>> Narrator: From theCUBE Studios in Palo Alto, in Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> Tech spending is poised to rebound as the economy reopens in 2021. CIOs and IT buyers, they expect a 4% increase in 2021 spending based on ETR's latest surveys. And we believe that number will actually be higher, in the six to 7% range even. The big drivers are continued fine tuning of, and investment in digital strategies, for example, cloud security, AI data and automation. Application modernization initiatives continue to attract attention, and we also expect more support with work from home demand, for instance laptops, et cetera. And we're even seeing pent-up demand for data center infrastructure and other major risks to this scenario, they remain the pace of the reopening, of course, no surprise there, however, even if there are speed bumps to the vaccine rollout and achieving herd immunity, we believe tech spending will grow at least two points faster than GDP, which is currently forecast at 4.1%. Hello and welcome to this week's (indistinct) on Cube Insights powered by ETR. In this breaking analysis, we want to update you on our latest macro view of the market, and then highlight a few key sectors that we've been watching, namely cloud with a particular drill down on Microsoft and AWS, security, database, and then we'll look at Dell and VMware as a proxy for the data center. Now here's a look at what IT buyers and CIOs think. This chart shows the latest survey data from ETR and it compares the December results with the year earlier survey. Consistent with our earlier reporting, we see a kind of a swoosh-like recovery with a slower first half and accelerating in the second half. And we think that CIOs are being prudently conservative, 'cause if GDP grows at 4% plus, we fully expect tech spending to outperform. Now let's look at the factors that really drive some of our thinking on that. This is data that we've shown before it asks buyers if they're initiating any of the following strategies in the coming quarter, in the face of the pandemic and you can see there's no change in work from home, really no change in business travel, but hiring freezes, freezing new deployments, these continue to trend down. New deployments continue to be up, layoffs are trending down and hiring is also up. So these are all good signs. Now having said that, one part of our scenario assumes workers return and the current 75% of employees that work from home will moderate by the second half to around 35%. Now that's double the historical average, and that large percentage, that will necessitate continued work from home infrastructure spend, we think and drive HQ spending as well in the data center. Now the caveat of course is that lots of companies are downsizing corporate headquarters, so that could weigh on this dual investment premise that we have, but generally with the easy compare in these tailwinds, we expect solid growth in this coming year. Now, what sectors are showing growth? Well, the same big four that we've been talking about for 10 months, machine intelligence or AI/ML, RPA and broader automation agendas, these lead the pack along with containers and cloud. These four, you can see here above that red dotted line at 40%, that's a 40% net score which is a measure of spending momentum. Now cloud, it's the most impressive because what you see in this chart is spending momentum or net score in the vertical axis and market share or pervasiveness in the data center on the horizontal axis. Now cloud it stands out, as it's has a large market share and it's got spending velocity tied to it. So, I mean that is really impressive for that sector. Now, what we want to do here is do a quick update on the big three cloud revenue for 2020. And so we're looking back at 2020, and this really updates the chart that we showed last week at our CUBE on Cloud event, the only differences Azure, Microsoft reported and this chart shows IaaS estimates for the big three, we had had Microsoft Azure in Q4 at 6.8 billion, it came in at 6.9 billion based on our cloud model. Now the points we previously made on this chart, they stand out. AWS is the biggest, and it's growing more slowly but it throws off more absolute dollars, Azure grew 48% sent last quarter, we had it slightly lower and so we've adjusted that and that's incredible. And Azure continues to close that gap on AWS and we'll see how AWS and Google do when they report next week. We definitely think based on Microsoft result that AWS has upside to these numbers, especially given the Q4 push, year end, and the continued transition to cloud and even Google we think can benefit. Now what we want to do is take a closer look at Microsoft and AWS and drill down into those two cloud leaders. So take a look at this graphic, it shows ETR's survey data for net score across Microsoft's portfolio, and we've selected a couple of key areas. Virtually every sector is in the green and has forward momentum relative to the October survey. Power Automate, which is RPA, Teams is off the chart, Azure itself we've reported on that, is the linchpin of Microsoft's innovation strategy, serverless, AI analytics, containers, they all have over 60% net scores. Skype is the only dog and Microsoft is doing a fabulous job of transitioning its customers to Teams away from Skype. I think there are still people using Skype. Yes, I know it's crazy. Now let's take a look at the AWS portfolio drill down, there's a similar story here for Amazon and virtually all sectors are well into the 50% net scores or above. Yeah, it's lower than Microsoft, but still AWS, very, very large, so across the board strength for the company and it's impressive for a $45 billion cloud company. Only Chime is lagging behind AWS and maybe, maybe AWS needs a Teams-like version to migrate folks off of Chime. Although you do see it's an uptick there relative to the last survey, but still not burning the house down. Now let's take a look at security. It's a sector that we've highlighted for several quarters, and it's really undergoing massive change. This of course was accelerated by the work from home trend, and this chart ranks the CIO and CSO priorities for security, and here you see identity access management stands out. So this bodes well for the likes of Okta and SailPoint, of course endpoint security also ranks highly, and that's good news for a company like CrowdStrike or Forescout, Carbon Black, which was acquired by VMware. And you can see network security is right there as well, I mean, it's all kind of network security but Cisco, Palo Alto, Fortinet are some of the names that we follow closely there, and cloud security, Microsoft, Amazon and Zscaler also stands out. Now, what we want to do now is drill in a little bit and take a look at the vendor map for security. So this chart shows one of our favorite views, it's getting net score or spending momentum on the vertical axis and market share on the horizontal. Okta, note in the upper right of that little chart there that table, Okta remains the highest net score of all the players that we're showing here, SailPoint and CrowdStrike definitely looming large, Microsoft continues to be impressive because of its both presence, you can see that dot in the upper right there and it's momentum, and you know, for context, we've included some of the legacy names like RSA and McAfee and Symantec, you could see them in the red as is IBM, and then the rest of the pack, they're solidly in the green, we've said this before security remains a priority, it's a very strong market, CIOs and CSOs have to spend on it, they're accelerating that spending, and it's a fragmented space with lots of legitimate players, and it's undergoing a major change, and with the SolarWinds hack, it's on everyone's radar even more than we've seen with earlier high profile breaches, we have some other data that we'll share in the future, on that front, but in the interest of time, we'll press on here. Now, one of the other sectors that's undergoing significant changes, database. And so if you take a look at the latest survey data, so we're showing that same xy-view, the first thing that we call your attention to is Snowflake, and we've been reporting on this company for years now, and sharing ETR data for well over a year. The company continues to impress us with spending momentum, this last survey it increased from 75% last quarter to 83% in the latest survey. This is unbelievable because having now done this for quite some time, many, many quarters, these numbers are historically not sustainable and very rarely do you see that kind of increase from the mid-70s up into the '80s. So now AWS is the other big call out here. This is a company that has become a database powerhouse, and they've done that from a standing start and they've become a leader in the market. Google's momentum is also impressive, especially with it's technical chops, it gets very, very high marks for things like BigQuery, and so you can see it's got momentum, it does not have the presence in the market to the right, that for instance AWS and Microsoft have, and that brings me to Microsoft is also notable, because it's so large and look at the momentum, it's got very, very strong spending momentum as well, so look, this database market it's seeing dramatically different strategies. Take Amazon for example, it's all about the right tool for the right job, they get a lot of different data stores with specialized databases, for different use cases, Aurora for transaction processing, Redshift for analytics, I want a key value store, hey, some DynamoDB, graph database? You got little Neptune, document database? They've got that, they got time series database, so very, very granular portfolio. You got Oracle on the other end of the spectrum. It along with several others are converging capabilities and that's a big trend that we're seeing across the board, into, sometimes we call it a mono database instead of one database fits all. Now Microsoft's world kind of largely revolves around SQL and Azure SQL but it does offer other options. But the big difference between Microsoft and AWS is AWS' approach is really to maximize the granularity in the technical flexibility with fine-grained access to primitives and APIs, that's their philosophy, whereas Microsoft with synapse for example, they're willing to build that abstraction layer as a means of simplifying the experiences. AWS, they've been reluctant to do this, their approach favors optionality and their philosophy is as the market changes, that will give them the ability to move faster. Microsoft's philosophy favors really abstracting that complexity, now that adds overhead, but it does simplify, so these are two very interesting counter poised strategies that we're watching and we think there's room for both, they're just not necessarily one better than the other, it's just different philosophies and different approaches. Now Snowflake for its part is building a data cloud on top of AWS, Google and Azure, so it's another example of adding value by abstracting away the underlying infrastructure complexity and it obviously seems to be working well, albeit at a much smaller scale at this point. Now let's talk a little bit about some of the on-prem players, the legacy players, and we'll use Dell and VMware as proxies for these markets. So what we're showing here in this chart is Dell's net scores across select parts of its portfolio and it's a pretty nice picture for Dell, I mean everything, but Desktop is showing forward momentum relative to previous surveys, laptops continue to benefit from the remote worker trend, in fact, PCs actually grew this year if you saw our spot on Intel last week, PCs had peaked, PC volume at peaked in 2011 and it actually bumped up this year but it's not really, we don't think sustainable, but nonetheless it's been a godsend during the pandemic as data center infrastructure has been softer. Dell's cloud is up and that really comprises a bunch of infrastructure along with some services, so that's showing some strength that both, look at storage and server momentum, they seem to be picking up and this is really important because these two sectors have been lagging for Dell. But this data supports our pent-up demand premise for on-prem infrastructure, and we'll see if the ETR survey which is forward-looking translates into revenue growth for Dell and others like HPE. Now, what about Dell's favorite new toy over at