical, we're not together physically and we can't be right now, but we're together digitally. And so it's not the same, it's different, but there's a lot of good things about it too. So thank you both for taking the time, this has been a really great conversation. Amy, I agree with you, we could go for another couple of hours, but I think the crew would start throwing things at me. So I think we'll have to cut it off here. Thanks again and stay safe and really appreciate the time. >> Thanks, Jeff. >> Thank you. >> All right, thank you for tuning in, thanks for watching theCUBE, we'll see you next time. (upbeat music)

(upbeat techno music) >> Announcer: Good morning ladies and gentlemen. This is Lenovo Transform. Please welcome to the stage Lenovo's Rod Lappin. (upbeat instrumental) >> Alright, ladies and gentlemen. Here we go. I was out the back having a chat. A bit faster than I expected. How are you all doing this morning? (crowd cheers) >> Good? How fantastic is it to be in New York City? (crowd applauds) Excellent. So my name's Rod Lappin. I'm with the Data Center Group, obviously. I do basically anything that touches customers from our sales people, our pre-sales engineers, our architects, et cetera, all the way through to our channel partner sales engagement globally. So that's my job, but enough of that, okay? So the weather this morning, absolutely fantastic. Not a cloud in the sky, perfect. A little bit different to how it was yesterday, right? I want to thank all of you because I know a lot of you had a lot of commuting issues getting into New York yesterday with all the storms. We have a lot of people from international and domestic travel caught up in obviously the network, which blows my mind, actually, but we have a lot of people here from Europe, obviously, a lot of analysts and media people here as well as customers who were caught up in circling around the airport apparently for hours. So a big round of applause for our team from Europe. (audience applauds) Thank you for coming. We have some people who commuted a very short distance. For example, our own server general manager, Cameron (mumbles), he's out the back there. Cameron, how long did it take you to get from Raleigh to New York? An hour-and-a-half flight? >> Cameron: 17 hours. >> 17 hours, ladies and gentleman. That's a fantastic distance. I think that's amazing. But I know a lot of us, obviously, in the United States have come a long way with the storms, obviously very tough, but I'm going to call out one individual. Shaneil from Spotless. Where are you Shaneil, you're here somewhere? There he is from Australia. Shaneil how long did it take you to come in from Australia? 25 hour, ladies and gentleman. A big round of applause. That's a pretty big effort. Shaneil actually I want you to stand up, if you don't mind. I've got a seat here right next to my CEO. You've gone the longest distance. How about a big round of applause for Shaneil. We'll put him in my seat, next to YY. Honestly, Shaneil, you're doing me a favor. Okay ladies and gentlemen, we've got a big day today. Obviously, my seat now taken there, fantastic. Obviously New York City, the absolute pinnacle of globalization. I first came to New York in 1996, which was before a lot of people in the room were born, unfortunately for me these days. Was completely in awe. I obviously went to a Yankees game, had no clue what was going on, didn't understand anything to do with baseball. Then I went and saw Patrick Ewing. Some of you would remember Patrick Ewing. Saw the Knicks play basketball. Had no idea what was going on. Obviously, from Australia, and somewhat slightly height challenged, basketball was not my thing but loved it. I really left that game... That was the first game of basketball I'd ever seen. Left that game realizing that effectively the guy throws the ball up at the beginning, someone taps it, that team gets it, they run it, they put it in the basket, then the other team gets it, they put it in the basket, the other team gets it, and that's basically the entire game. So I haven't really progressed from that sort of learning or understanding of basketball since then, but for me, personally, being here in New York, and obviously presenting with all of you guys today, it's really humbling from obviously some of you would have picked my accent, I'm also from Australia. From the north shore of Sydney. To be here is just a fantastic, fantastic event. So welcome ladies and gentlemen to Transform, part of our tech world series globally in our event series and our event season here at Lenovo. So once again, big round of applause. Thank you for coming (audience applauds). Today, basically, is the culmination of what I would classify as a very large journey. Many of you have been with us on that. Customers, partners, media, analysts obviously. We've got quite a lot of our industry analysts in the room. I know Matt Eastwood yesterday was on a train because he sent a Tweet out saying there's 170 people on the WIFI network. He was obviously a bit concerned he was going to get-- Pat Moorhead, he got in at 3:30 this morning, obviously from traveling here as well with some of the challenges with the transportation, so we've got a lot of people in the room that have been giving us advice over the last two years. I think all of our employees are joining us live. All of our partners and customers through the stream. As well as everybody in this packed-out room. We're very very excited about what we're going to be talking to you all today. I want to have a special thanks obviously to our R&D team in Raleigh and around the world. They've also been very very focused on what they've delivered for us today, and it's really important for them to also see the culmination of this great event. And like I mentioned, this is really the feedback. It's not just a Lenovo launch. This is a launch based on the feedback from our partners, our customers, our employees, the analysts. We've been talking to all of you about what we want to be when we grow up from a Data Center Group, and I think you're going to hear some really exciting stuff from some of the speakers today and in the demo and breakout sessions that we have after the event. These last two years, we've really transformed the organization, and that's one of the reasons why that theme is part of our Tech World Series today. We're very very confident in our future, obviously, and where the company's going. It's really important for all of you to understand today and take every single snippet that YY, Kirk, and Christian talk about today in the main session, and then our presenters in the demo sections on what Lenovo's actually doing for its future and how we're positioning the company, obviously, for that future and how the transformation, the digital transformation, is going ahead globally. So, all right, we are now going to step into our Transform event. And I've got a quick agenda statement for you. The very first thing is we're going to hear from YY, our chairman and CEO. He's going to discuss artificial intelligence, the evolution of our society and how Lenovo is clearly positioning itself in the industry. Then, obviously, you're going to hear from Kirk Skaugen, our president of the Data Center Group, our new boss. He's going to talk about how long he's been with the company and the transformation, once again, we're making, very specifically to the Data Center Group and how much of a difference we're making to society and some of our investments. Christian Teismann, our SVP and general manager of our client business is going to talk about the 25 years of ThinkPad. This year is the 25-year anniversary of our ThinkPad product. Easily the most successful brand in our client branch or client branch globally of any vendor. Most successful brand we've had launched, and this afternoon breakout sessions, obviously, with our keynotes, fantastic sessions. Make sure you actually attend all of those after this main arena here. Now, once again, listen, ask questions, and make sure you're giving us feedback. One of the things about Lenovo that we say all the time... There is no room for arrogance in our company. Every single person in this room is a customer, partner, analyst, or an employee. We love your feedback. It's only through your feedback that we continue to improve. And it's really important that through all of the sessions where the Q&As happen, breakouts afterwards, you're giving us feedback on what you want to see from us as an organization as we go forward. All right, so what were you doing 25 years ago? I spoke about ThinkPad being 25 years old, but let me ask you this. I bet you any money that no one here knew that our x86 business is also 25 years old. So, this year, we have both our ThinkPad and our x86 anniversaries for 25 years. Let me tell you. What were you guys doing 25 years ago? There's me, 25 years ago. It's a bit scary, isn't it? It's very svelte and athletic and a lot lighter than I am today. It makes me feel a little bit conscious. And you can see the black and white shot. It shows you that even if you're really really short and you come from the wrong side of the tracks to make some extra cash, you can still do some modeling as long as no one else is in the photo to give anyone any perspective, so very important. I think I might have got one photo shoot out of that, I don't know. I had to do it, I needed the money. Let me show you another couple of photos. Very interesting, how's this guy? How cool does he look? Very svelte and athletic. I think there's no doubt. He looks much much cooler than I do. Okay, so ladies and gentlemen, without further ado, it gives me great honor to obviously introduce our very very first guest to the stage. Ladies and gentlemen, our chairman and CEO, Yuanqing Yang. or as we like to call him, YY. A big round of applause, thank you. (upbeat techno instrumental) >> Good morning everyone. Thank you, Rod, for your introduction. Actually, I didn't think I was younger than you (mumbles). I can't think of another city more fitting to host the Transform event than New York. A city that has transformed from a humble trading post 400 years ago to one of the most vibrant cities in the world today. It is a perfect symbol of transformation of our world. The rapid and the deep transformations that have propelled us from the steam engine to the Internet era in just 200 years. Looking back at 200 years ago, there was only a few companies that operated on a global scale. The total value of the world's economy was around $188 billion U.S. dollars. Today, it is only $180 for each person on earth. Today, there are thousands of independent global companies that compete to sell everything, from corn and crude oil to servers and software. They drive a robust global economy was over $75 trillion or $1,000 per person. Think about it. The global economy has multiplied almost 450 times in just two centuries. What is even more remarkable is that the economy has almost doubled every 15 years since 1950. These are significant transformation for businesses and for the world and our tiny slice of pie. This transformation is the result of the greatest advancement in technology in human history. Not one but three industrial revolutions have happened over the last 200 years. Even though those revolutions created remarkable change, they were just the beginning. Today, we are standing at the beginning of the fourth revolution. This revolution will transform how we work (mumbles) in ways that no one could imagine in the 18th century or even just 18 months ago. You are the people who will lead this revolution. Along with Lenovo, we will redefine IT. IT is no longer just information technology. It's intelligent technology, intelligent transformation. A transformation that is driven by big data called computing and artificial intelligence. Even the transition from PC Internet to mobile Internet is a big leap. Today, we are facing yet another big leap from the mobile Internet to the Smart Internet or intelligent Internet. In this Smart Internet era, Cloud enables devices, such as PCs, Smart phones, Smart speakers, Smart TVs. (mumbles) to provide the content and the services. But the evolution does not stop them. Ultimately, almost everything around us will become Smart, with building computing, storage, and networking capabilities. That's what we call the device plus Cloud transformation. These Smart devices, incorporated with various sensors, will continuously sense our environment and send data about our world to the Cloud. (mumbles) the process of this ever-increasing big data and to support the delivery of Cloud content and services, the data center infrastructure is also transforming to be more agile, flexible, and intelligent. That's what we call the infrastructure plus Cloud transformation. But most importantly, it is the human wisdom, the people learning algorithm vigorously improved by engineers that enables artificial intelligence to learn from big data and make everything around us smarter. With big data collected from Smart devices, computing power of the new infrastructure under the trend artificial intelligence, we can understand the world around us more accurately and make smarter decisions. We can make life better, work easier, and society safer and healthy. Think about what is already possible as we start this transformation. Smart Assistants can help you place orders online with a voice command. Driverless cars can run on the same road as traditional cars. (mumbles) can help troubleshoot customers problems, and the virtual doctors already diagnose basic symptoms. This list goes on and on. Like every revolution before it, intelligent transformation, will fundamentally change the nature of business. Understanding and preparing for that will be the key for the growth and the success of your business. The first industrial revolution made it possible to maximize production. Water and steam power let us go from making things by hand to making them by machine. This transformed how fast things could be produced. It drove the quantity of merchandise made and led to massive increase in trade. With this revolution, business scale expanded, and the number of customers exploded. Fifty years later, the second industrial revolution made it necessary to organize a business like the modern enterprise, electric power, and the telegraph communication made business faster and more complex, challenging businesses to become more efficient and meeting entirely new customer demands. In our own lifetimes, we have witnessed the third industrial revolution, which made it possible to digitize the enterprise. The development of computers and the Internet accelerated business beyond human speed. Now, global businesses have to deal with customers at the end of a cable, not always a handshake. While we are still dealing with the effects of a digitizing business, the fourth revolution is already here. In just the past two or three years, the growth of data and advancement in visual intelligence has been astonishing. The computing power can now process the massive amount of data about your customers, suppliers, partners, competitors, and give you insights you simply could not imagine before. Artificial intelligence can not only tell you what your customers want today but also anticipate what they will need tomorrow. This is not just about making better business decisions or creating better customer relationships. It's about making the world a better place. Ultimately, can we build a new world without diseases, war, and poverty? The power of big data and artificial intelligence may be the revolutionary technology to make that possible. Revolutions don't happen on their own. Every industrial revolution has its leaders, its visionaries, and its heroes. The