live from New York it's the cube covering riverbed disrupt watch you buy riverbed now here are your hosts day volante and Stu minimus welcome back to the Big Apple everybody this is riverbed disrupts we've got a special guest Steve de plusieurs with us the man behind many men and women at enterprise strategy group founder head chief chief analyst senior analyst Steve's great to see you thanks for coming off thanks for having me I appreciate it I'm you doing fellas it was good we were photobombing video bombing us today and here you are that was not intentional I didn't know the exact configuration in the camera almost always live it's all right and that ended up now you're in front of the camera how the right time this is not a bomb so what's doing these days what's what's happening on that's a ridiculous question citing you ah somewhat less ridiculous and still very open to interpretation I give me a path to head down and we can't I let's start with the with Delhi MC you've got a great blog on that you know the history was good really enjoyed that it's EMC success is because you left right so I'm not exactly sure it's a 50-50 between my crackers coming in and making everything that we sold actually work because not much really good I gotta say a lot of people are really positive people who know both dell and emc are actually really positive about the the marriage here but we nuts i don't think so i think from day one I saw I'll give you a quick anecdote hopefully quick tell me to shut up if not here's the parallel in two thousand Joe Tucci comes in and at that particular run emc and at that particular time EMC was really good about bringing in some outsider and spitting them out the DNA and the antibodies were just awful in that culture in that for an outsider to come in and be able to survive in there and they went through a bunch of senior managers senior executive vice-presidents yada yada yada that nobody lasted and 2g came in and I'd never met the man or and he had no business to have any idea who I was for example and for whatever reason I was able to get an audience with him very early on and I sat down with him and the first question I asked him only question I asked him and I wasn't looking nice like you I was disrespectful and he could conceive of me as disrespectful and I said what are you going to do about mo Shay because at the time as many of us that are old enough to know mo Shay was king of the of the hill over there he owns symmetrix and and he was untouchable Harry Dixon and Mo Shay were the two untouchable human beings within that emc culture and Joe looked me right in the eye and didn't skip a beat at all and said he's either going to play nice in the sandbox or he's gone and it wasn't six weeks later that ostensibly he was gone and I couldn't believe and so I knew right that in there I knew without knowing the man that this guy was a little bit different and everybody within the EMC antibody sort of climate said nope he's not gonna last six months he's not going to last and but I you know you look somebody in the eye and you see that and so I saw a lot of the similarities in this deal so you guys have been around forever I've been around forever you know Michael Michaels a straight-shooting guy Michael's doesn't have a go or vanity pretense or he doesn't do things for the wrong reasons he said something very very interesting to me about a year before the MC deal which was or a couple years before when he was talking about I think it was three power at the time when he's in the bidding war with Dave Donatelli at HP / 3 part and I don't remember the exact context of the comment but he talked about Dell spending money and he said you know I treat it like it's my own money because it is because it is it whereas he what he was alluding to as others are spending stockholders money and it's not really it and but so that was just a sort of an interesting look into into into the guy there so when this deal happened these are not to strangers right they've been together they've been married and divorced if you will and have had a relationship for a long time they know each other and so when it sort of happened you like oh boy you know and you on paper you can see the synergies and a lot of people i think i'm certainly not unique everybody saw the synergies is not a lot of overlap really what you worry about in a deal like that is cultural other other chiefs of the generals going to be able to get along or are they going to beat the hell out of each other and backstab and and do what happens in every one of these deals it seems like and they didn't write though they really didn't interesting that you know thou MCS a private company kind of a bummer for those who live in Massachusetts good but I kind of a there's a good days that a bummer why is that a bummer well because CMC the brand emc is gonna be gone right just like the walk go up with your private yeah crime and wagon oh let's hope that doesn't happen well we'll see we'll see it's dell technologies it's there's already Delia me logos up on the building from that standpoint it's okay you're right about it too it's hard not sure after yeah of course ok but this backdrop of companies going private obviously riverbed now click BMC many many many other space this new private equity game plan veritas right exactly right used to be private equity put it in some financial guy suck all the money out sure