VMware? Let's take a look at that picture for VMware, it's pretty solid. VMware cloud on AWS, we've been reporting on that for several quarters now, it's showing up in the ETR survey and it is well, it's somewhat moderating, it's coming down from very high spending momentum, so it's still, we think very positive. NSX momentum is coming back in the survey, I'm not sure what happened there, but it's been strong, VMware's on-prem cloud with VCF VMware Cloud Foundation, that's strong, Tanzu was a bit surprising because containers are very hot overall, so that's something we're watching, seems to be moderating, maybe the market says okay, you did great VMware, you're embracing containers, but Tanzu is maybe not the, we'll see, we'll see how that all plays out. I think it's the right strategy for VMware to embrace that container strategy, but we said remember, everybody said containers are going to kill VMware, well, VMware rightly, they've embraced cloud with VMware cloud on AWS, they're embracing containers. So we're seeing much more forward-thinking strategies and management philosophies. Carbon Black, that benefits from the security tailwind, and then the core infrastructure looks good, vSAN, vSphere and VDI. So the big thing that we're watching for VMware, is of course, who's going to be the next CEO. Is it going to be Zane Rowe, who's now the acting CEO? And of course he's been the CFO for years. Who's going to get that job? Will it be Sanjay Poonen? The choice I think is going to say much about the direction of VMware going forward in our view. Succeeding Pat Gelsinger is like, it's going to be like following Peyton Manning at QB, but this summer we expect Dell to spin out VMware or do some other kind of restructuring, and restructure both VMware and Dell's balance sheet, it wants to get both companies back to investment grade and it wants to set a new era in motion or it's going to set a new era in motion. Now that financial transaction, maybe it does call for a CFO in favor of such a move and can orchestrate such a move, but certainly Sanjay Poonen has been a loyal soldier and he's performed very well in his executive roles, not just at VMware, but previous roles, SAP and others. So my opinion there's no doubt he's ready and he's earned it, and with, of course with was no offense to Zane Rowe by the way, he's an outstanding executive too, but the big questions for Dell and VMware's what will the future of these two companies look like? They've dominated, VMware especially has dominated the data center for a decade plus, they're responding to cloud, and some of these new trends, they've made tons of acquisitions and Gelsinger has orchestrated TAM expansion. They still got to get through paying down the debt so they can really double down on an innovation agenda from an R&D perspective, that's been somewhat hamstrung and to their credit, they've done a great job of navigating through Dell's tendency to take VMware cash and restructure its business to go public, and now to restructure both companies to do the pivotal acquisition, et cetera, et cetera, et cetera and clean up it's corporate structure. So it's been a drag on VMware's ability to use its free cash flow for R&D, and again it's been very impressive what it's been able to accomplish there. On the Dell side of the house, it's R&D largely has gone to kind of new products, follow-on products and evolutionary kind of approach, and it would be nice to see Dell be able to really double down on the innovation agenda especially with the looming edge opportunity. Look R&D is the lifeblood of a tech company, and there's so many opportunities across the clouds and at The Edge we've talked this a lot, I haven't talked much about or any about IBM, we wrote a piece last year on IBM's innovation agenda, really hinges on its R&D. It seems to be continuing to favor dividends and stock buybacks, that makes it difficult for the company to really invest in its future and grow, its promised growth, Ginni Rometty promised growth, that never really happened, Arvind Krishna is now promising growth, hopefully it doesn't fall into the same pattern of missed promises, and my concern there is that R&D, you can't just flick a switch and pour money and get a fast return, it takes years to get that. (Dave chuckles) We talked about Intel last week, so similar things going on, but I digress. Look, these guys are going to require in my view, VMware, Dell, I'll put HPE in there, they're going to require organic investment to get back to growth, so we're watching these factors very, very closely. Okay, got to wrap up here, so we're seeing IT spending growth coming in as high as potentially 7% this year, and it's going to be powered by the same old culprits, cloud, AI, automation, we'll be doing an RPA update soon here, application modernization, and the new work paradigm that we think will force increased investments in digital initiatives. The doubling of the expectation of work from home is significant, and so we see this hybrid world, not just hybrid cloud but hybrid work from home and on-prem, this new digital world, and it's going to require investment in both cloud and on-prem, and we think that's going to lift both boats but cloud, clearly the big winner. And we're not by any means suggesting that their growth rates are going to somehow converge, they're not, cloud will continue to outpace on-prem by several hundred basis points, throughout the decade we think. And AWS and Microsoft are in the top division of that cloud bracket. Security markets are really shifting and we continue to like the momentum of companies in identity and endpoint and cloud security, especially the pure plays like CrowdStrike and Okta and SailPoint, and Zscaler and others that we've mentioned over the past several quarters, but CSOs tell us they want to work with the big guys too, because they trust them, especially Palo Alto networks, Cisco obviously in the mix, their security business continues to outperform the balance of Cisco's portfolio, and these companies, they have resources to withstand market shifts and we'll do a deeper drill down at the security soon and update you on other trends, on other companies in that space. Now the database world, it continues to heat up, I used to say on theCUBE all the time that decade and a half ago database was boring and now database is anything but, and thank you to cloud databases and especially Snowflake, it's data cloud vision, it's simplicity, we're seeing lots of different ways though, to skin the cat, and while there's disruption, we believe Oracle's position is solid because it owns Mission-Critical, that's its stronghold, and we really haven't seen those workloads migrate into the cloud, and frankly, I think it's going to be hard to rest those away from Oracle. Now, AWS and Microsoft, they continue to be the easy choice for a lot of their customers. Microsoft migrating its software state, AWS continues to innovate, we've got a lot of database choices, the right tool for the right job, so there's lots of innovation going on in databases beyond these names as well, and we'll continue to update you on these markets shortly. Now, lastly, it's quite notable how well some of the legacy names have navigated through COVID. Sure, they're not rocketing like many of the work-from-home stocks, but they've been able to thus far survive, and in the example of Dell and VMware, the portfolio diversity has been a blessing. The bottom line is the first half of 2021 seems to be shaping up as we expected, momentum for the strongest digital plays, low interest rates helping large established companies hang in there with strong balance sheets, and large customer bases. And what will be really interesting to see is what happens coming out of the pandemic. Will the rich get richer? Yeah, well we think so. But we see the legacy players adjusting their business models, embracing change in the market and steadily moving forward. And we see at least a dozen new players hitting the radar that could become leaders in the coming decade, and as always, we'll be highlighting many of those in our future episodes. Okay, that's it for now, listen, these episodes remember, they're all available as podcasts, all you got to do is search for Breaking Analysis Podcasts and you'll you'll get them so please listen, like them, if you like them, share them, really, I always appreciate that, I publish weekly on wikibon.com and siliconangle.com, and really would appreciate your comments and always do in my LinkedIn posts, or you can always DM me @dvellante or email me at david.vellante@siliconangle.com, and tell me what you think is happening out there. Don't forget to check out ETR+ for all the survey action, this is David Vellante, thanks for watching theCUBE Insights powered by ETR. Stay safe, we'll see you next time. (downbeat music)

>>Live from San Diego, California It's the Q Covering Koopa and Cloud Native Cot Brought to you by Red Cloud. Native Computing Pounding and its ecosystem >>Welcome back, toe Gorgeous. SAN Diego, California This is Q Khan Cloud Native Khan. 29 years. I'm still minimum. My co host is John Troyer, and this is the end of three days water wall coverage over 12,000 and 10 d Having a welcome to the program. Cassie, Who's the executive director at the national headquarters for v. American Red Cross. Matt. Thank you, American Red Cross. And thank you so much for joining us. >>Yeah. Thanks for having me. Uh, it's been a great conference so far. Uh, you know, we're here to share our story where as an end user on our journey with Cloud native with kubernetes Andi how that helps Red Cross do what we do, which is help people in need a cz best we can every day. >>Eso no matter what industry I talked to, everybody's dealing with change. There's always more things happening. American Red Cross. I mean, you know, it feels like I hear American Red Cross mentioned Maur a cz Time goes on because you know everything from, you know, things related to climate through, you know, global events and the like. So maybe before we get into some of the tech, just give us, you know, you know your role there and how kind of the changing world impact your organization. >>Sure. So my role is to support a few different business units. One is biomedical marketing. We try to recruit blood donors, too. Give blood at Red Cross Blood Dot or GE and other channels. That's obviously a significant part of what we d'oh were major player in the blood supply market in the US we provide service is to the armed forces, you know, in that regard as well. So that's part of it. Part of it is I work with humanitarian service is group as well to recruit financial donors on recruit volunteers. That's primarily through Red Cross. That or GE a T least as faras my group goes on, then corporate brand marketing and chapter related marketing and communications. So all that happens through Red Cross that Oregon Red Cross blood dot organ some related platforms on those our flagship brand products. >>Okay, And what led to the American Red Cross being part of this cloud. Native computing, Yeah, system. >>Our journey is a lot like, you know, a lot of other folks. We had a very, you know, monolithic type of architecture. We had all of these different business units with the different priorities, different timelines, different needs wrapped up into one big monster of a platform that, you know, kind of bundled up risk for everybody in this one platform. And, uh, you know, we'd always have collisions of priorities, mostly not to mention the resource issues of who's gonna work, you know, on what? At what time. And so a few years ago, we started talking about breaking that down. And, um, we've been lucky to have some technical leaders that are very aware of and welcoming to new cloud native technologies. We decided at that time to pursue, you know, a cloud native architecture. And what we have today in a few years later, is two years worth of being in production with a platform that runs on Amazon. We take advantage of a lot of the native orchestration tools there for running our clusters. And we've been able to service, you know, those different needs in a much more nimble way. We can release something for a Red Cross blood dot or without risking much on the financial donation side or on the volunteer recruitment side. And likewise, you know, for those other groups, we can kind of separate out the risks for each of those groups. And that's that's been a great, great