>> Announcer: Live from Madrid, Spain, it's theCUBE, covering HP Discover Madrid 2017. Brought to you by Hewlett-Packard Enterprise. >> We're back in Madrid, everybody. This is theCUBE, the leader in live tech coverage. My name is Dave Vellante and I'm here with my colleague, Peter Burris, co-host for the week, covering HPE Discover Madrid 2017. McLeod Glass is here. He's the vice president of product management for software defined in the cloud group at Hewlett-Packard Enterprise, and he's joined by Ronald Veirweij, who is the managing partner with The Sourcing Company. >> Ronald: Yeah. >> Dave: Good to see you. >> Thank you. >> Dave: Thanks so much for coming on theCUBE. >> Thanks, thanks for-- >> So I'm excited about this. We've been hearing about Azure Stack for awhile now, and we've been talking about bringing the cloud model to your business for awhile now and it looks like it's here. >> Yeah, no, absolutely. We're excited. I mean, you know, I think we've worked hard with Microsoft to pull together what we believe is a very compelling solution with Azure Stack. I think this gentleman here can attest to the value behind it, but we basically pulled together a lot of capability and flexibility in the overall solution that allows our customers to be able to pull together a solution that lets you take Azure-centric type services and run them on premise for maybe conditions where you have data sovereignty issues or you maybe have edge applications where you can't actually have the connectivity you need to the Azure cloud and be able to start building on those capabilities. >> Well, Ronald, I wonder if you could come in. It's interesting to juxtapose, take the AWS strategy, which is hey, got the cloud here, bring it all over. Microsoft obviously has an on-prem estate already, recognizes the customer need for that, and says, alright, we can bring substantially that cloud model on-prem. Why does that appeal to you, and does it work? >> Well, actually, we do think that for the first time now it's possible to get control of cloud. To us, it's the connection between the devices and the Azure cloud, and Azure Stack, to us, is between in. As a company, we do have control of Azure Stack, but we can also give control to our clients for Azure Stack. So a user can decide to put things in the cloud, and the company can decide whether they go in the cloud, or whether they stay into Azure Stack. So they have control of their data, and they can keep control of their data. On top of that, it's our hardware. So the data they decide to store on Azure Stack is on our hardware, and it's not a US hardware company, it's a Dutch hardware company. >> So, should I ask you upfront? Talk about The Sourcing Company, what you guys do, what your role is. >> Well, we are a cloud service provider. We do deliver cloud service to end users. We have a strong vertical focus. We do lawyer companies. We do housing companies. And we do care companies. And especially for the lawyer companies, we have built our own proposition where we connected several applications together, called Magistra, and that's what we bring to companies to use. >> So the model is when you bring a solution on-prem, you bill it like it's a cloud, is that right? >> Absolutely, yeah, it's all pay per use. >> Dave: Okay, describe that a little bit more detail. What are my limitations of that pay per use? >> What's different between the on-prem version and the non-on-prem version? >> I can talk something about it. We have an Azure Pack, which is just a formal system cloud environment. We call it our legacy environment. That's in a pay-per-month model. So we do report to Microsoft what licenses are used, and we do that monthly. Azure and Azure Stack are different. Azure is in a pay-per-second model, and Azure Stack is in a pay-per-minute model. Actually, for the first time, we are also able to create more flexibility. If in our legacy environment, a machine is on for two minutes, we have to pay for it for a month. If we do the same in our Azure Stack environment, well, we have to pay for the minutes. For example, at lawyer offices, you'll have people supporting the lawyers while they work for maybe 16-20 hours a week. You know, the lawyers themselves try to. >> Dave: But they bill a lot more. >> They try to see if they can put 100 hours in a week. And we're now able to create more agility in that, and to make it more flexible. >> So you were an early Azure Stack customer. >> Yeah, we're three years in March of program now. We decided in March on the early Azure Stack, to acquire to buy the Azure Stack. >> So how's it working-- maybe take us through the journey. A lot of times, the first Microsoft product isn't quite right. The second one starts to get really good. And then after it's mature-- >> Ronald: Well, almost. >> Yeah. >> Ronald: Well, our company was founded almost 11 years ago. And we always have looked into ways to simplify our environment. We were founded on the estate of Nyenrode Business University. We were not able to put any service over there, so we decided to put in a data center, and that's what we now call our legacy cloud environment. But in that road, we were always searching to simplify our environment. And Azure Pack was a good step, but not good enough. And Azure Stack, actually, does simplify that. It's a box, and nothing more than that. And if the box runs, then the box runs, and we decide when to update it, and we decide what to put on it, and well, that helps us. Next to the simplification of our environment, we also wanted to be able to generate more standardization. And with Azure Stack, you are forced to use defaults. The best way to use Azure Stack is to create templates and with the creation of templates, you have a defaults environment. So that's also the biggest thing. >> So McLeod, what do you guys bring to the table? What does Microsoft bring into the table? >> Yeah, so obviously we've got a longstanding relationship, partnership, with Microsoft. We worked hand-in-hand with them on the solution. I mean, first of all, it's based on proliant hardware, which we all know and love, but then we've also worked very hard to engineer this solution. One of the things that separates our configuration, our solution, from some of the others, is the expandability. We allow you to scale it by node, so basically, you can add individual nodes. We have some capabilities around adding different memory, and different networking configurations that we support around that. And then also, wrapping some of our flexible capacity capabilities around that to allow a pay-as-you-go type of model, consumption model, very much in line with what he was talking about earlier, that really kind of builds together a complete solution. And the other thing that we've done, is we've co-invested with Microsoft in what we call our Azure Stack Innovation Centers. So there's one in Bellevue and one here in Switzerland, in Geneva, that allows customers to actually go and test and leverage the great capabilities of our solution in a controlled environment. They can actually go there and work with