(soft upbeat music) >> Narrator: theCUBE presents HPE Discover 2022 brought to you by HPE. >> Hey everyone. Welcome back to Las Vegas. theCUBE is live. We love saying that. theCUBE is live at HPE Discover '22. It's about 8,000 HP folks here, customers, partners, leadership. It's been an awesome day one. We're looking forward to a great conversation next. Lisa Martin, Dave Vellante, two guests join us. We're going to be talking about the power of the channel. Mike Beltrano joins us, Worldwide Channel Sales Leader at AMD, and Phil Soper is here, the North America Head of Channel Sales at HPE. Guys, great to have you. >> Thanks for having us. >> Great to be here. >> So we're talking a lot today about the ecosystem. It's evolved tremendously. Talk to us about the partnership. Mike, we'll start with you. Phil, we'll go to you. What's new with HPE and AMD Better Together? >> It's more than a partnership. It's actually a relationship. We are really tied at the hip, not just in X86 servers but we're really starting to get more diverse in HP's portfolio. We're in their hyper-converged solutions, we're in their storage solutions, we're in GreenLake. It's pretty hard to get away from AMD within the HP portfolio so the relationship is really good. It's gone beyond just a partnership so starting to transition now down into the channel, and we're really excited about it. >> Phil, talk about that more. Talk about the evolution of the partnership and that kind of really that pull-down. >> I think there's an impression sometimes that AMD is kind of the processor that's in our computers and it's so much more, the relationship is so much more than the inclusion of the technology. We co-develop solutions. Interesting news today at Antonio's presentation of the first Exascale supercomputer. We're solving health problems with the supercomputer that was co-developed between AMD and HPE. The other thing I would add is from a channel perspective, it's way more than just what's in the technology. It's how we engage and how we go to market together. And we're very active in working together to offer our solutions to customers and to be competitive and to win. >> Describe that go-to-market model that you guys have, specifically in the channel. >> So, there is a, his organization and mine, we develop joint go-to-market channel programs. We work through the same channel ecosystem of partners. We engage on specific opportunities. We work together to make sure we have the right creative solution pricing to be aggressive in the marketplace and to compete. >> It's a great question because we're in a supply chain crisis right now, right? And you look at the different ways that HP can go to market through the channel. There's probably about four or five ways that channel partners can provide solutions, but it's also route to purchase for the customers. So, we're in a supply chain crisis right now, but we have HP AMD servers in stock in distribution right now. That's a real big competitive advantage, okay? And if those aren't exactly what you need, HP can do custom solutions with AMD platforms all day, across the board. And if you want to go ahead and do it through the cloud, you've got AMD technology in GreenLake. So, it's pretty much have it your way for the customers through the channel and it's really great for the customers too because there's multiple ways for them to procure the equipment through the channel so we really love the way that HP allows us to kind of integrate into their products, but then integrate into their procurement model down through the channel for the end user to make the right choice. So, it's fantastic. >> You mentioned that AMD's in HCI, in storage, in GreenLake and in the channel. What are the different requirements within those areas? How does the channel influence those requirements and what you guys actually go to market with? >> Well, it comes down to awareness. Awareness is our biggest enemy and the channel's just huge for us because AMD's competitive advantage in our technology is much different. And when you think about price and performance and security and sustainability, that's what we're delivering. And really the channel kind of plugs that in and educates their customers through their marketing and demand gen, kind of influences when they hear from their customers or if they're proactively touching them, influences the route to purchase based on their situation, if they want to pay for it as a service, if they want to finance it, if it does happen to be in stock and speed of delivery is important to them, the channel partner influences that through the relationships and distribution or they can go ahead and place it as a custom to order. So, it's just really based on where they're at in their purchasing cycle and also, it's not about the hardware as much as it's about the software and the applications and the high-value workloads that they're running and that kind of just dictates the platform. >> Does hardware matter? >> Yes, it sure does. It does, man. We're just kind of, it's kind of like the vessel at this point and our processors and our GPS are in the HP vessel, but it is about the application. >> I love that analogy. I would say, absolutely does, workloads matter more and then what's the hardware to run those workloads is really critical. >> And to your point though, it's not just about the CPU anymore. It's about, you guys have made some acquisitions to sort of diversify. It's about all the other supporting sort of actors, if you will, that support those new workloads. >> Let me give you an example that's being showcased at this show, okay? Our extreme search solution with being driven by Splunk, okay? And it's a cybersecurity solution that the industry is going to have to be able to handle in regards to response to any sort of breach and when you think about, they have to search through the data and how they have to get through it and do it in a timely fashion. What we've done is developed a DL385 solution where we have a epic processor from AMD, we have a Xilinx which who we own now, they're FGPA, and Samsung SSDs which are four terabytes per drive packed in a DL385. Now you add the Splunk solution on top of that and if there ever is a breach, it would normally take about days to go ahead and access that breach. Now it can be done in 25 minutes and we have that solution here right now so it's not like we acquire Xilinx and we're waiting to integrate it. We hit the ground running and it's fantastic 'cause the solution's being driven by one of our top partners, WWT, and it's live in their booth here today so we're kind of showing that integration of what AMD is doing with our acquisitions in HP servers and being able to show that today with a workload on top of it is real deal. >> Purpose-built to scan through all those log files and actually surface the inside. >> Exactly what it is, and it's on public sector right now, that's a requirement to be able to do that and to not have it take weeks and be able to do it in 25 minutes is pretty impressive. >> Those are the outcomes customers are demanding? >> That's it. People are, if you're purchasing an outcome, HP can deliver it with AMD and if you're looking to build your own, we can give it to you that way too so, it's flexibility. >> Absolutely critical. Mike, from your perspective on the partnership we've seen and obviously a lot of transformation at HPE over the last couple of years, Antonio stood on this stage three years ago and said, "By 2022, we're going to deliver the entire portfolio as a service." How influential has AMD been from a relationship perspective on what he said three years ago and where they are today? >> Oh my gosh! We've been with them all the way through. I mean, HP is just such a great partner, and right now, we're the VDI solution on GreenLake so it's HP GreenLake, VDI solutions powered by AMD. We love that brand recognition as a service, okay? Same with high-performance computing powered by AMD, offered on HP GreenLake so it's really changed it a lot because as a service, it's just a different way for a customer to procure it and they don't have to worry about that hardware and the stack and anything like that. It's more about them going into that GreenLake portal and being able to understand that they're paying it just like they pay their phone bill or anything else so it's really Antonio's been spot-on with that because that's a reality today and it's being delivered through the channel and AMD's proud to be a part of it and it's much different 'cause we don't need to be as evolved as we have to be from a hardware sale perspective when it's going through GreenLake and it makes it much easier for us. >> Phil, you talked about workloads, really kind of what matter, how are they evolving? How is that affecting? What are customers grabbing you and saying, "We need this." What do you and from a workload standpoint and how are you delivering that? >> Well, the edge to the cloud platform or GreenLake is very much as a service offering, aimed at workloads. And so, if HPE is building and focusing its solutions on addressing specific workload needs, it's not about necessarily the performance you mentioned, or you're asking the question about hardware. It's not necessarily about that. It's, what is the workload, should the workload be, or could the workload be in public cloud or is it a workload that needs to be on premise and customers are making those choices and we're working with those customers to help them drive those strategies and then we adapt depending on where the customer wants the workload. >> Well, it's interesting, because Antonio in his keynote today said, "That's the wrong question," and my reaction was that's the question everybody's asking. It may be the wrong question, but that's what so, your challenge is to, I guess, get them to stop asking that question and just run the right tool for the right job kind of thing. >> That's exactly what it's about because you take high-value workloads, okay? And that can mean a lot of different things and if you just pick one of them, let's say like VDI or hyper-converged. HP's the only game in town where they can kind of go into a gun, a battle with four different guns. They give you a lot of choices and they offer them on an AMD platform and they're not locking you in. They give you a lot of flexibility and choice. So, if you were doing hyper-converged through HPE and you were looking to do it on AMD platform, they can offer to you with VMware vSAN ReadyNodes. They can offer it to you with SimpliVity. They can offer it to you with Nutanix. They can offer it to you with Microsoft, all on an AMD stack. And if you want to bring your own VMware and go bare metal, HP will just give you the notes. If you want to go factory integrated or if you want to purchase it via OEM through HP and have them support it, they just deliver it any way you want to get it. It's just a fantastic story. >> I'll just say, look, others could do that, but they don't want to, okay? That's the fact. Sometimes it happens, sometimes the channel cobbles it together in the field, but it's like they do it grinding their teeth so I mean, I think that is a differentiator of HPE. You're agnostic to that. In fact, by design. >> They can bring your own, you can bring your own software. I mean, it's like, you just bring your own. I mean, if you have it, why would we make a customer buy it again? And HP gives them that flexibility and if it's multiple hypervisors and it's brand agnostic, it's more about, let's deliver you the nodes, purpose-built, for the application that you're going to run in that workload and then HP goes ahead and does that across their portfolio on a custom to order. It's just beautiful for us to fit the need for the customer. >> Well, you're meeting customers where they are. >> Yes. >> Which in today's world is critical. There's no, really no other option for companies. Customers are demanding. Demands are not going to go. We're not going to see a decrease after the pandemic's over of demand, right? And the expectations on businesses. So meeting the customers where they are, giving them that choice, that flexibility is table stakes. >> How has those, you've mentioned supply chain constraints, it sounds like you guys are managing that pretty well. It's I think it's a lot of these hard to get supporting components, maybe not the most expensive component, but they just don't have it. So you can't ship the car or you can't ship the server, whatever it is, how is that affecting the channel? How are they dealing with that? Maybe you could give us an update. >> Oh, the channel's just, we love them, they're the front line, that's who the customers call in, who's been waiting to get their technology and we're wading through it, thank goodness that we have GreenLake because if you wanted to buy it traditionally, because HP is supplying supply-to-purchase through distribution in stock, but it's very limited. And then if you go customer order, that's where the long lead times come into place because it's not just the hard drives and memory and the traditional things that are constrained now. Now it's like the clips and the intangibles and things like that and when you get to that point, you got to just do the best you can and HP supply chain has just been fantastic, super informative, AMD, we're not the problem. We got HP, plenty of processors and plenty of accelerators and GPUs and we're standing with them because that back to the relationship, we're facing the customer with them and managing their expectations to the best we can and trying to give them options to keep their business floating. >> So is that going to be, is this a supply chain constraints could be an accelerant for GreenLake because that capacity is in place for you to service your customers with GreenLake presumably. You're planning for that. There's headroom there in terms of being able to deliver that. If you can't deliver GreenLake, all this promise. >> I would say I would be careful not to position GreenLake as an answer to supply chain challenges, right? I think there's a greater value proposition to a client, and keep in mind, you still have technology at the heart of it, right? And so, and to your question though about our partners, honestly in a lot of ways, it's heartbreaking given the challenges that they face, not just with HPE, but other vendors that they sell and support and without our partners and managing those, we'd be in a world of hurt, frankly and we're working on options. We work with our partners really closely. We work with AMD where we have constraints to move to other potential configurations. >> Does GreenLake make it harder or easier for you to forecast? Because on the one hand, it's as a service and on the other hand, I can dial it down as a customer or dial it up and spike it up if I need to. Do you have enough experience to know at this point, whether it's easier or harder to forecast? >> I think intuitively it's probably harder because you have that variable component that you can't forecast, right? It's with GreenLake, you have your baseline so you know what that baseline is going to be, the baseline commitment and you build in that variable component which is as a service, you pay for what you consume. So that variable component is the one thing that is we can estimate but we don't know exactly what the customer is going to use. >> When you do a GreenLake deal, how does it work? Let's say it's a two-year deal or a three-year deal, whatever and you negotiate a price with a customer for price per X. Do you know like what that contract value is going to be over the life or do you only know that that baseline and then everything else is upside for you and extra additional cost? So how does that work? >> It's a good question. So you know both, you know the baseline and you know what the variable capacity is, what the limits are. So at the beginning of the contract, that's what you know, whether or not a customer determines that they have to expand or do a change order to add another workload into the configuration is the one thing that we hope happens. You don't know. >> But you know with certainty that over the life of that contract, the amount of that contract that's booked, you're going to recognize at some point that. You just don't know when. >> Yes, and so that, and that's to your question, you know that element, the fluctuation in terms of usage is depending on what's happening in the world, right? The pandemic, as an example, with GreenLake customers, probably initially at the beginning of the pandemic, their usage went down for obvious reasons and then it fluctuates up. >> I think a lot of people don't understand that. That's an interesting nuance. Cool, thank you. >> Guys, thanks so much for joining us on the program, talking about the relationship that AMD and HPE have together, the benefits for customers on the outcomes that it's achieving. We appreciate your insights and your time. >> Thanks for having us, guys. >> Appreciate it. >> Our pleasure. >> Phil: Thank you. >> For our guests and Dave Vellante. I'm Lisa Martin live in Las Vegas at HPE Discover '22. Stick around. Our keynote analysis is up next. (soft upbeat music)

(bright upbeat music) >> Okay, we're back with theCUBE's continuous coverage of HPE's latest GreenLake announcement, the continuous cadence that we're seeing here. You know, when you're trying to figure out how to optimize workloads, it's getting more and more complex. Data-driven workloads are coming in to the scene, and so how do you know, with confidence, how to configure your systems, keep your costs down, and get the best performance and value for that? So we're going to talk about that. With me are Chris Shin, who is the founder of CloudPhysics and the senior director of HPE CloudPhysics, and Sandeep Singh, who's the vice-president of Storage Marketing. Gents, great to see you. Welcome. >> Dave, it's a pleasure to be here. >> So let's talk about the problem first, Sandeep, if we could. what are you guys trying to solve? What are you hearing from customers when they talk to you about their workloads and optimizing their workloads? >> Yeah, Dave, that's a great question. Overall, what customers are asking for is just to simplify their world. They want to be able to go faster. A lot of business is asking IT, let's go faster. One of the things that cloud got right is that overall cloud operational experience, that's bringing agility to organizations. We've been on this journey of bringing this cloud operational agility to customers for their data states, especially with HPE GreenLake Edge-to-Cloud platform. >> Dave: Right. >> And we're doing that with, you know, powering that with data-driven intelligence. Across the board, we've been transforming that operational support experience with HPE InfoSight. And what's incredibly exciting is now we're talking about how we can transform that experience in that upfront IT procurement portion of the process. You asked me what are customers asking about in terms of how to optimize those workloads. And when you think about when customers are purchasing infrastructure to support their app workloads, today it's still in the dark ages. They're operating on heuristics, or a gut feel. The data-driven insights are just missing. And with this incredible complexity across the full stack, how do you figure out where should I be placing my apps, whether on Prim or in the public cloud, and/or what's the right size infrastructure built upon what's actually being consumed in terms of resource utilization across the board. That's where we see a tremendous opportunity to continue to transform the experience for customers now with data-driven insights for smarter IT decisions. >> You know, Chris, Sandeep's right. It's like, it's like tribal knowledge. Well, Kenny would know how to do that, but Kenny doesn't work here anymore. So you've announced CloudPhysics. Tell us more about what that is, what impact it's going to have for customers. >> Sure. So just as Sandeep said, basically the problem that exists in IT today is you've got a bunch of customers that are getting overwhelmed with more and more options to solve their business problems. They're looking at cloud options, they're looking at new technologies, they're looking at new sub-technologies and the level at which people are competing for infrastructure sales is down at the very, very, you know, splitting hairs level in terms of features. And they don't know how much of these they need to acquire. Then on the other side, you've got partners and vendors who are trying to package up solutions and products to serve these people's needs. And while the IT industry has, for decades, done a good job of automating problems out of other technology spaces, hasn't done a good job of automating their own problems in terms of what does this customer need? How do I best service them? So you've got an unsatisfied customer and an inadequately equipped partner. CloudPhysics brings those two together in a common data platform, so that both those customers and their partners can look at the same set of data that came out of their data center and pick the solutions that will solve their problems most efficiently. >> So talk more about the partner angle, because it sounds like, you know, if they don't have a Kenny, they really need some help, and it's got to be repeatable. It's got to be consistent. So how have partners reacting to this? >> Very, very strongly. Over the course of the four or five years that that CloudPhysics has been doing this in market, we've had thousands and thousands of VARs, SIs and others, as well as many of the biggest technology providers in the market today, use CloudPhysics to help speed up the sales process, but also create better and more satisfied customers. >> So you guys made... Oh, go ahead, please. >> Well, I was just going to chime into that. When you think about partners that with HPE CloudPhysics, where it supports heterogeneous data center environments, partners all of a sudden get this opportunity to be much more strategic to their customers. They're operating on real world insights that are specific to that customer's environment. So now they can really have a tailored conversation as well as offer tailored solutions designed specifically for the areas, you know, where help is needed. >> Well, I think it builds an affinity with the customer as well, because if the partners that trust advisor, if you give a customer some advice and it's kind of the wrong advice, "Hey, we got to go back and reconfigure that workload. We won't charge you that much for it". You're now paying twice. Like when an accountant makes a mistake on your tax return, you got to pay for that again. But so, you guys acquired CloudPhysics in February of this year. What can you tell us about what's transpired since then? How many engagements that you've done? What kind of metrics can you share? >> Yeah. Chris, do you want to weigh in for that? >> Sure, sure. The start of it really has been to create a bunch of customized analytics on the CloudPhysics platform to target specific sales motions that are relevant to HPE partners. So what do I mean by that? You'll remember that in May, we announced the Alletra Series 6,000 and 9,000. In tandem with that, CloudPhysics released a new set of analytics that help someone who's interested in those technologies figure out what model might be best for them and how much firepower they would need from one or the other of those solutions. Similarly, we have a bunch solutions and a market strength in the HCI world, hyper converged, and that's both SimpliVity and dHCI. And we've set up some analytics that specifically help someone who's interested in that form factor to accelerate, and again, pick the right solutions that will serve their exact applications needs. >> When you talk to customers, are they able to give you a sense as to the cost impacts? I mean, even if it's subjective, "Hey, we think we, you know, we save 10% versus the way we used to do it", or more or less. I mean, just even gut feel metrics. >> So I'll start that one, Sandeep. So there's sort of two ways to look at it. One thing is, because we know everything that's currently running in the data center - we discovered that - we have a pretty good cost of what it is costing them today to run their workloads. So anything that we compare that to, whether it's a transition to public cloud or a transition to a hosted VMware solution, or a set of new infrastructure, we can compare their current costs to the specific solutions that are available to them. But on the more practical side of things, oftentimes customers know intuitively this is a set of servers I bought four years ago, or this is an old array that I know is loose. It's not keeping up anymore. So they typically have some fairly specific places to start, which gives that partner a quick win, solving a specific customer problem. And then it can often boil out into the rest of the data center, and continual optimization can occur. >> How unique is this? I mean, is it, you know, can you give us a little glimpse of the secret sauce behind it? Is this kind of table stakes for the industry? >> Yeah. I mean, look, it's unique in the sense that CloudPhysics brings along over 200 metrics across the spectrum of virtual machines and guest OSs, as well as the overall CPU and RAM utilization, overall infrastructure analysis, and built in cloud simulators. So what customers are able to do is basically, in real time, be able to: A - be aware of exactly what their environment looks like; B - be able to simulate if they were going to move and give an application workload to the cloud; C - they're able to just right-size the underlying infrastructure across the board. Chris? >> Well, I was going to say, yeah, along the same lines, there have been similar technology approaches to different problems. Most notably in the current HPE portfolio, InfoSight. Best in class, data lake driven, very highly analytical machine learning, geared predominantly toward an optimization model, right? CloudPhysics is earlier in the talk track with the customer. We're going to analyze your environment where HPE may not even have a footprint today. And then we're going to give you ideas of what products might help you based on very similar techniques, but approaching a very different problem. >> So you've got data, you've got experience, you know what best practice looks like. You get a sense as to the envelope as to what's achievable, right? And that is just going to get better and better and better over time. One of the things that that I've said, and we've said on theCUBE, is that the definition of cloud is changing. It's expanding, it's not just public cloud anymore. It's a remote set of services, it's coming on Prim, there's a hybrid connection. We're going across clouds, we're going out to the edge. So can CloudPhysics help with that complexity? >> Yeah, absolutely. So we have a set of analytics in the cloud world that range from we're going to price your on-premise IT. We also have the ability to simulate a transition, a set of workloads to AWS, Azure, or Google Cloud. We also have the ability to translate to VMware based solutions on many of those public clouds. And we're increasingly spreading our umbrella over GreenLake as well, and showing the optimization opportunities for a GreenLake solution when contrasted with some of those other clouds. So there's not a lot of... >> So it's not static. >> It's not static at all. And Dave, you were mentioning earlier in terms such as proven. CloudPhysics now has operated on trillions of data points over millions of virtual machines across thousands of overall data assessments. So there's a lot of proven learnings through that as well as actual optimizations that customers have benefited from. >> Yes. I mean, there's benchmarks, but it's more than that because benchmarks tend to be static, okay. We consider rules of thumb. We're living in an age with a lot more data, a lot more machine intelligence. And so this is organic, it'll evolve. >> Sandeep: Absolutely. >> And the partners who work with their customers on a regular basis over at CloudPhysics, and then build up a history over time of what's changing in their data center can even provide better service. They can look back over a year, if we've been collecting, and they can see what the operating system landscape has changed, how different workloads have lost popularity, how other ones have gained. And they really can become a much better solution provider to that customer the longer CloudPhysics is used. >> Yeah, it gives your partners a competitive advantage, it's a much stickier model because the customer is going to trust your partner more if they get it right. So we're not going to change horses in the middle of the street. We're going to go back to the partner that set us up, and they keep getting better and better and better each time, we've got a good cadence going. All right. Sandeep, bring us home. What's your sort of summary? How should we think about this going forward? >> Well, I'll bring us right back to the way I started is, and to end, we're looking at how we continue to deliver best in class cloud operational experience for customers across the board with HPE GreenLake. And earlier this year, we unveiled this cloud operation experience for data, and for customers, that experience starts with a cloud consult where they can essentially discover services, consume services, that overall operational and support experience is transformed with HPE InfoSight. And now we're transforming this experience where any organization out there that's looking to get data-driven insights into what should they do next? Where should they place their workloads? How to right-size the infrastructure? And in the process, be able to transform how they are working and collaborating with their partners. They're able to do that now with HPE CloudPhysics, bringing these data driven insights for smarter IT decision-making. >> I like this a lot, because a lot of the cloud is trial and error. And when you try and you make a mistake, you're paying each time. So this is a great innovation to really help clients focus on the things that matter, you know, helping them apply technology to solve their business problems. Guys, thanks so much for coming to theCUBE. Appreciate it. >> Dave, always a pleasure. >> Thanks very much for having us. >> And keep it right there. We got more content from HPE's GreenLake announcements. Look for the cadence. One of the hallmarks of cloud is the cadence of announcements. We're seeing HPE on a regular basis, push out new innovations. Keep it right there for more. (bright upbeat music begins) (bright upbeat music ends)