benefit. >>You've been on the the vendor side. The for profit side is I t very different at the non profit. If you're looking, people are looking down, you get >>higher. Yeah, You know, I have been doing it a long time, a lot of different perspectives. But I think you know what I tried to do. And I would. I think I've seen work best is when I t is not the ticket taker, you know, integrated with the business. I'm very fortunate to have some business partners at Red Cross that collaborate. You know, every day we're having conversations every day. We have some people on our team that feel as though they're accountable for business outcomes, not just, you know, doing cool technology things, you know, For example, you know, multiyear evolution of process related to being more agile. We've got so much more integration and communication with business teams have gone from, you know, something like one release every five months now due to a weak, you know, and I think we could do more. It's just we don't have the need to do more. Um, and that's a huge, huge, big lift. You know, there's a lot of conversations that need to happen. Should make that work. >>Yeah, it's all a journey, right? We're all we're all improved. Continuous improvement, but so follow up there. So as a 90 leader for a very large organization, you know, they're one of the things people are saying this year. Wow. The conference is big. So many new technologies. So many new company somebody open source projects. You know, you're in the middle of this journey. You can't screw it up, right? That would be disastrous. So how do you How do you How did you and your organization look at new technologies and pick out which do technologies to try and incorporate them into your stack and your portfolio? >>Right. So we wanted to be a cloud native. We wanted a do, um, you know, focus on projects that where we knew there were skills in the marketplace, uh, that we could acquire at our price point. You know, we try to be good stewards of donor dollars at the end of the day, you know, all the money we have comes from folks like you and you guys who support Red Cross, you know, and thank you very much for all that generous support. And so we try to spend that money, uh, you know, very carefully. Way have some people who are, uh, you know, employees on our team made about 25 or so. But one of the great things we've been able to do with some of these technologies now is we have a program called Code for Good. It's a volunteer work force where we're here recruiting volunteers with the skill set that you know, they have a day job, but they have an interest in supporting Red Cross. Uh, maybe not financially. Maybe not with their blood, but they can give us some time on their skills, and we run it like an open source project. We set out a road map of features for six months or so. We have planning sessions, we say. Listen, you know if you can sign up for a feature that because you have two hours this week to work. Great. You have six hours. Great. You just had a baby, and you're not available for three months. Fine. You know, we we wanna have a, you know, a bench of people that can self select based on their time commitment, what to work on. And somehow it's been been working Great. You know, we started this in June. We have about 30 volunteers now on. We've already delivered an app for slack. That is kind of a workplace app where you can, you know, if your organization works with us, you can donate right from slack. You can give a schedule of blood donation, appointment, do things like that. >>I love that model. It's something that, you know we've looked at years ago. That kind of micro participation, if you will. You know, You think it's like, you know, Wikipedia wouldn't have been built if it wasn't for everybody. Just spending a little bit of time on it. Uh, I'm curious. Does something like participating with you know, this ecosystem I have generalized tools that people know and can plug in with, as opposed to, you know, having to know your direct stack Is that helpful To kind of be able to recruit people into that environment? What? What are the kind of most needed skills on dhe usages that you're recruiting? >>It is. You are learning. Curve at this point is much smaller than it was on our previous platform Because of the fact that we're using technologies people are familiar with, um, you know, things like Docker we use a lot. We just started evaluating Prometheus, another C N C F project for monitoring some non proud systems. Hopefully that'll graduate into production systems. So from a technology standpoint, yes, yes, we find that, you know, the people we talked with can walk in and be productive sooner. You know, there's still the Red Cross specific things they need to know about how we do business. But, um, you know, at least at this point, is that and not some proprietary system that they also have to learn >>any learnings that you've had participating in the c m. D. F. With the rollout of the technologies that you share with your peers, >>you know, I love the sea. NCF is very maintainer driven, You know, uh, and and user driven. I heard today at one of the analyst panels. I did. I think maybe 30% of people here are end users. >>That's a pretty >>large number. Um, you know, the fact that we can come here and learn about technologies meet people, meat vendors meet some of the people contributing code. Um, it's a lot different than you know, maybe some some summit sponsored by a for profit vendor that wants to, uh, you know, generate leads and sell you things. It feels much more community driven here and open to lots of different perspectives. >>So now what you looking forward to in the next few years? Both in terms of your stack and maybe coming back >>to Cuba? Yeah, way. It's funny. We've started to see other parts of Red Cross come to us toe, learn about kubernetes because the vendors they work with are mentioning these things. And and we have been early adopters, as far as you know, where across goes our group. Um and I think it's great if we can expand usage of, um, cloud native technologies to other parts of the organization on really get some economies of scale. So that's part of what we're trying to do is kind of internal, uh, consulting knowledge sharing collaboration on then, as far as what we're doing on our team way. Just really want to focus on. We're on a stable point in the platform, and then we want to do some things around monitoring and alerting that. Reduce those incident outages, too. Nothing. Hopefully, um, and work on that. >>You're working on a few projects that are that are being worked on here for That >>s So you have this Prometheus project. Like I said, we're piloting that, uh, you know, I would say in four or five months time, we'll know if that's going to be something we can, you know, put some more investment into >>All right, that want to give you the final word. Red cross dot org's code for good. I believe. The web. >>Yes, yes. >>What else? >>Your code for the number four. Good on. You know, if you're interested in volunteering, we need technical skills. We need team leadership skills, product owner skills, eh? So it's not just about you know, developing features and ops engineers as well. So thanks for your time. I want to say hi to my daughter, Peyton. It's late on the East Coast, so go to bed now, but thanks, folks. >>All right. What? Well, Matt, and actually, that is the final word for our day one of coverage for John Troyer. I'm stupid. And be sure to join us tomorrow. We've got two more days water wall coverage here. Lots of great speakers. Really appreciate. We've got the end users on. And, Matt, thank you so much. And, you know, great mission. The code for good. We definitely hope that the community here, you know, reaches out in connection Participates s Oh, that's it for today. Fixes all for watching.

live from Las Vegas it's the queue covering del technology's world 2019 brought to you by Dell technologies and it's ecosystem partners hey welcome back everyone cubes live coverage day three of three days of wall-to-wall coverage got two sets exploding the content out there the cube can and we've been calling it so much content coming in I'm John Fourier your host with mykos de Villante we're Tom sweet is the CFO of Dell Technologies he's the man who's making it all happen all the numbers are starting to come in we're starting to see some real big numbers and more welcome to the Q thanks for spending the time hey I'm happy to be here it's great to see you guys again and it's been a great three days here at Deltek world so I'm very excited about what we're seeing all of the enthusiasm by with our customers and partners and the receptivity to what we're doing as a company and the capabilities we're driving is pretty exciting it's kind of like the postgame show I guess the show's going to end today but I've been watching you and the analysts giving all the presentations you're what we call a Czech athlete you got a you got to hold the ship down make the numbers work you got a lot of great puzzle pieces that you know you guys have laid out here at the show across the portfolio aggressive new architecture around end-to-end operations a lot of moving parts being integrated in and the numbers are looking really good a scoreboard looks good give it take us through the highlights of inside the numbers up into the right give us the highlights well you know thank you for that but it's been we had a great fiscal 19 as you guys know by now right so 90 over 91 billion dollars of non-gaap revenue we added 11 billion dollars of revenue in the year or so if you think about that that's the equivalent of a couple of Fortune 500 companies coming into the company you know took share in all the categories that were focused on you know we took over 320 basis points of share and storage I mean over 200 basis points of share and main stream server revenue you know our PC client commercial clients you took over I think a couple hundred basis points this year so we're very pleased with the progress but I think what's most exciting as we think about value creation we're headed as a company is some of the things that we announced this week around the cloud platform and what you're beginning to see is the fill in of the capabilities and the tie together of the companies that are coming together with integrated solutions and capabilities and so you know I've been with the analyst and as you referenced and they had lots of good questions on how does this all fit together how does it then what's the acceleration point if you will how does this take off from here and you know so work and so we went through that in terms of let's put the platform out there let's begin to build on it you know customers are asking for that multi cloud capability this is what this does for them it ties this together and one single pane of glass from an orchestration and management perspective so we're really excited and then you know you saw Jeff introduce a bunch of new products the new latitude line some of the new server capabilities new storage arrays that are coming and so you know customer the buzz here is pretty strong so it's been pretty exciting this we congratulations on just a shareholder value I know from a numbers standpoint it's really been successful congratulations the question I want to ask you going back I remember the conversation you know HPE got smaller HP Enterprise got smaller Dell was getting bigger and the conversation at that time was scale as a competitive advantage and we were talking about how cloud was showing the way that scale actually has these synergies as you look back now and as the evolution started you guys start executing we was the the first sign of wow this is gonna be awesome well probably Michael was more optimistic about it than I was figure out how to pay for it come on that's a lot of money you know so but look I mean I think what we saw when we when we came together as with Dell and EMC was the fact that he come we needed each other right we had capabilities that didn't overlap they gave us great presence and technology in the data center and clearly they have brought VMware and pivotal with them we brought scale we brought maybe an execution framework and a focus and the combination of the has been pretty powerful and look I mean it's taken a couple of years of heavy lifting right but and we're not done and there's lots to go do but I think we're pretty excited about how