master transformers of their age. The first industrial revolution was led by mechanics who designed and built power systems, machines, and factories. The heroes of the second industrial revolution were the business managers who designed and built modern organizations. The heroes of the third revolution were the engineers who designed and built the circuits and the source code that digitized our world. The master transformers of the next revolution are actually you. You are the designers and the builders of the networks and the systems. You will bring the benefits of intelligence to every corner of your enterprise and make intelligence the central asset of your business. At Lenovo, data intelligence is embedded into everything we do. How we understand our customer's true needs and develop more desirable products. How we profile our customers and market to them precisely. How we use internal and external data to balance our supply and the demand. And how we train virtual agents to provide more effective sales services. So the decisions you make today about your IT investment will determine the quality of the decisions your enterprise will make tomorrow. So I challenge each of you to seize this opportunity to become a master transformer, to join Lenovo as we work together at the forefront of the fourth industrial revolution, as leaders of the intelligent transformation. (triumphant instrumental) Today, we are launching the largest portfolio in our data center history at Lenovo. We are fully committed to the (mumbles) transformation. Thank you. (audience applauds) >> Thanks YY. All right, ladies and gentlemen. Fantastic, so how about a big round of applause for YY. (audience applauds) Obviously a great speech on the transformation that we at Lenovo are taking as well as obviously wanting to journey with our partners and customers obviously on that same journey. What I heard from him was obviously artificial intelligence, how we're leveraging that integrally as well as externally and for our customers, and the investments we're making in the transformation around IoT machine learning, obviously big data, et cetera, and obviously the Data Center Group, which is one of the key things we've got to be talking about today. So we're on the cusp of that fourth revolution, as YY just mentioned, and Lenovo is definitely leading the way and investing in those parts of the industry and our portfolio to ensure we're complimenting all of our customers and partners on what they want to be, obviously, as part of this new transformation we're seeing globally. Obviously now, ladies and gentlemen, without further ado once again, to tell us more about what's going on today, our announcements, obviously, that all of you will be reading about and seeing in the breakout and the demo sessions with our segment general managers this afternoon is our president of the data center, Mr. Kirk Skaugen. (upbeat instrumental) >> Good morning, and let me add my welcome to Transform. I just crossed my six months here at Lenovo after over 24 years at Intel Corporation, and I can tell you, we've been really busy over the last six months, and I'm more excited and enthusiastic than ever and hope to share some of that with you today. Today's event is called "Transform", and today we're announcing major new transformations in Lenovo, in the data center, but more importantly, we're celebrating the business results that these platforms are going to have on society and with international supercomputing going on in parallel in Frankfurt, some of the amazing scientific discoveries that are going to happen on some of these platforms. Lenovo has gone through some significant transformations in the last two years, since we acquired the IBM x86 business, and that's really positioning us for this next phase of growth, and we'll talk more about that later. Today, we're announcing the largest end-to-end data center portfolio in Lenovo's history, as you heard from YY, and we're really taking the best of the x86 heritage from our IBM acquisition of the x86 server business and combining that with the cost economics that we've delivered from kind of our China heritage. As we've talked to some of the analysts in the room, it's really that best of the east and best of the west is combining together in this announcement today. We're going to be announcing two new brands, building on our position as the number one x86 server vendor in both customer satisfaction and in reliability, and we're also celebrating, next month in July, a very significant milestone, which will we'll be shipping our 20 millionth x86 server into the industry. For us, it's an amazing time, and it's an inflection point to kind of look back, pause, but also share the next phase of Lenovo and the exciting vision for the future. We're also making some declarations on our vision for the future today. Again, international supercomputing's going on, and, as it turns out, we're the fastest growing supercomputer company on earth. We'll talk about that. Our goal today that we're announcing is that we plan in the next several years to become number one in supercomputing, and we're going to put the investments behind that. We're also committing to our customers that we're going to disrupt the status quo and accelerate the pace of innovation, not just in our legacy server solutions, but also in Software-Defined because what we've heard from you is that that lack of legacy, we don't have a huge router business or a huge sand business to protect. It's that lack of legacy that's enabling us to invest and get ahead of the curb on this next transition to Software-Defined. So you're going to see us doing that through building our internal IP, through some significant joint ventures, and also through some merges and acquisitions over the next several quarters. Altogether, we're driving to be the most trusted data center provider in the industry between us and our customers and our suppliers. So a quick summary of what we're going to dive into today, both in my keynote as well as in the breakout sessions. We're in this transformation to the next phase of Lenovo's data center growth. We're closing out our previous transformation. We actually, believe it or not, in the last six months or so, have renegotiated 18,000 contracts in 160 countries. We built out an entire end-to-end organization from development and architecture all the way through sales and support. This next transformation, I think, is really going to excite Lenovo shareholders. We're building the largest data center portfolio in our history. I think when IBM would be up here a couple years ago, we might have two or three servers to announce in time to market with the next Intel platform. Today, we're announcing 14 new servers, seven new storage systems, an expanded set of networking portfolios based on our legacy with Blade Network Technologies and other companies we've acquired. Two new brands that we'll talk about for both data center infrastructure and Software-Defined, a new set of premium premiere services as well as a set of engineered solutions that are going to help our customers get to market faster. We're going to be celebrating our 20 millionth x86 server, and as Rod said, 25 years in x86 server compute, and Christian will be up here talking about 25 years of ThinkPad as well. And then a new end-to-end segmentation model because all of these strategies without execution are kind of meaningless. I hope to give you some confidence in the transformation that Lenovo has gone through as well. So, having observed Lenovo from one of its largest partners, Intel, for more than a couple decades, I thought I'd just start with why we have confidence on the foundation that we're building off of as we move from a PC company into a data center provider in a much more significant way. So Lenovo today is a company of $43 billion in sales. Absolutely astonishing, it puts us at about Fortune 202 as a company, with 52,000 employees around the world. We're supporting and have service personnel, almost a little over 10,000 service personnel that service our servers and data center technologies in over 160 countries that provide onsite service and support. We have seven data center research centers. One of the reasons I came from Intel to Lenovo was that I saw that Lenovo became number one in PCs, not through cost cutting but through innovation. It was Lenovo that was partnering on the next-generation Ultrabooks and two-in-ones and tablets in the modem mods that you saw, but fundamentally, our path to number one in data center is going to be built on innovation. Lastly, we're one of the last companies that's actually building not only our own motherboards at our own motherboard factories, but also with five global data center manufacturing facilities. Today, we build about four devices a second, but we also build over 100 servers per hour, and the cost economics we get, and I just visited our Shenzhen factory, of having everything from screws to microprocessors come up through the elevator on the first floor, go left to build PCs and ThinkPads and go right to build server technology, means we have some of the world's most cost effective solutions so we can compete in things like hyperscale computing. So it's with that that I think we're excited about the foundation that we can build off of on the Data Center Group. Today, as we stated, this event is about transformation, and today, I want to talk about three things we're going to transform. Number one is the customer experience. Number two is the data center and our customer base with Software-Defined infrastructure, and then the third is talk about how we plan to execute flawlessly with a new transformation that we've had internally at Lenovo. So let's dive into it. On customer experience, really, what does it mean to transform customer experience? Industry pundits say that if you're not constantly innovating, you can fall behind. Certainly the technology industry that we're in is transforming at record speed. 42% of business leaders or CIOs say that digital first is their top priority, but less than 50% actually admit that they have a strategy to get there. So people are looking for a partner to keep pace with that innovation and change, and that's really what we're driving to at Lenovo. So today we're announcing a set of plans to take another step function in customer experience, and building off of our number one position. Just recently, Gartner shows Lenovo as the number 24 supply chains of companies over $12 billion. We're up there with Amazon, Coca-Cola, and we've now completely re-architected our supply chain in the Data Center Group from end to end. Today, we can deliver 90% of our SKUs, order to ship in less than seven days. The artificial intelligence that YY mentioned is optimizing our performance even further. In services, as we talked about, we're now in 160 countries, supporting on-site support, 50 different call centers around the world for local language support, and we're today announcing a whole set of new premiere support services that I'll get into in a second. But we're building on what's already better than 90% customer satisfaction in this space. And then in development, for all the engineers out there, we started foundationally for this new set of products, talking about being number one in reliability and the lowest downtime of any x86 server vendor on the planet, and these systems today are architected to basically extend that leadership position. So let me tell you the realities of reliability. This is ITIC, it's a reliability report. 750 CIOs and IT managers from more than 20 countries, so North America, Europe, Asia, Australia, South America, Africa. This isn't anything that's paid for with sponsorship dollars. Lenovo has been number one for four years running on x86 reliability. This is the amount of downtime, four hours or more, in mission-critical environments from the leading x86 providers. You can see relative to our top two competitors that are ahead of us, HP and Dell, you can see from ITIC why we are building foundationally off of this, and why it's foundational to how we're developing these new platforms. In customer satisfaction, we are also rated number one in x86 server customer satisfaction. This year, we're now incentivizing every single Lenovo employee on customer satisfaction and customer experience. It's been a huge mandate from myself and most importantly YY as our CEO. So you may say well what is the basis of this number one in customer satisfaction, and it's not just being number one in one category, it's actually being number one in 21 of the 22 categories that TBR talks about. So whether it's performance, support systems, online product information, parts and availability replacement, Lenovo is number one in 21 of the 22 categories and number one for six consecutive studies going back to Q1 of 2015. So this, again, as we talk about the new product introductions, it's something that we absolutely want to build on, and we're humbled by it, and we want to continue to do better. So let's start now on the new products and talk about how we're going to transform the data center. So today, we are announcing two new product offerings. Think Agile and ThinkSystem. If you think about the 25 years of ThinkPad that Christian's going to talk about, Lenovo has a continuous learning culture. We're fearless innovators, we're risk takers, we continuously learn, but, most importantly, I think we're humble and we have some humility. That when we fail, we can fail fast, we learn, and we improve. That's really what drove ThinkPad to number one. It took about eight years from the acquisition of IBM's x86 PC business before Lenovo became number one, but it was that innovation, that listening and learning, and then improving. As you look at the 25 years of ThinkPad, there were some amazing successes, but there were also some amazing failures along the way, but each and every time we learned and made things better. So this year, as Rod said, we're not just celebrating 25 years of ThinkPad, but we're celebrating 25 years of x86 server development since the original IBM PC servers in 1992. It's a significant day for Lenovo. Today, we're excited to announce two new brands. ThinkSystem and ThinkAgile. It's an important new announcement that we started almost three years ago when we acquired the x86 server business. Why don't we run a video, and we'll show you a little bit about ThinkSystem and ThinkAgile. >> Narrator: The status quo is comfortable. It gets you by, but if you think that's good enough for your data center, think again. If adoption is becoming more complicated when it should be simpler, think again. If others are selling you technology that's best for them, not for you, think again. It's time for answers that win today and tomorrow. Agile, innovative, different. Because different is better. Different embraces change and makes adoption simple. Different designs itself around you. Using 25 years of innovation and design and R&D. Different transforms, it gives you ThinkSystem. World-record performance, most reliable, easy to integrate, scales faster. Different empowers you with ThinkAgile. It redefines the experience, giving you the speed of Cloud and the control of on-premise IT. Responding faster to what your business really needs. Different defines the future. Introducing Lenovo ThinkSystem and ThinkAgile. (exciting and slightly aggressive digital instrumental) >> All right, good stuff, huh? (audience applauds) So it's built off of this 25-year history of us being in the x86 server business, the commitment we established three years ago after acquiring the x86 server business to be and have the most reliable, the most agile, and the most highest-performing data center solutions on the