(upbeat intro music) >> More than a decade ago, the team at Wikibon coined the term Server SAN. We saw the opportunity to dramatically change the storage infrastructure layer and predicted a major change in technologies that would hit the market. Server SAN had three fundamental attributes. First of all, it was software led. So all the traditionally expensive controller functions like snapshots and clones and de-dupe and replication, compression, encryption, et cetera, they were done in software directly challenging a two to three decade long storage controller paradigm. The second principle was it leveraged and shared storage inside of servers. And the third it enabled any-to-any typology between servers and storage. Now, at the time we defined this coming trend in a relatively narrow sense inside of a data center location, for example, but in the past decade, two additional major trends have emerged. First the software defined data center became the dominant model, thanks to VMware and others. And while this eliminated a lot of overhead, it also exposed another problem. Specifically data centers today allocate probably we estimate around 35% of CPU cores and cycles to managing things like storage and network and security, offloading those functions. This is wasted cores and doing this with traditional general purpose x86 processors is expensive and it's not efficient. This is why we've been reporting so aggressively on ARM's ascendancy into the enterprise. It's not only coming it's here and we're going to talk about that today. The second mega trend is cloud computing. Hyperscale infrastructure has allowed technology companies to put a management and control plane into the cloud and expand beyond our narrow server SAN scope within a single data center and support the management of distributed data at massive scale. And today we're on the cusp of a new era of infrastructure. And one of the startups in this space is Nebulon. Hello everybody, this is Dave Vellante, and welcome to this Cube Conversation where we welcome in two great guests, Craig Nunes, Cube alum, co-founder and COO at Nebulon and Tobias Flitsch who's director of product management at Nebulon. Guys, welcome. Great to see you. >> So good to be here Dave. Feels awesome. >> Soon, face to face. Craig, I'm heading your way. >> I can't wait. >> Craig, you heard my narrative upfront and I'm wondering are those the trends that you guys saw when you, when you started the company, what are the major shifts in the world today that, that caused you and your co-founders to launch Nebulon? >> Yeah, I'll give you sort of the way we think about the world, which I think aligns super right with, with what you're talking about, you know, over the last several years, organizations have had a great deal of experience with public cloud data centers. And I think like any platform or technology that is, you know, gets its use in a variety of ways, you know, a bit of savvy is being developed by organizations on, you know, what do I put where, how do I manage things in the most efficient way possible? And there are, in terms of the types of folks we're focused on in Nebulon's business, we see now kind of three groups of people emerging, and, and we sort of simply coined three terms, the returners, the removers, and the remainers. I'll explain what I mean by each of those, the returners are folks who maybe early on, you know, hit the gas on cloud, moved, you know, everything in, a lot in, and realize that while it's awesome for some things, for other things, it was less optimal. Maybe cost became a factor or visibility into what was going on with their data was a factor, security, service levels, whatever. And they've decided to move some of those workloads back. Returners. There are what I call the removers that are taking workloads from, you know, born in the cloud. On-prem, you know, and this was talked a lot about in Martine's blog that, you know, talked about a lot of the growth companies that built up such a large footprint in the public cloud, that economics were kind of working against them. You can, depending on the knobs you turn, you know, you're probably spending two and a half X, two X, what you might spend if you own your own factory. And you can argue about, you know, where your leverage is in negotiating your pricing with the cloud vendors, but there's a big gap. The last one is, and I think probably the most significant in terms of who we've engaged with is the remainers. And the remainers are, you know, hybrid IT organizations. They've got assets in the cloud and on-prem, they aspire to an operational model that is consistent across everything and, you know, leveraging all the best stuff that they observed in their cloud-based assets. And it's kind of our view that frankly we take from, from this constituency that, when people talk about cloud or cloud first, they're moving to something that is really more an operating model versus a destination or data center choice. And so, we get people on the phone every day, talking about cloud first. And when you kind of dig into what they're after, it's operating model characteristics, not which data center do I put it in, and those, those decisions are separating. And so that, you know, it's really that focus for us is where, we believe we're doing something unique for that group of customers. >> Yeah. Cloud first doesn't doesn't mean cloud only. And of course followers of this program know, we talk a lot about this, this definition of cloud is changing, it's evolving, It's moving to the edge, it's moving to data centers, data centers are moving to the cloud. Cross-cloud, it's that big layer that's expanding. And so I think the definition of cloud, even particularly in customer's minds is evolving. There's no question about it. People, they'll look at what VMware is doing in AWS and say, okay, that's cloud, but they'll also look at things like VMware cloud foundation and say oh yeah, that's cloud too. So to me, the beauty of cloud is in the eye of the customer beholder. So I buy that. Tobias. I wonder if you could talk about how this all translates into product, because you guys start up, you got to sell stuff, you use this term smart infrastructure, what is that? How does this all turn into stuff you can sell? >> Right. Yeah. So let me back up a little bit and talk a little bit about, you know, what we at Nebulon do. So we are a cloud based software company, and we're delivering sort of a new category of smart infrastructure. And if you think about things that you would know from your everyday surroundings, smart infrastructure is really all around us. Think smart home technology like Google Nest as an example. And what this all has in common is that there's a cloud control plane that is managing some IOT end points and smart devices in various locations. And by doing that, customers gain benefits like easy remote management, right? You can manage your thermostat, your temperature from anywhere in the world basically. You don't have to worry about automated software updates anymore, and you can easily automate your home, your infrastructure, through this cloud control plane and translating this idea to the data center, right? This idea is not necessarily new, right? If you look into the networking space with Meraki networks, now Cisco or Mist Systems now Juniper, they've really pioneered efforts in cloud management. So smart network infrastructure, and the key problem that they solved there is, you know, managing these vast amount of access points and switches that are scattered across the data centers across campuses, and, you know, the data center. Now, if you translate that to what Nebulon does, it's really applying this smart infrastructure idea, this methodology to application infrastructure, specifically to compute and storage infrastructure. And that's essentially what we're doing. So with smart infrastructure, basically our offering it at Nebulon, the product, that comes with the benefits of this cloud experience, public cloud operating model, as we've talked about, some of our customers look at the cloud as an operating model rather than a destination, a physical location. And with that, we bring to us this model, this, this experience as operating a model to on-premises application infrastructure, and really what you get with this broad offering from Nebulon and the benefits are really circling it out, you know, four areas, first of all, rapid time to value, right? So application owners think people that are not specialists or experts when it comes to IT infrastructure, but more generalists, they can provision on-premise application infrastructure in less than 10 minutes, right? It can go from, from just bare metal physical racks to the full application stack in less than 10 minutes, so they're up and running a lot quicker. And they can immediately deliver services to their end customers, cloud-like operations, this, this notion of zero touch remote management, which now with the last couple of months with this strange time that we're with COVID is, you know, turnout is becoming more and more relevant really as in remotely administrating and management of infrastructure that scales from just hundreds of nodes to thousands of nodes. It doesn't really matter with behind the scenes software updates, with global AI analytics and insights, and basically overall combined reduce the operational overhead when it comes to on-premises infrastructure by up to 75%, right? The other thing is support for any application, whether it's containerized, virtualized, or even bare metal applications. And the idea here is really consistent leveraging server-based storage that doesn't require any Nebulon-specific software on the server. So you get the full power of your application servers for your applications. Again, as the servers intended. And then the fourth benefit when it comes to smart infrastructure is, is of course doing this all at a lower cost and with better data center density. And that is really comparing it to three-tier architectures where you have your server, your SAN fabric, and then you have an external storage, but also when you compare it with hyper-converged infrastructure software, right, that is consuming resources of the application servers, think CPU, think memory and networking. So basically you get a lot more density with that approach compared to those architectures. >> Okay, I want to dig into some of that differentiation too, but what exactly do I buy from you? Do I buy a software subscription? Is that right? Can you explain that a little bit? >> Right. So basically the way we do this is it's really leveraging two key new innovations, right? So, and you see why I made the bridge to smart home technology, because the approach is civil, right? The one is, you know, the introduction of a cloud control plane that basically manage this on-premise application infrastructure, of course, that is delivered to customers as a service. The second one is, you know, a new infrastructure model that uses IOT endpoint technology, and that is embedded into standard application servers and the storage within this application servers. Let me add a couple of words to that to explain a little bit more, so really at the heart of smart infrastructure, in order to deliver this public cloud experience for any on-prem application is this cloud-based control plane, right? So we've built this, how we recommend our customers to use a public cloud, and that is built, you know, building your software on modern technologies that are vendor-agnostic. So it could essentially run anywhere, whether it is, you know, any public cloud vendor, or if we want to run in our own data centers, when regulatory requirements change, it's massively scalable and responsive, no matter how large the managed infrastructure is. But really the interesting part here, Dave, is that the customer doesn't really have to worry about any of that, it's delivered as a service. So what a customer gets from this cloud control plane is a single API end point, how they get it with a public cloud. They get a web user interface, from which they can manage all of their infrastructure, no matter how many devices, no matter where it is, can be in the data center, can be in an edge location anywhere in the world, they get template-based provisioning much like a marketplace in a public cloud. They get analytics, predictive support services, and super easy automation capabilities. Now the second thing that I mentioned is this server embedded software, the server embedded infrastructure software, and that is running on a PCIE based offload engine. And that is really acting as this managed IOT endpoint within the application server that I managed that I mentioned earlier. And that approach really further converges modern application infrastructure. And it really replaces the software defined storage approach that you'll find in hyper-converged infrastructure software. And that is really by embedding the data services, the storage data service into silicon within the server. Now this offload engine, we call that a services processing unit or SPU in short. And that is really what differentiates us from hyper-converged infrastructure. And it's quite different than a regular accelerator card that you get with some of the hyper-converged infrastructure offerings. And it's different in the sense that the SPU runs basically all of the shared and local data services, and it's not just accelerating individual algorithms, individual functions. And it basically provides all of these services aside the CPU with the boot drive, with data drives. And in essence provides you with this a separate fall domain from the service, so for example, if you reboot your server, the data plan remains intact. You know, it's not impacted for that. >> Okay. So I want to stay on that for just a second, Craig, if I could, I get very clear how you're different from, as Tobias said, the three-tier server SAN fabric, external array, the HCI thing's interesting because in some respects, the HCI has, you know, guys take Nutanix, they talk about cloud and becoming more friendly with developers and API piece, but what's your point of view Craig on how you position relative to say HCI? >> Yeah, absolutely. So everyone gets what three-tier architecture is and was, and HCI software, you know, emerged as an alternative to the three-tier architectures. Everyone I think today understands that data services are, you know, SDS is software hosted in the operating system of each HCI device and consume some amount of CPU, memory, network, whatever. And it's typically constrained to a hypervisor environment, kind of where we're most of that stuff is done. And over time, these platforms have added some monitoring capabilities, predictive analytics, typically provided by the vendor's cloud, right? And as Tobias mentioned, some HCIS vendors have augmented this approach by adding an accelerator to make things like compression and dedupe go faster, right? Think SimpliVity or something like that. The difference that we're talking about here is, the infrastructure software that we deliver as a service is embedded right into server silicon. So it's not sitting in the operating system of choice. And what that means is you get the full power of the server you bought for your workloads. It's not constrained to a hypervisor-only environment, it's OS agnostic. And, you know, it's entirely controlled and administered by the cloud versus with, you know, most HCIS is an on-prem console that manages a cluster or two on-prem. And, you know, think of it from a automation perspective. When you automate something, you've got to set up your playbook kind of cluster by cluster. And depending what versions they're on, APIs are changing, behaviors are changing. So a very different approach at scale. And so again, for us, we're talking about something that gives you a much more efficient infrastructure that is then managed by the cloud and gives you this full kind of operational model you would expect for any kind of cloud-based deployment. >> You know, I got to go back, you guys obviously have some three-part DNA hanging around and you know, of course you remember well, the three-part ASIC, it was kind of famous at the time and it was unique. And I bring that up only because you've mentioned a couple of times the silicon and a lot of people yeah, whatever, but we have been on this, especially, particularly with ARM. And I want to share with the audience, if you follow my breaking analysis, you know this. If you look at the historical curve of Moore's law with x86, it's the doubling of performance every two years, roughly, that comes out to about 40% a year. That's moderated down to about 30% a year now, if you look at the ARM ecosystem and take for instance, apple A15, and the previous series, for example, over the last five years, the performance, when you combine the CPU, GPU, NPU, the accelerators, the DSPs, which by the way, are all customizable. That's growing at 110% a year, and the SOC costs 50 bucks. So my point is that you guys are riding perfect example of doing offloads with a way more efficient architecture. You're now on that curve, that's growing at 100% plus per year. Whereas a lot of the legacy storage is still on that 30% a year curve, and so cheaper, lower power. That's why I love to buy, as you were bringing in the IOT and the smart infrastructure, this is the future of storage and infrastructure. >> Absolutely. And the thing I would emphasize is it's not limited to storage, storage is a big issue, but we're talking about your application infrastructure and you brought up something interesting on the GPU, the SmartNIC of things, and just to kind of level set with everybody there, there's the HCI world, and then there's this SmartNIC DPU world, whatever you want to call it, where it's effectively a network card, it's got that specialized processing onboard and firmware to provide some network security storage services, and think of it as a PCIE card in your server. It connects to an external storage system, so think Nvidia Bluefield 2 connecting to an external NVME storage device. And the interesting thing about that is, you know, storage processing is offloaded from the server. So as we said earlier, good, right, you get the server back to your application, but storage moves out of the server. And it starts to look a little bit like an external storage approach versus a server based approach. And infrastructure management is done by, you know, the server SmartNIC with some monitoring and analytics coming from, you know, your supplier's cloud support service. So complexity creeps back in, if you start to lose that, you know, heavily converged approach. Again, we are taking advantage of storage within the server and, you know, keeping this a real server based approach, but distinguishing ourselves from the HCI approach. Cause there's a real ROI there. And when we talked to folks who are looking at new and different ways, we talk a lot about the cloud and I think we've done a bit of that already, but then at the end of the day, folks are trying to figure out well, okay, but then what do I buy to enable this? And what you buy is your standard server recipe. So think your favorite HPE, Lenovo, Supermicro, whatever, whatever your brand, and it's going to come enabled with this IOT end point within it, so it's really a smart server, if you will, that can then be controlled by our cloud. And so you're effectively buying, you know, from your favorite server vendor, a server option that is this endpoint and a subscription. You don't buy any of this from us, by the way, it's all coming from them. And that's the way we deliver this. >> You know, sorry to get into the plumbing, but this is something we've been on and a facet of it. Is that silicon custom designed or is it pretty much off the shelf, do you guys add any value to it? >> No, there are off the shelf options that can deliver tremendous horsepower on that form factor. And so we take advantage of that to, you know, do what we do in terms of, you know, creating these sort of smart servers with our end point. And so that's where we're at. >> Yeah. Awesome. So guys, what's your sweet spot, you know, why are customers, you know, what are you seeing customers adopting? Maybe some examples you guys can share? >> Yeah, absolutely. So I think Tobias mentioned that because of the architectural approach, there's a lot of flexibility there, you can run virtualized, containerized, bare metal applications. The question is where are folks choosing to get started? And those use cases with our existing customers revolved heavily around virtualization modernization. So they're going back in to their virtualized environment, whether their existing infrastructure is array-based or HCI-based. And they're looking to streamline that, save money, automate more, the usual things. The second area is the distributed edge. You know, the edge is going through tremendous transformation with IOT devices, 5g, and trying to get processing closer to where customers are doing work. And so that distributed edge is a real opportunity because again, it's a more cost-effective, more dense infrastructure. The cloud effectively can manage across all of these sites through a single API. And then the third area is cloud service provider transformation. We do a fair bit of business with, you know, cloud service providers, CTOs, who are looking at trying to build top line growth, trying to create new services and, and drive better bottom line. And so this is really, you know, as much as a revenue opportunity for them as cost saving opportunity. And then the last one is this notion of, you know, bringing the cloud on-prem, we've done a cloud repatriation deal. And I know you've seen a little of that, but maybe not a lot of it. And, you know, I can tell you in our first deals, we've already seen it, so it's out there. Those are the places where people are getting started with us today. >> It's just interesting, you're right. I don't see a ton of it, but if I'm going to repatriate, I don't want to go backwards. I don't want to repatriate to legacy. So it actually does kind of make sense that I repatriate to essentially a component of on-prem cloud that's managed in the cloud, that makes sense to me to buy. But today you're managing from the cloud, you're managing on-prem infrastructure. Maybe you could show us a little leg, share a little roadmap, I mean, where are you guys headed from a product standpoint? >> Right, so I'm not going to go too far on the limb there, but obviously, right. So one of the key benefits of a cloud managed platform is this notion of a single API, right. We talked about the distributed edge where, you know, think of retailer that has, you know, thousands of stores, each store having local infrastructure. And, you know, if you think about the challenges that come with, you know, just administrating those systems, rolling out firmware updates, rolling out updates in general, monitoring those systems, et cetera. So having a single console, a cloud console to administrate all of that infrastructure, obviously, you know, the benefits are easy now. If you think about, if you're thinking about that and spin it further, right? So from the use cases and the types of users that we've see, and Craig talked about them at the very beginning, you can think about this as this is a hybrid world, right. Customers will have data that they'll have in the public cloud. They will have data and applications in their data centers and at the edge, obviously it is our objective to deliver the same experience that they gained from the public cloud on-prem, and eventually, you know, those two things can come closer together. Apart from that, we're constantly improving the data services. And as you mentioned, ARM is, is on a path that is becoming stronger and faster. So obviously we're going to leverage on that and build out our data storage services and become faster. But really the key thing that I'd like to, to mention all the time, and this is related to roadmap, but rather feature delivery, right? So the majority of what we do is in the cloud, our business logic in the cloud, the capabilities, the things that make infrastructure work are delivered in the cloud. And, you know, it's provided as a service. So compared with your Gmail, you know, your cloud services, one day, you don't have a feature, the next day you have a feature, so we're continuously rolling out new capabilities through our cloud. >> And that's about feature acceleration as opposed to technical debt, which is what you get with legacy features, feature creep. >> Absolutely. The other thing I would say too, is a big focus for us now is to help our customers more easily consume this new concept. And we've already got, you know, SDKs for things like Python and PowerShell and some of those things, but we've got, I think, nearly ready, an Ansible SDK. We're trying to help folks better kind of use case by use case, spin this stuff up within their organization, their infrastructure. Because again, part of our objective, we know that IT professionals have, you know, a lot of inertia when they're, you know, moving stuff around in their own data center. And we're aiming to make this, you know, a much simpler, more agile experience to deploy and grow over time. >> We've got to go, but Craig, quick company stats. Am I correct, you've raised just under 20 million. Where are you on funding? What's your head count today? >> I am going to plead the fifth on all of that. >> Oh, okay. Keep it stealth. Staying a little stealthy, I love it. Really excited for you. I love what you're doing. It's really starting to come into focus. And so congratulations. You know, you got a ways to go, but Tobias and Craig, appreciate you coming on The Cube today. And thank you for watching this Cube Conversation. This is Dave Vellante. We'll see you next time. (upbeat outro music)

