(futuristic music) >> Hey everyone. Lisa Martin here for theCUBE back with you, three guests join me. Dan Molina is here, the co-president and chief technology officer at NTH Generation. And I'm joined once again by Terry Richardson, North American channel chief for AMD and Dr. John Fry, chief technologist, sustainable transformation at HPE. Gentlemen, It's a pleasure to have you on theCUBE Thank you for joining me. >> Thank you, Lisa. >> Dan. Let's have you kick things off. Talk to us about how NTH Generation is addressing the environmental challenges that your customers are having while meeting the technology demands of the future. That those same customers are no doubt having. >> It's quite an interesting question, Lisa, in our case we have been in business since 1991 and we started by providing highly available computing solutions. So this is great for me to be partnered here with HPE and the AMD because we want to provide quality computing solutions. And back in the day, since 1991 saving energy saving footprint or reducing footprint in the data center saving on cooling costs was very important. Over time those became even more critical components of our solutions design. As you know, as a society we started becoming more aware of the benefits and the must that we have a responsibility back to society to basically contribute with our social and environmental responsibility. So one of the things that we continue to do and we started back in 1991 is to make sure that we're deciding compute solutions based on clients' actual needs. We go out of our way to collect real performance data real IT resource consumption data. And then we architect solutions using best in the industry components like AMD and HPE to make sure that they were going to be meeting those goals and energy savings, like cooling savings, footprint reduction, knowing that instead of maybe requiring 30 servers, just to mention an example maybe we're going to go down to 14 and that's going to result in great energy savings. Our commitment to making sure that we're providing optimized solutions goes all the way to achieving the top level certifications from our great partner, Hewlett Packard Enterprise. Also go deep into micro processing technologies like AMD but we want to make sure that the designs that we're putting together actually meet those goals. >> You talked about why sustainability is important to NTH from back in the day. I love how you said that. Dan, talk to us a little bit about what you're hearing from customers as we are seeing sustainability as a corporate initiative horizontally across industries and really rise up through the C-suite to the board. >> Right, it is quite interesting Lisa We do service pretty much horizontally just about any vertical, including public sector and the private sector from retail to healthcare, to biotech to manufacturing, of course, cities and counties. So we have a lot of experience with many different verticals. And across the board, we do see an increased interest in being socially responsible. And that includes not just being responsible on recycling as an example, most of our conversations or engagements that conversation happens, 'What what's going to happen with the old equipment ?' as we're replacing with more modern, more powerful, more efficient equipment. And we do a number of different things that go along with social responsibility and environment protection. And that's basically e-waste programs. As an example, we also have a program where we actually donate some of that older equipment to schools and that is quite quite something because we're helping an organization save energy, footprint. Basically the things that we've been talking about but at the same time, the older equipment even though it's not saving that much energy it still serves a purpose in society where maybe the unprivileged or not as able to afford computing equipment in certain schools and things of that nature. Now they can benefit and being productive to society. So it's not just about energy savings there's so many other factors around social corporate responsibility. >> So sounds like Dan, a very comprehensive end to end vision that NTH has around sustainability. Let's bring John and Terry into the conversation. John, we're going to start with you. Talk to us a little bit about how HPE and NTH are partnering together. What are some of the key aspects of the relationship from HPE's perspective that enable you both to meet not just your corporate sustainable IT objectives, but those of your customers. >> Yeah, it's a great question. And one of the things that HPE brings to bear is 20 years experience on sustainable IT, white papers, executive workbooks and a lot of expertise for how do we bring optimized solutions to market. If the customer doesn't want to manage those pieces himself we have our 'As a service solutions, HPE GreenLake. But our sales force won't get to every customer across the globe that wants to take advantage of this expertise. So we partner with companies like NTH to know the customer better, to develop the right solution for that customer and with NTH's relationships with the customers, they can constantly help the customer optimize those solutions and see where there perhaps areas of opportunity that may be outside of HPE's own portfolio, such as client devices where they can bring that expertise to bear, to help the customer have a better total customer experience. >> And that is critical, that better overall comprehensive total customer experience. As we know on the other end, all customers are demanding customers like us who want data in real time, we want access. We also want the corporate and the social responsibility of the companies that we work with. Terry, bringing you into the conversation. Talk to us a little about AMD. How are you helping customers to create what really is a sustainable IT strategy from what often starts out as sustainability tactics? >> Exactly. And