experts to kind of engineer their solution, or they can actually connect remotely to those. And we also spent a lot of time training a lot of individuals. I think somewhere in the neighborhood of about 6,000 individuals in the company from a service and support standpoint to support the solution. So we're very excited about it. >> So as I understand it, you're a cloud service provider. You're a service provider. So how does this granularity provided by Azure Stack translate into a superior experience for your customers? >> Well, it simplified our platform. And while simplifying our platform, we have time up. And we can, in that time, we can do other things. If you look to Magistra, Magistra is a complete workspace for lawyers, and while we are forced to keep it standard, in a default, and keeping the template up to date. So while doing that, we don't have to bother about the things below the template, because that's taken care of by HP and by Microsoft. So it gives us time to think of other things that helps lawyers. And we like to think of things what helps them enable more productivity. For example, for a lawyer, it is absolutely a thing to keep time writing right. And we just announced that we will extract the time-writing with artificial intelligence at keeping up what they do during the day, and at the end of the day, tells them, okay, you worked for 48 minutes on that document. We do take that from that client, and swipe to the right, and it's accepted. Swipe to the left, and that changes. And that, things we like to do to enable more productivity for our end users. >> So the advantages are at least that you can now put more time and energy into creating services. How do you go to market? Do you go to market, is it all self-service? Do you have a direct sales organization that's going out and meeting with law firms? How do you sell your service? >> The things we do most is go to events and sponsor events and tell people that Magistra is there. And then, second, is one-on-one meetings. >> Peter: That's person-to-person. >> Absolutely, yeah. We do think that we put a lot of time in finding out what they need, and what keeps them awake at night. And we try to translate that into software and into a product, Magistra, what's helped them not being awake at night. >> But for many years, one of the challenges of doing this approach for a partner like yourself was, you want to present the solution to the customer in a form that they understand, but the underlying provisioning of the assets and ultimately the costs end up being presented in infrastructure and technology terms, which means a salesperson's having a hard time, the customer's having a hard time. Does this kind of common, simplified approach allow the customer, the salesperson, and the business overall to use a common template to articulate and make commitments about what's going to be delivered, have conversations about what's needed, all of those things. It's just simplifying not only the technology, but the business and how the customer perceives value. >> Well, look at it this way. Implementation time is quite low, because when we go to an office and ask them what they want, we need at least two, maybe three months to implement that. But we have to think about the solution in Magistra, well, we just run the script. It runs for seven hours, and then it's there. The environment's there. 21 servers are enrolled. The SharePoint of the commencement system is enrolled. The things are put in place. So the functionality is there. And maybe it's not answering all the functionality. Maybe it's answering 60, 70, maybe 80%. But it's fast. And that's what they like. >> What is keeping your clients up at night? >> To a lawyer, we do think three things. They want to have a good office functionality. To us, that's Office 365. They want to have a good document management system. Being sure that they are not having two colleagues working on the same case. And time writing. And those three things were the first we enabled in Magistra. >> McLeod, so what's your expectation for this business? I mean you guys have been, the market's been waiting for it for a long time, and it looks like it's here and ready to roll. >> Yeah, we're very excited. I mean, the interest has been very high especially by, with customers, especially in the service provider space, and customers that are looking to deploy Edge applications. That's been really where we've seen the most uptake, at the beginning here. And also some of the other kind of common use cases are things like areas where compliance or data sovereignty is a concern, and we're very excited about it. It's been great so far, so we're looking forward to it this year. >> Do you think other large cloud service providers, namely AWS, are going to have to respond with something like Azure Stack? >> We think they will. >> I mean, I don't see how they could just let that big of a market go. But it's capitulating to the dogma of everything has to be in the cloud. >> Here's what we know. >> You would presumably welcome that. If AWS comes to you and says hey, we want to partner with HP >> Hey, we believe the world is hybrid, right. The world is hybrid, and it's going to be hybrid. >> Peter: This is not a belief. >> And that, yeah. >> Peter: It is. >> Yes. >> It is today. And there's not a lot of changes expected in the laws of physics that are going to change in the next couple of years to make it easier for AWS. I think it's going to be the same basic physics. So from that perspective, it suggests pretty strongly that while there's a lot of use cases and there's a lot of money to be made just on that central piece, and then introducing new technologies like serverless and functional to approximate the ability to serve, but you can't do an office environment easily in a serverless computing world. It's just not how it's going to work. >> True. >> So at the end of the day, AWS is going to be able to do a great business doing what it does, because there's a lot of open space, but if they want to claim that it's everything, if they want to get everything, they're not going to do it by just claiming that this is all going to go away. >> I mean, the TAM of this opportunity for HPE and Microsoft is quite large, right, I would think. >> Oh, it's enormous. >> Anyway, I'd be surprised if we don't see something-- >> They have to respond. >> Anyway, guys, last word on HPE Discover. What's the bumper sticker, pulling out of the show? >> Well they have it, it's stable. They have it all on the right note. >> Dave: On the right path. >> On the right path. >> We're just continuing to make hybrid IT simple, and you've seen more of it here at the show. There's been a lot of exciting announcements and a lot of the technologies that we're bringing together. Azure Stack's just one of many that we've got in our portfolio that we're extremely excited about. >> Gents, thanks so much for coming to theCUBE. It was a pleasure to have you. >> McLeod: Alright, thanks. >> You're welcome. Alright, keep it right there, buddy. Everybody. Peter and I will be back after this.