planet. So today we're announcing two brands. ThinkSystem is for the traditional data center infrastructure, and ThinkAgile is our brand for Software-Defined infrastructure. Again, the teams challenge themselves from the start, how do we build off this rich heritage, expanding our position as number one in customer satisfaction, reliability, and one of the world's best supply chains. So let's start and look at the next set of solutions. We have always prided ourself that little things don't mean a lot. Little things mean everything. So today, as we said on the legacy solutions, we have over 30 world-record performance benchmarks on Intel architecture, and more than actually 150 since we started tracking this back in 2001. So it's the little pieces of innovation. It's the fine tuning that we do with our partners like an Intel or a Microsoft, an SAP, VMware, and Nutanix that's enabling us to get these world-record performance benchmarks, and with this next generation of solutions we think we'll continue to certainly do that. So today we're announcing the most comprehensive portfolio ever in our data center history. There's 14 servers, seven storage devices, and five network switches. We're also announcing, which is super important to our customer base, a set of new premiere service options. That's giving you fast access directly to a level two support person. No automated response system involved. You get to pick up the phone and directly talk to a level two support person that's going to have end-to-end ownership of the customer experience for ThinkSystem. With ThinkAgile, that's going to be completely bundled with every ThinkAgile you purchase. In addition, we're having white glove service on site that will actually unbox the product for you and get it up and running. It's an entirely new set of solutions for hybrid Cloud, for big data analytics and database applications around these engineered solutions. These are like 40- to 50-page guides where we fine-tuned the most important applications around virtual desktop infrastructure and those kinds of applications, working side by side with all of our ISP partners. So significantly expanding, not just the hardware but the software solutions that, obviously, you, as our customers, are running. So if you look at ThinkSystem innovation, again, it was designed for the ultimate in flexibility, performance, and reliability. It's a single now-unified brand that combines what used to be the Lenovo Think server and the IBM System x products now into a single brand that spans server, storage, and networking. We're basically future-proofing it for the next-generation data center. It's a significantly simplified portfolio. One of the big pieces that we've heard is that the complexity of our competitors has really been overwhelming to customers. We're building a more flexible, more agile solution set that requires less work, less qualification, and more future proofing. There's a bunch of things in this that you'll see in the demos. Faster time-to-service in terms of the modularity of the systems. 12% faster service equating to almost $50 thousand per hour of reduced downtime. Some new high-density options where we have four nodes and a 2U, twice the density to improve and reduce outbacks and mission-critical workloads. And then in high-performance computing and supercomputing, we're going to spend some time on that here shortly. We're announcing new water-cooled solutions. We have some of the most premiere water-cooled solutions in the world, with more than 25 patents pending now, just in the water-cooled solutions for supercomputing. The performance that we think we're going to see out of these systems is significant. We're building off of that legacy that we have today on the existing Intel solutions. Today, we believe we have more than 50% of SAP HANA installations in the world. In fact, SAP just went public that they're running their internal SAP HANA on Lenovo hardware now. We're seeing a 59% increase in performance on SAP HANA generation on generation. We're seeing 31% lower total cost to ownership. We believe this will continue our position of having the highest level of five-nines in the x86 server industry. And all of these servers will start being available later this summer when the Intel announcements come out. We're also announcing the largest storage portfolio in our history, significantly larger than anything we've done in the past. These are all available today, including some new value class storage offerings. Our network portfolio is expanding now significantly. It was a big surprise when I came to Lenovo, seeing the hundreds of engineers we had from the acquisition of Blade Network Technologies and others with our teams in Romania, Santa Clara, really building out both the embedded portfolio but also the top racks, which is around 10 gig, 25 gig, and 100 gig. Significantly better economics, but all the performance you'd expect from the largest networking companies in the world. Those are also available today. ThinkAgile and Software-Defined, I think the one thing that has kind of overwhelmed me since coming in to Lenovo is we are being embraced by our customers because of our lack of legacy. We're not trying to sell you one more legacy SAN at 65% margins. ThinkAgile really was founded, kind of born free from the shackles of legacy thinking and legacy infrastructure. This is just the beginning of what's going to be an amazing new brand in the transformation to Software-Defined. So, for Lenovo, we're going to invest in our own internal organic IP. I'll foreshadow: There's some significant joint ventures and some mergers and acquisitions that are going to be coming in this space. And so this will be the foundation for our Software-Defined networking and storage, for IoT, and ultimately for the 5G build-out as well. This is all built for data centers of tomorrow that require fluid resources, tightly integrated software and hardware in kind of an appliance, selling at the rack level, and so we'll show you how that is going to take place here in a second. ThinkAgile, we have a few different offerings. One is around hyperconverged storage, Hybrid Cloud, and also Software-Defined storage. So we're really trying to redefine the customer experience. There's two different solutions we're having today. It's a Microsoft Azure solution and a Nutanix solution. These are going to be available both in the appliance space as well as in a full rack solution. We're really simplifying and trying to transform the entire customer experience from how you order it. We've got new capacity planning tools that used to take literally days for us to get the capacity planning done. It's now going down to literally minutes. We've got new order, delivery, deployment, administration service, something we're calling ThinkAgile Advantage, which is the white glove unboxing of the actual solutions on prem. So the whole thing when you hear about it in the breakout sessions about transforming the entire customer experience with both an HX solution and an SX solution. So again, available at the rack level for both Nutanix and for Microsoft Solutions available in just a few months. Many of you in the audience since the Microsoft Airlift event in Seattle have started using these things, and the feedback to date has been fantastic. We appreciate the early customer adoption that we've seen from people in the audience here. So next I want to bring up one of our most important partners, and certainly if you look at all of these solutions, they're based on the next-generation Intel Xeon scalable processor that's going to be announcing very very soon. I want to bring on stage Rupal Shah, who's the corporate vice president and general manager of Global Data Center Sales with Intel, so Rupal, please join me. (upbeat instrumental) So certainly I have long roots at Intel, but why don't you talk about, from Intel's perspective, why Lenovo is an important partner for Lenovo. >> Great, well first of all, thank you very much. I've had the distinct pleasure of not only working with Kirk for many many years, but also working with Lenovo for many years, so it's great to be here. Lenovo is not only a fantastic supplier and leader in the industry for Intel-based servers but also a very active partner in the Intel ecosystem. In the Intel ecosystem, specifically, in our partner programs and in our builder programs around Cloud, around the network, and around storage, I personally have had a long history in working with Lenovo, and I've seen personally that PC transformation that you talked about, Kirk, and I believe, and I know that Intel believes in Lenovo's ability to not only succeed in the data center but to actually lead in the data center. And so today, the ThinkSystem and ThinkAgile announcement is just so incredibly important. It's such a great testament to our two companies working together, and the innovation that we're able to bring to the market, and all of it based on the Intel Xeon scalable processor. >> Excellent, so tell me a little bit about why we've been collaborating, tell me a little bit about why you're excited about ThinkSystem and ThinkAgile, specifically. >> Well, there are a lot of reasons that I'm excited about the innovation, but let me talk about a few. First, both of our companies really stand behind the fact that it's increasingly a hybrid world. Our two companies offer a range of solutions now to customers to be able to address their different workload needs. ThinkSystem really brings the best, right? It brings incredible performance, flexibility in data center deployment, and industry-leading reliability that you've talked about. And, as always, Xeon has a history of being built for the data center specifically. The Intel Xeon scalable processor is really re-architected from the ground up in order to enhance compute, network, and storage data flows so that we can deliver workload optimized performance for both a wide range of traditional workloads and traditional needs but also some emerging new needs in areas like artificial intelligence. Second is when it comes to the next generation of Cloud infrastructure, the new Lenovo ThinkAgile line offers a truly integrated offering to address data center pain points, and so not only are you able to get these pretested solutions, but these pretested solutions are going to get deployed in your infrastructure faster, and they're going to be deployed in a way that's going to meet your specific needs. This is something that is new for both of us, and it's an incredible innovation in the marketplace. I think that it's a great addition to what is already a fantastic portfolio for Lenovo. >> Excellent. >> Finally, there's high-performance computing. In high-performance computing. First of all, congratulations. It's a big week, I think, for both of us. Fantastic work that we've been doing together in high-performance computing and actually bringing the best of the best to our customers, and you're going to hear a whole lot more about that. We obviously have a number of joint innovation centers together between Intel and Lenovo. Tell us about some of the key innovations that you guys are excited about. >> Well, Intel and Lenovo, we do have joint innovation labs around the world, and we have a long and strong history of very tight collaboration. This has brought a big wave of innovation to the marketplace in areas like software-defined infrastructure. Yet another area is working closely on a joint vision that I think our two companies have in artificial intelligence. Intel is very committed to the world of AI, and we're committed in making the investments required in technology development, in training, and also in R&D to be able to deliver end-to-end solutions. So with Intel's comprehensive technology portfolio and Lenovo's development and innovation expertise, it's a great combination in this space. I've already talked a little bit about HPC and so has Kirk, and we're going to hear a little bit more to come, but we're really building the fastest compute solutions for customers that are solving big problems. Finally, we often talk about processors from Intel, but it's not just about the processors. It's way beyond that. It's about engaging at the solution level for our customers, and I'm so excited about the work that we've done together with Lenovo to bring to market products like Intel Omni-Path Architecture, which is really the fabric for high-performance data centers. We've got a great showing this week with Intel Omni-Path Architecture, and I'm so grateful for all the work that we've done to be able to bring true solutions to the marketplace. I am really looking forward to our future collaboration with Lenovo as we have in the past. I want to thank you again for inviting me here today, and congratulations on a fantastic launch. >> Thank you, Rupal, very much, for the long partnership. >> Thank you. (audience applauds) >> Okay, well now let's transition and talk a little bit about how Lenovo is transforming. The first thing we've done when I came on board about six months ago is we've transformed to a truly end-to-end organization. We're looking at the market segments I think as our customers define them, and we've organized into having vice presidents and senior vice presidents in charge of each of these major groups, thinking really end to end, from architecture all the way to end of life and customer support. So the first is hyperscale infrastructure. It's about 20% on the market by 2020. We've hired a new vice president there to run that business. Given we can make money in high-volume desktop PCs, it's really the manufacturing prowess, deep engineering collaboration that's enabling us to sell into Baidu, and to Alibaba, Tencent, as well as the largest Cloud vendors on the West Coast here in the United States. We believe we can make money here by having basically a deep deep engineering engagement with our key customers and building on the PC volume economics that we have within Lenovo. On software-defined infrastructure, again, it's that lack of legacy that I think is propelling us into this space. We're not encumbered by trying to sell one more legacy SAN or router, and that's really what's exciting us here, as we transform from a hardware to a software-based company. On HPC and AI, as we said, we'll talk about this in a second. We're the fastest-growing supercomputing company on earth. We have aspirations to be the largest supercomputing company on earth, with China and the U.S. vying for number one in that position, it puts us in a good position there. We're going to bridge that into artificial intelligence in our upcoming Shanghai Tech World. The entire day is around AI. In fact, YY has committed $1.2 billion to artificial intelligence over the next few years of R&D to help us bridge that. And then on data center infrastructure, is really about moving to a solutions based infrastructure like our position with SAP HANA, where we've gone deep with engineers on site at SAP, SAP running their own infrastructure on Lenovo and building that out beyond just SAP to other solutions in the marketplace. Overall, significantly expanding our services portfolio to maintain our number one customer satisfaction rating. So given ISC, or International Supercomputing, this week in Frankfurt, and a lot of my team are actually over there, I wanted to just show you the transformation we've had at Lenovo for delivering some of the technology to solve some of the most challenging humanitarian problems on earth. Today, we are the fastest-growing supercomputer company on the planet in terms of number of systems on the Top 500 list. We've gone from zero to 92 positions in just a few short years, but IDC also positions Lenovo as the fast-growing supercomputer and HPC company