to pick up on what John and and Dan were saying, we're really energized about the opportunity to allow customers to accelerate their ability to attain some of their more strategic sustainability goals. You know, since we started on our current data center, CPU and GPU offerings, each generation we continue to focus on increasing the performance capability with great sensitivity to the efficiency, right? So as customers are modernizing their data center and achieving their own digital transformation initiatives we are able to deliver solutions through HPE that really address a greater performance per watt which is a a core element in allowing customers to achieve the goals that John and Dan talked about. So, you know, as a company, we're fully on board with some very public positions around our own sustainability goals, but working with terrific partners like NTH and HPE allows us to together bring those enabling technologies directly to customers >> Enabling and accelerating technologies. Dan, let's go back to you. You mentioned some of the things that NTH is doing from a sustainability approach, the social and the community concern, energy use savings, recycling but this goes all the way from NTH's perspective to things like outreach and fairness in the workplace. Talk to us a little bit about some of those other initiatives that NTH has fired up. >> Absolutely, well at NTH , since the early days, we have invested heavily on modern equipment and we have placed that at NTH labs, just like HPE labs we have NTH labs, and that's what we do a great deal of testing to make sure that our clients, right our joint clients are going to have high quality solutions that we're not just talking about it and we actually test them. So that is definitely an investment by being conscious about energy conservation. We have programs and scripts to shut down equipment that is not needed at the time, right. So we're definitely conscious about it. So I wanted to mention that example. Another one is, we all went through a pandemic and this is still ongoing from some perspectives. And that forced pretty much all of our employees, at least for some time to work from home. Being an IT company, we're very proud that we made that transition almost seamlessly. And we're very proud that you know people who continue to work from home, they're saving of course, gasoline, time, traffic, all those benefits that go with reducing transportation, and don't get me wrong, I mean, sometimes it is important to still have face to face meetings, especially with new organizations that you want to establish trust. But for the most part we have become a hybrid workforce type of organization. At the same time, we're also implementing our own hybrid IT approach which is what we talk to our clients about. So there's certain workloads, there are certain applications that truly belong in in public cloud or Software as a Service. And there's other workloads that truly belong, to stay in your data center. So a combination and doing it correctly can result in significant savings, not just money, but also again energy, consumption. Other things that we're doing, I mentioned trading programs, again, very proud that you know, we use a e-waste programs to make sure that those IT equipment is properly disposed of and it's not going to end in a landfill somewhere but also again, donating to schools, right? And very proud about that one. We have other outreach programs. Normally at the end of the year we do some substantial donations and we encourage our employees, my coworkers to donate. And we match those donations to organizations like Operation USA, they provide health and education programs to recover from disasters. Another one is Salvation Army, where basically they fund rehabilitation programs that heal addictions change lives and restore families. We also donate to the San Diego Zoo. We also believe in the whole ecosystem, of course and we're very proud to be part of that. They are supporting more than 140 conservation projects and partnerships in 70 countries. And we're part of that donation. And our owner has been part of the board or he was for a number of years. Mercy House down in San Diego, we have our headquarters. They have programs for the homeless. And basically that they're servicing. Also Save a Life Foundation for the youth to be educated to help prevent sudden cardiac arrest for the youth. So programs like that. We're very proud to be part of the donations. Again, it's not just about energy savings but it's so many other things as part of our corporate social responsibility program. Other things that I wanted to mention. Everything in our buildings, in our offices, multiple locations. Now we turn into LED. So again, we're eating our own dog food as they say but that is definitely some significant energy savings. And then lastly, I wanted to mention, this is more what we do for our customers, but the whole HPE GreenLake program we have a growing number of clients especially in Southern California. And some of those are quite large like school districts, like counties. And we feel very proud that in the old days customers would buy IT equipment for the next three to five years. Right? And they would buy extra because obviously they're expecting some growth while that equipment must consume energy from day one. With a GreenLake type of program, the solution is sized properly. Maybe a little bit of a buffer for unexpected growth needs. And anyway, but with a GreenLake program as customers need more IT resources to continue to expand their workloads for their organizations. Then we go in with 'just in time' type of resources. Saving energy and footprint and everything else that we've been talking about along the way. So very proud to be one of the go-tos for Hewlett Packard Enterprise on the GreenLake program which is now a platform, so. >> That's great. Dan, it sounds like NTH generation has such a comprehensive focus and