this started to accelerate on us you know or pick up momentum I should say you know middle last year does it margin expansion or is it to go to market efficiency or supply chain all three I think it's all three right if you listen to us over the last couple years we talked about hey we needed to invest we had to invest in new capabilities from a solution perspective we had to invest in go to market coverage you know so we've spent a fair amount of investment dollars putting you know putting the pieces in place and so then it takes time for that to come together and coalesce and I think we're early innings on that you know you know lots of competition out there but we're excited about the positioning right now so the numbers are pretty remarkable I mean to be a 90 billion dollar company growing it you know 14 percent it's pretty amazing however you know this if you take VMware's market cap to multiply it by 0.8 which is your share subtract out your core debt you know subtract out your market cap you're left with like a billion dollars is that really how we should think about the core Danelle is worth about about a billion dollars you know it's you're now getting to where I spent all my last year talking about valuation right but look I we obviously think differently about the value of the core company you just think about free cash flow coming out of the core which is over you know two and a half to three and a half billion dollars sort of three and a half billion dollar range I mean how quo the valuation framework in some instances doesn't make a lot of sense we understand that you know we're a large-scale tech company and tech investors in general haven't been you know exposed to companies with tech companies with a lot of debt right and we have more debt than the average I think it's very manageable because what's the opposite side of of you know the other side of the conversation on debt is what your EBIT are right so you think about moldable and and so look we think look I can't art I can't win those arguments as you know right around I think what we have to do is continue to go execute the business over time and I think you've you know that will demonstrate the value creation opportunity that exists here and you know people will decide whether they want to invest in us and come along with it or not well I've said it's a really cheap way to own VMware I mean if you really look at no way don't do the EM we're so there is that play one of the things that I've been really impressed with this week is your emphasis on growth but profitable growth you're not just going for market share for market share sake you got but but you are going hard for market share it's an interesting balance how do you balance those two oh it's sort of this constant juggle right because look I mean you think about where we compete PC server external storage we can talk Software Defined and some of the other dynamics that are going on but those mark those areas are generally not double-digit growth areas right and so if you're going to grow you're generally taking share from somebody right and so we had this philosophy in these types of areas we got to grow and it's got to be profitable to your point and in these spaces you can go out and get a lot of market share that's doable but you can also spend a lot of money doing that right you can you can rent share so to speak if you want it and so there's this balance of pushing the team's on go grow I want it to be the right kind of growth which means what does that mean it means you go acquire customers that have a value stream associated with them and yes you may be aggressive to go get them but over time you build that cape you build the ecosystem around them in terms of the other solutions and capabilities they're buying and so it's this constant balance you know and so that's what we're we're trying to make sure we get right if you will yeah one more CFL question if I may and then we can talk about more fun stuff so it talks about the debt yeah I think you got that covered you've managing that very well you know we talked about the valuation fine one of the areas that that I have some concerns about I'd like your responses just the PC business itself it's a very important business for you guys yeah it's it's about half the revenue maybe it's not as profitable we know that but it also absorbs a lot of overhead of the company so big shifts in that business would have tectonic effects I would think on your business how do you think about that how do you manage that I wonder if I haven't heard much talk about that and I just wonder if you could you know educate CSG business which is our PC business we've got forty three billion dollar business last year so you're right it provides us great scale by the way and great supply chain scale but if you if you think about what's driving the PC Renaissance right now there's a Windows 10 refresh going on as you both know and you know Microsoft's estimate would be hey you got to probably another year or so that left and then you got through most of that refresh cycle and then the question I always get to your point is what's next yeah and then I'm good some let me pivot the conversation which is if you think about what's next is the feedback we're now getting when you think about the workforce and the generation that's in the workforce now wants good technology and so the days of let me give all of my employees and team members these $400 $500 thick pcs that wait eight nine ten pounds are gone companies want employees want technology that they can carry that they like that's usable you know the whole flexible workforce dynamic and so there's a whole conversation around workforce transformation that's happening the other thing is you you hear us talk about edge to quarter cloud that edge computing dynamic which is will include both data you know infrastructure and hard PC hardware at the edges an interesting dynamic so we think the evolution continues to evolve and the PC business stays healthy for us but yes you're right it's a big business but it's a great cash flow built at the same time if that if John if that edge becomes a tailwind for you guys I mean essentially there's an oligopoly Michael Michael is all Michael was saying the edges where the games going to be in ten years I would just iterate add one thing to your comment about the client businesses I think one i 100% agree I think the Alienware booth here is a canary in the coal mine if you talk to any of the younger generation gamers they have this phrase called pcmr which stands for PC master-race there's a shift back to the PC because of gaming mm-hm and they all want their rigs and they want horsepower they're into the tap yeah so the ease of use and simplifying the tech they want the best graph they want rate racing they want I mean they want all these new things so I think there's a whole nother generation to your point anyway back to my question on this a business model issue is that Michaels on yesterday said we're not in the headline in Silicon angle right now says we're not a conglomerate Michael Dell savers the integrated pieces of his growing company so I gotta ask you you know in in the intersection of innovation strategy business model innovation and financial and strategy you gotta have a financial strategy at overlays innovation strategy as well as the business model how would you describe the financial strategy of Dell technologies and how does that overlay directly on top of the innovation strategy and the business model look alright smile to man job is to help Michael to build his vision and fulfill his vision the subset of that is what's the job of a what what does a company do it's all about creating value and shareholder value so the overall a financial strategy and framework is shareholder value creation right and you step down from that you say how do you create value you create value these would be better capabilities better products and solutions how do you do that then you get into a capital allocation conversation on how much am I going to allocate of my capital to innovation to R&D how much a value creation is going to come through debt pay down to your point you know if you look at the levers we're pulling right now and how and simplified capital structures I should also say so the leaveners we're pulling right now are all those levers right we're pulling a let me build the innovation the integrated capabilities this concept of it we've got great capabilities across the family of Dell technologies how do we integrate them how do I create solutions that you customers want at the same point in time I'm pricing those effectively I'm creating cash generation that allows me to reinvest in the business and also pay down debt that ultimately drives shareholder value right yeah and this conglomerate come I thought was relevant because I don't see you as a conglomerate if you look at the success of say Amazon Web Services as part of Amazon almost half their revenues now that's one large distributed computer basically I mean it's integrated parts of a lot of things as an operating environment operating system so you've said on the cube that is a model you guys have a similar approach you're looking at the holistic picture of Dell technologies as an operating model with synergies and systems not this divisions pumping out all this cash they're siloed it's the integrations of key part comment on that piece yeah look I mean you know I've we've been we've been having this pushing on this conglomerate thing now for awhile right in the sense up we've got certain investors in certain analysts and that think about well you've got all these piece parts in you but these piece parts don't run independently they're integrated what we're using joint selling activity joint solution capability and development to sell to we sell technology right I'm not selling engines and lightbulbs and appliances right I'm selling technology to a set of buyers that are consuming that technology in an integrated fashion and that's how we're going to market and that's how we're building solutions to them and so look we're gonna you're going to continue to hear us push on that theme because I think it's an important theme that people need to understand about what we're trying to do but you know and so work that drives evaluation conversation which has been you know Andy jassie CEO of Amazon told me once on the queue you gotta be able to myth being misunderstood for a while before people figure it out but what's your free cash flow down to three billion you're throwing off what's the number there a lot of cash yeah I mean you're you're it's higher than that but when you throw in VMware thrown beware your your cash flow from ops is roughly riding around seven billion dollars right so you can't go on a business if you don't run out of cash all right that's why we talk about cash no word we're good but you know we're also thing about cash right so look I mean I think we're just going to continue to run the business right we've got to go execute the business it's a challenging you know it's always a competitive environment out there but you know that's our job is to go execute the business macro questions so I think I heard from you Tom this week that IDC has the IT market growing at 2x GDP and I'm thinking about the same hmm how is that you know are people gonna start spending more on AI technology as a percentage of revenue maybe but then I'm thinking what they're spending a lot today on labor yeah and I think what's happening is they're shifting a lot of those labor into technology and they're eliminating some of those labor costs and with that shift is that a plausible premise yeah I think I think it is but I also think that companies are thinking about their business model now and you've seen and you guys know this you're in the middle of all this you've seen a generational shift on IT used to be in the background that said hey go you know go roll up the numbers and pay the people and Peyton you know pay the bills and don't think about the business you know that's a simplification but now it's about how is technology used to differentiate my business model to capture new customers to give you a new experience to give you a competitive advantage and what's interesting for us is that these conversations are not just with CIOs there were Co CF CEO CFOs and so this investment cycle that's here is pretty interesting for us right and so look