overall at about 17% year on year growth overall, including all of the broad channel, the regional universities and this kind of thing, so this is an exciting place for us. I'm excited today that Sergi has come all the way from Spain to be with us today. It's an exciting time because this week we announce the fastest next-generation Intel supercomputer on the planet at Barcelona Supercomputer. Before I bring Sergi on stage, let's run a video and I'll show you why we're excited about the capabilities of these next-generation supercomputers. Run the video please. >> Narrator: Different creates one of the most powerful supercomputers for the Barcelona Supercomputer Center. A high-performance, high-capacity design to help shape tomorrow's world. Different designs what's best for you, with 25 years of end-to-end expertise delivering large-scale solutions. It integrates easily with technology from industry partners, through deep collaboration with the client to manufacture, test, configure, and install at global scale. Different achieves the impossible. The first of a new series. A more energy-efficient supercomputer yet 10 times more powerful than its predecessor. With over 3,400 Lenovo ThinkSystem servers, each performing over two trillion calculations per second, giving us 11.1 petaflop capacity. Different powers MareNostrum, a supercomputer that will help us better understand cancer, help discover disease-fighting therapies, predict the impact of climate change. MareNostrom 4.0 promises to uncover answers that will help solve humanities greatest challenges. (audience applauds) >> So please help me in welcoming operations director of the Barcelona Supercomputer Center, Sergi Girona. So welcome, and again, congratulations. It's been a big week for both of us. But I think for a long time, if you haven't been to Barcelona, this has been called the world's most beautiful computer because it's in one of the most gorgeous chapels in the world as you can see here. Congratulations, we now are number 13 on the Top500 list and the fastest next-generation Intel computer. >> Thank you very much, and congratulations to you as well. >> So maybe we can just talk a little bit about what you've done over the last few months with us. >> Sure, thank you very much. It is a pleasure for me being invited here to present to you what we've been doing with Lenovo so far and what we are planning to do in the next future. I'm representing here Barcelona Supercomputing Center. I am presenting high-performance computing services to science and industry. How we see these science services has changed the paradigm of science. We are coming from observation. We are coming from observation on the telescopes and the microscopes and the building of infrastructures, but this is not affordable anymore. This is very expensive, so it's not possible, so we need to move to simulations. So we need to understand what's happening in our environment. We need to predict behaviors only going through simulation. So, at BSC, we are devoted to provide services to industry, to science, but also we are doing our own research because we want to understand. At the same time, we are helping and developing the new engineers of the future on the IT, on HPC. So we are having four departments based on different topics. The main and big one is wiling to understand how we are doing the next supercomputers from the programming level to the performance to the EIA, so all these things, but we are having also interest on what about the climate change, what's the air quality that we are having in our cities. What is the precision medicine we need to have. How we can see that the different drugs are better for different individuals, for different humans, and of course we have an energy department, taking care of understanding what's the better optimization for a cold, how we can save energy running simulations on different topics. But, of course, the topic of today is not my research, but it's the systems we are building in Barcelona. So this is what we have been building in Barcelona so far. From left to right, you have the preparation of the facility because this is 160 square meters with 1.4 megabytes, so that means we need new piping, we need new electricity, at the same time in the center we have to install the core services of the system, so the management practices, and then on the right-hand side you have installation of the networking, the Omni-Path by Intel. Because all of the new racks have to be fully integrated and they need to come into operation rapidly. So we start deployment of the system May 15, and we've now been ending and coming in production July first. All the systems, all the (mumbles) systems from Lenovo are coming before being open and available. What we've been installing here in Barcelona is general purpose systems for our general workload of the system with 3,456 nodes. Everyone of those having 48 cores, 96 gigabytes main memory for a total capacity of about 400 terabytes memory. The objective of this is that we want to, all the system, all the processors, to work together for a single execution for running altogether, so this is an example of the platinum processors from Intel having 24 cores each. Of course, for doing this together with all the cores in the same application, we need a high-speed network, so this is Omni-Path, and of course all these cables are connecting all the nodes. Noncontention, working together, cooperating. Of course, this is a bunch of cables. They need to be properly aligned in switches. So here you have the complete presentation. Of course, this is general purpose, but we wanted to invest with our partners. We want to understand what the supercomputers we wanted to install in 2020, (mumbles) Exascale. We want to find out, we are installing as well systems with different capacities with KNH, with power, with ARM processors. We want to leverage our obligations for the future. We want to make sure that in 2020 we are ready to move our users rapidly to the new technologies. Of course, this is in total, giving us a total capacity of 13.7 petaflops that it's 12 times the capacity of the former MareNostrum four years ago. We need to provide the services to our scientists because they are helping to solve problems for humanity. That's the place we are going to go. Last is inviting you to come to Barcelona to see our place and our chapel. Thank you very much (audience applauds). >> Thank you. So now you can all go home to your spouses and significant others and say you have a formal invitation to Barcelona, Spain. So last, I want to talk about what we've done to transform Lenovo. I think we all know the history is nice but without execution, none of this is going to be possible going forward, so we have been very very busy over the last six months to a year of transforming Lenovo's data center organization. First, we moved to a dedicated end-to-end sales and marketing organization. In the past, we had people that were shared between PC and data center, now thousands of sales people around the world are 100% dedicated end to end to our data center clients. We've moved to a fully integrated and dedicated supply chain and procurement organization. A fully dedicated quality organization, 100% dedicated to expanding our data center success. We've moved to a customer-centric segment, again, bringing in significant new leaders from outside the company to look end to end at each of these segments, supercomputing being very very different than small business, being very very different than taking care of, for example, a large retailer or bank. So around hyperscale, software-defined infrastructure, HPC, AI, and supercomputing and data center solutions-led infrastructure. We've built out a whole new set of global channel programs. Last year, or a year passed, we have five different channel programs around the world. We've now got one simplified channel program for dealer registration. I think our channel is very very energized to go out to market with Lenovo technology across the board, and a whole new set of system integrator relationships. You're going to hear from one of them in Christian's discussion, but a whole new set of partnerships to build solutions together with our system integrative partners. And, again, as I mentioned, a brand new leadership team. So look forward to talking about the details of this. There's been a significant amount of transformation internal to Lenovo that's led to the success of this new product introduction today. So in conclusion, I want to talk about the news of the day. We are transforming Lenovo to the next phase of our data center growth. Again, in over 160 countries, closing on that first phase of transformation and moving forward with some unique declarations. We're launching the largest portfolio in our history, not just in servers but in storage and networking, as everything becomes kind of a software personality on top of x86 Compute. We think we're very well positioned with our scale on PCs as well as data center. Two new brands for both data center infrastructure and Software-Defined, without the legacy shackles of our competitors, enabling us to move very very quickly into Software-Defined, and, again, foreshadowing some joint ventures in M&A that are going to be coming up that will further accelerate ourselves there. New premiere support offerings, enabling you to get direct access to level two engineers and white glove unboxing services, which are going to be bundled along with ThinkAgile. And then celebrating the milestone of 25 years in x86 server compute, not just ThinkPads that you'll hear about shortly, but also our 20 million server shipping next month. So we're celebrating that legacy and looking forward to the next phase. And then making sure we have the execution engine to maintain our position and grow it, being number one in customer satisfaction and number one in quality. So, with that, thank you very much. I look forward to seeing you in the breakouts today and talking with many of you, and I'll bring Rod back up to transition us to the next section. Thank you. (audience applauds) >> All right, Kirk, thank you, sir. All right, ladies and gentlemen, what did you think of that? How about a big round of applause for ThinkAgile, ThinkSystems new brands? (audience applauds) And, obviously, with that comes a big round of applause, for Kirk Skaugen, my boss, so we've got to give him a big round of applause, please. I need to stay employed, it's very important. All right, now you just heard from Kirk about some of the new systems, the brands. How about we have a quick look at the video, which shows us the brand new DCG images. >> Narrator: Legacy thinking is dead, stuck in the past, selling the same old stuff, over and over. So then why does it seem like a data center, you know, that thing powering all our little devices and more or less everything interaction today is still stuck in legacy thinking because it's rigid, inflexible, slow, but that's not us. We don't do legacy. We do different. Because different is fearless. Different reduces Cloud deployment from days to hours. Different creates agile technology that others follow. Different is fluid. It uses water-cooling technology to save energy. It co-innovates with some of the best minds in the industry today. Different is better, smarter. Maybe that's why different already holds so many world-record benchmarks in everything. From virtualization to database and application performance or why it's number one in reliability and customer satisfaction. Legacy sells you what they want. Different builds the data center you need without locking you in. Introducing the Data Center Group at Lenovo. Different... Is better. >> All right, ladies and gentlemen, a big round of applause, once again (mumbles) DCG, fantastic. And I'm sure all of you would agree, and Kirk mentioned it a couple of times there. No legacy means a real consultative approach to our customers, and that's something that we really feel is differentiated for ourselves. We are effectively now one of the largest startups in the DCG space, and we are very much ready to disrupt. Now, here in New York City, obviously, the heart of the fashion industry, and much like fashion, as I mentioned earlier, we're different, we're disruptive, we're agile, smarter, and faster. I'd like to say that about myself, but, unfortunately, I can't. But those of you who have observed, you may have noticed that I, too, have transformed. I don't know if anyone saw that. I've transformed from the pinstripe blue, white shirt, red tie look of the, shall we say, our predecessors who owned the x86 business to now a very Lenovo look. No tie and consequently a little bit more chic New York sort of fashion look, shall I say. Nothing more than that. So anyway, a bit of a transformation. It takes a lot to get to this look, by the way. It's a lot of effort. Our next speaker, Christian Teismann, is going to talk a lot about the core business of Lenovo, which really has been, as we've mentioned today, our ThinkPad, 25-year anniversary this year. It's going to be a great celebration inside Lenovo, and as we get through the year and we get closer and closer to the day, you'll see a lot more social and digital work that engages our customers, partners, analysts, et cetera, when we get close to that birthday. Customers just generally are a lot tougher on computers. We know they are. Whether you hang onto it between meetings from the corner of the Notebook, and that's why we have magnesium chassis inside the box or whether you're just dropping it or hypothetically doing anything else like that. We do a lot of robust testing on these products, and that's why it's the number one branded Notebook in the world. So Christian talks a lot about this, but I thought instead of having him talk, I might just do a little impromptu jump back stage and I'll show you exactly what I'm talking about. So follow me for a second. I'm going to jaunt this way. I know a lot of you would have seen, obviously, the front of house here, what we call the front of house. Lots of videos, et cetera, but I don't think many of you would have seen the back of house here, so I'm going to jump through the back here. Hang on one second. You'll see us when we get here. Okay, let's see what's going on back stage right now. You can see one of the team here in the back stage is obviously working on their keyboard. Fantastic, let me tell you, this is one of the key value props of this product, obviously still working, lots of coffee all over it, spill-proof keyboard, one of the key value propositions and why this is the number one laptop brand in the world. Congratulations there, well done for that. Obviously, we test these things. Height, distances, Mil-SPEC approved, once again, fantastic product, pick that up, lovely. Absolutely resistant to any height or drops, once again, in line with our Mil-SPEC. This is Charles, our producer and director back stage for the absolute event. You can see, once again, sand, coincidentally, in Manhattan, who would have thought a snow storm was occurring here, but you can throw sand. We test these things for all of the elements. I've obviously been pretty keen on our development solutions, having lived in Japan for 12 years. We had this originally designed in 1992 by (mumbles), he's still our chief development officer still today, fantastic, congratulations, a sand-enhanced notebook, he'd love that. All right, let's get back out front and on with the show. Watch the coffee. All right, how was that? Not too bad (laughs). It wasn't very impromptu at all, was it? Not at all a set up (giggles). How many people have events and have a bag of sand sitting on the floor right next to a Notebook? I don't know. All right, now it's