strategy on sustainability where you're pulling multiple levers it's almost like sustainability to the NTH degree ? See what I did there ? >> (laughing) >> I'd like to talk with all three of you now. And John, I want to start with you about employees. Dan, you talked about the hybrid work environment and some of the silver linings from the pandemic but I'd love to know, John, Terry and then Dan, in that order how educated and engaged are your employees where sustainability is concerned? Talk to me about that from their engagement perspective and also from the ability to retain them and make them proud as Dan was saying to work for these companies, John ? >> Yeah, absolutely. One of the things that we see in technology, and we hear it from our customers every day when we're meeting with them is we all have a challenge attracting and retaining new employees. And one of the ways that you can succeed in that challenge is by connecting the work that the employee does to both the purpose of your company and broader than that global purpose. So environmental and social types of activities. So for us, we actually do a tremendous amount of education for our employees. At the moment, all of our vice presidents and above are taking climate training as part of our own climate aspirations to really drive those goals into action. But we're opening that training to any employee in the company. We have a variety of employee resource groups that are focused on sustainability and carbon reduction. And in many cases, they're very loud advocates for why aren't we pushing a roadmap further? Why aren't we doing things in a particular industry segment where they think we're not moving quite as quickly as we should be. But part of the recognition around all of that as well is customers often ask us when we suggest a sustainability or sustainable IT solution to them. Their first question back is, are you doing this yourselves? So for all of those reasons, we invest a lot of time and effort in educating our employees, listening to our employees on that topic and really using them to help drive our programs forward. >> That sounds like it's critical, John for customers to understand, are you doing this as well? Are you using your own technology ? Terry, talk to us about from the AMD side the education of your employees, the engagement of them where sustainability is concerned. >> Yeah. So similar to what John said, I would characterize AMD is a very socially responsible company. We kind of share that alignment in point of view along with NTH. Corporate responsibility is something that you know, most companies have started to see become a lot more prominent, a lot more talked about internally. We've been very public with four key sustainability goals that we've set as an organization. And we regularly provide updates on where we are along the way. Some of those goals extend out to 2025 and in one case 2030 so not too far away, but we're providing milestone updates against some pretty aggressive and important goals. I think, you know, as a technology company, regardless of the role that you're in there's a way that you can connect to what the company's doing that I think is kind of a feel good. I spend more of my time with the customer facing or partner facing resources and being able to deliver a tool to partners like NTH and strategic partners like HPE that really helps quantify the benefit, you know in a bare metal, in terms of greenhouse gas emissions and a TCO tool to really quantify what an implementation of a new and modern solution will mean to a customer. And for the first time they have choice. So I think employees, they can really feel good about being able to to do something that is for a greater good than just the traditional corporate goals. And of course the engineers that are designing the next generation of products that have these as core competencies clearly can connect to the impact that we're able to make on the broader global ecosystem. >> And that is so important. Terry, you know, employee productivity and satisfaction directly translates to customer satisfaction, customer retention. So, I always think of them as inextricably linked. So great to hear what you're all doing in terms of the employee engagement. Dan, talk to me about some of the outcomes that NTH is enabling customers to achieve, from an outcomes perspective those business outcomes, maybe even at a high level or a generic level, love to dig into some of those. >> Of course. Yes. So again, our mission is really to deliver awesome in everything we do. And we're very proud about that mission, very crispy clear, short and sweet and that includes, we don't cut corners. We go through the extent of, again, learning the technology getting those certifications, testing those in the lab so that when we're working with our end user organizations they know they're going to have a quality solution. And part of our vision has been to provide industry leading transformational technologies and solutions for example, HPE and AMD for organizations to go through their own digital transformation. Those two words have been used extensively over the last decade, but this is a multi decade type of trend, super trend or mega trend. And we're very proud that by offering and architecting and implementing, and in many cases supporting, with our partners, those, you know, best in class IT cyber security solutions were helping those organizations with those business outcomes, their own digital transformation. If you extend that Lisa , a Little bit further, by helping our clients, both public and private sector become more efficient, more scalable we're also helping, you know organizations become more productive, if you scale that out to the entire society in the US that also helps with the GDP. So it's all interrelated and we're very proud through our, again, optimized solutions. We're not just going to sell a box we're going to understand what the organization