you asked me about the macro you know it's not a year ago what were we all talking about global synchronous growth right remember that a course we're not really talking about that right now there's you know there's pressure points around the globe depending upon where you are and and it's just a different environment so it is a bit choppier out there I mean I think the macro thing is to me is yeah I'm not as in the weeds as much you guys are but you got consolidation value creation and you guys saw with that big plan and then you got an exploding data ai business happening in the marketplace that's showing customers that they could actually reinvest and do new things drive new revenue source model expansions on the customer side as well as a massive tailwind of course cloud computing you could do it faster so between all these things that's a nice pop for you guys well the technology trends are clearly headed our way right you know there's data being created everywhere you got to do something with that data you got to store it you got to compute it if you want to get analytics and insight and so all of these things are sort of lining up now look I don't want to oversell that because we all know this this business is you know you got to go out and compete every day and to win but it's it's an interesting time are you increasing your spend on technology as a percentage of revenue or you know you know if you're talking about the R&D spend it's rough about four-and-a-half percent of my revenue right now so his revenues going up we're spending more money in IIT oh okay and might in my own tech we're up we're up right as a percentage yes okay digital transformation your premise is people are going to spend more as a percentage on tech because the return is higher but being a good CFO I'm also squeezing my guys in other you keep them in line right congratulations again on you your team Michael creating great shareholder value I still Dave still thinks it's undervalued he'll continue and I think he's right on that thanks for coming on spend your very valuable time sharing this summary of what's going on here at the Dell technology world thanks for being here guys and it's always fun to talk to you thanks great car tops we CFO chief financial officer of Dell technologies getting inside the numbers talking about the strategy how it all relates to customer impacts the cue bringing you all the action day three of coverage we'll be right back after this short break I'm sure for a devil on thing [Music]

>> Announcer: Live from Munich, Germany; it's The Cube! Covering IBM Fast Track Your Data, brought to you by IBM. >> Welcome back to Munich, Germany everybody. This is The Cube, the leader in live tech coverage. We're covering Fast Track Your Data, IBM's signature moment here in Munich. Big themes around GDPR, data science, data science being a team sport. I'm Dave Vellante, I'm here with my co-host Jim Kobielus. Marc Altshuller is here, he's the general manager of IBM Business Analytics. Good to see you again Marc. >> Hey, always great to see you. Welcome, it's our first time together. >> Okay so we heard your key note, you were talking about the caveats of correlations, you were talking about rear view mirror analysis versus sort of looking forward, something that I've been sort of harping on for years. You know, I mean I remember the early days of "decision support" and the promises of 360 degree views of the customer, and predictive analytics, and I've always said it, "DSS really never lived up to that", y'know? "Will big data live up to that?" and we're kind of living that now, but what's your take on where we're at in this whole databean? >> I mean look, different customers are at different ends of the spectrum, but people are really getting value. They're becoming these data driven businesses. I like what Rob Thomas talked about on stage, right. Visiting companies a few years ago where they'd say "I'm not a technology company.". Now, how can you possibly say you're not a technology company, regardless of the industry. Your competitors will beat you if they are using data and you're not. >> Yeah, and everybody talks about digital transformation. And you hear that a lot at conferences, you guys haven't been pounding that theme, other than, y'know below the surface. And to us, digital means data, right? And if you're going to transform digitally, then it's all about the data, you mentioned data driven. What are you seeing, I mean most organizations in our view aren't "data driven" they're sort of reactive. Their CEO's maybe want to be data driven, maybe they're aboard conversations as to how to get there, but they're mostly focused on "Alright, how do we keep "the lights on, how do we meet our revenue targets, "how do we grow a little bit, and then whatever money "we have leftover we'll try to, y'know transform." What are you seeing? Is that changing? >> I would say, look I can give you an example right from my own space, the software space. For years we would have product managers, offering managers, maybe interviewing clients, on gut feel deciding what features to put at what priority within the next release. Now we have all these products instrumented behind the scenes with data, so we can literally see the friction points, the exit points, how frequently they come back, how long they're sessions are, we can even see them effectively graduating within the system where they continue to learn, and where they had shorter sessions, they're now going the longer sessions. That's really, really powerful for us in terms of trying to maximize our outcome from a software perspective. So that's where we kind of like, drink our own champagne. >> I got to ask you, so in around 2003, 2004 HBR had an article, front page y'know cover article of how "gut feel beats data and analytics", now this is 2003, 2004, software development as you know it's a lot of art involved, so my question is how are you doing? Is the data informing you in ways that are nonintuitive? And is it driving y'know, business outcomes for IBM? >> It is, look you see, I'll see like GM's of sports teams talking about maybe pushing back a little bit on the data. It's not all data driven, there's a little bit of gut, like is the guy going to, is he a checker in hockey or whatever that happens to be, and I would say, when you actually look at what's going on within baseball, and you look at the data, when you watch baseball growing up, the commentator might say something along the lines of "the pitcher has their stuff" right? "Does the pitcher have their stuff or not?". Now they literally know, the release point based on elevation, IOT within the state of the release point, the spin velocity of the ball, where they mathematically know "does the pitcher have their stuff?", are they hitting their locations? So all that stuff has all become data driven, and if you don't want to embrace it, you get beat, right? I mean even in baseball, I remember talking to one of these Moneyball type guys where I said like "Doesn't weather impact baseball?" And they're like "Yeah, we've looked at that, it absolutely impacts it." 'Cause you always hear of football and remember the old Peyton Manning thing? Don't play Peyton Manning in cold weather, don't bet on Peyton Manning in cold weather. So "I'm like isn't the same in baseball?", And he's like, absolutely it's the same in baseball, players preform different based on the climate. Do any mangers change their lineup based on that? Never. >> Speaking of HBR, I mean in the last few years there was also an article or two by Michael Shrage about the whole notion of real world experimentation and e-commerce, driven by data, y'know in line, to an operational process, like tuning the design iteratively of say, a shopping cart within your e-commerce environment, based on the stats on what work and what does not work. So, in many ways I mean AB testing, real world experimentation thrives on data science. Do you see AB testing becoming a standard business practice everywhere, or only in particular industries like you know, like the Wal-marts of the world? >> Yeah, look so, AB testing, multi-variant testing, they're pervasive, pretty much anyone who has a website ought to be doing this if they're not doing it already. Maybe some startups aren't quite into it. They prioritized in different spots, but mainstream fortune 500 companies are doing this, the tools have made it really easy. I would say, maybe the Achilles heel or the next frontier is, that is effectively saying, kind of creating one pattern of user, putting everyone in a single bucket, right? "Does this button perform better "when it's orange or when it's green? "Oh, it performs better orange." Really, does it perform well for every segmentation orange better than green or is it just a certain segmentation? So that next kind of frontier is going to be, how do we segment it, know a little bit more about you when you're coming in so that AB testing starts to build these kind of sub-profiles, sub-segmentation. >> Micro-segmentation, and of course, the end extreme of that dynamic is one-to-one personalization of experiences and engagements based on knowing 360 degrees about you and what makes you tick as well, so yeah. >> Altshuller: And add onto that context, right? You have your business, let's even keep it really simple, right, you've got your business life, you've got your social life, and your profile of what you're looking for when you're shopping your social life or something is very different than when you're shopping your business life. We have to personalize it to the idea where, I don't want to say schizophrenic but you do have multiple personalities from an online perspective, right? From a digital perspective it all depends in the moment, what is it that you're actually doing, right? And what are you, who are you acting for? >> Marc, I want to ask you, you're homies, your peeps are the business people. >> Yes. >> That's where you spend your time. I'm interested in the relationship between those business people and the data science teams. They're all, we all hear about how data science and unicorns are hard to find, difficult to get the skills, citizen data science is sort of a nirvana. But, how are you seeing businesses bring the domain expertise of the business and blending that with data science? >> So, they do it, I have some cautionary tales that I've experienced in terms of how they're doing it. They feel like, let's just assign the subject matter expert, they'll work with the data scientist, they'll give them context as they're doing their project, but unfortunately what I've seen time and time again, is that subject matter expert right out of the gate brings a tremendous amount of bias based on the types of analysis they've done in the past. >> Vellante: That's not how we do it here. >> Yeah, exactly, like "did you test this?". "Oh yeah, there's no correlation there, we've tried it." Well, just because there's no correlation, as I talked about onstage, doesn't mean it's not part of the pattern in terms of, like you don't want someone in there right off the bat dismissing things. So I always coach, when the business user subject matter experts become involved early, they have to be tremendously open-minded and not all of them can be. I like bringing them in later, because that data scientist, they are unbiased, like they see this data set, it doesn't mean anything to them, they're just numerically telling you what the data set says. Now the business user can then add some context, maybe they grabbed a field that really is an irrelevant field and they can give them that context afterwards. But we just don't want them shutting down, kind of roots, too early in the process. >> You know, we've been talking for a couple of years now within our community about this digital matrix, this digital fabric that's emerged and you're seeing these horizontal layers of technology, whether it's cloud or, you know, security, you all OAuth in with LinkedIn, Facebook, and Twitter. There's a data fabric that's emerging and you're seeing all these new business models, whether it's Uber or Airbnb or WAZE, et cetera, and then you see this blockbuster announcement last week, Amazon buying Whole Foods. And it's just fascinating to us and it's all about the data that a company like an Amazon can be a content company, could be a retail company, now it's becoming a grocer, you see Apple getting into financial services. So, you're