time, obviously, to introduce our next speaker, ladies and gentlemen, and I hope I didn't steal his thunder, obviously, in my conversations just now that you saw back stage. He's one of my best friends in Lenovo and easily is a great representative of our legendary PC products and solutions that we're putting together for all of our customers right now, and having been an ex-Pat with Lenovo in New York really calls this his second home and is continually fighting with me over the fact that he believes New York has better sushi than Tokyo, let's welcome please, Christian Teismann, our SVP, Commercial Business Segment, and PC Smart Office. Christian Teismann, come on up mate. (audience applauds) >> So Rod thank you very much for this wonderful introduction. I'm not sure how much there is to add to what you have seen already back stage, but I think there is a 25-year of history I will touch a little bit on, but also a very big transformation. But first of all, welcome to New York. As Rod said, it's my second home, but it's also a very important place for the ThinkPad, and I will come back to this later. The ThinkPad is thee industry standard of business computing. It's an industry icon. We are celebrating 25 years this year like no other PC brand has done before. But this story today is not looking back only. It's a story looking forward about the future of PC, and we see a transformation from PCs to personalized computing. I am privileged to lead the commercial PC and Smart device business for Lenovo, but much more important beyond product, I also am responsible for customer experience. And this is what really matters on an ongoing basis. But allow me to stay a little bit longer with our iconic ThinkPad and history of the last 25 years. ThinkPad has always stand for two things, and it always will be. Highest quality in the industry and technology innovation leadership that matters. That matters for you and that matters for your end users. So, now let me step back a little bit in time. As Rod was showing you, as only Rod can do, reliability is a very important part of ThinkPad story. ThinkPads have been used everywhere and done everything. They have survived fires and extreme weather, and they keep surviving your end users. For 25 years, they have been built for real business. ThinkPad also has a legacy of first innovation. There are so many firsts over the last 25 years, we could spend an hour talking about them. But I just want to cover a couple of the most important milestones. First of all, the ThinkPad 1992 has been developed and invented in Japan on the base design of a Bento box. It was designed by the famous industrial designer, Richard Sapper. Did you also know that the ThinkPad was the first commercial Notebook flying into space? In '93, we traveled with the space shuttle the first time. For two decades, ThinkPads were on every single mission. Did you know that the ThinkPad Butterfly, the iconic ThinkPad that opens the keyboard to its size, is the first and only computer showcased in the permanent collection of the Museum of Modern Art, right here in New York City? Ten years later, in 2005, IBM passed the torch to Lenovo, and the story got even better. Over the last 12 years, we sold over 100 million ThinkPads, four times the amount IBM sold in the same time. Many customers were concerned at that time, but since then, the ThinkPad has remained the best business Notebook in the industry, with even better quality, but most important, we kept innovating. In 2012, we unveiled the X1 Carbon. It was the thinnest, lightest, and still most robust business PC in the world. Using advanced composited materials like a Formula One car, for super strengths, X1 Carbon has become our ThinkPad flagship since then. We've added an X1 Carbon Yoga, a 360-degree convertible. An X1 Carbon tablet, a detachable, and many new products to come in the future. Over the last few years, many new firsts have been focused on providing the best end-user experience. The first dual-screen mobile workstation. The first Windows business tablet, and the first business PC with OLED screen technology. History is important, but a massive transformation is on the way. Future success requires us to think beyond the box. Think beyond hardware, think beyond notebooks and desktops, and to think about the future of personalized computing. Now, why is this happening? Well, because the business world is rapidly changing. Looking back on history that YY gave, and the acceleration of innovation and how it changes our everyday life in business and in personal is driving a massive change also to our industry. Most important because you are changing faster than ever before. Human capital is your most important asset. In today's generation, they want to have freedom of choice. They want to have a product that is tailored to their specific needs, every single day, every single minute, when they use it. But also IT is changing. The Cloud, constant connectivity, 5G will change everything. Artificial intelligence is adding things to the capability of an infrastructure that we just are starting to imagine. Let me talk about the workforce first because it's the most important part of what drives this. The millennials will comprise more than half of the world's workforce in 2020, three years from now. Already, one out of three millennials is prioritizing mobile work environment over salary, and for nearly 60% of all new hires in the United States, technology is a very important factor for their job search in terms of the way they work and the way they are empowered. This new generation of new employees has grown up with PCs, with Smart phones, with tablets, with touch, for their personal use and for their occupation use. They want freedom. Second, the workplace is transforming. The video you see here in the background. This is our North America headquarters in Raleigh, where we have a brand new Smart workspace. We have transformed this to attract the new generation of workers. It has fewer traditional workspaces, much more meaning and collaborative spaces, and Lenovo, like many companies, is seeing workspaces getting smaller. An average workspace per employee has decreased by 30% over the last five years. Employees are increasingly mobile, but, if they come to the office, they want to collaborate with their colleagues. The way we collaborate and communicate is changing. Investment in new collaboration technology is exploding. The market of collaboration technology is exceeding the market of personal computing today. It will grow in the future. Conference rooms are being re-imagined from a ratio of 50 employees to one large conference room. Today, we are moving into scenarios of four employees to one conference room, and these are huddle rooms, pioneer spaces. Technology is everywhere. Video, mega-screens, audio, electronic whiteboards. Adaptive technologies are popping up and change the way we work. As YY said earlier, the pace of the revolution is astonishing. So personalized computing will transform the PC we all know. There's a couple of key factors that we are integrating in our next generations of PC as we go forward. The most important trends that we see. First of all, choose your own device. We talked about this new generation of workforce. Employees who are used to choosing their own device. We have to respond and offer devices that are tailored to each end user's needs without adding complexity to how we operate them. PC is a service. Corporations increasingly are looking for on-demand computing in data center as well as in personal computing. Customers want flexibility. A tailored management solution and a services portfolio that completes the lifecycle of the device. Agile IT, even more important, corporations want to run an infrastructure that is agile, instant respond to their end-customer needs, that is self provisioning, self diagnostic, and remote software repair. Artificial intelligence. Think about artificial intelligence for you personally as your personal assistant. A personal assistant which does understand you, your schedule, your travel, your next task, an extension of yourself. We believe the PC will be the center of this mobile device universe. Mobile device synergy. Each of you have two devices or more with you. They need to work together across different operating systems, across different platforms. We believe Lenovo is uniquely positioned as the only company who has a Smart phone business, a PC business, and an infrastructure business to really seamlessly integrate all of these devices for simplicity and for efficiency. Augmented reality. We believe augmented reality will drive significantly productivity improvements in commercial business. The core will be to understand industry-specific solutions. New processes, new business challenges, to improve things like customer service and sales. Security will remain the foundation for personalized computing. Without security, without trust in the device integrity, this will not happen. One of the most important trends, I believe, is that the PC will transform, is always connected, and always on, like a Smart phone. Regardless if it's open, if it's closed, if you carry it, or if you work with it, it always is capable to respond to you and to work with you. 5G is becoming a reality, and the data capacity that will be out there is by far exceeding today's traffic imagination. Finally, Smart Office, delivering flexible and collaborative work environments regardless on where the worker sits, fully integrated and leverages all the technologies we just talked before. These are the main challenges you and all of your CIO and CTO colleagues have to face today. A changing workforce and a new set of technologies that are transforming PC into personalized computing. Let me give you a real example of a challenge. DXC was just formed by merging CSE company and HP's Enterprise services for the largest independent services company in the world. DXC is now a 25 billion IT services leader with more than 170,000 employees. The most important capital. 6,000 clients and eight million managed devices. I'd like to welcome their CIO, who has one of the most challenging workforce transformation in front of him. Erich Windmuller, please give him a round of applause. (audience applauds). >> Thank you Christian. >> Thank you. >> It's my pleasure to be here, thank you. >> So first of all, let me congratulation you to this very special time. By forming a new multi-billion-dollar enterprise, this new venture. I think it has been so far fantastically received by analysts, by the press, by customers, and we are delighted to be one of your strategic partners, and clearly we are collaborating around workforce transformation between our two companies. But let me ask you a couple of more personal questions. So by bringing these two companies together with nearly 200,00 employees, what are the first actions you are taking to make this a success, and what are your biggest challenges? >> Well, first, again, let me thank you for inviting me and for DXC Technology to be a part of this very very special event with Lenovo, so thank you. As many of you might expect, it's been a bit of a challenge over the past several months. My goal was really very simple. It was to make sure that we brought two companies together, and they could operate as one. We need to make sure that could continue to support our clients. We certainly need to make sure we could continue to sell, our sellers could sell. That we could pay our employees, that we could hire people, we could do all the basic foundational things that you might expect a company would want to do, but we really focused on three simple areas. I called it the three Cs. Connectivity, communicate, and collaborate. So we wanted to make sure that we connected our legacy data centers so we could transfer information and communicate back and forth. We certainly wanted to be sure that our employees could communicate via WIFI, whatever locations they may or may not go to. We certainly wanted to, when we talk about communicate, we need to be sure that everyone of our employees could send and receive email as a DXC employee. And that we had a single-enterprise directory and people could communicate, gain access to calendars across each of the two legacy companies, and then collaborate was also key. And so we wanted to be sure, again, that people could communicate across each other, that our legacy employees on either side could get access to many of their legacy systems, and, again, we could collaborate together as a single corporation, so it was challenging, but very very, great opportunity for all of us. And, certainly, you might expect cyber and security was a very very important topic. My chairman challenged me that we had to be at least as good as we were before from a cyber perspective, and when you bring two large companies together like that there's clearly an opportunity in this disruptive world so we wanted to be sure that we had a very very strong cyber security posture, of which Lenovo has been very very helpful in our achieving that. >> Thank you, Erich. So what does DXC consider as their critical solutions and technology for workplace transformation, both internally as well as out on the market? >> So workplace transformation, and, again, I've heard a lot of the same kinds of words that I would espouse... It's all about making our employees productive. It's giving the right tools to do their jobs. I, personally, have been focused, and you know this because Lenovo has been a very very big part of this, in working with our, we call it our My Style Workplace, it's an offering team in developing a solution and driving as much functionality as possible down to the workstation. We want to be able, for me, to avoid and eliminate other ancillary costs, audio video costs, telecommunication cost. The platform that we have, the digitized workstation that Lenovo has provided us, has just got a tremendous amount of capability. We want to streamline those solutions, as well, on top of the modern server. The modern platform, as we call it, internally. I'd like to congratulate Kirk and your team that you guys have successfully... Your hardware has been certified on our modern platform, which is a significant accomplishment between our two companies and our partnership. It was really really foundational. Lenovo is a big part of our digital workstation transformation, and you'll continue to be, so it's very very important, and I want you to know that your tools and your products have done a significant job in helping us bring two large corporations together as one. >> Thank you, Erich. Last question, what is your view on device as a service and hardware utility model? >> This is the easy question, right? So who in the room doesn't like PC or device as a service? This is a tremendous opportunity, I think, for all of us. Our corporation, like many of you in the room, we're all driven by the concept of buying devices in an Opex versus a Capex type of a world and be able to pay as you go. I think this is something that all of us would like to procure, product services and products, if you will, personal products, in this type of a mode, so I am very very eager to work with Lenovo to be sure that we bring forth a very dynamic and constructive device as a service approach. So very eager to do that with Lenovo and bring that forward for DXC Technology. >> Erich, thank you very much. It's a great pleasure to work with you, today and going forward on all sides. I think with your new company and our lineup, I think we have great things to come. Thank you very much. >> My pleasure, great pleasure, thank you very much. >> So, what's next for Lenovo PC? We already have the most comprehensive commercial portfolio in the industry. We