truly needs and adapt and architect our solutions accordingly. And we have, again, access to amazing technology, micro processes. Is just amazing what they can do today even compared to five years ago. And that enables new initiatives like artificial intelligence through machine learning and things of that nature. You need GPU technology , that specialized microprocessors and companies like AMD, like I said that are enabling organizations to go down that path faster, right? While saving energy, footprint and everything that we've been talking about. So those are some of the outcomes that I see >> Hey, Dan, listening to you talk, I can't help but think this is not a stretch for NTH right? Although, you know, terms like sustainability and reducing carbon footprint might be, you know more in vogue, the type of solutions that you've been architecting for customers your approach, dates back decades, and you don't have to change a lot. You just have new kind of toys to play with and new compelling offerings from great vendors like HPE to position to your customers. But it's not a big change in what you need to do. >> We're blessed from that perspective that's how our founders started the company. And we only, I think we go through a very extensive interview process to make sure that there will be a fit both ways. We want our new team members to get to know the the rest of the team before they actually make the decision. We are very proud as well, Terry, Lisa and John, that our tenure here at NTH is probably well over a decade. People get here and they really value how we help organizations through our dedicated work, providing again, leading edge technology solutions and the results that they see in our own organizations where we have made many friends in the industry because they had a problem, right? Or they had a very challenging initiative for their organization and we work together and the outcome there is something that they're very, very proud of. So you're right, Terry, we've been doing this for a long time. We're also very happy again with programs like the HPE GreenLake. We were already doing optimized solutions but with something like GreenLake is helping us save more energy consumption from the very beginning by allowing organizations to pay for only what they need with a little bit of buffer that we talked about. So what we've been doing since 1991 combined with a program like GreenLake I think is going to help us even better with our social corporate responsibility. >> I think what you guys have all articulated beautifully in the last 20 minutes is how strategic and interwoven the partnerships between HP, AMD and NTH is what your enabling customers to achieve those outcomes. What you're also doing internally to do things like reduce waste, reduce carbon emissions, and ensure that your employees are proud of who they're working for. Those are all fantastic guys. I wish we had more time cause I know we are just scratching the surface here. We appreciate everything that you shared with respect to sustainable IT and what you're enabling the end user customer to achieve. >> Thank you, Lisa. >> Thanks. >> Thank you. >> My pleasure. From my guests, I'm Lisa Martin. In a moment, Dave Vellante will return to give you some closing thoughts on sustainable IT You're watching theCUBE. the leader in high tech enterprise coverage.

>> Hi, I'm Peter Burris. Welcome to Wikibon's Action Item. On Action Item, every week I assemble the core of the Wikibon research time here in our theCUBE Palo Alto studios, as well as remotely, to discuss a seminal topic that's facing the technology industry, and business overall, as we navigate this complex transition of digital business. Here in the studio with me this week, I have David Floyer. David, welcome. >> Thank you. >> And then remotely, we have George Gilbert, Neil Raden, Jim Kobielus, and Ralph Finos. Guys, thank you very much for joining today. >> Hi, how are you doing? >> Great to be here. >> This week, we're going to discuss something that's a challenge to talk about in a small format, but we're going to do our best, and that is, given that the industry is maneuvering through this significant transformation from a product orientation to a services orientation, what's that going to mean for business models? Now this is not a small question, because there are some very, very big players that the technology industry has been extremely dependent upon to drive forward invention, and innovation, and new ideas, and customers, that are entirely dependent upon this ongoing stream of product revenue. On the other hand, we've got companies like AWS, and others that are much more dependent upon the notion of services revenue, where the delivery of the value is in a continuous service orientation. And we conclude most of the SaaS players in that as well, like sales force, etc. So how are those crucial companies, that have been so central to the development of the technology industry, and still are essential to the future of the technology industry, going to navigate this transition? Similarly, how are the services companies, for those circumstances in which the customer does want a private asset that they can utilize as a basis for performing their core business, how are they going to introduce a product orientation? What's that mix, what's that match going to be? And that's what we're going to talk about today. So David, I've kind of laid it out, but really, where are we in this notion of product to service in some of these business model changes? >> It's an early stage, but it's very, very profound changes going on. We can see it from the amount of business of the cloud business supplies are providing. You can see that Amazon, Google, IBM, and Microsoft Azure, all of those are putting very large resources into creating services to be provided to the business itself. But equally, we are aware that services themselves need to be on premise as well, so we're seeing the