seeing industries being able to traverse or companies being able traverse industries and it's all because of the data, so these conversations absolutely are going on in boardrooms. It's all about the digital transformation, the digital disruption, so how do you see, you know, your clients trying to take advantage of that or defend against that? >> Yeah look, I mean, you have to be proactive. You have to be willing to disrupt yourself in all these tech industries, it's just moving too quickly. I read a similar story, I think yesterday, around potentially Blockchain disrupting ridesharing programs, right? Why do you need the intermediary if you have this open ledger and these secure transactions you can do back and forth with this ecosystem. So there's another interesting disruption. Now do the ridesharing guys proactively get into that and promote it, or do they almost in slow motion, get replaced by that at some point. So yeah I think it's a come-on on all of us, like you don't remain a market lead, every market leader gets destructive at some point, the key is, do you disrupt yourself and you remain the market leader, or do you let someone else disrupt you. And if you get disrupted, how quickly can you recover. >> Well you know, you talked to banking executives and they're all talking Blockchain. Blockchain is the future, Bitcoin was designed to disintermediate the bank, so they're many, many banks are embracing it and so it comes back to the data. So my question I have, the discussion I'd like to have is how organizations are valuing data. You can't put data as a value on, y'know an asset on your balance sheet. The accounting industry standards don't exist. They probably won't for decades. So how are companies, y'know crocking data value, is it limiting their ability to move toward a data driven economy, is it a limiting factor that they don't have a good way to value their data, and understand how to monetize it. >> So I have heard of cases where companies have but data on their balance sheet, it's not mainstream at this point, but I mean you've seen it sometimes, and even some bankruptcy proceedings, their industry that's being in a bankruptcy protection where they say "Hey, but this data asset "is really where the value is." >> Vellante: And it's certainly implicit in valuations. >> Correct, I mean you see bios all the time based on the actual data sets, so yeah that data set, they definitely treasure it, and they realize that a lot of their answers are within that data set. And they also I think, understand that they're is a lot of peeling the onion that goes on when you're starting to work through that data, right? You have your initial thoughts, then you correct something based on what the data told you to do, and then the new data comes in based on what your new experience is, and then all of a sudden you have, you see what your next friction point is. You continue to knock down these things, so it is also very iterative working with that data asset. But yeah, these companies are seeing it's very value when they collect the data, but the other thing is the signal of what's driving your business may not be in your data, more and more often it may be in market data that's out there. So you think about social media data, you think about weather data and being able to go and grab that information. I remember watching the show Millions, where they talk about the hedge fund guys running satellites over like Wal-mart parking lots to try to predict the redux for the quarter, right? Like, you're collecting all this data but it's out there. >> Or maybe the value is not so much in the data itself, but in what it enables you to develop as a derivative asset, meaning a statistical predictive model or machine learning model that shows the patterns that you can then drive into, recommendation engines, and your target marketing y'know applications. So you see any clients valuate, doing their valuation of data on those derivative assets? >> Altshuller: Yeah. >> In lieu of... >> In these new business models I see within corporations that have been around for decades, it's actual data offers that they make to maybe their ecosystem, their channel. "Here's data we have, here's how you interpret it, "we'll continue to collect it, we'll continue to curate it, "we'll make it available." And this is really what's driving your business. So yeah, data assets become something that, companies are figuring out how to monetize their data assets. >> Of course those derived assets will decay if those models of, for example machine learning models are not trained with fresh, y'know data from the sources. >> And if we're not testing for new variable too, right? Like if the variable was never in the model, you still have to have this discovery process, that's always going on the see what new variables might be out there, what new data set, right. Like if a new IOT sensor in the baseball stadium becomes available, maybe that one I talked about with elevation of the pitcher, like until you have that you can't use it, but once you have it you have to figure out how to use it. >> Alright lets bring it back to your business, what can I buy from you, what do sell, what are your products? >> Yeah so after being in business analytics is Cognos analytics, Watson analytics, Watts analytics for social media, and planning analytics. Cognos is the "what", what's going on in my business. Watts analytics is the "why", planning analytics is "what do we think is going to happen?". We're starting to do more and more smarter, what do we think's going to happen based on these predictive models instead of just guessing what's going to happen. And then social media really gets into this idea of trying to find the signal, the sentiment. Not just around your own brand, it could be a competitor recall, and what now the intent is of that customer, are they going to now start buying other products, or are they going to stick with the recall company. >> Vellante: Okay so the starting point of your business having Cognos, one of the largest acquisitions ever in IBM's history, and of course it was all about CFO's and reporting and Sarbanes-Oxley was a huge boom to that business, but as I was saying before it, it never really got us to that predictive era. So you're layering those predictive pieces on top. >> That's what you saw on stage. >> Yes, that's right, what, so we saw on stage, and then are you selling to the same constituencies? Or how is constituency that you sell to changing? >> Yeah, no it's actually the same. Well Cognos BI, historically was selling to IT, and Cognos Analytics is selling to the business. But if we take that leap forward then we're now in the market, we have been for a few years now at Cognos Analytics. Yeah, that capability we showed onstage where we talked about not only what's going on, why it's going on, what will happen next, and what we ought to do about it. We're selling that capability for them, the business user, the dashboard becomes like a piece of glass to them. And that glass is able to call services that they don't have to be proficient in, they just want to be able to use them. It calls the weather service, it calls the optimization service, it calls the machine learning data sign service, and it actually gives them information that's forward looking and highly accurate, so they love it, 'cause it's cool they haven't had anything like that before. >> Vellante: Alright Marc Altshuller, thanks very much for coming back on The Cube, it's great to see you. >> Thank you. >> "You can't measure heart" as we say in boston, but you better start measuring. Alright keep right there everybody, Jim and I will right back after this short break. This is The Cube, we're live from Fast Track Your Data in Munich. We'll be right back. (upbeat jingle) (thoughtful music)

(upbeat music) >> Hi, I'm Lauren Cooney, and welcome back to theCUBE. Today we have Jeff Frick with us, who is the general manager of theCUBE, and we're here to learn about what goes on at theCUBE, what the business is like, some of the most fun aspects of what he does, and go from there. >> Jeff: Great to be here. >> Thank you so much. So, Jeff, starting out, really, when did you join theCUBE, and really what are your goals and aspirations for theCUBE as you look to business going forward now? >> My first CUBE gig was, I've known John for a long, long time, reached out. It was actually Splunk.conf 2012 in the Cosmo, I'll never forget, and they needed an extra host, we were over-subscribed, and I went and did that show. I did it with Jeff Kelley, and was really touched by this format where you've got kind of this professional looking, newsy, opportunity for people to tell their story, most people don't ever get to tell their story in that context, which I thought was pretty cool. And then also just to personalize the people behind the tech because since Steve Jobs, and that genre of people, people want to know who the people are behind the technology. So not only the people that run the companies, but who creates it. I think Open-source had a lot to do with that where people are interested in other people, not just the tech for itself. And that's what I really like. >> You bring up a great point with stories, and luminaries, and visionaries. Can you talk about some of those folks that you've had on theCUBE, some of the best guests you've ever had? >> Oh my gosh, we've had so much. People ask me this all the time, I need to prepare my answer better. But like Scott Cook, from Intuit, was just phenomenal. Tremendously successful, still focused on the same core vision that he came up with when his wife was filling out her checkbook, writing checks, about just a better way to organize and manage cash. And that show is so inspirational because it's really a small business show pretending to be an accounting show. We've had Robert Gates on, I didn't get to interview Robert Gates, but served with many, many President's. We're really fortunate, we often get the keynotes. Fred Luddy, from ServiceNow, phenomenal founder, goofy, quirky. Maria Klawe who runs Harvey Mudd College, goofy, quirky, great personality. So there's just so many great individuals and then some that you don't know. We had, an original ServiceNow we had this little older lady who had got a ServiceNow POC through, it's some ancient company, I don't even remember what company it was, and it was just fascinating to me how this, you know, she wasn't young and hip and new and on top of things, was able to kind of see the vision, get it funded, get a project underway, and then eventually build into being a customer for them. And how she was able to do that, and what was the story, and how many peers out there are curious to know how they could do that for their company. And those, I love those stories. >> Those are great. And I think one of the things that we want to look at too is that we want to understand for the most part what are some of the bloopers that you've seen out there? What are some of the things that you've noticed that are funny or were oh my gosh, you know, while you were on air, while you were thinking about different things. Can you tell me a little bit about that? >> Well, of course, the classic one that we've referenced over and over and over, and if you've seen any of our promos you see, it was John Cleese. Ironically again, at another ServiceNow keynote he was doing their CIO Summit or something, and he came on and he basically decided he wanted to rewrite the end of the, it became a sketch, not an interview. And just stood up and threw his water all over John and Dave, fried Dave's laptop, and marched off the stage. Half the people there, we had a huge live audience, were laughing hysterically. The other half were petrified. Unfortunately, a number of those were the client senior executives who didn't really know, and we had to go out and do some investigation and find out he actually does it a lot to people. And in fact the guys ran into him later that night and he said, "Wasn't that fun, wasn't that fun?" So that's one that just jumps right off the page. Another great one was Michael North from the NFL was at an IBM event talking about how they build the schedule. And while the analytics are fine, and you run an algorithm and it can plug a bunch of numbers, it's really the softer side. You know, how do you leverage at that point a Peyton Manning versus a Tom Brady match up? Do you use it to leverage an existing relationship? Do you