>>Edge computing is predict, projected to be a multi-trillion dollar business. You know, it's hard to really pinpoint the size of this market. Let alone fathom the potential of bringing software, compute, storage, AI, and automation to the edge and connecting all that to clouds and on-prem systems. But what, you know, what is the edge? Is it factories? Is it oil rigs, airplanes, windmills, shipping containers, buildings, homes, race cars. Well, yes and so much more. And what about the data for decades? We've talked about the data explosion. I mean, it's mind boggling, but guess what, we're gonna look back in 10 years and laugh. What we thought was a lot of data in 2020, perhaps the best way to think about edge is not as a place, but when is the most logical opportunity to process the data and maybe it's the first opportunity to do so where it can be decrypted and analyzed at very low latencies that that defines the edge. And so by locating compute as close as possible to the sources of data, to reduce latency and maximize your ability to get insights and return them to users quickly, maybe that's where the value lies. Hello everyone. And welcome to this cube conversation. My name is Dave Vellante and with me to noodle on these topics is Omar Assad, VP, and GM of primary storage and data management services at HPE. Hello, Omer. Welcome to the program. >>Hey Steve. Thank you so much. Pleasure to be here. >>Yeah. Great to see you again. So how do you see the edge in the broader market shaping up? >>Uh, David? I think that's a super important, important question. I think your ideas are quite aligned with how we think about it. Uh, I personally think, you know, as enterprises are accelerating their sort of digitization and asset collection and data collection, uh, they're typically, especially in a distributed enterprise, they're trying to get to their customers. They're trying to minimize the latency to their customers. So especially if you look across industries manufacturing, which is distributed factories all over the place, they are going through a lot of factory transformations where they're digitizing their factories. That means a lot more data is being now being generated within their factories. A lot of robot automation is going on that requires a lot of compute power to go out to those particular factories, which is going to generate their data out there. We've got insurance companies, banks that are creating and interviewing and gathering more customers out at the edge for that. >>They need a lot more distributed processing out at the edge. What this is requiring is what we've seen is across analysts. A common consensus is that more than 50% of an enterprise is data, especially if they operate globally around the world is going to be generated out at the edge. What does that mean? More data is new data is generated at the edge, but needs to be stored. It needs to be processed data. What is not required needs to be thrown away or classified as not important. And then it needs to be moved for Dr. Purposes either to a central data center or just to another site. So overall in order to give the best possible experience for manufacturing, retail, uh, you know, especially in distributed enterprises, people are generating more and more data centric assets out at the edge. And that's what we see in the industry. >>Yeah. We're definitely aligned on that. There's some great points. And so now, okay. You think about all this diversity, what's the right architecture for these deploying multi-site deployments, robo edge. How do you look at that? >>Oh, excellent question. So now it's sort of, you know, obviously you want every customer that we talk to wants SimpliVity, uh, in, in, and, and, and, and no pun intended because SimpliVity is reasoned with a simplistic edge centric architecture, right? So because let's, let's take a few examples. You've got large global retailers, uh, they have hundreds of global retail stores around the world that is generating data that is producing data. Then you've got insurance companies, then you've got banks. So when you look at a distributed enterprise, how do you deploy in a very simple and easy to deploy manner, easy to lifecycle, easy to mobilize and easy to lifecycle equipment out at the edge. What are some of the challenges that these customers deal with these customers? You don't want to send a lot of ID staff out there because that adds costs. You don't want to have islands of data and islands of storage and promote sites, because that adds a lot of States outside of the data center that needs to be protected. >>And then last but not the least, how do you push lifecycle based applications, new applications out at the edge in a very simple to deploy better. And how do you protect all this data at the edge? So the right architecture in my opinion, needs to be extremely simple to deploy. So storage, compute and networking, uh, out towards the edge in a hyperconverged environment. So that's, we agree upon that. It's a very simple to deploy model, but then comes, how do you deploy applications on top of that? How do you manage these applications on top of that? How do you back up these applications back towards the data center, all of this keeping in mind that it has to be as zero touch as possible. We at HBS believe that it needs to be extremely simple. Just give me two cables, a network cable, a power cable, tied it up, connected to the network, push it state from the data center and back up at state from the ed back into the data center. Extremely simple. >>It's gotta be simple because you've got so many challenges. You've got physics that you have to deal your latency to deal with. You got RPO and RTO. What happens if something goes wrong, you've gotta be able to recover quickly. So, so that's great. Thank you for that. Now you guys have hard news. W what is new from HPE in this space >>From a, from a, from a, from a deployment perspective, you know, HPE SimpliVity is just gaining like it's exploding, like crazy, especially as distributed enterprises adopt it as it's standardized edge architecture, right? It's an HCI box has got stories, computer networking, all in one. But now what we have done is not only you can deploy applications all from your standard V-Center interface, from a data center, what have you have now added is the ability to backup to the cloud, right? From the edge. You can also back up all the way back to your core data center. All of the backup policies are fully automated and implemented in the, in the distributed file system. That is the heart and soul of, of the SimpliVity installation. In addition to that, the customers now do not have to buy any third-party software into backup is fully integrated in the architecture and it's van efficient. >>In addition to that, now you can backup straight to the client. You can backup to a central, uh, high-end backup repository, which is in your data center. And last but not least, we have a lot of customers that are pushing the limit in their application transformation. So not only do we previously were, were one-on-one them leaving VMware deployments out at the edge sites. Now revolver also added both stateful and stateless container orchestration, as well as data protection capabilities for containerized applications out at the edge. So we have a lot, we have a lot of customers that are now deploying containers, rapid manufacturing containers to process data out at remote sites. And that allows us to not only protect those stateful applications, but back them up, back into the central data center. >>I saw in that chart, it was a light on no egress fees. That's a pain point for a lot of CEOs that I talked to. They grit their teeth at those entities. So, so you can't comment on that or >>Excellent, excellent question. I'm so glad you brought that up and sort of at that point, uh, uh, pick that up. So, uh, along with SimpliVity, you know, we have the whole green Lake as a service offering as well. Right? So what that means, Dave, is that we can literally provide our customers edge as a service. And when you compliment that with, with Aruba wired wireless infrastructure, that goes at the edge, the hyperconverged infrastructure, as part of SimpliVity, that goes at the edge, you know, one of the things that was missing with cloud backups is the every time you backup to the cloud, which is a great thing, by the way, anytime you restore from the cloud, there is that breastfeed, right? So as a result of that, as part of the GreenLake offering, we have cloud backup service natively now offered as part of HPE, which is included in your HPE SimpliVity edge as a service offering. So now not only can you backup into the cloud from your edge sites, but you can also restore back without any egress fees from HBS data protection service. Either you can restore it back onto your data center, you can restore it back towards the edge site and because the infrastructure is so easy to deploy centrally lifecycle manage, it's very mobile. So if you want to deploy and recover to a different site, you could also do that. >>Nice. Hey, uh, can you, Omar, can you double click a little bit on some of the use cases that customers are choosing SimpliVity for, particularly at the edge, and maybe talk about why they're choosing HPE? >>What are the major use cases that we see? Dave is obviously, uh, easy to deploy and easy to manage in a standardized form factor, right? A lot of these customers, like for example, we have large retailer across the us with hundreds of stores across us. Right now you cannot send service staff to each of these stores. These data centers are their data center is essentially just a closet for these guys, right? So now how do you have a standardized deployment? So standardized deployment from the data center, which you can literally push out and you can connect a network cable and a power cable, and you're up and running, and then automated backup elimination of backup and state and BR from the edge sites and into the data center. So that's one of the big use cases to rapidly deploy new stores, bring them up in a standardized configuration, both from a hardware and a software perspective, and the ability to backup and recover that instantly. >>That's one large use case. The second use case that we see actually refers to a comment that you made in your opener. Dave was where a lot of these customers are generating a lot of the data at the edge. This is robotics automation that is going to up in manufacturing sites. These is racing teams that are out at the edge of doing post-processing of their cars data. Uh, at the same time, there is disaster recovery use cases where you have, uh, you know, campsites and local, uh, you know, uh, agencies that go out there for humanity's benefit. And they move from one site to the other. It's a very, very mobile architecture that they need. So those, those are just a few cases where we were deployed. There was a lot of data collection, and there's a lot of mobility involved in these environments. So you need to be quick to set up quick, to up quick, to recover, and essentially you're up to your next, next move. >>You seem pretty pumped up about this, uh, this new innovation and why not. >>It is, it is, uh, you know, especially because, you know, it is, it has been taught through with edge in mind and edge has to be mobile. It has to be simple. And especially as, you know, we have lived through this pandemic, which, which I hope we see the tail end of it in at least 2021, or at least 2022. They, you know, one of the most common use cases that we saw, and this was an accidental discovery. A lot of the retail sites could not go out to service their stores because, you know, mobility is limited in these, in these strange times that we live in. So from a central center, you're able to deploy applications, you're able to recover applications. And, and a lot of our customers said, Hey, I don't have enough space in my data center to back up. Do you have another option? So then we rolled out this update release to SimpliVity verse from the edge site. You can now directly back up to our backup service, which is offered on a consumption basis to the customers, and they can recover that anywhere they want. >>Fantastic Omer, thanks so much for coming on the program today. >>It's a pleasure, Dave. Thank you. >>All right. Awesome to see you. Now, let's hear from red bull racing and HPE customer, that's actually using SimpliVity at the edge. Countdown really begins when the checkered flag drops on a Sunday. It's always about this race to manufacture >>The next designs to make it more adapt to the next circuit to run those. Of course, if we can't manufacture the next component in time, all that will be wasted. >>Okay. We're back with Matt kudu, who is the CIO of red bull racing? Matt, it's good to see you again. >>Great to say, >>Hey, we're going to dig into a real-world example of using data at the edge and in near real time to gain insights that really lead to competitive advantage. But, but first Matt, tell us a little bit about red bull racing and your role there. >>Sure. So I'm the CIO at red bull racing and that red bull race. And we're based in Milton Keynes in the UK. And the main job job for us is to design a race car, to manufacture the race car, and then to race it around the world. So as CIO, we need to develop the ITT group needs to develop the applications is the design, manufacturing racing. We also need to supply all the underlying infrastructure and also manage security. So it's really interesting environment. That's all about speed. So this season we have 23 races and we need to tear the car apart and rebuild it to a unique configuration for every individual race. And we're also designing and making components targeted for races. So 20 a movable deadlines, um, this big evolving prototype to manage with our car. Um, but we're also improving all of our tools and methods and software that we use to design and make and race the car. >>So we have a big can do attitude of the company around continuous improvement. And the expectations are that we continuously make the car faster. That we're, that we're winning races, that we improve our methods in the factory and our tools. And, um, so for, I take it's really unique and that we can be part of that journey and provide a better service. It's also a big challenge to provide that service and to give the business the agility, agility, and needs. So my job is, is really to make sure we have the right staff, the right partners, the right technical platforms. So we can live up to expectations >>That tear down and rebuild for 23 races. Is that because each track has its own unique signature that you have to tune to, or are there other factors involved there? >>Yeah, exactly. Every track has a different shape. Some have lots of strengths. Some have lots of curves and lots are in between. Um, the track surface is very different and the impact that has some tires, um, the temperature and the climate is very different. Some are hilly, some, a big curves that affect the dynamics of the power. So all that in order to win, you need to micromanage everything and optimize it for any given race track. >>Talk about some of the key drivers in your business and some of the key apps that give you a competitive advantage to help you win races. >>Yeah. So in our business, everything is all about speed. So the car obviously needs to be fast, but also all of our business operations needed to be fast. We need to be able to design a car and it's all done in the virtual world, but the, the virtual simulations and designs need to correlate to what happens in the real world. So all of that requires a lot of expertise to develop the simulation is the algorithms and have all the underlying infrastructure that runs it quickly and reliably. Um, in manufacturing, um, we have cost caps and financial controls by regulation. We need to be super efficient and control material and resources. So ERP and MES systems are running and helping us do that. And at the race track itself in speed, we have hundreds of decisions to make on a Friday and Saturday as we're fine tuning the final configuration of the car. And here again, we rely on simulations and analytics to help do that. And then during the race, we have split seconds, literally seconds to alter our race strategy if an event happens. So if there's an accident, um, and the safety car comes out, or the weather changes, we revise our tactics and we're running Monte Carlo for example. And he is an experienced engineers with simulations to make a data-driven decision and hopefully a better one and faster than our competitors, all of that needs it. Um, so work at a very high level. >>It's interesting. I mean, as a lay person, historically we know when I think about technology and car racing, of course, I think about the mechanical aspects of a self-propelled vehicle, the electronics and the light, but not necessarily the data, but the data's always been there. Hasn't it? I mean, maybe in the form of like tribal knowledge, if somebody who knows the track and where the Hills are and experience and gut feel, but today you're digitizing it and you're, you're processing it and close to real time. >>It's amazing. I think exactly right. Yeah. The car's instrumented with sensors, we post-process at Virgin, um, video, um, image analysis, and we're looking at our car, our competitor's car. So there's a huge amount of, um, very complicated models that we're using to optimize our performance and to continuously improve our car. Yeah. The data and the applications that can leverage it are really key. Um, and that's a critical success factor for us. >>So let's talk about your data center at the track, if you will. I mean, if I can call it that paint a picture for us, what does that look like? >>So we have to send, um, a lot of equipment to the track at the edge. Um, and even though we have really a great wide area network linked back to the factory and there's cloud resources, a lot of the trucks are very old. You don't have hardened infrastructure, don't have ducks that protect cabling, for example, and you could lose connectivity to remote locations. So the applications we need to operate the car and to make really critical decisions, all that needs to be at the edge where the car operates. So historically we had three racks of equipment, like a safe infrastructure, um, and it was really hard to manage, um, to make changes. It was too flexible. Um, there were multiple panes of glass, um, and, um, and it was too slow. It didn't run her applications quickly. Um, it was also too heavy and took up too much space when you're cramped into a garage with lots of environmental constraints. >>So we, um, we'd, we'd introduced hyperconvergence into the factory and seen a lot of great benefits. And when we came time to refresh our infrastructure at the track, we stepped back and said, there's a lot smarter way of operating. We can get rid of all the slow and flexible, expensive legacy and introduce hyperconvergence. And we saw really excellent benefits for doing that. Um, we saw a three X speed up for a lot of our applications. So I'm here where we're post-processing data, and we have to make decisions about race strategy. Time is of the essence in a three X reduction in processing time really matters. Um, we also, um, were able to go from three racks of equipment down to two racks of equipment and the storage efficiency of the HPE SimpliVity platform with 20 to one ratios allowed us to eliminate a rack. And that actually saved a hundred thousand dollars a year in freight costs by shipping less equipment, um, things like backup, um, mistakes happen. >>Sometimes the user makes a mistake. So for example, a race engineer could load the wrong data map into one of our simulations. And we could restore that VDI through SimpliVity backup at 90 seconds. And this makes sure it enables engineers to focus on the car to make better decisions without having downtime. And we sent them to, I take guys to every race they're managing 60 users, a really diverse environment, juggling a lot of balls and having a simple management platform like HPE SimpliVity gives us, allows them to be very effective and to work quickly. So all of those benefits were a huge step forward relative to the legacy infrastructure that we used to run at the edge. >>Yeah. So you had the nice Petri dish and the factory. So it sounds like your, your goals, obviously your number one KPI is speed to help shave seconds time, but also costs just the simplicity of setting up the infrastructure. >>Yeah. It's speed. Speed, speed. So we want applications absolutely fly, you know, get to actionable results quicker, um, get answers from our simulations quicker. The other area that speed's really critical is, um, our applications are also evolving prototypes, and we're always, the models are getting bigger. The simulations are getting bigger and they need more and more resource and being able to spin up resource and provision things without being a bottleneck is a big challenge in SimpliVity. It gives us the means of doing that. >>So did you consider any other options or was it because you had the factory knowledge? It was HCI was, you know, very clearly the option. What did you look at? >>Yeah, so, um, we have over five years of experience in the factory and we eliminated all of our legacy, um, um, infrastructure five years ago. And the benefits I've described, um, at the track, we saw that in the factory, um, at the track we have a three-year operational life cycle for our equipment. When into 2017 was the last year we had legacy as we were building for 2018. It was obvious that hyper-converged was the right technology to introduce. And we'd had years of experience in the factory already. And the benefits that we see with hyper-converged actually mattered even more at the edge because our operations are so much more pressurized time has even more of the essence. And so speeding everything up at the really pointy end of our business was really critical. It was an obvious choice. >>Why, why SimpliVity? What why'd you choose HPE SimpliVity? >>Yeah. So when we first heard about hyperconverged way back in the, in the factory, um, we had, um, a legacy infrastructure, overly complicated, too slow, too inflexible, too expensive. And we stepped back and said, there has to be a smarter way of operating. We went out and challenged our technology partners. We learned about hyperconvergence within enough, the hype, um, was real or not. So we underwent some PLCs and benchmarking and, and the, the PLCs were really impressive. And, and all these, you know, speed and agility benefits, we saw an HP for our use cases was the clear winner in the benchmarks. So based on that, we made an initial investment in the factory. Uh, we moved about 150 VMs in the 150 VDI into it. Um, and then as, as we've seen all the benefits we've successfully invested, and we now have, um, an estate to the factory of about 800 VMs and about 400 VDI. So it's been a great platform and it's allowed us to really push boundaries and, and give the business, um, the service that expects. >>So w was that with the time in which you were able to go from data to insight to recommendation or, or edict, uh, was that compressed, you kind of indicated that, but >>So we, we all telemetry from the car and we post-process it, and that reprocessing time really it's very time consuming. And, um, you know, we went from nine, eight minutes for some of the simulations down to just two minutes. So we saw big, big reductions in time and all, ultimately that meant an engineer could understand what the car was during a practice session, recommend a tweak to the configuration or setup of it, and just get more actionable insight quicker. And it ultimately helps get a better car quicker. >>Such a great example. How are you guys feeling about the season, Matt? What's the team's sentiment? >>Yeah, I think we're optimistic. Um, we w we, um, uh, we have a new driver >>Lineup. Uh, we have, um, max for stopping his carries on with the team and Sergio joins the team. So we're really excited about this year and, uh, we want to go and win races. Great, Matt, good luck this season and going forward and thanks so much for coming back in the cube. Really appreciate it. And it's my pleasure. Great talking to you again. Okay. Now we're going to bring back Omer for quick summary. So keep it real >>Without having solutions from HB, we can't drive those five senses, CFD aerodynamics that would undermine the simulations being software defined. We can bring new apps into play. If we can bring new them's storage, networking, all of that can be highly advises is a hugely beneficial partnership for us. We're able to be at the cutting edge of technology in a highly stressed environment. That is no bigger challenge than the formula. >>Okay. We're back with Omar. Hey, what did you think about that interview with Matt? >>Great. Uh, I have to tell you I'm a big formula one fan, and they are one of my favorite customers. Uh, so, you know, obviously, uh, one of the biggest use cases as you saw for red bull racing is Trackside deployments. There are now 22 races in a season. These guys are jumping from one city to the next, they've got to pack up, move to the next city, set up, set up the infrastructure very, very quickly and average formula. One car is running the thousand plus sensors on that is generating a ton of data on track side that needs to be collected very quickly. It needs to be processed very quickly, and then sometimes believe it or not, snapshots of this data needs to be sent to the red bull back factory back at the data center. What does this all need? It needs reliability. >>It needs compute power in a very short form factor. And it needs agility quick to set up quick, to go quick, to recover. And then in post processing, they need to have CPU density so they can pack more VMs out at the edge to be able to do that processing now. And we accomplished that for, for the red bull racing guys in basically two are you have two SimpliVity nodes that are running track side and moving with them from one, one race to the next race, to the next race. And every time those SimpliVity nodes connect up to the data center collector to a satellite, they're backing up back to their data center. They're sending snapshots of data back to the data center, essentially making their job a whole lot easier, where they can focus on racing and not on troubleshooting virtual machines, >>Red bull racing and HPE SimpliVity. Great example. It's agile, it's it's cost efficient, and it shows a real impact. Thank you very much. I really appreciate those summary comments. Thank you, Dave. Really appreciate it. All right. And thank you for watching. This is Dave Volante. >>You.