movement of true private cloud, for example, which is going to be provided as a service as well, so if we take some examples, like for example, Oracle, the customer, they're a cloud customer, they're providing exactly the same service on premise as they provide in the cloud. >> And by service, you mean in how the customer utilizes the technologies. >> Correct. >> The asset arrangement may be very different, but the proposition of what the customer gets out of the assets are essentially the same. >> Yes, the previous model was, we provide you with a product, you buy a number of those products, you put them together, you service it, you look after it. The new model, here coming in with TPC, with the single throat to choke, is that the vendor will look after the maintenance of everything, putting in new releases, bringing things up to date, and they will have a smaller set of things that they will support, and as a result, it's win-win. It's win for the customer, because he's costs are lower, and he can concentrate on differentiated services. >> And secure and privatize his assets. >> Right, and the vendor wins because they have economies of scale, they can provide it at a much lower cost as well. And even more important to both sides is that the time to value of new releases is much, much quicker, and time to security exposures, time to a whole number of other things, improve with this new model. >> So Jim, when we think about this notion of a services orientation, ultimately, it starts to change the relationships between the customer and the vendor. And the consequence of that is, not surprisingly, that a number of different considerations, whether they be metrics, or other elements, become more important. Specifically we start thinking about the experience that the customer has of using something. Walk us through this kind of transition to an experience-oriented approach to conceiving of whether or not the business model's being successful. >> Right, your customer will now perceive the experience in the context of an entire engagement that is multi-channel, multi-touch point, multi-device, multi-application, and so forth, where they're expecting the same experience, the same value, the same repeatable package of goodies, whatever it is they get from you, regardless of the channel through which you're touching them or they're touching you. That channel may be provided through a private, on-premises implementation of your stack, or through a public cloud implementation of your capability, or most likely through all of the above, combined into a hybrid true private cloud. Regardless of the packaging, and the delivery of that value in the context of the engagement the customer expects it to be, self-service increasingly, predictable, managed by the solution provider, guaranteed with a fast continuous release in update cycle. So, fundamentally it's an experience economy, because the customer has many other options to go to, of providers that can provide them with a good or better experience, in terms of the life cycle of things that you're doing for them. So bottom line, the whole notion of a TPC really gets to that notion that the experience is the most important thing, the cloud experience, that can be delivered on-prem, or can be delivered in the public environment. And that's really the new world. With a multi-cloud is that master sort of a matrix of the seamless cross-channel experience. >> We like to think of the notion of a business model as worrying about three fundamental questions. How are you going to create value? How are you going to deliver value? And how are you going to capture value? Where the creation is how shared it's going to be, it's going to be a network of providers, you're going to have to work with OEMs. The delivery, is it going to be online, is it going to be on-prem? Those types of questions, but this notion of value capture is a key feature, David, of how this is changing. And George, I want to ask you a question. The historical norm is that value capture took place in the form of, I give you a product, you give me cash. But when we start moving to a services-orientation, where the services is perhaps being operated and delivered by the supplier, it introduces softer types of exchange mechanisms, like, how are you going to use my data? Are you going to improve the fidelity of the system by pooling me with a lot of other customers? Am I losing my differentiation? My understanding of customers, is that being appropriated and munged with others to create models? Take us through this soft value capture challenge that a service provider has, and what specifically, I guess actually the real challenge that the customer has as they try to privatize their assets, George. >> So, it's a big question that you're asking, and let me use an example to help sort of make concrete the elaboration, or an explanation. So now we're not just selling software, but we might be selling sort of analytic data services. Let's say, a vendor like IBM works with Airbus to build data services where the aircraft that Airbus sells to its airline customers, that provides feedback data that both IBM has access to, to improve its models about how the aircraft work, as well as that data would also go back to Airbus. Now, Airbus then can use that data service to help its customers with prescriptions about how to operate better on certain routes, how to do maintenance better, not just predictive maintenance, but how to do it more just in time with less huge manuals. The key here is that since it's a data service that's being embedded with the product, multiple vendors can benefit from that data service. And the customer of the traditional software company, so in this case, Airbus being the customer of IBM, has to negotiate to make sure its IP is protected to some extent, but at the same time, they want IBM to continue working with that data feedback because it makes their models richer, the models that