have put the end user in the core of our portfolio to finish and going forward. Ultra mobile users, like consultants, analysts, sales and service. Heavy compute users like engineers and designers. Industry users, increasingly more understanding. Industry-specific use cases like education, healthcare, or banking. So, there are a few exciting things we have to announce today. Obviously, we don't have that broad of an announcement like our colleagues from the data center side, but there is one thing that I have that actually... Thank you Rod... Looks like a Bento box, but it's not a ThinkPad. It's a first of it's kind. It's the world's smallest professional workstation. It has the power of a tower in the Bento box. It has the newest Intel core architecture, and it's designed for a wide range of heavy duty workload. Innovation continues, not only in the ThinkPad but also in the desktops and workstations. Second, you hear much about Smart Office and workspace transformation today. I'm excited to announce that we have made a strategic decision to expand our Think portfolio into Smart Office, and we will soon have solutions on the table in conference rooms, working with strategic partners like Intel and like Microsoft. We are focused on a set of devices and a software architecture that, as an IoT architecture, unifies the management of Smart Office. We want to move fast, so our target is that we will have our first product already later this year. More to come. And finally, what gets me most excited is the upcoming 25 anniversary in October. Actually, if you go to Japan, there are many ThinkPad lovers. Actually beyond lovers, enthusiasts, who are collectors. We've been consistently asked in blogs and forums about a special anniversary edition, so let me offer you a first glimpse what we will announce in October, of something we are bring to market later this year. For the anniversary, we will introduce a limited edition product. This will include throwback features from ThinkPad's history as well as the best and most powerful features of the ThinkPad today. But we are not just making incremental adjustments to the Think product line. We are rethinking ThinkPad of the future. Well, here is what I would call a concept card. Maybe a ThinkPad without a hinge. Maybe one you can fold. What do you think? (audience applauds) but this is more than just design or look and feel. It's a new set of advanced materials and new screen technologies. It's how you can speak to it or write on it or how it speaks to you. Always connected, always on, and can communicate on multiple inputs and outputs. It will anticipate your next meeting, your next travel, your next task. And when you put it all together, it's just another part of the story, which we call personalized computing. Thank you very much. (audience applauds) Thank you, sir. >> Good on ya, mate. All right, ladies and gentlemen. We are now at the conclusion of the day, for this session anyway. I'm going to talk a little bit more about our breakouts and our demo rooms next door. But how about the power with no tower, from Christian, huh? Big round of applause. (audience applauds) And what about the concept card, the ThinkPad? Pretty good, huh? I love that as well. I tell you, it was almost like Leonardo DiCaprio was up on stage at one stage. He put that big ThinkPad concept up, and everyone's phones went straight up and took a photo, the whole audience, so let's be very selective on how we distribute that. I'm sure it's already on Twitter. I'll check it out in a second. So once again, ThinkPad brand is a core part of the organization, and together both DCG and PCSD, what we call PCSD, which is our client side of the business and Smart device side of the business, are obviously very very linked in transforming Lenovo for the future. We want to also transform the industry, obviously, and transform the way that all of us do business. Lenovo, if you look at basically a summary of the day, we are highly committed to being a top three data center provider. That is really important for us. We are the largest and fastest growing supercomputing company in the world, and Kirk actually mentioned earlier on, committed to being number one by 2020. So Madhu who is in Frankfurt at the International Supercomputing Convention, if you're watching, congratulations, your targets have gone up. There's no doubt he's going to have a lot of work to do. We're obviously very very committed to disrupting the data center. That's obviously really important for us. As we mentioned, with both the brands, the ThinkSystem, and our ThinkAgile brands now, highly focused on disrupting and ensuring that we do things differently because different is better. Thank you to our customers, our partners, media, analysts, and of course, once again, all of our employees who have been on this journey with us over the last two years that's really culminating today in the launch of all of our new products and our profile and our portfolio. It's really thanks to all of you that once again on your feedback we've been able to get to this day. And now really our journey truly begins in ensuring we are disrupting and enduring that we are bringing more value to our customers without that legacy that Kirk mentioned earlier on is really an advantage for us as we really are that large startup from a company perspective. It's an exciting time to be part of Lenovo. It's an exciting time to be associated with Lenovo, and I hope very much all of you feel that way. So a big round of applause for today, thank you very much. (audience applauds) I need to remind all of you. I don't think I'm going to have too much trouble getting you out there, because I was just looking at Christian on the streaming solutions out in the room out the back there, and there's quite a nice bit of lunch out there as well for those of you who are hungry, so at least there's some good food out there, but I think in reality all of you should be getting up into the demo sessions with our segment general managers because that's really where the rubber hits the road. You've heard from YY, you've heard from Kirk, and you've heard from Christian. All of our general managers and our specialists in our product sets are going to be out there to obviously demonstrate our technology. As we said at the very beginning of this session, this is Transform, obviously the fashion change, hopefully you remember that. Transform, we've all gone through the transformation. It's part of our season of events globally, and our next event obviously is going to be in Tech World in Shanghai on the 20th of July. I hope very much for those of you who are going to attend have a great safe travel over there. We look forward to seeing you. Hope you've had a good morning, and get into the sessions next door so you get to understand the technology. Thank you very much, ladies and gentlemen. (upbeat innovative instrumental)

>> Narrator: Congratulations, Reggie Jackson. >> Certainly in the moment, is about what are youth is and who we are today as a country, as a universe. You are CUBE alumni. Live from San Francisco, it's theCUBE covering Oracle OpenWorld 2016. Brought to you by Oracle now here's your host John Furrier and Peter Burris. >> Hey welcome back everyone we're live here in San Francisco at Oracle OpenWorld. This is SiliconANGLE Media's flagship program, theCUBE, where we go out to the events and extract the signal from noise. I'm John Furrier, co-CEO of SiliconANGLE Media, with Peter Burris, general manager at Wikibon research, and Head of Research at SiliconANGLE Media. Our next guest is CUBE alumni, Chuck Hollis, Senior Vice-President of Infrastructure at cloud and storage. Welcome back to theCUBE. >> It's always a pleasure. I always have a good time when I'm here. >> So the best part of having you on is you've seen the movie before, you've lived it on other teams, you're now at Oracle, what, two and a half years? >> Chuck: One year at Oracle. >> Almost two years, so -- >> Chuck: I'm not dead yet. >> I don't think you -- >> What's that mean? Let's explore that. When will you be dead? >> You're looking good right now. You actually look like you been working out. >> A little tan, like you, like you, you know? >> So is it the country club here at Oracle? >> No, no, no. >> Chairs spinning at five o' clock? >> I'm up early and to bed late and weekends included, right? >> Well, certainly, Dave Donatelli's here, and a team of people really ramping up, essentially engineered systems, AKA hardware engineered in with the software. >> Both, in the cloud, and on premises, right? >> In the cloud and on premises. Clear, end-to-end oracle solution, which will, one, be optimized to run on Oracle, or -- >> Among other things, yes. >> So give us the update; what's the new announcements today? >> So Larry from onstage was very proud to talk about our new gen-two infrastructures of service, and our belief is there's a gap in the market. We have people doing public cloud, right, which, basically, is Startover, Azure, AWS. No chance of an on-prem solution. We have the private cloud guys, basically a Vmware shop, infrastructure only, no pass no nothing, and certainly not a lot of choices if you want to go to public cloud. We think that Oracle's doing a good job of creating that third option. Here's a combined, integrated strategy, on-premises and in the cloud, same technology, same set of capabilities aimed at enterprise applications that basically works the way enterprise IT needs it to work. So this next-gen two infrastructures of service is kind of the first peak of this massive investment we'd be making making entirely new infrastructure cloud that meets the needs of enterprise IT. >> So is this a reboot, or is this an extension of where you guys were? Some were, analysts were saying, not us, but -- >> Chuck: Ah, you'd never say that. >> Well, they said, I was using their words. Holger at Constellation said it's a reboot of their other infrastructure service, so he didn't want to say it failed, implied a transition -- >> Well, I wouldn't say it failed, it's more like a leapfrog. >> John: Explain. >> Oracle got into this business software as service, rather than standalone Sass packages, they worked on integrating everything tightly together, unifying the company. That was followed by platform as a service, aimed at 9,000,000 Java developers around the planet and everything they do. Infrastructure as a service was just made separately about a year ago. We got into the market, we learned a lot of things, but we also realized that we could actually start over again. We look at the engineering team, it's up to about 400 people who are building this next-gen IS, are all ex-Amazon, all ex-Azure. This is not their first infrastructure cloud, and because they were handed a blank piece of paper and said, "you can start over again," it actually is pretty exciting what they've done architecturally. >> So there's got to be something Oracle's doing that's distinct, so just for any number of reasons. Oracle has a lot of existing customers that're running heavy-duty enterprise applications. >> Chuck: Yeah, the tough stuff. >> The tough stuff, so talk to us about how the tough stuff is going to end up in the cloud. >> I think you bring up a good point. One way of looking at it now is that the easy stuff is gone. Desktop has gone to Office 365, and those kids from college are playing with AWS, and maybe I've got some generic workload consolidation sitting in the back room with a private cloud. What about those hairy applications, the demanding databases, in-memory analytics, the big to-do workloads? Where are they going to go? Well, what you see with out infrastructure-to-service is that we're actually providing two capabilities. We can run all of those through our cloud using those exact same technologies that we're running on-premises. You're probably familiar with products like Exadata. Well, you can buy an Exadata. You can use the Exadata in the Oracle public cloud, or you can consume it as a cloud machine, something we call "cloud-to-customer" on premises. And I think that's an important differentiation. A lot of this market is focused on consolidating generic workloads. That's more moderately interesting to us. To your point, what we're really interested are the big, hairy ones. As I joke, these are the ones that have vice-presidents attached to them, right? Yeah, the ones that people really care about. >> Peter: And typically eight figures. >> Depends on the size of the company. Like, Mark was interviewing a lot of people, a lot of customers this morning, and some of them were not large shops. >> But even those partners that're serving those customers often have eight figures associated with their investment in Oracle as well, so it cascades out through the entire industry. But it's also, I want to ask you this, Chuck. It's also not always the applications that have to be brought forward, but we were talking about ageism and it's always better if it's new, but there's a lot of skills in the industry. It's not a question of we want to bring them along. That's still where a lot of the value's being created, so talk about how this third way is going to make not only existing customers and existing apps, but also existing skill sets more rapidly develop inside and experience the expertise with these new technologies. >> I think that's a very good important because any IT organization's only as good as their skill set portfolio. I think anybody who's worked with IT understands that. By the same token, look at the portfolio. Walk into an average IT shop. Here's the stuff that was built decades ago. Here's the stuff that's kind of modern client-server three-tier. Here's the new stuffs that were using containers and microservices. If you're going to be an enterprise cloud provider to that IT shop, you got to support the old stuff, you got to support the kind of current stuff, and you definitely got to give a little pathway to the new stuff, and give me the ability to evolve that portfolio, and peoples' skills forward at the same time. This is what my big arguments that most public cloud providers is public cloud is easy. Just blow everything up and start over in our cloud. Well, as attractive as that might sound, that may not just be a financial reality for the majority of IT organizations. >> Yeah, operationally, too, they can't run their business. So so much for the container stuff. Ravello was the new container cloud server. >> Two things. So we have Ravello and we have a new container cloud service. So we'll put that on Ravello. So we all know hypervisors virtualize hardware. Ravello virtualizes hypervisors. What it does is it comes in to a VC or KVM environment, lifts it up, strips off the hypervisor, encapsulates the network to storage and the compute, then you can actually choose your cloud. You want to run it on AWS, you want to run it on Google, or do you want to run on the Oracle cloud? And it'll show you the prices for each, and you can shop there, so the reason we think that's interesting is nobody really wants to get locked into anybody's cloud, and if we can give people workload portability through VMs, that's great. Well, that's for stuff that we wrapped with virtualization. What about the new containerization? Well, trick with containers is container management, and today, if you want to do container management, you got to graft some open-source stuff and basically build your own. What Oracle has done is created and end-to-end container management service that says, alright, if you really would like to build your own, have at it, but in the meantime, here's something that kind of works. We can do that on-premises, on our cloud machines. We can do this in public Oracle clouds. We have this fast-burning