(upbeat music) >> Edge computing is projected to be a multi-trillion dollar business. It's hard to really pinpoint the size of this market let alone fathom the potential of bringing software, compute, storage, AI and automation to the edge and connecting all that to clouds and on-prem systems. But what is the edge? Is it factories? Is it oil rigs, airplanes, windmills, shipping containers, buildings, homes, race cars. Well, yes and so much more. And what about the data? For decades we've talked about the data explosion. I mean, it's a mind-boggling but guess what we're going to look back in 10 years and laugh what we thought was a lot of data in 2020. Perhaps the best way to think about Edge is not as a place but when is the most logical opportunity to process the data and maybe it's the first opportunity to do so where it can be decrypted and analyzed at very low latencies. That defines the edge. And so by locating compute as close as possible to the sources of data to reduce latency and maximize your ability to get insights and return them to users quickly, maybe that's where the value lies. Hello everyone and welcome to this CUBE conversation. My name is Dave Vellante and with me to noodle on these topics is Omer Asad, VP and GM of Primary Storage and Data Management Services at HPE. Hello Omer, welcome to the program. >> Thanks Dave. Thank you so much. Pleasure to be here. >> Yeah. Great to see you again. So how do you see the edge in the broader market shaping up? >> Dave, I think that's a super important question. I think your ideas are quite aligned with how we think about it. I personally think enterprises are accelerating their sort of digitization and asset collection and data collection, they're typically especially in a distributed enterprise, they're trying to get to their customers. They're trying to minimize the latency to their customers. So especially if you look across industries manufacturing which has distributed factories all over the place they are going through a lot of factory transformations where they're digitizing their factories. That means a lot more data is now being generated within their factories. A lot of robot automation is going on, that requires a lot of compute power to go out to those particular factories which is going to generate their data out there. We've got insurance companies, banks, that are creating and interviewing and gathering more customers out at the edge for that. They need a lot more distributed processing out at the edge. What this is requiring is what we've seen is across analysts. A common consensus is this that more than 50% of an enterprises data especially if they operate globally around the world is going to be generated out at the edge. What does that mean? New data is generated at the edge what needs to be stored. It needs to be processed data. Data which is not required needs to be thrown away or classified as not important. And then it needs to be moved for DR purposes either to a central data center or just to another site. So overall in order to give the best possible experience for manufacturing, retail, especially in distributed enterprises, people are generating more and more data centric assets out at the edge. And that's what we see in the industry. >> Yeah. We're definitely aligned on that. There's some great points and so now, okay. You think about all this diversity what's the right architecture for these multi-site deployments, ROBO, edge? How do you look at that? >> Oh, excellent question, Dave. Every customer that we talked to wants SimpliVity and no pun intended because SimpliVity is reasoned with a simplistic edge centric architecture, right? Let's take a few examples. You've got large global retailers, they have hundreds of global retail stores around the world that is generating data that is producing data. Then you've got insurance companies, then you've got banks. So when you look at a distributed enterprise how do you deploy in a very simple and easy to deploy manner, easy to lifecycle, easy to mobilize and easy to lifecycle equipment out at the edge. What are some of the challenges that these customers deal with? These customers, you don't want to send a lot of IT staff out there because that adds cost. You don't want to have islands of data and islands of storage and promote sites because that adds a lot of states outside of the data center that needs to be protected. And then last but not the least how do you push lifecycle based applications, new applications out at the edge in a very simple to deploy manner. And how do you protect all this data at the edge? So the right architecture in my opinion needs to be extremely simple to deploy so storage compute and networking out towards the edge in a hyper converged environment. So that's we agree upon that. It's a very simple to deploy model but then comes how do you deploy applications on top of that? How do you manage these applications on top of that? How do you back up these applications back towards the data center, all of this keeping in mind that it has to be as zero touch as possible. We at HPE believe that it needs to be extremely simple, just give me two cables, a network cable, a power cable, fire it up, connect it to the network, push it state from the data center and back up it state from the edge back into the data center, extremely simple. >> It's got to be simple 'cause you've got so many challenges. You've got physics that you have to deal, you have latency to deal with. You got RPO and RTO. What happens if something goes wrong you've got to be able to recover quickly. So that's great. Thank you for that. Now you guys have heard news. What is new from HPE in this space? >> Excellent question, great. So from a deployment perspective, HPE SimpliVity is just gaining like it's exploding like crazy especially as distributed enterprises adopted as it's standardized edge architecture, right? It's an HCI box has got storage computer networking all in one. But now what we have done is not only you can deploy applications all from your standard V-Center interface from a data center, what have you have now added is the ability to backup to the cloud right from the edge. You can also back up all the way back to your core data center. All of the backup policies are fully automated and implemented in the distributed file system that is the heart and soul of the SimpliVity installation. In addition to that, the customers now do not have to buy any third-party software. Backup is fully integrated in the architecture and it's then efficient. In addition to that now you can backup straight to the client. You can back up to a central high-end backup repository which is in your data center. And last but not least, we have a lot of customers that are pushing the limit in their application transformation. So not only, we previously were one-on-one leaving VMware deployments out at the edge site now evolved also added both stateful and stateless container orchestration as well as data protection capabilities for containerized applications out at the edge. So we have a lot of customers that are now deploying containers, rapid manufacture containers to process data out at remote sites. And that allows us to not only protect those stateful applications but back them up back into the central data center. >> I saw in that chart, it was a line no egress fees. That's a pain point for a lot of CIOs that I talked to. They grit their teeth at those cities. So you can't comment on that or? >> Excellent question. I'm so glad you brought that up and sort of at the point that pick that up. So along with SimpliVity, we have the whole Green Lake as a service offering as well, right? So what that means Dave is, that we can literally provide our customers edge as a service. And when you compliment that with with Aruba Wired Wireless Infrastructure that goes at the edge, the hyperconverged infrastructure as part of SimpliVity that goes at the edge. One of the things that was missing with cloud backups is that every time you back up to the cloud, which is a great thing by the way, anytime you restore from the cloud there is that egress fee, right? So as a result of that, as part of the GreenLake offering we have cloud backup service natively now offered as part of HPE, which is included in your HPE SimpliVity edge as a service offering. So now not only can you backup into the cloud from your edge sites, but you can also restore back without any egress fees from HPE's data protection service. Either you can restore it back onto your data center, you can restore it back towards the edge site and because the infrastructure is so easy to deploy centrally lifecycle manage, it's very mobile. So if you want to deploy and recover to a different site, you could also do that. >> Nice. Hey, can you, Omer, can you double click a little bit on some of the use cases that customers are choosing SimpliVity for particularly at the edge and maybe talk about why they're choosing HPE? >> Excellent question. So one of the major use cases that we see Dave is obviously easy to deploy and easy to manage in a standardized form factor, right? A lot of these customers, like for example, we have large retailer across the US with hundreds of stores across US, right? Now you cannot send service staff to each of these stores. Their data center is essentially just a closet for these guys, right? So now how do you have a standardized deployment? So standardized deployment from the data center which you can literally push out and you can connect a network cable and a power cable and you're up and running and then automated backup, elimination of backup and state and DR from the edge sites and into the data center. So that's one of the big use cases to rapidly deploy new stores, bring them up in a standardized configuration both from a hardware and a software perspective and the ability to backup and recover that instantly. That's one large use case. The second use case that we see actually refers to a comment that you made in your opener, Dave, was when a lot of these customers are generating a lot of the data at the edge. This is robotics automation that is going up in manufacturing sites. These is racing teams that are out at the edge of doing post-processing of their cars data. At the same time there is disaster recovery use cases where you have campsites and local agencies that go out there for humanity's benefit. And they move from one site to the other. It's a very, very mobile architecture that they need. So those are just a few cases where we were deployed. There was a lot of data collection and there was a lot of mobility involved in these environments, so you need to be quick to set up, quick to backup, quick to recover. And essentially you're up to your next move. >> You seem pretty pumped up about this new innovation and why not. >> It is, especially because it has been taught through with edge in mind and edge has to be mobile. It has to be simple. And especially as we have lived through this pandemic which I hope we see the tail end of it in at least 2021 or at least 2022. One of the most common use cases that we saw and this was an accidental discovery. A lot of the retail sites could not go out to service their stores because mobility is limited in these strange times that we live in. So from a central recenter you're able to deploy applications. You're able to recover applications. And a lot of our customers said, hey I don't have enough space in my data center to back up. Do you have another option? So then we rolled out this update release to SimpliVity verse from the edge site. You can now directly back up to our backup service which is offered on a consumption basis to the customers and they can recover that anywhere they want. >> Fantastic Omer, thanks so much for coming on the program today. >> It's a pleasure, Dave. Thank you. >> All right. Awesome to see you, now, let's hear from Red Bull Racing an HPE customer that's actually using SimpliVity at the edge. (engine revving) >> Narrator: Formula one is a constant race against time Chasing in tens of seconds. (upbeat music) >> Okay. We're back with Matt Cadieux who is the CIO Red Bull Racing. Matt, it's good to see you again. >> Great to see you Dave. >> Hey, we're going to dig in to a real world example of using data at the edge in near real time to gain insights that really lead to competitive advantage. But first Matt tell us a little bit about Red Bull Racing and your role there. >> Sure. So I'm the CIO at Red Bull Racing and at Red Bull Racing we're based in Milton Keynes in the UK. And the main job for us is to design a race car, to manufacture the race car and then to race it around the world. So as CIO, we need to develop, the IT group needs to develop the applications use the design, manufacturing racing. We also need to supply all the underlying infrastructure and also manage security. So it's really interesting environment that's all about speed. So this season we have 23 races and we need to tear the car apart and rebuild it to a unique configuration for every individual race. And we're also designing and making components targeted for races. So 23 and movable deadlines this big evolving prototype to manage with our car but we're also improving all of our tools and methods and software that we use to design make and race the car. So we have a big can-do attitude of the company around continuous improvement. And the expectations are that we continue to say, make the car faster. That we're winning races, that we improve our methods in the factory and our tools. And so for IT it's really unique and that we can be part of that journey and provide a better service. It's also a big challenge to provide that service and to give the business the agility of needs. So my job is really to make sure we have the right staff, the right partners, the right technical platforms. So we can live up to expectations. >> And Matt that tear down and rebuild for 23 races, is that because each track has its own unique signature that you have to tune to or are there other factors involved? >> Yeah, exactly. Every track has a different shape. Some have lots of straight, some have lots of curves and lots are in between. The track surface is very different and the impact that has on tires, the temperature and the climate is very different. Some are hilly, some have big curbs that affect the dynamics of the car. So all that in order to win you need to micromanage everything and optimize it for any given race track. >> COVID has of course been brutal for sports. What's the status of your season? >> So this season we knew that COVID was here and we're doing 23 races knowing we have COVID to manage. And as a premium sporting team with Pharma Bubbles we've put health and safety and social distancing into our environment. And we're able to able to operate by doing things in a safe manner. We have some special exceptions in the UK. So for example, when people returned from overseas that they did not have to quarantine for two weeks, but they get tested multiple times a week. And we know they're safe. So we're racing, we're dealing with all the hassle that COVID gives us. And we are really hoping for a return to normality sooner instead of later where we can get fans back at the track and really go racing and have the spectacle where everyone enjoys it. >> Yeah. That's awesome. So important for the fans but also all the employees around that ecosystem. Talk about some of the key drivers in your business and some of the key apps that give you competitive advantage to help you win races. >> Yeah. So in our business, everything is all about speed. So the car obviously needs to be fast but also all of our business operations need to be fast. We need to be able to design a car and it's all done in the virtual world, but the virtual simulations and designs needed to correlate to what happens in the real world. So all of that requires a lot of expertise to develop the simulations, the algorithms and have all the underlying infrastructure that runs it quickly and reliably. In manufacturing we have cost caps and financial controls by regulation. We need to be super efficient and control material and resources. So ERP and MES systems are running and helping us do that. And at the race track itself. And in speed, we have hundreds of decisions to make on a Friday and Saturday as we're fine tuning the final configuration of the car. And here again, we rely on simulations and analytics to help do that. And then during the race we have split seconds literally seconds to alter our race strategy if an event happens. So if there's an accident and the safety car comes out or the weather changes, we revise our tactics and we're running Monte-Carlo for example. And use an experienced engineers with simulations to make a data-driven decision and hopefully a better one and faster than our competitors. All of that needs IT to work at a very high level. >> Yeah, it's interesting. I mean, as a lay person, historically when I think about technology in car racing, of course I think about the mechanical aspects of a self-propelled vehicle, the electronics and the light but not necessarily the data but the data's always been there. Hasn't it? I mean, maybe in the form of like tribal knowledge if you are somebody who knows the track and where the hills are and experience and gut feel but today you're digitizing it and you're processing it and close to real time. Its amazing. >> I think exactly right. Yeah. The car's instrumented with sensors, we post process and we are doing video image analysis and we're looking at our car, competitor's car. So there's a huge amount of very complicated models that we're using to optimize our performance and to continuously improve our car. Yeah. The data and the applications that leverage it are really key and that's a critical success factor for us. >> So let's talk about your data center at the track, if you will. I mean, if I can call it that. Paint a picture for us what does that look like? >> So we have to send a lot of equipment to the track at the edge. And even though we have really a great wide area network link back to the factory and there's cloud resources a lot of the tracks are very old. You don't have hardened infrastructure, don't have ducks that protect cabling, for example and you can lose connectivity to remote locations. So the applications we need to operate the car and to make really critical decisions all that needs to be at the edge where the car operates. So historically we had three racks of equipment like I said infrastructure and it was really hard to manage, to make changes, it was too flexible. There were multiple panes of glass and it was too slow. It didn't run our applications quickly. It was also too heavy and took up too much space when you're cramped into a garage with lots of environmental constraints. So we'd introduced hyper convergence into the factory and seen a lot of great benefits. And when we came time to refresh our infrastructure at the track, we stepped back and said, there's a lot smarter way of operating. We can get rid of all the slow and flexible expensive legacy and introduce hyper convergence. And we saw really excellent benefits for doing that. We saw up three X speed up for a lot of our applications. So I'm here where we're post-processing data. And we have to make decisions about race strategy. Time is of the essence. The three X reduction in processing time really matters. We also were able to go from three racks of equipment down to two racks of equipment and the storage efficiency of the HPE SimpliVity platform with 20 to one ratios allowed us to eliminate a rack. And that actually saved a $100,000 a year in freight costs by shipping less equipment. Things like backup mistakes happen. Sometimes the user makes a mistake. So for example a race engineer could load the wrong data map into one of our simulations. And we could restore that DDI through SimpliVity backup at 90 seconds. And this enables engineers to focus on the car to make better decisions without having downtime. And we sent two IT guys to every race, they're managing 60 users a really diverse environment, juggling a lot of balls and having a simple management platform like HPE SimpliVity gives us, allows them to be very effective and to work quickly. So all of those benefits were a huge step forward relative to the legacy infrastructure that we used to run at the edge. >> Yeah. So you had the nice Petri dish in the factory so it sounds like your goals are obviously number one KPIs speed to help shave seconds, awesome time, but also cost just the simplicity of setting up the infrastructure is-- >> That's exactly right. It's speed, speed, speed. So we want applications absolutely fly, get to actionable results quicker, get answers from our simulations quicker. The other area that speed's really critical is our applications are also evolving prototypes and we're always, the models are getting bigger. The simulations are getting bigger and they need more and more resource and being able to spin up resource and provision things without being a bottleneck is a big challenge in SimpliVity. It gives us the means of doing that. >> So did you consider any other options or was it because you had the factory knowledge? It was HCI was very clearly the option. What did you look at? >> Yeah, so we have over five years of experience in the factory and we eliminated all of our legacy infrastructure five years ago. And the benefits I've described at the track we saw that in the factory. At the track we have a three-year operational life cycle for our equipment. When in 2017 was the last year we had legacy as we were building for 2018, it was obvious that hyper-converged was the right technology to introduce. And we'd had years of experience in the factory already. And the benefits that we see with hyper-converged actually mattered even more at the edge because our operations are so much more pressurized. Time is even more of the essence. And so speeding everything up at the really pointy end of our business was really critical. It was an obvious choice. >> Why SimpliVity, why'd you choose HPE SimpliVity? >> Yeah. So when we first heard about hyper-converged way back in the factory, we had a legacy infrastructure overly complicated, too slow, too inflexible, too expensive. And we stepped back and said there has to be a smarter way of operating. We went out and challenged our technology partners, we learned about hyperconvergence, would enough the hype was real or not. So we underwent some PLCs and benchmarking and the PLCs were really impressive. And all these speed and agility benefits we saw and HPE for our use cases was the clear winner in the benchmarks. So based on that we made an initial investment in the factory. We moved about 150 VMs and 150 VDIs into it. And then as we've seen all the benefits we've successfully invested and we now have an estate in the factory of about 800 VMs and about 400 VDIs. So it's been a great platform and it's allowed us to really push boundaries and give the business the service it expects. >> Awesome fun stories, just coming back to the metrics for a minute. So you're running Monte Carlo simulations in real time and sort of near real-time. And so essentially that's if I understand it, that's what ifs and it's the probability of the outcome. And then somebody got to make, then the human's got to say, okay, do this, right? Was the time in which you were able to go from data to insight to recommendation or edict was that compressed and you kind of indicated that. >> Yeah, that was accelerated. And so in that use case, what we're trying to do is predict the future and you're saying, well and before any event happens, you're doing what ifs and if it were to happen, what would you probabilistic do? So that simulation, we've been running for awhile but it gets better and better as we get more knowledge. And so that we were able to accelerate that with SimpliVity but there's other use cases too. So we also have telemetry from the car and we post-process it. And that reprocessing time really, is it's very time consuming. And we went from nine, eight minutes for some of the simulations down to just two minutes. So we saw big, big reductions in time. And ultimately that meant an engineer could understand what the car was doing in a practice session, recommend a tweak to the configuration or setup of it and just get more actionable insight quicker. And it ultimately helps get a better car quicker. >> Such a great example. How are you guys feeling about the season, Matt? What's the team's sentiment? >> I think we're optimistic. Thinking our simulations that we have a great car we have a new driver lineup. We have the Max Verstapenn who carries on with the team and Sergio Cross joins the team. So we're really excited about this year and we want to go and win races. And I think with COVID people are just itching also to get back to a little degree of normality and going racing again even though there's no fans, it gets us into a degree of normality. >> That's great, Matt, good luck this season and going forward and thanks so much for coming back in theCUBE. Really appreciate it. >> It's my pleasure. Great talking to you again. >> Okay. Now we're going to bring back Omer for quick summary. So keep it right there. >> Narrator: That's where the data comes face to face with the real world. >> Narrator: Working with Hewlett Packard Enterprise is a hugely beneficial partnership for us. We're able to be at the cutting edge of technology in a highly technical, highly stressed environment. There is no bigger challenge than Formula One. (upbeat music) >> Being in the car and driving in on the limit that is the best thing out there. >> Narrator: It's that innovation and creativity to ultimately achieves winning of this. >> Okay. We're back with Omer. Hey, what did you think about that interview with Matt? >> Great. I have to tell you, I'm a big formula One fan and they are one of my favorite customers. So obviously one of the biggest use cases as you saw for Red Bull Racing is track side deployments. There are now 22 races in a season. These guys are jumping from one city to the next they got to pack up, move to the next city, set up the infrastructure very very quickly. An average Formula One car is running the thousand plus sensors on, that is generating a ton of data on track side that needs to be collected very quickly. It needs to be processed very quickly and then sometimes believe it or not snapshots of this data needs to be sent to the Red Bull back factory back at the data center. What does this all need? It needs reliability. It needs compute power in a very short form factor. And it needs agility quick to set up, quick to go, quick to recover. And then in post processing they need to have CPU density so they can pack more VMs out at the edge to be able to do that processing. And we accomplished that for the Red Bull Racing guys in basically two of you have two SimpliVity nodes that are running track side and moving with them from one race to the next race to the next race. And every time those SimpliVity nodes connect up to the data center, collect up to a satellite they're backing up back to their data center. They're sending snapshots of data back to the data center essentially making their job a whole lot easier where they can focus on racing and not on troubleshooting virtual machines. >> Red bull Racing and HPE SimpliVity. Great example. It's agile, it's it's cost efficient and it shows a real impact. Thank you very much Omer. I really appreciate those summary comments. >> Thank you, Dave. Really appreciate it. >> All right. And thank you for watching. This is Dave Volante for theCUBE. (upbeat music)