Airbus gets access to richer over time. >> But presumably that has to be factored into the contractual obligations of both parties enter into, to make sure that those soft dollars are properly commensurated in the agreements. That's not something that we're seeing a lot in the industry, but the model of how we work closely with our clients and our customers is an important one. And it's likely to change the way that IT thinks about itself as a provider of services. Neil, what kinds of behaviors are IT likely to start exhibiting as it finds itself, if not competing, at least trying to mimic the classes of behaviors that we're seeing from service providers inside their own businesses? >> Yeah, well, IT organizations grew over the last, I dunno, 50 years or so, organically, and it was actually amazing how similar their habits and processes, and ways of doing things were the same across industries, and locations, and so forth. But the problem was that everything they had to deal with, whether they were the computers, or the storage, or the networks, and so forth, were all really expensive. So they were always in a process of managing from scarcity. The business wanted more and more from them, and they had lower and lower budgets, because they had to maintain what they had, so it created a lot of tension between IT and organizations, and because of that, whenever a conversation happened between other groups within the business and IT, IT always seemed to have the last word, no, or okay. Whatever the decision was, it was really IT's. And what I see happening here is, when the IT business becomes less insular, I think a lot of this tension between IT and the rest of the organization will start to dissipate. And that's what I'm hoping will happen, because they started this concept of IT vs the business, but if you went out in an organization and asked 100 people what they did, not one of them would say, "I'm the business," right? They have a function, but IT created this us vs them thing, to protect themselves, and I think that once they're able to utilize external services for hardware, for software, for whatever else they have to do, they become more like a commercial operation, like supply-side, or procurement, or something, and managing those relationships, and getting the services that they're paying for, and I think ultimately that could really help organizations, by breaking down those walls in IT. >> So it used to be that an IT decision to make an investment would have uncertain returns, but certain costs, and there are multiple reasons why those returns would be uncertain, or those benefits would be uncertain. Usually it was because some other function would see the benefits under their umbrella, you know, marketing might see increased productivity, or finance would see increased productivity as a consequence of those investments, but the costs always ended up in IT. And that's one of the reasons why we yet find ourself in this nasty cycle of constantly trying to push costs down, because the benefits always showed up somewhere else, the costs always showed up inside IT. But it does raise this question ultimately of, does this notion of an ongoing services orientation, is it just another way of saying, we're letting a lock in back in the door in a big way? Because we're now moving from a relationship, a sourcing relationship that's procurement oriented, buy it, spend as little money as possible, get value out of it, as opposed to a services orientation, which is effectively, move responsibility for this part of the function off into some other service provider, perpetually. And that's going to have a significant implication, ultimately, on the question of whether or not we buy services, default to services. Ralph, what do you think, where are businesses going to end up on this, are we just going to see everything end up being a set of services, or is there going to be some model that we might use, and I'll ask the team this, some model that we might use to conceive when it should be a purchase, and when it should be a service? What do you think, Ralph? >> Yeah, I think the industry's gravitating towards a service model, and I think it's a function of differentiation. You know, if you're an enterprise, and you're running a hundred different workloads, and 15 of them are things that really don't differentiate you from your competition, or create value that's differentiable in some kind of way, it doesn't make any sense to own that kind of functionality. And I think, in the long run, more and more aspects, or a higher percentage of workload is going to be in that category. There will always be differentiation workloads, there will always be workloads requiring unique kinds of security, especially around transactions. But in the net, the slow march of service makes a lot of sense to me. >> What do you think, guys? Are we going to see, uh, do we agree with Ralph, number one? And number two, what about those exceptions? Is there a framework that we can start to utilize to start helping folks imagine what are the exceptions to that rule, what do you think David? >> Sure, I think that there are circumstances when... >> Well first, do we generally agree with the march? >> Absolutely, absolutely. >> I agree too. >> Yes, fully agree that more and more services are going to be purchased, and a smaller percentage of the IT budget from an enterprise will go into specific purchases of assets. But there are some circumstances where you will want to make sure that you have those assets on premise, that there is no other call on those assets, either from the court, or from difference of priority between what you need and what a service provider needs. So in both those circumstances, they may well choose to purchase it, or to have the asset on the premise so that it's clearly theirs, and clearly their priority of when to use it, and how to use it. So yes, clearly, an example might be, for example, if you are a