desire to do this on other people's clouds just as soon as we get our own stuff sorted out. But it's the same thing. If I'm developing an application, Oracle has to go compete for that infrastructure business. It can't just say, well, you're an Oracle customer, you have go on all our stuff. And it would be the rare IT leader that would accept lock-in at the cloud level. >> There's no reason to do it today. There's absolutely no reason to do that. >> They may choose to go with us. >> But even if they choose to go with you, they want to do so in a way that doesn't force the lock-in. >> We all flew here, did you pay attention to the flight attendant when she showed where the exit rows are and everything? You may not plan on using that, but it's nice to know they're there. >> And it's nice for you to know where they are, too. Because you guys have learned that to stay at the vanguard of the industry, you have to be always aware of who's about to eat your lunch. >> And I think the Oracle database did a good job back in the day, and still to this day of being affordable. You can invest in the database, it can go wherever you want. And we're trying to do the same thing for that application ecosystem. And we're trying to involve three categories. The old, legacy stuff, the somewhat contemporary stuff, and the emerging containers, microservices-based stuff. >> So talk about your partners, because I know that something that we've been talking about on theCUBE a fair amount is -- >> Partners, we got lots of them. Infrastructure partners in particular? >> John: Well, Centure has an announcement. >> There's a disco party going on behind us here. >> There sure is, unfortunately theCUBE sign's in the way. Otherwise I could participate in it. >> I can see. >> But come back to this notion of a lot of the value that has always been created in the Oracle ecosystems has been created in partners. I have this theory, we have this theory at Wikibon that ultimately there will be more examples of college suppliers being created by your customers and your partners than by individual like AWS and Oracle and Microsoft. >> So Oracle's always had a very rich partner ecosystem. Applications, development, to infrastructure. And the exciting thing that I'm seeing with out partners is like they're seeing opportunity. So let's say that you have this cool vertical application. Five years ago your were selling on-prem hardware with all that entailed. Now you can run the in the Oracle cloud and simply sell a subscription service to your customers. You've evolved your business model forward. Folks that we partner with do application development. They have a platform now for application integration where they have vastly more capablites as opposed to the old school, got to go build it, got to go assemble it, etc, etc. The people who're feeling a little threatened by all of this not surprisingly, are the box-shifters, right? They're guys who just move hardware from A to B. And we're working with them, it's like there's still opportunity there. You just have to look up the stack a little bit. Their skills are still valid, they're just not assembling hardware. >> And you got a Centure announced that the business groups taking the infrastructure-to-service products out, that press release went out today. We covered that. >> I didn't know if that went out yet, but thanks for confirming. >> Oh, maybe that was embargoed, oops. >> Roll back, roll back, roll back. >> Put that back in the model, live TV. >> Centure, all these guys, they want to provide more value to their clients, and 10 years ago, that was stitching together hardware. Now it's about teaching them how to intelligently consume cloud. And I think what these partners like about the Oracle offering is designed to work the way enterprise IT works. It's not this, hey, here's our model, take it or leave it. >> One more thought on this, that there's a difference between the traditional, as you said, three-tier infrastructure, client-server innovation center, and some of the new analytic stuff that's on the horizon. Talk about how you guys are specifically focusing on some of the new analytics applications that are on the horizon coming into the cloud and how you intend to make the two worlds work better together. >> So I think that's great. Old-school analytics we used to call data warehousing, and business intelligence. That hasn't gone away. If you look back five years, it was all about big data, and mining values. Now we're moving to a phase of real-time decision making. Welcome to in-memory analytics things as fast as they can be. And once you figure out how to monetize data, it's addictive, you just want to do it faster and faster and faster and faster. Also, we're talking about relatively exotic infrastructure, right? Multi-terabyte memory spaces, shared Numa architectures. Pretty hard to go down to Best Buy and find the hardware for that and go build that, so as people start pushing the envelope, they're looking more for on-prem engineered solutions or more often, what can you do for me in the cloud. Interestingly enough, we talked about this gen-2 infrastructure service. One of the things it's very good at is having enormous memory spaces and very fast to compute, this kind of bare-metal compute we're seeing in real-time analytics. I think the other factor on this is internet of things, forgive me for playing buzzword bingo, the easy part is gathering the data. The real-time decisioning and actioning on it, that's heavy computing. >> Peter: And delivery with control. >> Yeah, delivering with control. You've got 10 million gas meters. Okay, how do I reason over that in real time, right? That kind of thing. >> So I had to ask you, we've been hearing about this spark-based exadata, what it's all about. What's that all about, is it a new product? >> Another member in the family. So you guys probably know the headlines on the spark chip has a couple of unique talents. It's got 32 encryption processors, so it can encrypt in real time, no delay. Has this ability to take queries and run them in silicon. It also has the ability to compress and decompress memory for in-memory analytics. So the exadata is basically a purpose-built, engineered system for database, so by taking our processor technology and putting it in this purpose-built machine, it gets a whole bunch of new talents for no more money because again, that's part of our differentiation. Things I've learned since I've been a year at Oracle is it's nice to have your own chips. Sometimes they come in very very handy as you build differentiated solutions, so I think exadata customers will have a new option, and I'm sure in the fullness of time it'll be available in our public cloud, it'll be available as a cloud -- >> But this brings up a good point, though. Intel was on stage yesterday, gave the same old corporate pitch, didn't really learn anything new there. >> Chuck: They had nice slides, though. >> That Ian Bryant's awesome. But the thing is, and Larry said that I find compelling is now that I can get your thoughts on it because it kind of comes back to the hyperconversion trend, which is he said, "we are going to provide it faster and cheaper." So he's clearly looking at infrastructures, bring this thing down, cost down to zero if possible, while performance he wants to bring up to a whole other level. How are you guys going to do that, what's the strategy? >> I think Larry and Oracle have the ability to invest like crazy. Don't forget, we build our own hardware. We build our own servers. We build our own data center fabrics. We don't have to buy this stuff from anybody. We build it, so Larry and the team, a couple years ago set this team up with a mission to go compete. Now if you've looked at Amazon, AWS margins, you know there's a lot of fat there. They're also running on really old stuff, the basic architecture was designed 10, 11 years ago. I don't want to throw aspersions around, but you could call it legacy cloud, right? >> John: What do you call it? >> Legacy cloud, anything 10 years or older, it's got to be legacy. So there's a clear opportunity to go build something new. That being said, this is a big boy's game. This is not let's round up a couple million dollars of VC and build a new cloud. So to look at the aggregate spend Oracle's putting behind this infrastructure -- >> Well, you just said the big boys are public, like Rackspace, they couldn't make it, right? So you're starting to see, they were a little, kind of a big boy, I mean... >> They're reasonable out there. But look at it this way, Oracle's got a national software franchise. Much like Microsoft does bring people on. We build our own hardware. We build our own data centers. We actually can become a vertical supplier in this and the argument is efficiency is result. >> So we're going to see Dave Donatelli on Wednesday after his keynote. I know he's prepping up for that. How's it going with Dave, what's going on with Dave? >> Dave's having a good time. I mean, we all came to Oracle on the same premise, is that the industry was rotating, and I think we've seen that in some of the analyst numbers, less and less on-premise spend, more and more spent in the cloud. >> A lot of new hires coming in from an industry that we know on Oracle, pre-existing players. >> And if you asked 'em five years ago if they ever would end up working for Oracle, they might have not said so. >> John: You're being polite. They'd say, "no friggin' way." >> Go through your mind and think what are the traditional on-prem IT vendors that transition their customers to the cloud? It would be a very short list. >> So you buy the whole cloud-broker Dell technologies? >> They don't have a cloud. I think customers want to consume cloud. >> Bing cloud air network now has 4,000 cloud providers. >> All slightly different, all slightly different. >> All working together with hypervisor. >> It's like a big portfolio management company. >> Is that a chess game, or is that just hail Mary? >> Vshpere was designed for the data centers. EMC bombed 10 years ago. Our tech's designed for the data center, and it wasn't designed for a world where people don't want data centers anymore. So I think VM ware's very challenged because their technology and business model is standing up viable public cloud options. The last big one was, oh no, we can't do it. We'll go to IBM. What's your cloud strategy, VM ware? Call IBM? That's kind of a rough deal on a sales call. >> Well, if you put it in the context of a V-cloud air network, you could argue that they're giving up the cloud. Basically, VM world, they said, "we're done with the cloud." they yielded -- >> Peter: I don't think they said that, John. >> They yielded that they weren't going to have their own cloud. >> Absolutely they yielded. >> They yielded on not having their own cloud. >> Okay, they yielded on their own cloud, that's what I meant. >> Nothing more than kind of a boutique offering, and certainly there's a market for small regional service providers around the world. No argument there. And there's a natural tendency, but as I look at people going to cloud, the sticking point isn't the hypervisor, the sticking point is the database and the applications, the middleware. This is something Microsoft has done brilliantly with Azure. >> Larry pointed out that's Ernie's call. Microsoft's well ahead of Oracle on migrating their install base half into their cloud. >> And that's what you guys have to try to figure out how to do as well. >> We're well along the way. But the point is that without that franchise, that's a tough road to hoe, right? The infrastructure guys maybe, the applications guys are the ones you want to talk to. >> Peter said, I'd like to get your thoughts on a comment Peter made on our intro with Matt Eastwood from IDC, everything's on the table. Ecosystems, channel partners, >> Chuck: And we're shaking the table apart. >> So if you have the gravity, an Oracle face of the world that's a suite, which I think is a little bit orthogonal to where the cloud is, but I get the language of Oracle the suite. Is it gravity around the suite, not a winner-take-all? >> You got to be able to pick off pieces and they have to stand on their own. >> You could build a ecosystem around that, and open ecosystem, so that means a new lock-in spec is stickyness, or pure performance, or not, am I getting that right? >> I think Oracle's going to try to play on both sides. If you appreciate the value of the suite, the IAS working with a pass, working with a Sass, great, we have all those pieces; pick and choose. Larry made it pretty clear. He wanted to go head-to-head on iops, memory and core, and dollars per whatever. Oracle intends to feed on that as well, so it'll be interesting to see how this plays out. Nothing like a low price to get an IT buyer -- >> Well he said, and the word he called this is interesting, he was overselling in my opinion, I've heard Larry. >> Chuck: Larry? I can't imagine he'd do that. >> Larry was overselling on their earnings call, but I don't think the analysts understand, they don't see the long game. You look down the 20-mile stare, it just hasn't even started for Oracle. >> Larry is a master at the long game in ways that I'm just now starting to appreciate. >> Well, let's be honest. What is the most sticky thing in the industry? Your applications, that's the stickiest thing in the industry. After that, the developer ecosystem and then you get down to the hypervisor, and you get down to the first -- >> Chuck: And then you get to the wires that connect it together and all that kind of stuff. >> But the most sticky thing is the businesses are still run around some of these floor applications. >> Well, that's why I brought up the suite angle, because I think that the developer angle is sticky because agility has proven that not everyone can build a killer app, so for instance, with an HCM there's probably some feature of HCM that is sub-par relative to some genius entrepreneur that eats, breathes that one feature, has an app, that could be integrated into that feature. >> I think that's your point, and with the platform-as-a-service offering, oh, you want to add it, do something different, great. Yes, exactly. >> It's all a continuous development, continuous integration, but that continuity still is close to the application. >> Yeah, ecosystem to me is, I've heard talks about what the developers' market, go-to-market strategy is. If that's in place, Oracle could have a very robust -- >> We're seeing the both the same thing on the hardware and the software. So hardware, build-your-own, is starting to get out of bow, ya know? Less and less popular buying servers and storage and knitting them together. A lot of guys still buy into that, but that market's going down. I think you're going to see the same thing with software and applications. Rather than starting with a blank piece of paper, where are the big chunks of enterprise functionality that I can grab out of the box and build the thing -- >> Reused, preexisting applications. >> Yes, yes! >> Everybody's talking about business capabilities, right? And the idea is that this capability is the things that I have to do to perform the activities to fit my business needs. And those activities are people, and increasingly, software. And being able to grab those capabilites and pick parts of them from the industry and weave them together quickly, continuously sustained, the match with the marketplace, to your point -- >> Well, we're going to have Juan Luzon next, and we're going to go deep on this, but I think -- >> That was a great guy. >> The API economy, if anything, showed us one, security is FUBARed and needs to be fixed fast, and the encryption on a chip thing has been downplayed. I don't know why Fowler's