(mellow music) >> Okay, we're back with Matt Cadieux who is the CIO Red Bull Racing. Matt, it's good to see you again. >> Yeah, great to see you, Dave. >> Hey, we're going to dig into a real world example of using data at the edge and in near real-time to gain insights that really lead to competitive advantage. But first Matt, tell us a little bit about Red Bull Racing and your role there. >> Sure, so I'm the CIO at Red Bull Racing. And at Red Bull Racing we're based in Milton Keynes in the UK. And the main job for us is to design a race car, to manufacture the race car, and then to race it around the world. So as CIO, we need to develop, the IT team needs to develop the applications used for the design, manufacturing, and racing. We also need to supply all the underlying infrastructure, and also manage security. So it's a really interesting environment that's all about speed. So this season we have 23 races, and we need to tear the car apart, and rebuild it to a unique configuration for every individual race. And we're also designing and making components targeted for races. So 23 immovable deadlines, this big evolving prototype to manage with our car. But we're also improving all of our tools and methods and software that we use to design and make and race the car. So we have a big can-do attitude in the company, around continuous improvement. And the expectations are that we continue to make the car faster, that we're winning races, that we improve our methods in the factory and our tools. And so for IT it's really unique and that we can be part of that journey and provide a better service. It's also a big challenge to provide that service and to give the business the agility it needs. So my job is really to make sure we have the right staff, the right partners, the right technical platforms, so we can live up to expectations. >> And Matt that tear down and rebuild for 23 races. Is that because each track has its own unique signature that you have to tune to or are there other factors involved there? >> Yeah, exactly. Every track has a different shape. Some have lots of straight, some have lots of curves and lots are in between. The track's surface is very different and the impact that has on tires, the temperature and the climate is very different. Some are hilly, some are big curves that affect the dynamics of the car. So all that in order to win, you need to micromanage everything and optimize it for any given race track. >> And, you know, COVID has, of course, been brutal for sports. What's the status of your season? >> So this season we knew that COVID was here and we're doing 23 races knowing we have COVID to manage. And as a premium sporting team we've formed bubbles, we've put health and safety and social distancing into our environment. And we're able to operate by doing things in a safe manner. We have some special exhibitions in the UK. So for example, when people return from overseas that they do not have to quarantine for two weeks but they get tested multiple times a week and we know they're safe. So we're racing, we're dealing with all the hassle that COVID gives us. And we are really hoping for a return to normality sooner instead of later where we can get fans back at the track and really go racing and have the spectacle where everyone enjoys it. >> Yeah, that's awesome. So important for the fans but also all the employees around that ecosystem. Talk about some of the key drivers in your business and some of the key apps that give you competitive advantage to help you win races. >> Yeah, so in our business everything is all about speed. So the car obviously needs to be fast but also all of our business operations need to be fast. We need to be able to design our car and it's all done in the virtual world but the virtual simulations and designs need to correlate to what happens in the real world. So all of that requires a lot of expertise to develop the simulations, the algorithms, and have all the underlying infrastructure that runs it quickly and reliably. In manufacturing, we have cost caps and financial controls by regulation. We need to be super efficient and control material and resources. So ERP and MES systems are running, helping us do that. And at the race track itself in speed, we have hundreds of decisions to make on a Friday and Saturday as we're fine tuning the final configuration of the car. And here again, we rely on simulations and analytics to help do that. And then during the race, we have split seconds, literally seconds to alter our race strategy if an event happens. So if there's an accident and the safety car comes out or the weather changes, we revise our tactics. And we're running Monte Carlo for example. And using experienced engineers with simulations to make a data-driven decision and hopefully a better one and faster than our competitors. All of that needs IT to work at a very high level. >> You know it's interesting, I mean, as a lay person, historically when I think about technology and car racing, of course, I think about the mechanical aspects of a self-propelled vehicle, the electronics and the like, but not necessarily the data. But the data's always been there, hasn't it? I mean, maybe in the form of like tribal knowledge, if it's somebody who knows the track and where the hills are and experience and gut feel. But today you're digitizing it and you're processing it in close to real-time. It's amazing. >> Yeah, exactly right. Yeah, the car is instrumented with sensors, we post-process, we're doing video, image analysis and we're looking at our car, our competitor's car. So there's a huge amount of very complicated models that we're using to optimize our performance and to continuously improve our car. Yeah, the data and the applications that leverage it are really key. And that's a critical success factor for us. >> So let's talk about your data center at the track, if you will, I mean, if I can call it that. Paint a picture for us. >> Sure. What does that look like? >> So we have to send a lot of equipment to the track, at the edge. And even though we have really a great lateral network link back to the factory and there's cloud resources, a lot of the tracks are very old. You don't have hardened infrastructure, you don't have docks that protect cabling, for example, and you can lose connectivity to remote locations. So the applications we need to operate the car and to make really critical decisions, all that needs to be at the edge where the car operates. So historically we had three racks of equipment, legacy infrastructure and it was really hard to manage, to make changes, it was too inflexible. There were multiple panes of glass, and it was too slow. It didn't run our applications quickly. It was also too heavy and took up too much space when you're cramped into a garage with lots of environmental constraints. So we'd introduced hyper-convergence into the factory and seen a lot of great benefits. And when we came time to refresh our infrastructure at the track, we stepped back and said there's a lot smarter way of operating. We can get rid of all this slow and inflexible expensive legacy and introduce hyper-convergence. And we saw really excellent benefits for doing that. We saw a three X speed up for a lot of our applications. So here where we're post-processing data, and we have to make decisions about race strategy, time is of the essence and a three X reduction in processing time really matters. We also were able to go from three racks of equipment down to two racks of equipment and the storage efficiency of the HPE SimpliVity platform with 20 to one ratios allowed us to eliminate a rack. And that actually saved a $100,000 a year in freight costs by shipping less equipment. Things like backup, mistakes happen. Sometimes a user makes a mistake. So for example a race engineer could load the wrong data map into one of our simulations. And we could restore that DDI through SimpliVity backup in 90 seconds. And this makes sure, enables engineers to focus on the car, to make better decisions without having downtime. And we send two IT guys to every race. They're managing 60 users, a really diverse environment, juggling a lot of balls and having a simple management platform like HP SimpliVity gives us, allows them to be very effective and to work quickly. So all of those benefits were a huge step forward relative to the legacy infrastructure that we used to run at the edge. >> Yes, so you had the nice Petri dish in the factory, so it sounds like your goals obviously, number one KPI is speed to help shave seconds off the time, but also cost. >> That's right. Just the simplicity of setting up the infrastructure is key. >> Yeah, that's exactly right. >> It's speed, speed, speed. So we want applications that absolutely fly, you know gets actionable results quicker, get answers from our simulations quicker. The other area that speed's really critical is our applications are also evolving prototypes and we're always, the models are getting bigger, the simulations are getting bigger, and they need more and more resource. And being able to spin up resource and provision things without being a bottleneck is a big challenge. And SimpliVity gives us the means of doing that. >> So did you consider any other options or was it because you had the factory knowledge, HCI was, you know, very clearly the option? What did you look at? >> Yeah, so we have over five years of experience in the factory and we eliminated all of our legacy infrastructure five years ago. And the benefits I've described at the track we saw that in the factory. At the track, we have a three-year operational life cycle for our equipment. 2017 was the last year we had legacy. As we were building for 2018, it was obvious that hyper-converged was the right technology to introduce. And we'd had years of experience in the factory already. And the benefits that we see with hyper-converged actually mattered even more at the edge because our operations are so much more pressurized. Time is even more of the essence. And so speeding everything up at the really pointy end of our business was really critical. It was an obvious choice. >> So why SimpliVity? Why do you choose HPE SimpliVity? >> Yeah, so when we first heard about hyper-converged, way back in the factory. We had a legacy infrastructure, overly complicated, too slow, too inflexible, too expensive. And we stepped back and said there has to be a smarter way of operating. We went out and challenged our technology partners. We learned about hyper-convergence. We didn't know if the hype was real or not. So we underwent some PLCs and benchmarking and the PLCs were really impressive. And all these, you know, speed and agility benefits we saw and HPE for our use cases was the clear winner in the benchmarks. So based on that we made an initial investment in the factory. We moved about 150 VMs and 150 VDIs into it. And then as we've seen all the benefits we've successfully invested, and we now have an estate in the factory of about 800 VMs and about 400 VDIs. So it's been a great platform and it's allowed us to really push boundaries and give the business the service it expects. >> Well that's a fun story. So just coming back to the metrics for a minute. So you're running Monte Carlo simulations in real-time and sort of near real-time. >> Yeah. And so essentially that's, if I understand it, that's what-ifs and it's the probability of the outcome. And then somebody's got to make, >> Exactly. then a human's got to say, okay, do this, right. And so was that, >> Yeah. with the time in which you were able to go from data to insight to recommendation or edict was that compressed? You kind of indicated that, but. >> Yeah, that was accelerated. And so in that use case, what we're trying to do is predict the future and you're saying well, and before any event happens, you're doing what-ifs. Then if it were to happen, what would you probabilistically do? So, you know, so that simulation we've been running for a while but it gets better and better as we get more knowledge. And so that we were able to accelerate that with SimpliVity. But there's other use cases too. So we offload telemetry from the car and we post-process it. And that reprocessing time really is very time consuming. And, you know, we went from nine, eight minutes for some of the simulations down to just two minutes. So we saw big, big reductions in time. And ultimately that meant an engineer could understand what the car was doing in a practice session, recommend a tweak to the configuration or setup of it, and just get more actionable insight quicker. And it ultimately helps get a better car quicker. >> Such a great example. How are you guys feeling about the season, Matt? What's the team's, the sentiment? >> Yeah, I think we're optimistic. We with thinking our simulations that we have a great car. We have a new driver lineup. We have Max Verstappen who carries on with the team and Sergio Perez joins the team. So we're really excited about this year and we want to go and win races. And I think with COVID people are just itching also to get back to a little degree of normality, and, you know, and going racing again, even though there's no fans, it gets us into a degree of normality. >> That's great, Matt, good luck this season and going forward and thanks so much for coming back in theCUBE. Really appreciate it. >> It's my pleasure. Great talking to you again. >> Okay, now we're going to bring back Omar for a quick summary. So keep it right there. (mellow music)

>> From around the globe, it's theCUBE. Covering HPE Discover Virtual Experience. Brought to you by HPE. >> Welcome back, this is theCUBE's coverage of HPE Discover the Virtual Experience. I'm your host Stu Miniman. And we are now excited to be able to go beyond the hype of hyper convergence. Happy to welcome back to the program one of our regulars, even though he has a new title, Patrick Osborne is the vice president and general manager for Hewlett Packard Enterprise Hyperconverged Infrastructure, or HPE HCI as we could abbreviate. Patrick, good to see you. Thanks for much for coming back on theCUBE. >> Absolutely Stu, thanks for having me. It's always a pleasure to be on theCUBE. >> All right. So, you know, HCI, obviously has had a dramatic impact on the storage industry, you know, HPE has, you know, acquisitions like SimpliVity, Nimble has a play there, you've got partnerships with some solutions including with GreenLake. Why don't you give us just kind of the update, you've been with HPE for quite a while, what really, you know, excited you about taking this job and then we'll begin on the latest in the portfolio. >> Well, I think, so what's exciting about this market is it's a growth market. HCI is certainly a great solution for a whole swath of customer segments. So we thought, you know, about these HCI solutions from everyone, from our largest enterprise customers all the way down to our smallest SMB customers, and it really fits the bill not only for what you think about a standard HCI, where you're collapsing workloads and you're collapsing infrastructure, but also I think one of the interesting things that we've been able to deliver, especially with products like the HCI is around delivering dHCI experience for three tiers of architecture. And, you know, I think that's really exciting for customers that you know, certainly are moving more towards generalists, away from specialists and, you know, you're going to get really get that HCI experience in addition to a lot of other things we bring to the table here at HPE, that you know, we've talked about before, especially around AI ops and InfoSight and the ability to do a ton of things around predictive analytics. So it's an exciting space and it serves almost our entire customer base. >> Excellent. Now your group you did some announcements, a little bit ahead of Discover, why don't you give us the latest on the news and lay out how the portfolio fits. >> Yeah, so back in May we made some significant announcements on, in the HCI portfolio. So both on HCI SimpliVity as well as our Nimble dHCI offerings. One of the things we brought to market was around VDI specifically and we launched a new platform called the SimpliVity 325 and based on some new technology with our partner AMD are able to, you know, significantly lower the cost and increase the performance for the number of remote users that were, you know, that we're able to support with the platform and also bring together a solution you know, so, you know, what you also partner with folks like Citrix and CTERA and a whole a number of folks so we can have a full vertically oriented solution stack for customers that are doing, you know, they're significantly expanding their footprint around remote workers. And, you know, at the end of the day, it's going to cut in half, you can say 50% savings on your, you know per remote worker for desktop. So some significant savings there, and we've seen a huge amount of uptick for that platform in the last two months, even since we announced it. And then secondly, on the dHCI side, we made a number of announcements around simplicity, adding that a platform to our GreenLake consumption model, which is really cool, and then adding a whole set of new building blocks on the compute side based on AMD technology that allows, you know, folks to apply different types of compute per workload for our dHCI solution. So we made a pretty, pretty big announcement back in May around our portfolio for HCI solutions and the customers are definitely impacted super positively for both announcements. >> Yeah, it's funny. I remember a few years back, everybody kind of rolled their eyes a little bit. It was like, Oh, you know, VDI talked about it to death. And of course with the global pandemic, now of course remote work so critically important, I've talked to a number of CIOs that have had HCI solutions and it's like, Hey, I need to dramatically increase my services, I need to be able to scale things up and if I didn't have these solutions, I wouldn't be able to react as fast as I need. You said you you've seen an uptick, any particularly anecdotes or, you know, customer stories as to how they've been able to react fast in today's climate. >> Yeah, so especially for knowledge workers that are working remote, I mean, I can tell you that, almost 98 or 99% of my staff and the folks at HPE are working remotely and they're doing a fantastic job. So, you know, when we're able to service, you know, very small customers that are just, you know, embarking on their journey for remote workers to some of the largest corporations out there that our partners and customers of HPE, we've been able to, you know, produce a, you know, a really good outcome for them in addition to, you know, working with our partners, our reseller partners, to put this is another solution building block in their bag of tricks for their customers. >> All right. The other thing, what I want to talk a bit about is, you know, HCI is a managed service, so GreenLake, I've talked to some of your team, it has about a thousand customers HCI, so you know, one of the main options that they're offering there. Why don't you bring us inside a little bit as to, you know, why customers are choosing choosing GreenLake and you know, what that means for your product set? >> So this, from a strategic perspective, HPE, we've stated this publicly is that we want to offer all of our products and solutions as a service from a consumption perspective over the next couple of years. And so, you know, one of those key things that we want to offer from a workload perspective is certainly HCI as a service, so VMs as a service and as well as, you know, higher level type of applications, like VDI as a service. And so one of the announcements that we made was including both of our portfolios, HCI and dHCI in GreenLake so you can, essentially as a customer, you can start off very small and you are paying for the solution in metered increments, and we have lots of flexibility, you can do it at the workload level, you can do it at the CPU consumption level, you can do it at storage consumption level and so that gives a lot of flexibility and that's great for our larger customers that want to move from a CAPEX to an OPEX model. And, but it also really helps a lot of our small and medium sized customers who are, you know, in this environment, they are, you know, one of the top things in their mind is maintaining liquidity and so they can move that to an OPEX model and we actually have some really great offers that we announced with HPE financial services in conjunction with GreenLake on making this a very flexible, very cost effective manner to consume infrastructure and provide solutions for their customers and their end users. >> Excellent. You mentioned before a little bit about AI ops, give us a little bit as to how you see the, really the next generation of HCI taking advantage of, you know, automation intelligence and the like. >> Yes, so you know, as we've a talk on theCUBE before, one of the, I think one of the key solutions that we have and experiences that we bring to our customers in addition to the consumption level is this ability to do AI ops, global learning, predictive analytics for our workloads, for our customers, and essentially really really cut down on the costs in people that it takes to maintain these solutions and then you can, you know, essentially use the global learning and global aspect of, you know, a giant fleet in our entire install base and that gets applied to HCI. So SimpliVity HCI has been plugged into info site for over about a year now. Nimble obviously, Nimble dHCI, it's a core from the product offering and it's the best offering in the market for AI ops. And so our ability to do these things and provide predictive analytics, memory pressure, black listing, and white listing, the install base for problems, being able to reach out to customers before issues happen, noisy neighbors, VM consumption, storage consumption, all these things, you know, really cut down and provide a really awesome support automation experience for customers and essentially have a seamless experience for managing all of our systems. And when you think about HCI 2.O being able to do that, not only on a compressed infrastructure like HCI, but being able to do it on dHCI, which is desegregated hyperconverged so you can scale storage and networking and compute separately and you provide that same HCI experience from a management perspective and the AI ops around it is a game changer for, you know, some of the most, you know, business and mission critical applications that our customers are running. >> Alright. Well, one of the big themes that we're hearing across HPE Discover this year is about it's solutions. Traditionally I think of HCI really as helping collapse and simplify the data center, really that cloud operating model almost in the data center, where do these things connect? How does the edge fit in to this whole discussion? >> Yeah, so one of the beauties of HCI and specifically SimpliVity is our ability to be hyper efficient not only in the just the storage of the data. So, you know, from day one, everything is de-duped, everything is compressed and that's across both your on prem copies, as well as your DR copies, as well as your backup copies. And one of the things that we're seeing is that, sure HCI is great to collapse workloads in the data center and, but what we're seeing now is the ability to go serve as workloads that are running outside of the data center and when we talk about edge, we have some fantastic assets and a lot of customers, you know, running our edge compute solutions, our edge networking solution, specifically wireless and Aruba and what we're able to do is we're bringing those services, so compute, networking, and storage closer to the end user, but outside the data center and so there are some challenges to that like, so how do you federate the management of hundreds, if not thousands of clusters of these workloads running that could be anywhere from, you can think about a small, like a micro data center to a closet to even just, you know, small form factor that could be in a half of a rack and being able to manage those effectively but then also be able to pull the workloads and the data back. So being able to do edge, to core to cloud from a data mobility perspective. It's something that we provide and our customers are certainly deploying our solutions because of that. So a lot of stuff going on in the edge and I think one of the other things too that we see is people are running virtualized workloads, so VMs, and then also starting to incorporate containers. So microservices for, you know, industry specific things like vision and video and, you know, a whole bunch of things that happen around AI and ML at the edge. So it's very exciting place. >> Yeah. I'm glad you brought that up. You know, obviously one of the things that we're hearing a lot of interest from the community when it comes to virtualization is, you know, what is happening with that, really application modernization and containerization a big piece of that, of course, VMware with vSphere 7 are really helping to bring Kubernetes together to the virtualization environment. How do you see all of these playing together? You know, being a bare mental virtualization, containers, you know, edge, core, cloud, it's a complicated environment and, you know, the goal of HCI was always to help simplify this but we know IT is a bit messy and additive. >> Yeah, I think at the end of the day, you know, there are some basic services that customers want to run at the end of the day. They want to be able to deploy a workload on infrastructure that can be managed remotely, that could be managed at scale that provides, resiliency, it provides performance and it provides data mobility and HCI provides all of those capabilities whether it's, you know, through the HPE SimpliVity portfolio or Nimble dHCI and so you have a number of different building blocks that you can build. But on top of that is a set of data services in cloud consumption like experience that allows you to place those workloads on the infrastructure that you need and where you need it. And so if it's running at the edge, this commingling of VMs and containers, you know, we have a pretty unique platform out there, especially for things like AI and ML workloads in our HPE container platform and so you can run that for example, on something like HPE SimpliVity or dHCI, whether that's in the data center or whether you're running that on the edge and being able to service those customers, that's not an all or nothing proposition. At this point, you know, a number of our customers are running workloads that are virtualized and that are side by side to provide essentially good to customers, their customers at the end of the day. >> Excellent. Patrick, I'll give you the final word, takeaways if you want, that your customers want to have from HPE Discovery's week. >> Yeah, HPE Discover Virtual Experience has been great and you know, I think everyone participating in this, you know, we'd love to provide you as (mumble) as possible. There are a number of announcements around HCI, both our HCI platform was SimpliVity, to dHCI, we made some really great announcements recently around our primary storage and then we're going to continue at HPE Discover around some of our cloud data services. So when you think about someone who's going to provide, you know, you're going to partner with, from a costumer perspective on your most valuable workloads, whether it's workloads that exist today, or workloads that are fuel your digital transformation, HPE really is a partner that's providing, you know the infrastructure, the workloads and the cloud like experience both from a management perspective as well as from a consumption perspective that's going to service as these workloads from edge to core to cloud. So we're pretty excited about HPE discover now. >> Excellent. Thanks so much, Patrick and we'll be right back with lots more coverage from HPE Discover, I'm Stu Miniman and thank you as always for watching theCUBE.