bank, and you need to guarantee that all of that information is yours, because you need to know what assets are owned by who, and if you give it to a service provider, there are circumstances where there could be a legal claim on that service provider, which would mean that you'll essentially go out of business. So there are very clear examples of where that could happen, but in general, I agree. There's one other thing I'd like to add to this conversation. The interesting thing from an IT point of view, an enterprise IT, is that you'll have fewer people to do business with, you'll be buying a package of services. So that means many of the traditional people that you did business with, both software and hardware, will not be your customers anymore, and they will have to change their business models to deal with this. So for example, Permabit has become an OEM supplier of capabilities of data management inside. And Kaminario has just announced that it's becoming a software vendor. >> Nutanix. >> Nutanix is becoming a software vendor, and is either allowing other people to take the single throat to choke, or putting together particular packages where it will be the single throat to choke. >> Even NetAct, which is a pretty consequential business, has been been around for a long time, is moving in this direction. >> Yes, a small movement in that direction, but I think a key question for many of these vendors are, do I become an OEM supplier to the... >> Customer owner. >> The customer owner. Or what's my business model going to be? Should I become the OEM supplier, or should I try and market something directly in some sort of way to the vendors? >> Now this is a very important point, David, because one of the reasons, for a long time, why the OEM model ran into some challenges, is precisely over customer ownership. But when data from operations of the product, or of the service is capable of flowing, not only to the customer engagement originator, but also to the OEM supplier, the supplier has pretty significant, the OEM company has pretty significant visibility, ultimately, into what is going on with their product. And they can use that to continuously improve their product, while at the same time, reducing some of the costs associated with engagement. So the flowing of data, the whole notion of digital business allows a single data about operation to go to multiple parties, and as a consequence, all those parties now have viable business models, if they do it right. >> Yeah, absolutely. And Kaminario will be be a case in point. They need metadata about the whole system, as a whole, to help them know how to apply the best patches to their piece of software, and the same is true for other suppliers of software, the Permabit, or whoever those are, and it's the responsibility of that owner or the customer to make sure that all of those people can work in that OEM environment effectively, and improve their product as well. >> Yeah, so great conversation guys. This is a very, very rich and fertile domain, and I think it's one that we're going to come back to, if not directly, at least in talking about how different vendors are doing things, or how customers have to, or IT organizations have to adjust their behaviors to move from a procurement to a strategic sourcing set of relationships, etc. But what I'd like to do now, as we try to do every week, is getting to the Action Item round, and I'm going to ask each of you guys to give me, give our audience, give our users, the action item, what do they do differently on next Monday as a consequence of this conversation? And George Gilbert, I'm going to start with you. George, action item. >> Okay, so mine is really an extension of what we were talking about when I was raising my example, which is your OEM supplier, let's say IBM, or a company we just talked to recently, C3 IoT, is building essentially what are application data services that would accompany your products that you, who used to be a customer, are selling a supply chain master, say. So really trying to boil that down is, there is a model of your product or service could be the digital twin, and as your vendor keeps improving it, and you offer it to your customers, you need to make sure that as the vendor improves it, that there is a version that is backward compatible with what you are using. So there's the IP protection part, but then there's also the compatibility protection part. >> Alright, so George, your action item would be, don't focus narrowly on the dollars being spent, factor those soft dollars as well, both from a value perspective, as well an ongoing operational compatibility perspective. Alright, Jim Kobielus, action item. >> Action item's for IT professionals to take a quick inventory of what of your assets in computing you should be outsourcing to the cloud as services, it's almost everything. And also, to inventory, what of your assets must remain in the form of hard discreet tangible goods or products, and my contention is that, I would argue that the edge, the OT, the operational technology, the IOT, sensors and actuators that are embedded in your machine tools and everything else, that you're running the business on, are the last bastion of products in this new marketplace, where everything else becomes a service. Because the actual physical devices upon which you've built your OT are essentially going to remain hard tangible products forevermore, of necessity, and you'll probably want to own those, because those are the very physical fabric of your operation. >> So Jim, your action item is, start factoring the edge into your consideration of the arrangements of your assets, as you think about product vs services. >> Yes. >> Neil Raden, action item. >> Well, I want to draw a distinction between actually, sorry, between actually, ah damn, sorry. (laughs) >> Jim: I like your fan, Neil. >> Peter: Action item, get your monitor right. >> You know. I want to draw the distinction