not getting more airtime on that. That's a really huge thing, but the API economy has proven that this ability to pull stuff that someone else has already done, not assembling like a junkyard kind of situation, why build it if someone's got to get it though an API? >> You talk about giving capital management, right? And you know, there's 175 functions, I don't know, some large number of function there, they're fine. I need this one little thing, so I'm just going to extend it, and still do it in such a way that I'm not developing -- >> And a developer who does that becomes a feature in a bigger pie. I mean, he'll make more money, doesn't go out of business, doesn't try to go public. >> So I wanted to share, before we wrapped up, one interesting thought. We all talked about cloud is coming, cloud is coming. I actually got tangible evidence at the beginning of the year that it's here. So a new word was given to me, cloud quotas. Cloud quotas, and it was kind of funny. This is happening mostly in the larger banks. Senior management, executive management, you're a little slow on this cloud thing. Let me help you out. We'll set a strategic objective. Five years from now, how much did we cloud-spend? This year, your cloud quota is 15% between cloud and non-cloud spent. Next year, etc, and I think what we're seeing is that kind of like the gears are starting to rub, between the businesses says, guys, this can't be so hard. Let's get on with it. >> I'm sure your sales guys have cloud quotas, too. >> Different kind of cloud quota. Different kind of cloud quota. >> On that point, 20 years ago, when it became very popular to pay executives on the basis of RONA, return on net assets, it was right about that time that outsourcing got popular. >> Shocking, isn't that, your mess for less, right? >> Sounds like cloud. >> Okay, bottom line, for the folks at home, Oracle's infrastructure stuff that you're involved in is not new, but it's growing now because it didn't have a lot of nurturing. It was always kind of like that back office secret sauce. What's the update, give a quick update. >> We want to give people a strategy for their enterprise applications for cloud. If they want to consume on-prem, great. Engineered system's cloud equivalence. You want to consume off-prem, same set of capabilites and more in our public cloud. You want to consume the public cloud in your data center, that's a cloud machine, and it oughtta be the technology stack and the set of capabilities. Geographical location, the consumption model really doesn't matter, and when we put this in front of large IT shops, and even smaller ones, they're like, this is great. I can build my architecture, I can build my strategy. I don't have to make a cloud decision now, and if I do make one, then I can undo it later. That agility has become very very attractive to people. >> I could invest in options but have a future. >> Chuck Hollis, Senior Vice-President of infrastructure, congratulations, and then Larry Ellison got to the end of his keynote, didn't have a lot of time, but there's a lot of meat on the bone in the keynote, that he kind of, he couldn't hit. Welcome to the cloud, too many product announcements. Welcome to Amazon's world. >> Peter: Seems excited. >> There's a lot of stuff coming down. It was great talking to you guys, thanks for your time. >> Thanks for sharing your insight and the data and the bits here. Here at theCUBE, we're always sending out the packets of content out to the network, live, original content. I'm John for Peter Burris with SiliconANGLE theCUBE. We'll be right back with more live coverage after this short break. >> Hi, I'm John Furrier, the co-founder of

lying from the austin convention center in austin texas it's the q @ l world 2014 here are your hosts dave vellante and Stu miniman hi we're back to wrap up 2l world's two minima and I have been here all day will be here tomorrow as well we're starting at eight thirty local time 930 east coast time tomorrow getting started early michael dell will be on tomorrow we'll have the keynotes again only bar broadcasting for a half day but so today's do i want to get your take on this a lot of talk of course initiated by me and others about dallas a private company I think it's a two-edged sword frankly because I think that when things are really good and you got a lot of momentum behind you you've got transparent confirmation or quasi transparent confirmation and that creates a lot of buzz and Busby gets buzzed and acted some good thing some flywheel effects can occur from being public at the same time when things aren't so great and the headlines are bad and the earnings aren't great you can go into this vortex this abyss which dealt was kind of there and I think as you were talking about with Matt Eastwood the timing of del going private couldn't have been better from a valuation standpoint for Michael Dell and Silver Lake I mean I I think they got a fantastic deal even though there's a lot of risk in it that they're taking but the fact that Michael Dell's willing to step up and do that now on 75 percent of the company yes they have debt service what is it 18 billion dollars in debt so i think i think was the number but they'll pay that off over time because of the cash flow machine and they're going to be in a really good position when that happens yeah David's real interesting you know there's been a lot of change Adele there's been there's a lot of new faces here and some of the ones that we knew for many years are gone and you really are having that transformation inside I heard one person kind of overheard in the hallway type thing is you know there were certain antibodies in Dell and you know they're kind of sweeping through making changes and if there's some that aren't on board with where it's going you know well maybe they'll need to take I guess it was the voluntary exit type solution around and but they're hiring aggressively in other spaces because yeah I T is changing and for me the real striking thing dave is they'll talk a lot about choice and we say you know there's so many different markets out there there's you know VMware in their ecosystem that's what Microsoft's doing there's a public cloud and there's all of these little you know sub climates inside IT and devils playing a lot of bets which we talked about is how many bets can you place and actually make enough margin and win at what you're doing so since dell doesn't have to answer to Wall Street they can do what they think is best for the company and really for the customers it kept coming back to you know Michael and all the executive saying we're focused on what the customers are asking us to do we can move really fast we've definitely seen examples of Dell moving faster to deliver some of these solutions that then then they had when they were a public company things like a cloud marketplace things like the new tanukhs OEM you know a lot of interesting technologies here and there's still lots of hardware Dave you know i'm looking through the twitter stream and everybody snapping pictures of the new FX to kind of the next generation vertex it went from vertex really be in that remote office box to the FX to really being a data center you know nice hardware platform that you can build for a more scalable environment so you know interesting stuff happening always a good vibe here in Austin I think that one of the things that's interesting to me in a way when I think I think of I'm reminded of Luger stirs you know can who says elephants can't dance in a way Michael Dell is orchestrating a a different version with clear differences of that playbook and here's what I mean by that he took a company that was 100% essentially PCs and began a multi-billion dollar buying spree and transform this company into what is now the only end-to-end enterprise company now HP used to talk about that as a big deal they've given up on that now that they're going to split up what is the value to a customer in the end one this is supply chain why does the customer care about supply chain because gives you a dell pricing power so Dells got potentially one of the biggest supply chains now in the industry HP had a supply chain that was enormous but now when they split it up I don't know how they're going to continue to leverage that maybe they will maybe they won't that sounds like they won't be able to have that same leverage IBM when it sold its pc division to lenovo lost a lot of leverage gel is now able to sit claim number one in storage terabyte shipped why because it ships so many pcs it's not because of the server business it's because every PC goes out with a half a terabyte disk drive in it so add it up until kicks but all of a sudden boom number one that's interesting but from a customer standpoint you can buy virtually anything from the company now I talked about second elephants dancing you're seeing that transformation being led by a number of factors certainly servers is a big part of that and networking and storage with the big acquisitions that they've made and networking with the acquisitions that they made but also Perot gels got a big services organization that's very sticky and then the other thing which not a lot of people talk about is Dell software in fact I got a tweet earlier from somebody saying del I presume Dave I presume when you talk about Dell having one of everything you're not including software well as we know tells got a almost a two billion dollar software business now that's not ridiculously enormous but it's substantial how many how many multi-billion dollar software companies are out there so what I see is this big portfolio it's not i wouldn't say it's services lead it's not it's it's dell lead but there's a sticky services component with an increasing software component in growth areas like security like systems management like so quick tell calls information management which is a lot of the analytics and big data so jeal can continue if Dell can continue to make those acquisitions do the integrations it's got a pretty good story for customers don't you think yeah absolutely Dave and there's still it's that PC business in that server business that's generating the cash and allowing them to get into a lot of environments and trying out a lot of pieces you know the cloud broker models really interesting because we talked about it a couple of years ago and clouds are not homogeneous and it's not you know until recently moving from one environment to another was going to be difficult enter things like docker and management tools like the Australia saquisili del made are enabling some of these multi cloud environments and so we're seeing customers you know from what we see aren't going all in with one environment you know we've got a survey going on right now and some of the data we've seen so far is that you know it's not like they're saying oh I've got amazon and i'm only doing amazon most customers they're doing amazon they've got VMware inside they might be doing something with a jour because everybody's got office 365 and of course they've got lots of SAS applications so you know where does dell fit into this environment and can they be you know a broker of supplier and arms dealer for a lot of these pieces and you know how do they tie them all together how do they grow those services how do they have their software you said you know there's pieces of software they don't have they don't have you know 200 SAS applications like IBM does they don't have the breath of the amazon marketplace today but you know Dell is in a lot of customer environments especially in that you know kind of sub 5000 user you know marketplace so you know there's a lot of opportunity for Delta add on to that and I said before they can craft a story because they're not a public company that is very positive you know every CEO that is of si of a public company when he or she comes on the earnings call even if they have a Miss even if they have a quarter that they're disappointed in they spin a story and and the street that starts opening up the books and parsing the numbers and doing the analysis and the street either buys it or they don't and so what Dell can do is they can craft any story that they want and make it sound great and and create their own momentum now it sounds like they're growing but you know even today in the keynotes you got a little mix of units and dollars and terabytes and geographies and in different segments and so forth but Michael Dell was able to very effectively put together a story of growth that's been mirrored by his executive management team I'm gonna have no doubt that there's this growth segments but you think about it if IBM we're a private company they could talk about cloud they could talk about their software to find stuff they can talk about you know the security businesses those businesses that are growing and not talk about the business that are shrinking and not talk about the top line that's flatted down or whatever it is so so dell has that advantage in that they can craft a story and and and use that in their marketing to be relevant and I think that's really what customers want to know they want to know that the company I'm doing business with is relevant so they got pcs is the tip of the spear everybody knows dell pc is easy to do business with no problem they've got the services piece that's sticky and they've got everything else in between which is this end end strategy for mid-sized and smaller enterprises which really everybody else kind of pooh-poohed enough poo-poos they all they give it lip service this is this is where del really shines and so I don't know still it's gonna be interesting to see yeah David's interesting i was just ruminating on the fact that you know when you think about the early PC days del just made it so easy to buy first with a catalog and then with a website i could go in and click and choose the environments that i wanted if we look at converged infrastructure and cloud which is where the growth really is you know candle take those same type of experiences and move those to the environments and make you know those choices you know the cloud marketplace reminds me a lot of the dell S&P which was really the offering that I could buy almost anything from dell and dell would take a you know i cut even if it's a small one they didn't necessarily have to support it hugely successful drove a ton of revenue for dell so you know lots of things that they can you know to take advantage of Wow and like I say when wouldn't tell was was public they were a roughly sixty billion dollar company with with trading at fifty to sixty cents on the dollar Michael Delta and silverlake having taken that private the ultimate measure yes customer value etc etc but the real leader board is going to be what if and when tell this hides to have another exit whether that's public offering whatever what the thing to watch is will del have been able to shift its business mix toward the enterprise so that it can even trade let's say it one to one if so it can it could it could create 30 billion dollars of value you know then that Michael the open 75% of saw to me it was just a brilliant move this company is still a cash flow machine you know these big companies that aren't growing that Wall Street seems to hate for some reason even Corey MC these are cash flow machines Oracle cash flow machine IBM HP cash flow machines that if they have good leadership they can transform their businesses into a success story alright well getting kicked out of here still look tomorrow we start at 830am the cube would be live SiliconANGLE TV check out Wikibon org check out SiliconANGLE calm for all the news we'll see you tomorrow this is the cubes two minima and Dave vellante we're out see you tomorrow