use it to build a new network? Do you use it in your feature presentation to get the most leverage from that asset? So a whole lot of kind of soft, softer sided things in terms of the decision making. Which I think is what's really interesting. >> Yeah, I think that's great. And I want to take it a little bit further into what are the business aspects of theCUBE? What do you do on a day to day basis? What are the things that matter the most for running this business? >> Big question. So most important area is our customers. So what customer, what value does theCUBE bring to people when they take us to their conference? >> Lauren: And who are the key customers? >> Well key customers, right. IBM, and we've mentioned ServiceNow, Splunk, EMC, Dell EMC now, Vmware and their ecosystem partners. So a lot of enterprise infrastructure, a lot of opensource, and a lot of applications. But really there's three key components to why people bring theCUBE and what we deliver when we're there. One of them is just great content. The format that we have, the conversational tone, the way that it all works, we just get people to say stuff that you wouldn't ever ask them to say, especially on the customer reference ones. So the content is great and, you know, conferences are looking for more great content. The second really is our community and our distribution. You know we are a media company, we're super active in the community, we leverage a lot of social tools. We try to ask interviews and get information that's topical and evergreen and can be used often and over and over, and really run that out through a number of different channels and different formats. And then the third thing, which we didn't use to talk about as much, but we really do now, it's really the theater of our presence. There's something to bright lights and cameras when theCUBE is at an event. It's like, oh, theCUBE guys are here. And we hear it all the time, theCUBE guys are here. >> Everyone likes to be a star. >> Everybody wants to be a star. And it does a little bit of, I won't say validates for the greater good, but certainly within our community when we're at an event it's a signal that something's going on, something's exciting here, theCUBE guys are here, and we're covering it. And we hear that over and over. We have people stop us literally in an elevator to say, I look at your guys' upcoming sheet to make some decisions as to where I should plan my schedule time. And, or we've also heard, you know, I just wait and watch theCUBE all day, I can't go, I just have theCUBE running in the background. And get a taste of not necessarily what happened in all the breakouts and all the keynotes and all the other stuff, but we generally get all the same people who run all the keynotes. You're getting those same folks, but you're getting them in a conversational tone, talking often about many of the similar topics, it's just a different way to get that message across. >> So how do you grow the community further? So you talk about the community you have, you talk about the community that's at large right now. How are you looking to grow your user base and your community further? >> Right, so it's really kind of along two angles. One is kind of this natural bundling of subsets within our existing community. And that's like our Women in Tech coverage that we started years ago. Honestly, you know things were kind of slowing again in November, so we're like, you know, there's some great women, they're not getting highlighted, let's go out and do some Women in Tech interviews and integrate that. So that's kind of more of a horizontal play if you will. In terms of more vertical plays, we're trying to get a little bit out of the application infrastructure space and more into the app space. So autonomous vehicles, autonomous drones, commercial drones, we've done a lot of just app shows as companies do their own shows versus more of an industry show. So like I said, I mentioned QuickBooks Connect was fun. So really getting into some of these other areas that are more application specific and not just kind of infrastructure, per se which is the roots. >> So when you so application specific, are you looking at for example, you know Microsoft for example is a very large company. They have application space. Is that what you're looking for? >> Love to do some Microsoft shows, yeah, we have a Microsoft build and Ignite, they have a number of shows. >> What about Salesforce? Salesforce is doing some really interesting stuff around applications and community and the whole nine yards. >> Right, so before we didn't really go after Salesforce per se, 'cause it was just really big and we were just really small, we were trying to get a lot of our processes and structure in place. Since then we actually covered one Salesforce lightly a couple years back. A friend of mine, Lynn Voinovich, was a CMO and we covered the kick off. >> I love Lynn. >> You know Lynn? But we need to get back to Salesforce, that's one that we should be at, it's an important show, we should be there. >> Great, so let's have, let's kind of end here with a fun fact. So tell me a fun fact about your job or something that you do that perhaps people don't know about. >> A fun fact about my job. Just, it's just a lot. >> Lauren: Let's make it fun, not a lot of work. >> Basically our job is kind of like the proverbial duck, right? When we run production, we do about a hundred shows a year. There is, I always tell people it's like catering. There's about a thousand details that you kind of have some idea about, and there's a thousand ideas, there's a thousand issues that you have just no control. So being able to dance, being able to be like that proverbial duck that looks smooth, and cool, calm, and collected on top, but it's really pumping pretty hard underneath, you know we've got a lot of people, we've got a lot of back end processes, we have a lot of dancing that happens to try to make it really smooth for the guests, really smooth for the consumer. And we screw up and things happen. But I think we're pretty good, and we're constantly trying to improve our process. >> Great, thank you so much, and thank you for being here again. >> Thank you. >> I really appreciate your time. And we'll be back shortly on theCUBE with something that is coming up in about 15 minutes. (techno music)

(mumbling) >> Voiceover: Covering Sapphire now. Headline sponsored by SAP HANA Cloud, the leader in platform as a service. With support from Console Inc., the cloud internet company. Now, here are your hosts, John Furrier and Peter Burris. >> We are here live at SAP Sapphire. This is SiliconANGLE Media's The Cube. It's our flagship program. We go out to the events and extract the signal to noise and want to do a shoutout to our sponsors SAP HANA Cloud and Console Inc. at console cloud, connecting the clouds together. I'm John Furrier with my co-host Peter Burris. Our next guest is Reggie Jackson, winner, athlete, tech athlete now, entrepreneur, overall great guy, and a cube alumni. Four years ago, we interviewed him here at SAP Sapphire. Welcome back, Reggie, to The Cube. Thanks for coming on. John, thank you very much. It's good to be here with old friends. We were havin' a little conversation about baseball there, but good to see you guys. Yeah, and obviously, the baseball, we were just talkin' about the whole fisticuffs and the glee of the grand slam walk-off. >> Reggie: Good stuff, good stuff. >> It's a good pivot point in some of the things that you're workin' on in here, the conversations in the tech world, which is social media and that notion of celebrating in a world of Instagram and Snapchat and social media. Certainly, ya flip the bat, the views go up. But then, baseball has these (laughing) unwritten rules, right. So does corporations. And so we're now a new era. Is baseball safe now with these unwritten rules and should they maintain those, certain things that have kept the game in balance? But yet with social media, the players are their own brand. And you certainly were a brand, even back in your day, which is a pioneer. What's your thoughts on that? >> You know John, Peter, I don't like the idea of someone going out of their way to promote their brand. Some of the great brands to me in history, Babe Ruth, Ty Cobb, the great Jim Brown, Joe Montana, Michael Jordan. And Michael Jordan would be a prominent example where technology and TV enhanced who he was. And he had someone behind him to enhance his brand, Nike, Phil Knight, who was a real pioneer. I'm not so in favor, I'm not in favor at all of someone manufacturing themselves as a brand. And I hear players talk about their brand and about trying to create something. If you're great, if you deserve it, I don't think Stephen Curry works on his brand. I think he works on bein' a great player. I think he works on bein' a great teammate. I think he does his best to maximize his skill set. And he's nothing but a gentleman along the way. He'll celebrate with joy once in awhile, with the Curry moves, which we've come to recognize. But for guys that talk about the manufacturing of their brand, there's something about it that's manufactured. It's not real, it's false. And I don't like it. I think it's okay, the Snapchats and the Google+ and all of the stuff, Twitter and Facebook and all that stuff, all of the things that go along with trying to create some hubbub, etc. I'm okay with that. >> So you're saying if it's not deserved. People are overplaying their hand before earning it. >> A lot of it, John, a lot of it. Joe Montana didn't work on his brand, he was great. Jim Brown didn't work on his brand, he was great. I don't want to use Jimmy Brown. I want to use Montana because even young people today will know Joe Montana. Tom Brady, Peyton Manning, they're not about their brand. They're about being classy, being great, being part of a team, being a leader, presenting themselves as something that's respected in the NFL, across the United States. Go ahead, Pete. >> So even though it's cheaper to get your name out there, you still believe in let your performance speak for itself. >> You got to be real about it. Ya got to be who you are. If you're not a great player, get out of the way. Get out of the space. So manufacturing your brand. I played with the Yankees. I was in the era of Cosell and Billy Martin and George Steinbrenner. We won championships with the team. I was part of something that helped me become recognized. And so in our era, the Sandy Koufax's became brands because they were associated with greatness around them. They stood out and so they earned that tremendous brand. >> We were just watching Graig Nettles gettin' taken out by George Brett in that big game and also the pine tar, we kind of gettin' some good laughs at it. You look at the balance of personalities. Certainly, Brett and Nettles and your team and you had a great personality, winning championships. Worked together as a team. And so I want to ask you that question about the balance, about the in baseball, certainly, the unwritten rules are a legacy and that has worked. And now in a era of personalities, in some cases, people self-promoting themselves, people are questioning that. Your thoughts on that because that applies to business too 'cause tech athletes or business athletes have a team, there are some unwritten rules. Thoughts on this baseball debate about unwritten rules. >> Pete and John, I'll try to correlate it between some tech giants that have a brand. I just left a guy with a brand, Bill McDermott, that runs SAP. Even Hasso, the boss. The face now of SAP is Bill McDermott. Dapper, slender, stylish, bright. It comes across well. So maintaining that brand, to me, relates to SAP, bills a great image for it. He's stylish, he's smooth, he's smart. He's about people. He presents himself with care. So that is a brand. I don't think it's manufactured. That's who he is in real life. If you take a look, and I'll go back to Steph Curry because that name resonates and everyone recognize it. That style of cool, that style of control, that style of team and care. And he presents to us all that he cares about us, the fan, his team, his family. And so those are things and I think you can go from the tech world. Bill Gates had a brand. Brilliant, somewhat reclusive, concerned about the world, concerned about the country, concerned about his company. And so that resonated it Microsoft because that's who he really was. Some of the people today don't really recognize that Jobs was thrown out of Apple. He was pushed out. All of his brilliance, which was marketing. And the gentleman there that really was the mind for the company, Steve Wozniak, happens to be here at SAP Sapphire. Today, I think he speaks. But those brands were real, not manufactured. And so, in today's world, I think you can manufacture a brand. And then all of a sudden, it'll crumble. It'll go away in the future. But the great brands of whether it's Jackie Robinson or whether it's Jack Welch or whether it's George Steinbrenner and the Yankee brand, those brands were real. They were not manufactured. Those guys were eccentric. They were brilliant. Go ahead. >> And also, they work hard. And I want to point out a comment you made yesterday here at the event. You were asked a question up on stage about that moment when you hit the home runs. I think we talked about it last time. I don't necessarily want to talk about the home runs. But you made a comment I'd like you to expand on and share with the audience. 