between actually moving to a service, as opposed to just doing something that's a funding operate. Suppose we have 500 Oracle applications in our company running on 35 or 40 Oracle instances, and we have this whole army of Oracle DBAs, and programmers, and instance tuners, and we say well, we're going to give all the servers to the Salvation Army, and we're going to move everything to the Oracle cloud. We haven't really changed anything in the way the IT organization works. So if we're really looking for change in culture and operation, and everything else, we have to make sure we're thinking about how we're changing, reading the way things get done and managed in the organization. And I think just moving to the cloud is very often just a budgetary thing. >> So your action item would be, as you go through this process, you're going to re-institutionalize the way you work, get ready to do it. Ralph Finos, action item. >> Yeah, I think if you're a vendor, if you're an IT industry vendor, you kind of want to begin to look a lot like, say, a Honda or Toyota in terms of selling the hardware to get the service in the long term relationship in the lock-in. I think that's really where the hardware vendors, as one group of providers, is going to want to go. And I think you want, as a user and an enterprise, I think you're going to want to drive your vendors in that direction. >> So your action item would be, for a user anyway, move from a procurement orientation that's focused on cost, to a vendor management orientation that's focused on co-development, co-evolution of the value that's being delivered by the service. David Floyer, action item. >> So my action item is for vendors, a whole number of smaller vendors. They have to decide whether they're going to invest in the single most expensive thing that they can do, which is an enterprise sales force, for direct selling of their products to enterprise IT, and-or whether they're going to take an OEM type model, and provide services to a subset, for example, to focus on the cloud service providers, which Kaminario are doing, or focus on selling indirectly to all of the, the vendors who are owning the relationship with the enterprise. So that, to me, is a key decision, very important decision as the number of vendors will decline over the next five years. >> Certainly, what we have, visibility to what we have right now, so your action item is, as a small vendor, choose whose sales force you're going to use, yours or somebody else's. >> Correct. >> Alright. So great conversation guys. Let me kind of summarize this a bit. This week, we talked about the evolving business models in the industry, and the basic notion, or the reason why this has become such an important consideration, is because we're moving from an era where the types of applications that we were building were entirely being used internally, and were therefore effectively entirely private, vs increasingly trying to extend even those high-volume transaction processing applications into other types of applications that deliver things out to customers. So the consequence of the move to greater integration, greater external delivery of things within the business, has catalyzed this movement to the cloud. And as a consequence, this significant reformation, from a product to a services orientation, is gripping the industry, and that's going to have significant implications on how both buyers and users of technology, and sellers and providers of technology are going to behave. We believe that the fundamental question is going to come down to, what process are you going to use to create value, with partnerships, go it alone? How are you going to deliver that value, through an OEM sales force, through a network of providers? And how are you going to capture value out of that process, through money, through capturing of data, and more of an advertising model? These are not just questions that feature in the consumer world, they're questions that feature significantly in the B2B world as well. Our expectations, over the next few years, we expect to see a number of changes start to manifest themselves. We expect to see, for example, a greater drive towards experience of the customer as a dominant consideration. And today, it's the cloud experience that's driving many of these changes. Can we get the cloud experience, both the public cloud, and on premise, for example? Secondly, our expectations that we're going to see a lot of emphasis on how soft exchanges of value take place, and how we privatize those exchanges. Hard dollars are always going to flow back and forth, even if they take on subscription, as opposed to a purchase orientation, but what about that data that comes out of the operations? Who owns that, and who gets to lay claim to future revenue streams as a consequence of having that data? Similarly, we expect to see that we will have a new model that IT can use to start focusing its efforts on more business orientation, and therefore not treating IT as the managers of hardware assets, but rather managers of business services that have to remain private to the business. And then finally, our expectation is that this march is going to continue. There will be significant and ongoing drive to increase the role that a service's business model plays in how value is delivered, and how value is captured. Partly because of the increasing dominant role that data's playing as an asset in digital business. But we do believe that there are some concrete formulas and frameworks that can be applied to best understand how to arrange those assets, how to institutionalize and work around those assets, and that's a key feature of how we're working with our customers today. Alright, once again, team, thank you very much for this week's Action Item. From theCUBE studios in beautiful Palo Alto, I want to thank David Floyer, George Gilbert, Jim Kobielus, Neil Raden, and Ralph Finos, this has been Action Item.