>> Announcer: From around the globe, it's theCUBE covering HPE Discover Virtual Experience. Brought to you by HPE. >> Hi, and welcome back. I'm Stu Miniman, and this is theCUBE's coverage of HPE Discover 2020, the Virtual Experience. Happy to welcome back to the program, just had him on at VeeamON at theCUBE's coverage there. David Harvey, he is the Vice President of Strategic Alliances at Veeam. David, welcome to our coverage of HPE Discover. >> Thank you. I appreciate the invitation and great to see you again. >> All right, so when I talked to you at VeeamON, of course, you talk about lots of partners and you love all of them, but now we get to hear the truth. HPE, which one of your partners do you love the best? Talk to us a little bit about that HPE relationship. >> Sure, yeah, absolutely and really great to be part of Discover this year. And I think it's a fantastic set up in the way that HPE is running this event. As we've talked about with you guys before as well, HPE's always been a really special relationship for us. It was really the first relationship that we sort of established over eight years ago. And so from our point of view, it's got a long, rich heritage, that level of trust and desire for growth has been fantastic. And in the recent years as well as both of us have really continued to lean in, it's just continued to grow at a fantastic rate. I mean you would've seen some of the recent results there. Veeam's grown over 20% in the second half of 2019 with IBC. I'm really happy to say that the HPE alliance is growing well in excess of that. And so we're really pleased on how things have continued to evolve. >> Well congratulations on that growth. Yeah, boy, eight years so much has changed. So of course, I think about HPE and VMware and one of the earliest partners for server virtualization. But HPE's got a broad portfolio. Bring us through where Veeam sits. You know you got solutions like GreenLake out there, of course, traditional virtualization. So give us a little bit of kind of the breadth and depth of engineering work and partnership that you have. >> Yeah, great question Stu. And I think the interesting part of this is when you look at sort of the ecosystem that's out there now and the evolution HPE's gone through in embracing partners, the focus on the portfolio development and engagement between the two companies has reflected that. There are so many different areas that we could work with HPE on, but when we sat down together and we said where can we really provide the best value to our customers, we focused on a few key parts of the portfolio. Storage, obviously, is key. 3PAR, Primera, Nimble, StorONE, Apollo, areas where we've done really strong work over the years and continue to provide great solutions to the customers. Really pleased with how we've increased into SimpliVity. That's a really big push area for us over the last 12 months. And we're starting to see some great success together with that providing really unique solutions to extend the value of SimpliVity into new use cases, complimenting what they already have. And then obviously at Discover a couple of years ago we did a big push with GreenLake. And we're really pleased with how that's moving forwards as well because that's not really as much as a technology type of play, but that's a philosophy play about how we're satisfying the economic and service needs of the customers. So we're really pleased how that's been moving forwards, and that's another really big push for us this year. >> Well excellent. Maybe it would help to illustrate this. Do you have some customer examples? I understand sometimes, if you can share who the the logo is >> Harvey: Sure. >> that's great, otherwise if it needs to be a little more anonymized, that's fine too. >> No I think that's a great question, and the reason why we like talking about these types of things is we do thousands of orders a year with HPE. It's a really rich partnership on a global basis. If I remember correctly, last time we had over 100 countries where we've done deals together, so it's really nice to see it be appeared as on a global basis. A couple of easy ones that come to mind, certainly is White River Health Services. Big medical system solution serving over half a million customers that are out there. And those guys had a massive growth rate of data, 30% growth year over year, and really needed to make sure that that availability of data was there so that they provided solid solutions to their customers. We partnered up with a solution with StorONE and provided them with a fantastic amount of savings per year on their overall solution but also gave them that business continuity that they were looking at. So I think that's a great example. If we move over to Europe though there's another good market for us where we're seeing really success, great success together. The Metropolitan Thames Valley is a very large housing authorities are a very different virtual but shows the wide applicability of the solution, where they were having trouble looking at the ability to put a full disaster recovery plan into place, And obviously contingencies is a key topic right now. So we worked with HPE and then we've really put in great solution that not only reduced the ability to recover from seven days to less than 30 minutes, but we also managed to be more efficient with the amount rack utilization that was in place for them as well. So economic support, very critical business continuity support, and obviously a unified solution to allow them to be in a scenario where they knew that the IT partners they were working with were fully in unison so there was never any service question if they needed any support. So a couple of really good examples from around the world. >> You know, I wonder if we can touch a little bit on the competitive dynamics here. So eight years ago, HP had its own data protectant. When HP split that piece went over to micro focus so it kind of (murmurs) the swim lanes a little bit. But HP has also been increasing their partnership, so Veeam, you're a good partner but there are other partners out. So how do you help differentiate and how do you make you got clean engagements through HPE's channel and with their field? >> Yeah, that's a really good question, and there's a number of different answers to that, but I think that one of the things that will support what I'm about to touch on is that we're really proud that we just got awarded the Global Technology Partner award again this year. This is the second year running for HPE. Last year was the first time a software application partner was provided and now two years in a row, we've demonstrated that the partnership is really valuable for HPE. And I think to your point, Stuart, it comes down to a couple different areas. The first is just the overall attitude, approach, and relationship. Partnerships work when you can turn your back on each other. They work on the assumption that you really have the same vested interest for success and you can roll through some tough times as well as the good times. With good dialogue, with focus on the objectives you are trying to achieve, but also more importantly that you are excited and you enjoy working together. And so, it's a pleasure to spend hours and hours together to come up with something that satisfies the customer pains that you are solving. Now combined with that attitude because to me that attitude is a core foundation, technology's hugely important but if you can't have a business relationship, you can't actually execute that technology position. Now we're fortunate enough as well that you combine that attitude of partnershipping together with the investments and technology that we've done, and that's why we feel like we continue to differentiate. I think it's great that HPE has such a rich ecosystem. I think it's helpful to get focus on what is a huge topic for customers and frankly, the technology world is a complex ecosystem nowadays. But I think you stand out from the rest by focusing on being the most successful, being the best, having the right attitude, making the right investments together to move forward and that's where we've demonstrated, historically, our engineering commitment and our future roadmap commitment, which we're working on right now together heavily combining with a big marketing and sales investment, so all of the facets and the organization come together in a nice, seamless manner. So, you know, trust, I think it's great that they have the depth of ecosystem that's out there, we're just really proud that we continue to be the preferred partner in this space and we keep getting recognized for the investment that we have with HPE as well. >> Excellent. Yeah, you brought up it is such a complex ecosystem out there. One of the themes that we heard, your show as well as HP Discover, you know, we're talking about customers going through that digital information. You gave us a couple of customer examples, but maybe some big themes, what're you hearing? You know, how do the (murmurs) markets align between Veeam and HPE? >> Yeah, great question. And I think that is another great example where when you use the topic of data transformation, it's a really broad discussion. You know, what we've tried to do is focus on the areas that we provide the most value to customers right now. And I think that focuses us down and data protection powered by intelligence storage, which is a really key topic for a lot of our joint customers that are out there. We really want to make sure we can extend your data management from on-premise to the cloud. That's a really key area we're working with the Simplivity team on. And then finally, the consumption-based data management working very closely with GreenLake. And the (murmurs) of all of those solutions satisfied the plethora of needs that the customers have on storage of data availability. And I think that from that point of view, that's where keeping that focus on what is solving pains today, is why were having such great success together. So I think from that basis, we found that that helps the sales teams identify and satisfy the needs of the customer, It helps us get clarity on execution, and more importantly, keeps us in the scenario where we got really clear bars for success to make sure that this partnership is not just a, I call it a website partnership, but a real partnership that's driving key revenues, key (murmurs) leadership, and frankly, key solutions for the customers. >> Yeah, if you talk about where your data lives and how Veeam could support across multiple environments. There's the technical pieces which Veeam's done a good job on and I think people understand pretty well. I wonder if you could talk a little bit about the financial piece of things. How do you make sure, you know, especially with a deep partner like HPE, that you make it seamless as companies are trying to move more towards the SaaS and Opex models, and that it's not getting understanding, full control of what my billing is, and how these things go together. >> Yeah, it's a really good point, and I think there's sort of a capital facet to that. You know, the first part is, on a global basis across all of the segments that we've worked together on, especially if when you look at the success we have at the higher end price together, and the high end commercial. You have to be in a situation where you can support the financial structure that they have as a business. And that's looking at it whether or not it's a traditional Capex employment related to more of the traditional HP solutions, or looking at the flexibility of the Veeam licensing combined with that so they can have the choice that they desire. As well as moving down that path, that if they decide they want to move through a more consumption-based type of position by having that seamless integration with GreenLake as well, you get through a scenario where you can find the right solution for their needs and then the economic structure is really a choice for them, taking away a lot of that pain imposition. Now what we're seeing overall to that point too, which I think is also interesting is customers are going through evolution. If you go back a number of years, every conversation and topic was related to public cloud and it's still a huge area of focus. But, I've also seen a lot of organization especially at the higher end, really start to look at how they can take a lot of their consumption-based economics and bring it on-premise because they want to make sure that the reaction position they got, they're getting their data back is within their premise as well. And so that's why we're really enjoying a lot of success together because we can synergize the flexibility of the HPE offerings with the commercial offerings of (murmurs) Veeam, and be in a scenario where it's almost a perfect fit for most customers. And we try not to force them down a specific path because I think those days are gone, but customers want to look at the economic or the budget constraints they've got today and find the best fit, but they want that best fit without compromising on their overall support they get, and they want the scenario, like we have with HPE where it's fully on their price box, single supplier, single throat to choke, making sure were in unison, and they've got continued investment moving forward in the portfolio (murmurs). >> Excellent. Well final question I have for you is in the general market place, people often get stuck in their head to how they think about a company. Veeam is such a close partner to HPE. (murmurs) has thousands of customers with them. Give our viewers a little bit of how should people be thinking about HPE in 2020, and then also give us the final take away for Veeam and HPE. >> Yeah, great question. I mean, I've been working with HPE now a multitude of, overall over six years now. And the evolution that we're seeing is fantastic. I think that my view on how you should see HPE is, a trusted advisor related to talking about the transformation you're going through your data, and also a clear, solidified portfolio, especially in the storage realm related to the control of the data. Following the data from the origination point of the application all the way through. And so I think from that point of view, there's clarity with portfolio, there's a comprehensive interlock of the portfolio. And so from that point of view, I think there's calmness in the discussion. What I would say is that (murmurs) further and how to look at the HP (murmurs) relationship is. That continued investment on future proofing and hopefully some exciting announcements as we move through the year, will demonstrate that we are constantly making sure that we're differentiating at the frontier (mic cuts) for the customer. And you can see that in the growth of our enterprise business together. You could see that in the growth of high end commercial business together, and you can also see the fact that our customers are growing every single year together. So when we put these solutions in place, they're loving them and they're growing them year over year, and very quickly as well. So we're seeing a very high percentage of our customers reorder within the first year because they're really enjoying the unification of the solution. And so hopefully, the HP customers should look at that, through confidence, through calmness, and be really pleased that the market leader approach will indict protection by Veeam and they're primary (murmurs) leader when it comes to technology with HPE, together provide a really powerful solution, and we're really pleased on the customer satisfaction results we're getting from this work. >> All right. Well, David Harvey, thank you so much for the updates. Looking forward to some of those innovations that you talked about coming later this year. Thanks so much for joining us. >> Thanks so much. I really appreciate the time and enjoying Discover, and I hope everybody's having a great event. >> All right, stay tuned for launch of theCUBE's coverage, HPE Discover 2020, the Virtual Experience. I'm Stu Miniman. Thanks as always for watching.

>> From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now here's your host, Dave Vellante. >> Hello everybody and welcome to this week's CUBE Insights, powered by ETR. It is Breaking Analysis, but first I'm coming to you from the floor of Cisco Live in Barcelona, and I want to talk about storage. Storage continues to be soft but there are some bright spots. I've been reporting on this for awhile now and I want to dig in and share with you some of the reasons why, maybe give you some forecasts as to what I think is going to happen in the coming months. And of course, we want to look into some of the ETR spending data, and try to parse through that and understand who's winning, who's losing, who's got the momentum, where are the tailwinds and headwinds. So the first thing I want to show you is let's get right into it. What this slide is showing here is a storage spending snapshot of net score. Now remember, net score in the ETR parlance is an indicator of momentum or spending velocity. Essentially every quarter, what ETR does is they go out to, in this case, 1100 respondents out of the 4500 dataset, and they ask them are you spending more or are you spending less. Essentially they subtract the less from the more and that constitutes net score. It's not that simple but for this purpose, that's what we're showing. Now you can see here on the left hand side, I'm showing all respondents out of 1161. You see the January survey net scores. You've got Rubrik, Cohesity, Nutanix, and Pure, and VMware vSAN are the top five. So Rubrik and Cohesity, very strong, and interesting, Rubrik was very strong last quarter. Cohesity not as strong but really shooting up. It kind of surprised me last quarter, Cohesity being a little low but they were early into the dataset and now they're starting to show what I think is really happening in the marketplace. That's a good indicator. But you can see 75 percent, 72 percent. Nutanix still very strong at 56 percent, driving that hyperconverge piece. You see Pure Storage at 44 percent, down a little bit, talk a little bit more about that in a moment. VMware vSAN, Veeam, et cetera, down the list. The thing about the left hand side and storage in general, you can see the softness. Only about one third of the suppliers are in the green, and that's a problem. If you compare this to security, probably three quarters are in the green. It's a much hotter segment. Now, look on the right hand side. The right hand side is showing what ETR calls GPP, giant, public, and private. You can see there's an N of 403. These are the largest, the very largest public and private companies, private company being a company like Mars Candy. And they say that they are the best indicators of spending momentum in the dataset. So really isolating on some of the large companies. Look what happens here. You can see Rubrik gets even stronger as does Cohesity, they're into the 80 percent range. That's really rarefied air, so very strong. You can see Nutanix drops down. It does better in the smaller companies, it appears. They drop down to 41 percent. Pure gets stronger in the GPP at 68 percent. You can see VMware's vSAN uptick to 45 percent. Nimble gets better, HPE's Nimble, to 54 percent. Dell drops down to 4.8 percent. HPE goes up to 33 percent. HPE was red in the left hand side. You can see Veeam drops, not surprising, Veeam in the biggest companies is not going to be as prevalent. We talked about that in our Breaking Analysis segment after the acquisition of Veeam. You can see NetApp bumps up a little bit but it's still kind of in that red zone. I also want to call your attention to Actifio. They're way down on the bottom in the left hand side, which kind of surprised me. And then I started digging into it because I know Actifio does better in the larger companies. In the right hand side, they pop up to 33 percent. It's only an N of three, but what I'm seeing in the marketplace is Actifio solving some really hard problems in database and copy data management. You're starting to see those results as well. But generally speaking, this picture is not great for storage, with the exception of a few players like Rubrik and Cohesity, Pure, Nutanix. And I'm going to get into that a little bit and try to explain what's going on here. The market's bifurcated. Primary storage has been on the back burner for awhile now, and I've been talking about that. The one exception to that is really been Pure. Little bit for Dell EMC coming back, we'll dig into that a little bit more but Pure has been the stand-out. They're even moderating lately, I'll talk about that some more. Secondary storage is where the market momentum is and you can see that with Rubrik and Cohesity. Again, we'll talk about that some more. Let me dig into the primary side. Cloud, as I've talked about in many Breaking Analysis segments is siphoning off demand from on-prem spend. The second big factor in storage has been there was such an injection of flash into the marketplace, it added headroom. Customers used to buy spindles to get performance, and they don't need to do that so much anymore because so much flash was pushed into the system. The third thing is you're still seeing in primary the consolidation dynamics play out with hyperconverge. So hyperconverge is the software defined bringing together of storage, compute, and networking into a single logical managed unit. That is taking share away from traditional primary storage. You're also seeing tactical NAND pricing be problematic for storage suppliers. You saw that with Pure again this past quarter. NAND pricing comes down, which you'd think would be a good thing from a component standpoint, which it is, but it also lowers prices of the systems. So that hurt Pure's revenue. Their unit volume was pretty good but you're seeing that sort of put pressure on prices, so ASPs are down, average system prices. Let's turn our attention to the secondary market for a moment. Huge injection of venture capital, like a billion dollars, half a billion dollars over the last year, and then another five billion just spent on the acquisition of Veeam. A lot of action going on there. You're seeing big TAM expansions where companies like Rubrik and Cohesity, who have garnered much of that VC spending, are really expanding the notion of data protection from back-up into data management, into analytics, into security, and things of that nature, so a much bigger emphasis on TAM expansion, of course as I talked about the M and A. Let's dig into each of these segments. The chart that I'm showing now really digs into primary storage. You can see here the big players, Pure, Dell EMC, HPE, NetApp, and IBM. And lookit, there's only company in the green, Pure. You can see they're trending down just a little bit from previous quarters but still far and away the company with most spending momentum. Again, here I'm showing net score measure of spending velocity back to the January '18 survey. You can see Dell EMC sort of fell and then is slowly coming back up. NetApp hanging in there, Dell EMC, HP, and NetApp kind of converging, and you can see IBM. IBM announced last quarter about three percent growth. I talked about that actually in September. I predicted that IBM storage would have growth because they synchronized their DS8000 high-end mainframe announcement to the z15, so you saw a little bit of uptick in IBM. Pure, as I said, 15 percent growth. I mean, if you're flat in this market or growing at three percent, you're doing pretty well, you're probably a share gainer. We'll see what happens in February when Dell EMC, HPE, and NetApp announce earnings. We'll update you at that time. So that's what you're seeing now. Same story, Pure outpacing the others, everybody else fighting for share. Let's turn our attention now to secondary storage. What I'm showing here is net score for the secondary storage players. I can't isolate on a drill down for secondary storage, last slide I could do on storage overall, but what I can show is pure plays. What's showing here is Rubrik, Cohesity, Veeam, Commvault, and Veritas. Five pure play, you can argue Veritas isn't a pure play, but I consider it a pure play data protection vendor. Look at Rubrik and Cohesity really shooting up to the right, 75 percent and 72 percent net scores, respectively. You see Veeam hanging in there. This is again, all respondents, the full 1100 dataset. Commvault announced last quarter it beat earnings but it's not growing. You can see some pressure there, and you can see Veritas under some pressure as well. You can see a net score really deep in the red, so that's cause for some concern. We'll keep watching that, maybe dig into some of the larger accounts to see how they're doing there. But you can see clear standouts with Rubrik and Cohesity. I want to look at hyperconverge now. Again, I can't drill into hyperconverge but what I can do is show some of the pure plays. So what this slide shows is the net score for some of the pure play hyperconverge vendors led by Nutanix. The relative newcomer here is vSAN with VMware. You can see Dell EMC, VxRail, and Simplivity. I would say this. A lot of the marketing push that you hear out of Dell and out of VMware says Nutanix is in big trouble, they're dying and so forth. Our data definitely shows something different. The one caution is, you can see Nutanix and larger accounts, not as strong. And you can see both vSAN and Dell EMC stronger in those larger accounts. Maybe that's kind of their bias and their observation space, but it's something that we've got to watch. But you can see the net scores here. Everybody's in the green because overall, this is a strong market. Everybody is winning. It's taking share as I said from primary. We're watching that very closely. Nutanix continues to be strong. Watching very carefully that competitive dynamic and the dynamics within those larger companies which are a bellwether. Now the big question that I want to ask here is can storage reverse the ten-year trend of the big cloud sucking sound that we have heard for the past decade. I've been reporting with data on how cloud generally has hurt that storage spend on-prem. So what I'm showing here in this slide is the net score for the cloud spenders. Many hundreds of cloud spenders in the dataset. What we're showing here is the net score, the spending velocity over the last 10 years for the leaders. You can see Dell EMC, the number one. NetApp, right there in terms of market share, IBM as well. I didn't show HPE because the slide got too busy but they'd be up there as well. So these are the big spenders, big on-prem players and you can see, well, it's up and down. The highs are lower and the lows tend to be lower. You can see on the latest surveys, maybe there's some upticks here in some of the companies. But generally speaking, the trend has been down. That siphoning away of demand from the cloud guys. Can that be reversed, and that's something that we're going to watch, so keeping an eye on that. Let me kind of summarize and I'll make some other comments here. One of the things we're going to watch here is Dell EMC, NetApp, and HPE earnings announcements in February. That's going to be a clear indicator. We'll look for what's happening with overall demand, what the growth trajectory looks like, and very importantly, what NAND pricing looks like. As a corollary to that, we're going to be watching elasticity. I firmly believe as prices go down, that more storage is going to bought. That's always been the case. Flash is still only about 20, 25, 30 percent of the market, about 30 percent of the spending, about 20 percent of the terabytes. But as prices come down, expect people to buy more. That's always been the case. If there's an elasticity of demand, it hasn't shown up in the earning statements, and that's a bit of a concern. But we'll keep an eye on that. We're also going to watch the cloud siphoning demand from on-prem spend. Can the big players and guys like Pure and others, new start-ups maybe, reverse that trend. Multi-cloud, there's an opportunity for these guys. Multi-cloud management, TAM expansion into new areas. Actually delivering services in the cloud. You saw Pure announce block storage in the cloud. So that's kind of interesting that we'll watch. Other players may be getting into the data protection space, but as it relates to the cloud, one of the things I'm watching very closely is the TAM expansion of the cloud players. What do I mean by that. Late last year, Amazon announced a broader set of products or services really in its portfolio. Let's watch for Amazon's moves and other big cloud players into the storage space. I fully expect they're going to want to get a bigger piece of that pie. Remember, much if not most of Amazon's revenue comes from compute. They really haven't awakened to the great storage opportunity that's out there. Why is that important. You saw this play out on-prem. Servers became a really tough market. Intel made all the money. Amazon is a huge customer of Intel, and Intel's getting a big piece of Amazon's EC2 business. That's why you see, in part, Amazon getting into its own chip design. I mean, in the server business, you're talking about low gross margin business. If you're in the 20s or low 30s, you're thrilled. Pure last quarter had 70 plus percent gross margins. It's been a 60 plus percent gross margin business consistently. You're going to see the cloud guys wake up to that and try to grab even more share. It's going to be interesting to see how the traditional on-prem vendors respond to that. Coming into last decade, you saw tons of start-ups but only two companies really reached escape velocity: Nutanix and Pure. At the beginning of the century, you saw Data Domain, Isilon, Compellent, 3PAR all went public. EqualLogic and LeftHand got taken out. There are a bunch of other companies that got acquired. Storage was really a great market. Coming into this decade, mid part of the decade, you had lots of VC opportunity here. You had Fusion and Violin, Intentury went public. They all flamed out. You had a big acquisition with SolidFire, almost a billion dollars, but really Pure and Nutanix were the only ones to make it, so the question is, are you going to see anyone reach escape velocity in the next decade, and where's that going to come from. The likely players today would be Cohesity and Rubrik. Those unicorns would be the opportunity. You could argue Veeam, I guess reached it, but hard to tell because Veeam's a private company. By escape velocity, we're talking large companies who go public, have a big exit in the public market and become transparent so we really know what's going on there. Will it come from a cloud or a cloud native play. We'll see. Are there others that might emerge, like a Nebulon or a Clumio. A company like Infinidat's doing well, will they hit escape velocity and do an IPO and again, become more transparent. That's again something that we're watching, but you're clearly seeing moves up the stack where there's a lot more emphasis in spending on cloud, cloud native. We clearly saw it with hyperconverge consolidation but up the stack towards the apps, really driving digital transformations. People want to spend less on heavy lifting like storage. They're always going to need storage. But is it going to be the same type of market it has been for the last 30 or 40 years, of great investment opportunities. We're starting to see that wane but we'll keep track of it. Thank you for watching this Breaking Analysis, this is CUBE Insights powered by ETR. This is Dave Vellante. We'll see you next time.