the carcass for yeah whatever's left and now they're saying why should the VCS have all the fun I mean riverbed got taken out for 13.6 billion think at some point to an IPO they're gonna be 10 billion plus a year from now J right I mean eight ten billion maybe I probably 70th I mean that's a nice return as a nitrile Michael Dell returns so I think that you bring up a very fascinating point that I think is gonna happen more often than less and the at the I'm not that smart but fundamentally having that microscope and that's spotlight on you in 90 day increments dealing with no disrespect 26 year old MBAs that have never had a real job that their only interest is squeezing that any per share regardless of what the human impact or what the long-term impact of a company is is the wrong way to do business it's it's our way it's our system but it's the wrong fundamental way to do business you your dad's probably told you just like I did no no you you you spend less than you make it's right if we're not the government we can't print our own money you spend less than you make and and you you honor your debts and all these other things i think the privatization aspect and all of this stuff is just going to keep going because these companies are good companies and they you take the handcuffs on them they don't care what Wall Street thinks for a certain period of time years certain period of time and when they're ready to come back exactly right they go from three billion dollars to ten billion dollars because they were able to do the right things not because they only cared about squeezing the coffee budget to make another you know point ten cents a share yeah Steve so you know market shares in competition and enterprise tech you know seemed for a long time you know nothing change storage industry was very entrenched you know we've seen market share shifting a lot i'll bring it back to you know where to show called disrupt here you know there's been a leader in the networking world for most of my career here um why are you know enterprises you know open to you no more change they're doing cloud there you know looking at some of the things like riverbeds talking about it's a great question so at first i would say they're not they're not open to it nobody and there are two fundamental reasons one is i hate to say it but human beings are lazy I'm one of them the devil I know is easier than the devil I don't yeah most people don't like change no to do not like change whatsoever so the really reason that anybody changes any of this stuff is because one they have to it just doesn't work anymore nobody buys something that's better because it's better they buy it because they have to buy it yeah why'd you buy that Tesla yeah what well that's a terrible example I'm an idiot and I just bought it because it was way better all right sorry now but where we are at some inflection points right now so it doesn't matter why the change occurred right so I could still I think maybe a different answer is I could buy a horse but it's still a valid mode of transportation it just makes me a complete ass if if I do right but it's technically a valid mode of transportation so we I can still go on do that path I people get into a habit of over a course of years and sometimes decades this is just the way we did it this is the way we do it its way I was trained this is way I will train the next guy I'm gonna walk in in the morning and smash myself on the hand with a hammer in the head every day why I don't know it doesn't feel good why do you keep doing it because that's the way we do it type of stuff so it change tends to be some you need some macro external function to force a change VMware had ESX for 10 years before they became VMware as we know them in 10 years why did that happen because it was a nice to have it was the smarter thing to do it only happened when the data center ran out of power and cooling when I couldn't physically fit any more stuff in there and I still had to do a job that's when people went well those guys in the corner are running this cool stuff that emulates pretty much any environment you want to you doing them people at oh oh that's interesting and now you're an idiot if you don't run vmware just as an example right and so I think that it's the same sort of thing we get hub-and-spoke spine and leaf yatta yatta yatta whatever the networking terminology is that we had to do that had a place and and in time but you would never probably architect something like that today if you started from a clean piece of paper and I'm not picking on just Cisco I'd take the longer you're going to keep giving me a buck I'm gonna take your buck right it's because they do answer to shareholders so they're sort of at a catchment they could they could and they will eventually react to the market that says stop doing it that way because it's the wrong way to do HP HP e oh how about a go in the opposite direction of del super interesting well they will will will Dells ability to sell through EMC change the dynamic in the server market well they surpass HP ok so my personal bet if I had to bet right now I would say yes the answer is yes and here's the reason why you could you had three sort of mega companies in in what really to HP and IBM and then you had dell as the it sounds stupid to say but of the wannabe to those guys intel's grown up and now they're on equal playing field but so h IBM