'Cause you said, "I worked hard," but that day during warm-ups, you had batting practice. You made a comment that you were in the zone. So working hard and being great as it leads up to that. But also, in the moment, 'cause that's a theme these days, in the moment, being ready and prepared. Share your thoughts on what you meant by you had a great batting practice and you just felt it. >> I'm going to take it to what you say is in the moment. I remember when I was talkin' about it yesterday, which you reference to, when I had such a fantastic batting practice. I walked by a coupla sports writers in that era. Really well-known guys, Dave Anderson, New York Times. I can't think of his name right now, but it'll come to me, of the Daily News. It was like hey man. >> John: You were rockin' it out there. >> I kind of hope I didn't leave it out here. (laughing) That was in the moment and at the same time, >> I mean, you were crushing it. >> Yes, when the game started, I got back in that moment. I got back in what was live, what was now, what was going on. Certainly, I think our world now with the instant gratification of sending out a message or tweeting to someone or whatever certainly in the moment is about what our youth is and who we are today as a country, as a universe. >> But you didn't make that up. You worked hard, but you pulled it together in the moment. >> A comment with that is I went and did something with ESPN earlier this year in San Francisco, in Oakland with Stephen Curry. They said, "Reggie, we want ya to come up "and watch his practice, his pre-game." And it was very similar to your batting practice, where people come out and watch, etc. And so I was looking forward to it and I like to go to the games about an hour and a half or two hours early so I can see warm-up and see some of the guys and say hello. And I got a chance to watch Steph Curry. I know his dad. And happened to be the first time I went this year, the dad, Carolina, the Panthers were in town. Not the Panthers. Come on, help me, help me, help me. >> Peter: The Wizards? >> No, no, no, the Carolina. >> Peter: Carolina Panthers. >> The Carolina Hornets. >> John: Hornets. >> Were there and I know his dad, Dell Curry. And we talked a little bit. But then, Steph came out and I watched him. And I watched the dribbling exhibition. I watched the going between the legs and behind the back and the fancy passing, etc. And I watched the shots, the high-arcing threes, the normal trajectory threes, the high shots off the backboard and things like that that he did. The left-handed shots, the right-handed shots. And the guy asked me what I thought of the show. And I said, "Well, it's a cool show, "but I'm going to see all that tonight." And me watching him, the behind the backs, the between the legs, the passes, the high-arching shots from three, the high-arching touches off the glass. He does all that. >> John: He brought it into the game. >> Yeah, I said so, (laughing) >> Peter: That is his game. >> It's not a show, but that's his game. >> So Reggie, you did an interesting promotion, Reggie's Garage, where you bought a virtual reality camera and you created a really nice show of your garage demonstrating your love >> Reggie: 360. >> Peter: of cars, 360. Talk a little bit about that. And then if ya get a second, imagine what baseball's going to be like as that technology becomes available and how some of the conversation that we're having about authenticity, the fan coming into the game. >> An experience. >> Is going to change baseball. Start with the garage and how that went and then how ya think that's going to translate into baseball, if you've had any thoughts on that. >> In the technology that was used, certainly I enjoyed it. While I was doing it, I noticed where the cameras were in different spots. There was one on the floor of my car. There was one in the backseat. And then there was someone following us as closely as they could. But you could see everything. You'd see the shift and you could see my feet. It was like you were with me. When we did the 360 inside the garage as well, you could listen to me and then you could use your finger and spin around. And they had these special headset and special glasses that you could look around, just with your headset on, and see all around the room. Behind you, in front of you. And so it's an experience that I think is going to become part of who we are as a nation, who we are as a people watching television, that you're going to really feel like you're in the room. I think it's going to be exciting. And I think it's going to be fun. And when you're talking about products, when you're talking about my website, if you will, with the focus on automotive parts, where a guy can go in and shop and get any part he wants for a vehicle, you really can build a complete car from my website. You can buy a frame. You can buy body parts. You can buy a horn, an engine, brakes, tires, grills, turn signals, the whole nine yards. And it gives you an experience through 360 video of really walking into the store, walking into the building, walking into the stadium and looking around to see the hot dog stand, see the dugout, see the pitcher and the hitter, to see the parts in the garage, to see the cars and take a look and view at everything that's there. >> How are players going to react to havin' the fans virtually right there with them? >> I don't think it bothers you. I don't think ya notice. I don't think they'll show anything that will affect the player that he's going to be concerned about. I think you'd have to be sensitive if they start microphoning, start micing up and then the looseness of the language would impact. So I don't think they'll go that far. But I do think the more that you can see, the more attractive the game becomes, the more interested that you can get people. When I broadcast baseball for ABC back in the 80's, I always tried to broadcast for the lady of the house, while she worked, while she cooked the meal, she didn't have time to think about a backup slider or the fastball that painted the outside corner, the changeup, etc., the sinker. I tried to broadcast for her interpretation so I could attract another fan to the game. So I think that the technology and the viewing that you'll see from behind home plate, from under the player's feet while he's running down the bases and the slides and things of that nature, Pete, I think are going to be exciting for the fan and it'll attract more fans, attract a new type of television it's going to produce, etc. So it's exciting. >> Reggie, thanks for comin' on The Cube again. Appreciate your time. I ask ya final two questions that I want to get your thoughts on. One is obviously the cars. Reggie's Garage is goin' great. And you shared with us last time on The Cube, it's on YouTube, about you when you grew up and decide football and baseball. But when you were growin' up, what was your favorite car? What was that car that you wanted that was out of reach? That car that was your hot rod? And then the second question is, we'll get to the second question. Answer that one first. What was you dream car at the time? How did ya get >> Reggie: The dream car >> John: hooked on this? >> at the time. I had a '55 Chevrolet that I bought from a buddy by the name of Ronny Fog. I don't even know if he's still around anymore. Out of Pennsylvania. I had $300 and my dad gave me $200. I'd saved up mine from workin' for my dad. But my dream car was I went to school with a guy named Wayne Gethman and another guy named Irwin Croyes. I don't know Wayne Gethman anymore. But from the age of 16, I reengaged with Irwin Croyes, who happens to be a business investing type guy in the city of Philadelphia, right where we're still from. He's a car collector. And he drove a '62 Corvette and so did Wayne Gethman. And I always wanted one. And I now happen to have four. (laughing) >> He who get the most toys wins. Final question, 'cause you're such a legend and you're awesome and you're doin' so much work. And you're very active, engaged, appreciate that. Advice to young athletes coming up, whether they're also in business or a tech athlete or a business athlete. But the sports athletes today got travel ball, you got all this stuff goin' on. The idols like Stephen Curry are lookin' great. Great role models now emerging. What advice do you give them? >> John's got a freshman in high school. I got a junior in high school. What would ya say to 'em? >> You know, I'll tell ya. When you're young, the people you want to listen to are Mom and Dad. No one, and I'll say this to any child from the age of eight or nine years old, five, six years old to 17, 18, 19, 20, all the way up, now my daughter's 25. All the way up to the end of your parents' days. No one cares for you more than your mother or your father. Any parent, whether it's a job or whether their success in life, number one in that man or woman, mom or dad, number one in their life is their children. And so for kids, I say if there's any person you're going to listen to for advice in any path you want to walk down, it's the one that your parents talk to you about or how they show you. That is what I would leave as being most important. For kids, anything, idea that you have that you believe you can do, whether it's the athlete like Stephen Curry that has created shots and done things on the basketball court that he envisioned, that he thought about. Or whether it's the next Steve Jobs who happens to be Mark Zuckerman, who I don't know Mark is 30 years old yet. >> John: He just turned 30. >> It's an idea. He's born around the same time. He's born this week. His birthday is in this week. My birthday's tomorrow. >> John: Happy birthday. >> But thank you. Anything that you can think of in today's world of technology. With places like Silicon Valley where they take dreams and create foundations for them. I had a dream about a website that would sell automotive parts and you could go to my site and buy anything for your car. We've got about 75,000 items now. We'll get to 180,000 in a few months. We'll get to a half a million as soon as my technology is ready for it. But we have things to pay attention to and look into and issues to make sure that we iron out that aren't there for our consumer, for ease of navigation, ease of consumption and purchasing. Any idea that you have, take time to dream. It's much more so than taking time to dream when I was a young kid. Because my father would say, "Stop daydreamin' "and wastin' time." >> John: Get to work. >> Reggie: In today's world, for our children, I say take time to create a vision or to create something new. And go to someone that's in the tech world and they'll figure out a way of helping you manifest it into something that's a reality. >> Listen to your parents, kids. And folks out there, dream, build the foundation, go for it. Reggie Jackson, congratulations for being a Cube alumni again, multi-return. >> Peter: Thank you very much. >> John: Appreciate it. Congratulate on all your continued success. You're a legend. Great to have you on. And thanks so much for comin' on The Cube. >> Peter: And happy 70th birthday. >> John, Pete, always a pleasure. >> John: Happy birthday. >> Thank you very much. >> Have some cake for Reggie. It's The Cube, live here in Orlando. Bringin' all the action here on The Cube. I'm John Furrier with Peter Burris with Reggie Jackson. We'll be right back. (electronic music)