(upbeat music) >> Hi, and welcome to another Cube Conversation where we speak with thought leaders in depth about the topics that are most important to the overall technology community. I'm Peter Burris, your host. Every business inspires to be a digital business, which is every business, faces a significant challenge. They need to use their data in new and value creating ways. But some of that data is not lending itself to new applications, new uses because it's locked up in formats, in technologies and applications that don't lend themselves to change. That's one of the big challenges that every business faces. What can they do to help unlock, to help liberate their data from older formats and older approaches so they can create new sources of value with it. To have that conversation, we're joined by a great guest. Greg Tinker is the CTO and Founder of SereneIT. Greg, welcome back to theCube. >> Thank you Peter, very appreciate it buddy. >> It's been a long time. This is your first time here with SereneIT so why don't you tell us a little bit about SereneIT. >> Sure, so at a high level we are a technology partner. SereneIT focuses on the next generation model structures of engineering first. There's a lot of VARS, in simplest terms, I would say we're a value at a reseller, sure. But we capitalize and focus just on the VA. Anybody can bring VR. The legacy approach of just being a reseller is no longer valid in our industry. Complexities and trying to have a situation where you can liberate data, try to take it from a legacy entrenched model, process, procedure and go into a new modern IT software defined ecosystem is very complex. And our objective is to make the, enablement of IT serene or simple and that's where SereneIT comes from. >> You know, I love the name but if you go back 20 years as you said, the asset that IT was focused on and took care of was the hardware. >> That's right. >> And we bought the hardware from a reseller, they just made the installations, configurations and what not. But as you said, today we're focused on the data. That's the asset. >> That's correct. >> And just as we used to have challenges uplifting and all the things we had to do with hardware, we're having similar types of challenges when you think about how to apply data to new uses, sustain that asset feature of it but apply it in new ways to create new value. As you talk to customers, what is the problem that you find they're encountering as they try to think what to do with their high value traditional data? So there's actually, I'll call it three strategic problems. Becoming to where it to be a workload optimized model structures or your data driven intelligence, trying to pull something out of the data model, trying to pull something out of the data, make it tangible to the business. And then trying to figure out a way to make it easy to enable the users, that is the employees to do something with the data the have. Making it more of a cloud-centric approach. Everybody wants that easy button now. So at a high level, trying to make that a possibility is where we spend our time today. And give you a quick example of that would be legacy block storage. We do a lot in the storage world. And we focus on software defined storage apparatus or solutions. So a lot of our clients are kind of mired down with legacy block, via Fibre Channel basics that were great for their era. But today with cost being a big factor in trying to be able to leverage an ecosystem where I can take my data, wherever my data sits and leverage it on multiple different apparatuses, be it BlueData, be in Kubernetes, be it name your favorite Docker solution. Trying to be able to use that in an ecosystem in a software defined hyper cloud, doing that on a legacy block is very problematic. And that's where we help customers transition from that legacy mindset, legacy IT infrastructure into a more of a modern software defined data program. >> So what's talk about that. Because there's a more modern technology, but really what they're doing is they're saying, look I've got this data, using these protocols like Fibre Channel with these applications and it's doing its job. >> That's right. >> But I want to create options on how I might use that data in the future, options that aren't available to me or aren't available to my business if it stays locked inside Fibre Channel for example. >> That's correct. >> So what you're really doing, is you're giving them paths to new options with their data that can be sustained whatever the technology is. Have I got that right? >> In a nutshell, Frank I would agree with your sentiment on that, your comment is spot on. We take customers data, we look at the business as a whole. And we focus on, what is the core of the business? Be it, maybe it's a High-Performance Computing Cluster Maybe it's a Oracle, Cyrus, Informant name your favorite data base structure. Maybe it's MapR, maybe it's a Dupe. We look at the business and determine, how are we using that data? How much data do we need? What's my data working set size? Understanding that and then we actually would design a solution that will be a software defined ecosystem that we can move that data in. And nine times out of 10 we can do it on the fly. Rarely, rarely ever do we have an outage to do it. Or that might be a small few minute outage window when we do a cut over, where we keep everything in mirroring Lockstep . >> Well that's one of the beauties of software defined is that you have those kinds of flexibilities. >> That's right. >> But think of, so talk to me a little bit about the you are, the customer realizes they have a problem. They find you guys. >> Sure. >> So how do they find you? >> So we do a lot with large scale Fortune 50, Fortune 100, the large scale enterprise businesses. And we do that with our, we're known in the engineering world, big accounts, because of our backdrop in HP engineering. And so HP brings us a lot into these accounts to help them solve a big business problem. So that's how a lot of our customers are finding us today. We are reaching out with media, like theCube here to talk to clients about the fact that we do exist and that we exist to help them consume a more modern IT in footprint. To help them go from that legacy model into that more modern model. >> Okay, so the customer realizes they have a problem, HPE and others, help identify you guys, matches you together. You show up, how do you work with the customer? Is it your big brains and the customer passive? Or you're working side by side to help them accelerate their journey? >> We find it best that we do it in a cohesive manner. We sit down and have a long discussion with their, usually their Chief Executive officer, their CTO, Chief Technology Officer, we'll sit down and talk about the business constraints. And then we'll go down to the directors the guys on the front lines that see the problems on a day to day basis. And we look at where their constraints are. Is it performance, IOP driven. Nine times out of 10, those problems are no longer there. They were solved years ago. Today it's more about the legacy model of, let me log a ticket to stand up a new virtual machine to a SQL database to do this application. So I've logged the ticket, a week two later I finally get a virtual machine. And now I got to get five more teams engaged, I get it online. Total business takes about a month to get some new apparatus up. Where if we go into a software defined ecosystem where we have these playbooks and this model written for the business, we can do that in 10 minutes. Be it on Nutanix do it with SimpliVity, VMware models, we don't' differentiate that. We let the customer tell us which one they use. 'Cause everybody has their liking. Be it some are VMware shop, some are Hyper-V, some are KBM. We do all of them. >> But the point is you want to help them move form an old world that was focused on executing the tasks associate with bringing the system up to a new world that's focused on the resources being able to configure themselves, being able to bring to bring themselves up test themselves in a software defined manner introducing some of those DevOps processes. Whatever the technology is, they have the people and the process to execute the technology. >> That's exactly right, because the technology in a nutshell. If you look at just technology itself that's not the hard part. Not for us anyway, 'cause we're an engineering team that's what we do well. The data driven intelligence stuff and helping customers bring more value out of their data. We can help them with that and show them exactly how we would do it. Be it a different technologies and stuff and we'll get into that discussion later. But the biggest problem we see is the people and processes which you just mentioned. Pushing the button, achieve an objective. That is where the old way of being very ticket driven Siloed approach, really slow down the economics of business. Was a huge driving force of not achieving the ROI that you actually set out to do years ago. Where we have one client that has a little over 4,000 servers and how my team and I explain it to the clients. Come out to the Golden Gate bridge. January 1 you start painting. December 30th you're done painting and January 1 you start painting again. You never get done. It's always getting painted. Patching of these large scale enterprises is the exact same way. You can't patch all the servers on a Saturday. You can't patch three thousand machines, BIOS, firmware, the list goes on. What we do for them is we actually put in an apparatus engine, basically an automation engine and instead of an army of 10 people doing firmware or BIOS and all the stuff updates, we automated 100% of that entire process. That's what SereneIT does. Help a customer take a, could be a legacy model, bare metal machine and show them how we can automate the bare metal machine. We can do the exact same thing in any hypervisor on the planet today. >> So that it's done faster, simpler. The outcome is more predictable. The result is more measurable. >> Yes. >> That's really great stuff. Let's go back to this notion of data because we kind of started with this idea of data and having to evolve the formats increasing the flexibility of it's utilization. We talked about hypervisors and all that technology is kind of sucking it forward, bringing that data forward making it possible to do things with it, but still the data itself is a major challenge. How are you working with customers to get them to envision the new data world independent of some of these other technologies? >> Sure, okay. So yeah, we have clients right now, we have (mumbled) systems these are global file systems that have enormous amount of data in it, some of it is compiled code logics for drivers and firmware and Kernel code structure that are forthcoming technologies that aren't even released yet. We have clients that have data based structure with ascii text is very common road driven. We have customers that have flat ascii files that are just flat text files. So we help the customers grab data from that existing data footprint for new lines of business. Determine what are we touching, how are we touching and how often are we touching it and why are we touching it? Case in point, when you have a large manufacturer doing chip design and your looking at a global file system you're trying to give assertation data as to what drivers are our developers working on most frequently. In the medical community, we have a client we're working on at global scale, we're doing real time data analytics to figure out if we're doing SQL injection from a hacker. So we show them exactly how we can do this in an inline driver stack and show them how to do it with the technology reducing their actual CapEx expend. There's legacy tools out there that work great. You know one of these is like, I won't give names of product and stuff, but there's a lot of cool technologies that's been around for a long time. >> That works. >> That works. >> And it just needs a smart person, or a smart team to put it together so it can be applied. >> That's what we've been doing with our clients is trying to show them that we can take the data that you have, be it flat ascii files or binary data structures. And we can show them that we can give you data analytics and pull that back. We have another client in law industry that we manage worldwide and we do e-discovery. On trying to figure out phrases and things that are maybe concerning to them in a financial world that is the global market. And we're able to give them that data structure on their own intellectual property and we give that to them in real time. We give them a dashboard so they can log in to the dashboard and they can see real time data transparency at a moments notice, so they can tell what the market is doing in Britain or they can tell what the market is doing in Singapore or U.S. by just looking at a dashboard and we're pulling data back. And we're pulling it from outside of world data points, this could be Facebook. Real time feeds, news, media and we pull it from internal data feeds. Email transactions that are going from their financial, they have like CIO's the Chief Investment Officers. Most people think of that as an information officer, right? So we're able to pull data from that and show them that they have a great deal of intellectual property at their fingertips that honestly they've never used before and that's what we're helping customers do today. >> Greg Tinker, Founder, CTO SereneIT. Thanks so much for being on theCube. >> Thank you very much Peter. >> And once again want to thank you for listening to this Cube Conversation. Until next time. (upbeat music)

>> From the SiliconANGLE Media Office in Boston, Massachusetts, it's theCube. (techno music) Now here's your host, Dave Vellante. >> Hi everybody, this is Dave Vellante and welcome to this special Cube Insights, powered by ETR. We've been running these Breaking Analysis Segments and today we're going to talk about some spending data that shows that there's continued interest in hyperconverged infrastructure. So we've been running these segments over the last several weeks with our partner ETR. They've got a database of about 4,500 IT Practitioners and CIOs. They go out quarterly and ask spending intentions. So we've been sharing that, along with our opinions. These are completely independent segments. I want to disclose that a number of the companies that we're talking about today: Nutanix, VMware, Dell EMC, Cisco, HPE. They sponsor theCube, but they have absolutely no input into editorial. They don't affect our opinion in any way, shape or form. So let's get into it. I'm here with Stu Miniman. Stu is an expert in this field. He's covered the space. Stu, let's look at some of the fundamentals. What do people need to know... Alex, if ya put up the slide, Stu, maybe you could talk to it. >> Yeah. Dave, thanks. I've been watching you have some fun with this. I enjoyed swimming in some of the data here and as you know, Dave, we've been watching since before hyperconverged infrastructure, or HCI, was a term that everybody talked about. We've been looking at how these hyperscale trends are going to impact the Enterprise. We put out our server SAN research years and years ago, so we know all these companies really well. And despite the latest AI and cloud and everything, the data shows, HCI, the simplification of the data center, building out what we would call True Private Cloud is important today. So right, we wanted to know when you look at the data, first of all, how are the vendors doing? Who are the leaders in this space here? There were a whole number of startups that came in this space. When we first analyzed the market it was companies like Microsoft and VMware that owned the operating system we thought would be hugely important. If you look in the big names this environment: Dell partnered with everyone, of course they bought Dell, bought EMC, which included a stake in VMware. What's that relationship with Nutanix? How is that shaping the market? As well as how is cloud impacting things? Both from a spending standpoint, has cloud sucked away revenue from HCI as that specter has overhung everybody in the IT space? And also, how does HCI fit into multicloud and how does that fit? >> Okay, great. So thanks for that setup, Stu, now let's get into some of the data. Alex, if you bring up the slide, the next slide. This is spending intentions for Nutanix, VMware and some other vendors. I'll go through that. But it's basically showing Nutanix and VMware are fighting it out. You know they're in this internecine battle and in social, and (chuckles) there's a war goin' on, because there's big money to be made here. So for those of you who are familiar with these segments, this is data from Enterprise Technology Research, from their July 2019 Spending Intentions Survey. So they're asking about spending intentions for the second half of 2019. The end of the survey, out of the 4,500 people in the panel, 1,068 responded to this survey. So on the left hand side you see the vendors: Nutanix, VMware with vSAN, Dell EMC with VxRail, specifically. Then SimpliVity, and then Springpath, or Cisco. So what the chart shows is what we call, Net Score. And net score is calculated by taking the red, on the bar, which is, we're going to leave the platform, that's the dark red. The lighter red, which is, we're going to spend less in the second half. The gray, which their spending's going to be flat. The dark green, or the evergreen, which says, we're going to increase spending. And the lime green, which I'm going to add to the platform. You take the green, minus the red, you get net score. Higher the net score, the better. You can see, Nutanix and VMware with vSAN are leading the pack. And then we'll go through that. But then you see, Shared Accounts. That's the number of indications for spending that they received out of those 1068. So Stu, what is this data telling you? >> So first of all, Dave, it confirmed kind of the general market share numbers that we hear out there. The vendors that track that on quarterly. VMware has the most customers, has the largest revenue, and their largest partner for that, of course, is Dell. VMware and Dell go to market, joint product development, joint engineering, joint go to market and it's the biggest piece of vSAN, so that's where we specifically wanted to look at the VxRail. And vSAN and VxRail, doing very well. They're adding new customers; was interesting to me that you saw VxRail kind of ramping up a little more on the, attracting new companies, but also looked to be losing some on the tail end of the dark red. As opposed to vSAN in general, is a little bit more stable. We know how many thousands of customers they have out there, and Vmware's a software story as opposed to VxRail is that full appliance. Nutanix is the second horse in this two-horse race that we're really talking about here, from HCI. There's some discussion in the marketplace after two quarters being down, is Nutanix showing weakness? What's happening there? The most recent quarter announcement was that Nutanix is doing well, seems to... They had a little bit of change as they're going through their move to a software model and sorting things out with sales and marketing in their channel. The data here shows that the second half of the year looks good for Nutanix. So to some of the questions I asked in the first slide, Dave, Nutanix and VMware, of course the clear leaders in this space. SimpliVity, which was of course bought be HP, Springpath which is the hyperflex from Cisco, are far behind those two out there. And it seems that even though Dell and VMware are fighting, very much with Nutanix, that is not heavily dampening Nutanix's from the respondents in this survey. >> Okay, and just a word on the data, so you see 184 shared accounts for Nutanix, 174 for VMware and down the line. Only 42 for SimpliVity and only 18 for Springpath, and Cisco. It's an indication of the size of the install base, obviously the more shared accounts, the more mentions, the larger the install base. Again, they're statistically significant; ETR does a very good job of that. Let's look Stu, at... Oh, actually I want to make another point here. So how are these net scores? Well let's put 'em in context. The hottest net scores we've seen recently are: Snowflake, and UiPath, with 80% plus, net score. Okay, so that's really, they're off the charts, they're growing like crazy. We saw Salesforce with 55%, so, and Workday sort of in there as well. Companies that are growing share. So SAP in the 30% range, and so you see the Dell EMC, VxRail, that's kind of holding serve. It's not like, dramatically gaining share, but they're growing a little bit and then-- >> And I think it's a lot, Dave, it shows to the maturity of this market. HCI is not new, both Nutanix and VMware have thousands of customers, specifically with V's then we're talking VMware. So it was more, when I saw some of your charts, Microsoft has a similar net score. >> Right >> Well liked, good install based, still growing and the like. And brings in the discussion of when we did some cross section of the analysis looking at cloud companies and how does this impact their public cloud spend; is this detracting if this customer's also doing public cloud? And the long and the short of it is VMware and Nutanix are pretty much the same if not actually a little bit better when you talk about a customer that's looking at their overall cloud spend. So to me that really signals that both VMware and Nutanix are doing a good job into how their solution fits into the customer's overall hybrid cloud strategy. >> All right, let's take a look at the next slide, which talks to time series. So this is hyperconverged infrastructure spending intentions again, for the second half of 2019, over time. So the July '19 Survey you can see is the most recent one. We go all the way back to January '17 and you can see Nutanix on the top, VMware or vSAN on the bottom. We just selected those two. We're just repeating the net score and the shared accounts. And you can see these things tend to bounce around a little bit. You can see Nutanix maintains a lead, but the market's startin' to converge. These two companies are coming together. We hear a lot about vSAN doing very well, it's kind of held on. You can see a slight downward pressure in July, in the July survey. It's unclear what that means. That could be an indication of just some uncertainty in the marketplace. Some economic macro concerns. Tariffs, potential headwinds there, so there could be some uncertainty there. But what do you takeaway from this slide, Stu? >> Yeah, first of all right. As you show, Dave, VMware is a bit more steady, Nutanix gone up for bit and come down. Both of them stayed relatively stable. Somewhere between kind of the 45 and 55 lately. A little bit, if you look at the overall trend, Nutanix is down. VMware could surpass them from the net score in the future, if this trend holds. But both of them doing quite well. When you looked at all the other vendors in there, of course the scale is just showing 40-70%, if you put all the others, which are down much lower, you can see once again, that kind of the clear leadership. These two companies, just strong lead. Does not look like there any challengers in this space that are ready to be a clear number three yet, in the market. >> But Nutanix at one point had no competition. >> Yeah. >> Okay, now vSAN comes in and of course-- >> Oh no, absolutely. So no, SimpliVity and Scale Computing, and there were a whole host of startups. There's all the brand new startups in the space. Everything from little companies like Diamante, Pivot3, who was around doing this before it came. So there's always been a lot there, but Nutanix is the one that separated from the pack. The only one in this space that's gone IPO. But VMware's there, Microsoft won that, they rebranded their Azure Stack HCI for what they put in the data center last year. So expect Microsoft partnering with all of the big server manufacturers to push farther into HCI, but really has not directly impacted this market too much, just yet. >> But there's definitely been some pressure on Nutanix from an earning standpoint, the stock's been hit. You've had some executive departures. There's some rumors about acquisition with Google. Your thoughts on-- >> Yeah, definitely. So John Furrier just had Dheeraj Pandey, the CEO of Nutanix, in our Palo Alto studio, leading up to the Copenhagen show for Nutanix that I will be at. Sure. Sunil Potti who was basically the number two at Nutanix, is now working for Thomas Kurian, TK, over at Google Cloud. My indication from what I hear, he is not over there to help broker a deal. Sunil had a great run at Nutanix, there was a clean break there, but there is a mostly new executive team at Nutanix. Now a couple of years past the IPO and the team at Nutanix, they have their platform. The have a bunch of SaaS offerings that they're doing there. Do they have a relationship with Google? Absolutely! They had Diane Greene at one of their events a couple of years ago. They did joint engineering. But I actually saw that engineering effort cool off a little bit in the last year or so since the new regime came on in Google Cloud. So does Nutanix have a lot of Enterprise accounts and know how to work with the Enterprise and could that be a boon to Google? Absolutely! But the personnel of a Nutanix executive over at Google, and Brian Stevens who's the CTO of Google Cloud being on the Board of Nutanix? I do not think that that is telegraphing that an acquisition is going to happen. It could. We see lots of big acquisitions. Nine or 10 billion dollars from Nutanix could be interesting for Nutanix and help them get in a lot of places and help Google. But Dave, I goin' on record say, I don't think it's going to happen. I don't think Cisco is going to buy Nutanix. Infrastructure's not the real push for Chuck Robbins and that team. And at the Google Cloud event, Dave, that we were at, we saw Sanjay Poonen from VMware up on stage touting how deeply VMware was going to partner. So both VMware and Nutanix are partnering with all of the clouds. VMware of course has a very deep relationship with VMware. They're going deeper with Google, they are even partnering with the old enemy of Microsoft, so I would give VMware definitely has a deeper and more public relationship with all the public cloud providers but Nutanix is also partnering and expanding their portfolio to give themselves good growth beyond just the core HCI market. >> HP's another one. So Nutanix and HPE are workin' together. Kind of the enemy of my enemy is my friend. Nutanix was not at VMworld this year; they're kind of booted out. So they belly up to HP. >> Yeah, HP loves having, they have their, "As a service offerings," and Nutanix is one of those as well as Nutanix can sell the HP. So as the, right, the Dell relationship is likely going to die down over time, as Michael Dell on the team, want to sell more Dell hardware with VMware software. HPE is another... And they also partner with Lenovo on the Nutanix side. >> All right, Stu, bring it home. What are the key takeaways on this cube Insights. >> Okay, so HCI, who is a two-horse race right now. There are interesting companies to look at beyond the two, but if you want to understand who the leaders are in the space it is: VMware, especially with their VxRail and Nutanix, are the two leaders in that space. Really looking and understanding how they're expanding into multicloud and hybrid cloud solutions. VMware very much with their VCF offering, which packages vSAN to go into the VMware cloud offerings. And Nutanix with an interesting strategy, both with how they really spread some of their services like what they're doing with Xi Cloud, as well as some SaaS offerings, which some of them really have a disconnect. Not in a bad way, but just are not tied directly to the hardware. What the infrastructure companies have tried to do for years. Both of them, VMware's done tons of acquisitions. Nutanix has done quite a few acquisitions too. >> So your second point here, what's the impact of Dell VMware versus the Nutanix battle? You say not a significant impact on spending intentions yet. I mean there's clearly some evidence that those two markets are comin' together, that VMware's pressuring Nutanix. But why do you say, yet? What do you expect? I mean is it the OEM deal with Dell? >> It's the OAM relationship. There is huge pipeline of Dell hardware with Nutanix software and they're at loggerheads. So absolutely, the Dell family: Dell, EMC and VMware are doing all they can to dial that down. So they put pressure on the channel. And even some of the most loyal Nutanix channel partners that work with Dell, have had pressure to do more and more VxRail. So I expect it to have impact, but just as, Dave, I'll dial back the clock. You probably remember when EMC had a relationship with HP and HP killed the OEM of EMC storage. EMC stormed back and got a lot of those accounts. Same thing happened when EMC and Dell broke up a couple of years before the acquisition. So Nutanix is storming to go with HPE as one of their server partners, and (mumbles). So can Nutanix keep their growth and momentum going as Dell is no longer their biggest partner? >> Well, they're fighting a two-front war. They've got one with Dell VMware and they're also fighting the war with the public cloud guys, even though they're partnering with the public cloud guys. All right, they're sort of taking that cloud model but of course it's on prim. So you say how this public cloud affects HCI spending; not a significant impact on spending intentions yet. Can I infer from that that you do expect there to be pressure on that second front? >> Yeah, so as I've talked about before Dave, when we look at VMware and VMware gives the VMware cloud in AWS. Some say, "Great, that gives me a nice path to be able to use public cloud. But maybe I don't need some of this VMware licensing and software in there." The question for Nutanix is very similar. What services do they have? How do they become more sticky in customer environments? And absolutely, they're driving a roadmap for that in working with their customers. >> Well the thing about Nutanix is that customer's really happy. The customer's really like Nutanix. They like the simplicity. I've talked to a number of Nutanix customers that are very happy in that regard. And they have a leading product in that regard. But they're aiming at the multicloud space and can they play there? >> And Dave, you make a really good point. The killer use case, what did HCI deliver? It delivered simplicity. Today, if you talk about public cloud in general or even hybrid or multicloud, (chuckles) simplicity is not how you would describe this. So can the customers, the companies that did HCI, so, VMware, Nutanix, HPE and Cisco, they're all fighting for that hybrid and multicloud environment. And if they can help deliver simplicity of management, simplicity of leveraging my data, they can be successful in that space. >> Okay, so you're sort of positive on the multicloud, their position in multicloud. Even though they're not one of the big five. >> Yeah, and the good news for a Nutanix is that they're growing off of a much smaller base then say VMware, when you say they have five or 600,000 customers. Hey, how big of an impact will public cloud have on them? >> All right, so we don't pick stocks. We're not making recommendations. (laughs) But, do you feel like it's overdone, that it's undervalued? Independent of the macro. Do you feel like the pressure on Nutanix is warranted, or do you feel like it's got legs? >> So I feel Wall Street tends to over adjust when they go through things. When I talk to my friends on the Wall Street stuff. Definitely Nutanix took more of a beating probably then they should have. But they had two quarters that weren't great. And some of that was the management changes, they blamed that they couldn't hire sales and marketing fast enough. Something we'd asked, if you're a company in the Valley and you've gone from a few hundred people to a few thousand people. How do you keep adding good quality people? That's challenging. So yes, I think we've actually seen Dave, in the last week, or so Nutanix has been one of the fastest growing stocks in the tech market. So they're adjusting some. So I still think Nutanix has plenty of room for growth. The question is, what's their path to say, two billion dollars? Or is it an exit for 9-10 billion dollars down the road? >> All right, Stu, some great stuff. Thank you for that analysis. And thank you for watching this episode of theCube Insights, powered by ETR. This is Dave Vellante, for Stu Miniman, we'll see ya next time. (techno music)