took one path IBM said I'm kind of getting it out of the infrastructure business and I'm gonna get into the third platform all in the higher value or what I presume to be eventually higher value plays there but there's no value in commodity hardware etc etc analytics baby yeah you got it whatever automotive yeah and ok let's very good for them and I made a lot of big bets right eight feet went exactly the other way let's just strictly you know we might have paid 10 billion for autonomy but we're gonna sell our 30 billion dollars and in software assets for less money because it is distractive and they so they split the two companies into printers assess your losses and go and don't get me wrong but those are Burger King makes money right Burger King makes money they follow McDonald's around and I'm this is not a good analogy but the only one I can kind of think of on the top of my head being number two and profitable is not a bad business and so as such they don't have to support each feed is enough to support a full stack of all of this other stuff that's really complicated and hard and really big company things so they're divesting themselves of it so makes essentially being her own PE firm she's stripping it before somebody else strips it and taking what she can get in the coffers and in a sufficient yeah starting it again what about riverbed give you a book give us your bumper sticker and then we get a rep all right so they I am I I'm probably the wrong person to ask and for the following reasons number one am not deep enough but number two is I love these guys since literally their inception and i will tell a quick story in that sense i was meeting their primary venture capitalist at the time a guy named chris chevy from light speed and i went to that that greek place in palo alto that I can never member the name of and I was meeting he he called me on the way over he said hey I'm running a little late with a guy do you mind if somebody joins us I said no and it was Jerry and in so I walk in and I'm this kid and there's Jerry and his jeans and doesn't care about anything type of thing oh great so what do you do he said oh well crank chris said why we just funded seed funded him my gosh all this terrific what's what's the company doing I swear to god he went not exactly sure yet thinking about a networking thing you know some paraphrasing Dudley they gave him money and he didn't know what they were gonna do and I was like oh my god what a great bet that worked out of any of your people really really well so I love riverbed I've loved them ever since I love Jerry is not only a character in a human being but it's a great company that is done you know again taking on Goliath really hard to take on Goliath and Cisco's about its Goliath as they come and these guys have just kicked by well you've taken on Goliath in a pretty entrenched business so I said last question last question what's new with ESG you guys are rocking you got a bunch of people working for you and just keep growing and love to see it new areas hit the security or to virtually you know every part of IT your customers love you what's what's new with you guys I'm my current personal passion and we're we're driving more I think interesting stuff the normal is insecurity because it is the wild wild west so I'm a storage guy I'm boring box kind of guy i understood that stuff 25 years ago securities fascinating to me because it is the storage business kind of 25 years ago only an order of magnitude if not bigger so there are 1500 companies not 150 trying to wannabes and and there's zero clear winners in any of these senses they riverbed brought up Palo Alto today great company but there are hundreds of different vectors that are all sort of attempting in one way or another to do the same thing but it's a it's a horse race where all the horses are running in different directions looks like a Monty Python look kind of scared two ready go hmm everywhere and so I I personally find that intriguing and fascinating also because the bigger they are the harder they fall so we'll go from 1,500 to 150 and we'll go from almost a trillion invested too oh boy a lot of people are going to lose a lot of money but from that certainly some players are going to rise tremendously and the other thing I'd really find interesting is this is we're no longer in the era of the boring box we really aren't and I and that's good for everybody in i.t except people that really love the boring box and so there's always hard a school of hard knocks right people are going to lose jobs and and it's unfortunate that respect and they'll come clinging to that Titanic but at the end of the day what's on the other side is crazy stuff you know it's great that the iphone we forget is it's seven years old or something it's eight years old we act like it's a you know we've had it forever but no no I had a bag phone when i was with the MC and i thought it was really cool at a thousand dollars a minute to be calling my friend who had a bag phone cuz you couldn't call anybody else cuz no one else at a bank what wasn't that long ago so anyway them all right well big buddy could be interesting to see picking winners in the security space but some gradual ations on all your success okay thank you very much for coming to the cubes great time guys thank you so much all right keep right to everybody will be back to wrap riverbed disrupt right after this