>> From the Silicon Angle Media office in Boston Massachusetts, it's theCUBE. Now here's your host, Dave Vellante. (upbeat music) >> Hello everybody, this is Dave Vallante with Stu Miniman and we're going to take a look back at ten years of theCUBE at VMworld and look forward to see what's coming next. So, as I say, this is theCUBE's 10th year at VMworld, that's VMworld, of course 2019. And Stu, if you think about the VMware of 2010, when we first started, it's a dramatically different VMware today. Let's look back at 2010. Paul Maritz was running VMware, he set forth the vision of the software mainframe last decade, well, what does that mean, software mainframe? Highly integrated hardware and software that can run any workload, any application. That is the gauntlet that Tucci and Maritz laid down. A lot of people were skeptical. Fast forward 10 years, they've actually achieved that, I mean, essentially, it is the standard operating system, if you will, in the data center, but there's a lot more to the story. But you remember, at the time, Stu, it was a very complex environment. When something went wrong, you needed guys with lab coats to come in a figure out, you know, what was going on, the I/O blender problem, storage was a real bottleneck. So let's talk about that. >> Yeah, Dave, so much. First of all, hard to believe, 10 years, you know, think back to 2010, it was my first time being at VMworld, even though I started working with VMware back in 2002 when it was like, you know, 100, 150 person company. Remember when vMotion first launched. But that first show that we went to, Dave, was in San Francisco, and most people didn't know theCUBE, heck, we were still figuring out exactly what theCUBE will be, and we brought in a bunch of our friends that were doing the CloudCamps in Silicon Valley, and we were talking about cloud. And there was this gap that we saw between, as you said, the challenges we were solving with VMware, which was fixing infrastructure, storage and networking had been broken, and how were we going to make sure that that worked in a virtual environment even better? But there were the early thought leaders that were talking about that future of cloud computing, which, today in 2019, looks like we had a good prediction. And, of course, where VMware is today, we're talking all about cloud. So, so many different eras and pieces and research that we did, you know, hundreds and hundreds of interviews that we've done at that show, it's definitely been one of our flagship shows and one of our favorite for guests and ecosystems and so much that we got to dig into at that event. >> So Tod Nielsen, who was the President and probably COO at the time, talked about the ecosystem. For every dollar spent on a VMware license, $15 was spent on the ecosystem. VMware was a very, even though they were owned by EMC, they were very, sort of, neutral to the ecosystem. You had what we called the storage cartel. It was certainly EMC, you know, but NetApp was right there, IBM, HP, you know, Dell had purchased EqualLogic, HDS was kind of there as well. These companies were the first to get the APIs, you remember, the VASA VAAI. So, we pushed VMware at the time, saying, "Look, you guys got a storage problem." And they said, "Well, we don't have a lot of resources, "we're going to let the ecosystem solve the problem, "here's an API, you guys figure it out." Which they largely did, but it took a long time. The other big thing you had in that 2010 timeframe was storage consolidation. You had the bidding war between Dell and HP, which, ultimately, HP, under Donatelli's leadership, won that bidding war and acquired 3PAR >> Bought 3PAR >> for 2.4, 2.5 billion, it forced Dell to buy Compellent. Subsequently, Isilon was acquired, Data Domain was acquired by EMC. So you had this consolidation of the early 2000s storage startups and then, still, storage was a major problem back then. But the big sea change was, two things happened in 2012. Pat Gelsinger took over as CEO, and VMware acquired Nicira, beat Cisco to the punch. Why did that change everything? >> Yeah, Dave, we talked a lot about storage, and how, you know, the ecosystem was changing this. Nicira, we knew it was a big deal. When I, you know, I talked to my friends that were deep in networking and I talked with Nicira and was majorly impressed with what they were doing. But this heterogeneous, and what now is the multi-cloud environment, networking needs to play a critical role. You see, you know, Cisco has clearly targeted that environment and Nicira had some really smart people and some really fundamental technology underneath that would allow networking to go just beyond the virtual machine where it was before, the vSwitch. So, you know, that expansion, and actually, it took a little while for, you know, the Nicira acquisition to run into NSX and that product to gain maturity, and to gain adoption, but as Pat Gelsinger has said more recently, it is one of the key drivers for VMware, getting them beyond just the hypervisor itself. So, so much is happening, I mean, Dave, I look at the swings as, you know, you said, VMware didn't have enough resources, they were going to let the ecosystem do it. In the early days, it was, I chose a server provider, and, oh yeah, VMware kind of plays in it. So VMware really grew how much control and how much power they had in buying decisions, and we're going through more of that change now, as to, as they're partnering we're going to talk about AWS and Microsoft and Google as those pieces. And Pat driving that ship. The analogy we gave is, could Pat do for VMware what Intel had done for a long time, which is, you have a big ecosystem, and you slowly start eating away at some of that other functionality without alienating that ecosystem. And to Pat's credit, it's actually something that he's done quite well. There's been some ebbs and flows, there's pushback in the community. Those that remember things like the "vTax," when they rolled that out. You know, there's certain features that the rolled into the hypervisor that have had parts of the ecosystem gripe a little bit, but for the most part, VMware is still playing well with the ecosystem, even though, after the Dell acquisition of EMC, you know, we'll talk about this some more, that relationship between Dell and VMware is tighter than it ever was in the EMC days. >> So that led to the Software-Defined Data Center, which was the big, sort of, vision. VMware wanted to do to storage and networking what it had done to compute. And this started to set up the tension between with VMware and Cisco, which, you know, lives on today. The other big mega trend, of course, was flash storage, which was coming into play. In many ways, that whole API gymnastics was a Band-Aid. But the other big piece if it is Pat Gelsinger was much more willing to integrate, you know, some of the EMC technologies, and now Dell technologies, into the VMware sort of stack. >> Right, so Dave, you talked about all of those APIs, Vvols was a huge multi-year initiative that VMware worked on and all of the big storage players were talking about how that would allow them to deeply integrate and make it virtualization-aware storage your so tense we come out on their own and try to do that. But if you look at it, VVols was also what enabled VMware to do vSAN, and that is a little bit of how they can try to erode in some of the storage piece, because vSAN today has the most customers in the hyperconverged infrastructure space, and is keeping to grow, but they still have those storage partnerships. It didn't eliminate it, but it definitely adds some tension. >> Well it is important, because under EMC's ownership it was sort of a let 1,000 flowers bloom sort of strategy, and today you see Jeff Clarke coming in and consolidating the portfolios, saying, "Look, let's let VMware go hard with vSAN." So you're seeing a different type of governance structure, we'll talk about that. 2013 was a big year. That's the year they brought in Sanjay Poonen, they did the AirWatch acquisition, they took on what the industry called VDI, what VMware called EUC, End-User Computing. Citrix was the dominant player in that space, VMware was fumbling, frankly. Sanjay Poonen came in, the AirWatch acquisition, now, VMware is a leader in that space, so that was big. The other big thing in 2013 was, you know, the famous comment by Carl Eschenbach about, you know, if we lose to the book seller, we'll all lose. VMware came out with it's cloud strategy, vCloud Air. I was there with the Wall Street analyst that day listening to Pat explain that and we were talking afterwards to a number of the Wall Street analysts saying, "This really doesn't make a lot of sense." And then they sort of retreated on that, saying that it was going to be an accelerant, and it just was basically a failed cloud strategy. >> And Dave, that 2013 is also when they spun out Cloud Foundry and founded Pivital. So, you know, this is where they took some of the pieces from EMC, the Greenplum, and they took some of the pieces from VMware, Spring and the Cloud Foundation, and put those together. As we speak right now, there was just an SEC Filing that VMware might suck them back in. Where I look at that, back in 2013, there was a huge gap between what VMware was doing on the infrastructure side and what Cloud Foundry was doing on the application modernization standpoint, they had bought the Pivotal Labs piece to help people understand new programming models and everything along those lines. Today, in 2019, if you look at where VMware is going, the changes happening in containerization, the changes happening from the application down, they need to come together. The Achilles heel that I have seen from VMware for a long time is that VMware doesn't have enough a tie to or help build the applications. Microsoft owns the applications, Oracle owns the applications. You know, there are all the ISVs that own the applications, and Pivotal, if they bring that back into VMware it can help, but it made sense at the time to kind of spin that out because it wasn't synergies between them. >> It was what I called at the time a bunch of misfit toys. And so it was largely David Goulden's engineering of what they called The Federation. And now you're seeing some more engineering, financial engineering, of having VMware essentially buy another, you know, Dell Silver Lake asset, which, you know, drove the stock price up 77% in a day that the Dow dropped 800 points. So I guess that works, kind of funny money. The other big trend sort of in that mid-part of this decade, hyperconverged, you know, really hit. Nutanix, who was at one point a strong partner of both VMware and Dell, was sort of hitting its groove swing. Fast forward to 2019, different situation, Nutanix really doesn't have a presence there. You know, people are looking at going beyond hyperconverged. So there's sort of the VMware ecosystem, sort of friendly posture has changed, they point fingers at each other. VMware says, "Well, it's Nutanix's fault." Nutanix will say it's VMware's fault. >> Right, so Dave, I pointed out, the Achilles heel for VMware might be that they don't have the closest tie to the application, but their greatest strength is, really, they are really the data center operating system, if you will. When we wrote out our research on Server SAN was before vSAN had gotten launched. It was where Nutanix, Scale Computing, SimpliVity, you know, Pivot3, and a few others were early in that space, but we stated in our research, if Microsoft and VMware get serious about that space, they can dominate. And we've seen, VMware came in strong, they do work with their partnerships. Of course, Dell, with the VxRail is their largest solution, but all of the other server providers, you know, have offerings and can put those together. And Microsoft, just last year, they kind of rebranded some of the Azure Stack as HCI and they're going strong in that space. So, absolutely, you know, strong presence in the data center platform, and that's what they're extending into their hybrid and multi-cloud offering, the VMware Cloud Solutions. >> So I want to get to some of the trends today, but just real quick, let's go through some of this. So 2015 was the big announcement in the fall where Dell was acquiring EMC, so we entered, really, the Dell era of VMware ownership in 2016. And the other piece that happened, really 2016 in the fall, but it went GA 2017, was the announcement AWS and VMware as the preferred partnership. Yes, AWS had a partnership with IBM, they've subsequently >> VMware had a partnership >> Yeah, sorry, VMware has a partnership with IBM for their cloud, subsequently VMware has done deals with Google and Microsoft, so there's, we now have entered the multi-cloud hybrid world. VMware capitulated on cloud, smart move, cleaned up its cloud strategy, cleaned that AirWatch mess. AWS also capitulated on hybrid. It's a term that they would never use, they don't use it necessarily a lot today, but they recognize that On Prem is a viable portion of the marketplace. And so now we've entered this new era of cloud, hybrid cloud, containers is the other big trend. People said, "Containers are going to really hurt VMware." You know, the jury's still out on that, VMware sort of pushes back on that. >> And Dave, just to put a point on that, you know, everybody, including us, spent a lot of time looking at this VMware Cloud on AWS partnership, and what does it mean, especially, to the parent, you know, Dell? How do they make that environment? And you've pointed out, Dave, that while VMware gets in those environments and gives themselves a very strong cloud strategy, AWS is the key partner, but of course, as you said, Microsoft Azure, Google Cloud, and all the server providers, we have a number of them including CenturyLink and Rackspace that they're partnering with, but we have to wait a little while before Amazon, when they announced their outpost solutions, VMware is a critical software piece, and you've got two flavors of the hardware. You can run the full AWS Stack, just like what they're running in their data center, but the alternative, of course, is VMware software running on Dell hardware. And we think that if VMware hadn't come in with a strong position with Amazon and their 600,000 customers, we're not sure that Amazon would have said, "Oh yeah, hey, you can run that same software stack "that you're running, but run some different hardware." So that's a good place for Dell to get in the environment, it helps kind of close out that story of VMware, Dell, and AWS and how the pieces fit together. >> Yeah, well so, by the way, earlier this week I privately mentioned to a Dell executive that one of the things I thought they should do was fold Pivotal into VMware. By the way, I think they should go further. I think they should look at RSA and Dell Boomi and SecureWorks, make VMware the mothership of software, and then really tie in Dell's hardware to VMware. That seems to me, Stu, the direction that they're going to try to gain an advantage on the balance of the ecosystem. I think VMware now is in a position of strength with, what, 5 or 600,000 customers. It feels like it's less ecosystem friendly than it used to be. >> Yeah, Dave, there's no doubt about it. HPE and IBM, who were two of the main companies that helped with VMware's ascendancy, do a lot of other things beyond VMware. Of course, IBM bought Red Hat, it is a key counterbalance to what VMware is doing in the multi-cloud. And Dave, to your point, absolutely, if you look at Dell's cloud strategy, they're number one offering is VMware, VMware cloud on Dell. Dell as the project dimension piece. All of these pieces do line up. I'll say, some of those pieces, absolutely, I would say, make sense to kind of pull in and shell together. I know one of the reasons they keep the security pieces at arm's length is just, you know, when something goes wrong in the security space, and it's not of the question of if, it's a question of when, they do have that arm's length to be able to keep that out and be able to remediate a little bit when something happens. >> So let's look at some of the things that we're following today. I think one of the big ones is, how will containers effect customer spending on VMware? We know people are concerned about the vTax. We also know that they're concerned about lock-in. And so, containers are this major force. Can VMware make containers a tailwind, or is it a headwind for them? >> So you look at all the acquisitions that they've made lately, Dave, CloudHealth is, from a management standpoint, in the public cloud. Heptio and Bitnami, targeting that cloud native space. Pair that with Cloud Foundry and you see, VMware and Pivotal together trying to go all-in on Kubernetes. So those 600,000 customers, VMware wants to be the group that educates you on containerization, Kubernetes, you know, how to build these new environments. For, you know, a lot of customers, it's attractive for them to just stay. "I have a relationship, "I have an enterprise licensing agreement, "I'm going to stay along with that." The question I would have is, if I want to do something in a modern way, is VMware really the best partner to choose from? Do they have the cost structure? A lot of these environments set up, you know, it's open source base, or I can work with my public cloud providers there, so why would I partner with VMware? Sure, they have a lot of smart people and they have expertise and we have a relationship, but what differentiates VMware, and is it worth paying for that licensing that they have, or will I look at alternatives? But as VMware grows their hybrid and multi-cloud deployments they absolutely are on the short list of, you know, strategic partners for most customers. >> The other big thing that we're watching is multi-cloud. I have said over and over that multi-cloud has largely been a symptom of multi-vendor. It's not necessarily, to date anyway, been a strategy of customers. Having said that, issues around security, governance, compliance have forced organizations and boards to say, "You know what, we need IT more involved, "let's make multi-cloud part of our strategy, "not only for governance and compliance "and making sure it adheres to the corporate edicts, "but also to put the right workload on the right cloud." So having some kind of strategy there is important. Who are the players there? Obviously VMware, I would say, right now, is the favorite because it's coming from a position of strength in the data center. Microsoft with it's software state, Cisco coming at it from a standpoint of network strength. Google, with Anthos, that announcement earlier this year, and, of course, Red Hat with IBM. Who's the company that I didn't mention in that list? >> Well, of course, you can't talk about cloud, Dave, without talking about AWS. So, as you stated before, they don't really want to talk about hybrid, hey, come on, multi-cloud, why would you do this? But any customer that has a multi-cloud environment, they've got AWS. And the VMware-AWS partnership is really interesting to watch. It will be, you know, where will Amazon grow in this environment as they find their customers are using multiple solutions? Amazon has lots of offerings to allow you leverage Kubernetes, but, for the most part, the messaging is still, "We are the best place for you, "if you do everything on us, "you're going to get better pricing "and all of these environments." But as you've said, Dave, we never get down to that homogeneous, you know, one vendor solution. It tends to be, you know, IT has always been this heterogeneous mess and you have different groups that purchase different things for different reasons, and we have not seen, yet, public cloud solving that for a lot of customers. If anything we often have many more silos in the clouds than we had in the data center before. >> Okay. Another big story that we're following, big trend, is the battle for networking. NSX, the software networking component, and then Cisco, who's got a combination of, obviously, hardware and software with ACI. You know, Stu, I got to say, Cisco a very impressive company. You know, 60+% market share, being able to hold that share for a long time. I've seen a lot of companies try to go up against Cisco. You know, the industry's littered with failures. It feels, however, like NSX is a disruptive force that's very hard for Cisco to deal with in a number of dimensions. We talked about multi-cloud, but networking in general. Cisco's still a major player, still, you know, owns the hardware infrastructure, obviously layering in its own software-defined strategy. But that seems to be a source of tension between the two companies. What's the customer perspective? >> Yeah, so first of all, Dave, Cisco, from a hardware perspective, is still going strong. There are some big competitors. Arista has been doing quite well into getting in, especially, a high performance, high speed environments, you know, Jayshree Ullal and that team, you know, very impressive public company that's doing quite well. >> Service providers that do really well there. >> Absolutely, but, absolutely, software is eating the world and it is impacting networking. Even when you look at Cisco's overall strategy, it is in the future. Cisco is not a networking company, they are a software company. The whole DevNet, you know, group that they have there is helping customers modernize, what we were talking about with Pivotal. Cisco is going there and helping customers create those new environments. But from a customer standpoint, they want simplicity. If my VMware is a big piece of my environment, I've probably started using NSX, NSX-T, some of these environments. As I go to my service providers, as I go to multi-cloud, that NSX piece inside my VMware cloud foundation starts to grow. I remember, Dave, a few years back, you know, Pat Gelsinger got up on a stage and was like, "This is the biggest collection of network administrators that we've ever seen!" And everybody's looking around and they're like, "Where? "We're virtualization people. "Oh, wait, just because we've got vNICs and vSwitches "and things like that." It still is a gap between kind of a hardcore networking people and the software state. But just like we see on storage, Dave, it's not like vSAN, despite it's thousands and thousands of customers, it is not the dominant player in storage. It's a big player, it's a great revenue stream, and it is expanding VMware beyond their core vSphere solutions. >> Back to Cisco real quickly. One of the things I'm very impressed with Cisco is the way in which they've developed infrastructures. Code with the DevNet group, how CCIEs are learning Python, and that's a very powerful sort of trend to watch. The other thing we're watching is VMware-AWS. How will it affect spending, you know, near-term, mid-term, long-term? Clearly it's been a momentum, you know, tailwind, for VMware today, but the questions remains, long-term, where will customers place their bets? Where will the spending be? We know that cloud is growing dramatically faster than On Prem, but it appears, at least in the near- to mid-term, for one, two, maybe three more cycles, maybe indefinitely, that the VMware-AWS relationship has been a real positive for VMware. >> Yeah, Dave, I think you stated it really well. When I talked to customers, they were a bit frozen a couple of years ago. "Ah, I know I need to do more in cloud, "but I have this environment, what do I do? "Do I stay with VMware, do I have to make a big change." And what VMware did, is they really opened things up and said, "Look, no, you can embrace cloud, and we're there for you. "We will be there to help be that bridge to the future, "if you will, so take your VMware environment, "do VMware cloud in lots of places, "and we will enable that." What we know today, the stat that we hear all the time, the old 80/20 we used to talk about was 80% keeping the lights on, now the 80% we hear about is, there's only 20% of workloads that are in public cloud today. It doesn't mean that that other 80% is going to flip overnight, but if you look over the next five to ten years, it could be a flip from 80/20 to 20/80. And as that shift happens, how much of that estate will stay under VMware licenses? Because the day after AWS made the announcement of VMware cloud on AWS, they offered some migration services. So if you just want to go on natively on the public cloud, you can do that. And Microsoft, Google, everybody has migration services, so use VMware for what I need to, but I might go more native cloud for some of those other environments. So we know it is going to continue to be a mix. Multi-cloud is what customers are doing today, and multi- and hybrid-cloud is what customers will be doing five years from now. >> The other big question we're watching is Outposts. Will VMware and Outposts get a larger share of wallet as a result of that partnership at the expense of other vendors? And so, remains to be seen, Outposts grabbed a lot of attention, that whole notion of same control plane, same hardware, same software, same data plane On Prem as in the Data Center, kind of like Oracle's same-same approach, but it's seemingly a logical one. Others are responding. Your thoughts on whether or not these two companies will dominate or the industry will respond or an equilibrium. >> Right, so first of all, right, that full same-same full stack has been something we've been talking about now, feels like for 10 years, Dave, with Oracle, IBM had a strategy on that, and you see that, but one of the things with VMware has strong strength. What they have over two decades of experiences on is making sure that I can have a software stack that can actually live in heterogeneous environments. So in the future, if we talk about if Kubernetes allows me to live in a multi-cloud environment, VMware might be able to give me some flexibility so that I can move from one hardware stack to another as I move from data centers to service providers to public clouds. So, absolutely, you know, one to watch. And VMware is smart. Amazon might be their number one partner, but they're lining up everywhere. When you see Sanjay Poonen up on stage with Thomas Kurian at Google Cloud talking about how Anthos in your data center very much requires VMware. You see Sachi Nodella up on stage talking about these kind of VMware partnerships. VMware is going to make sure that they live in all of these environments, just like they lived on all of the servers in the data center in the past. >> The other last two pieces that I want to touch on, and they're related is, as a result of Dell's ownership of VMware, are customers going to spend more with Dell? And it's clear that Dell is architecting a very tight relationship. You can see, first of all, Michael Dell putting Jeff Clarke in charge of everything Dell was brilliant, because, in a way, you know, Pat was kind of elevated as this superstar. And Michael Dell is the founder, and he's the leader of the company. So basically what he's created is this team of rivals. Now, you know, Jeff and Pat, they've worked together for decades, but very interesting. We saw them up on stage together, you know, last year, well I guess at Dell Technologies World, it was kind of awkward, but so, I love it. I love that tension of, It's very clear to me that Dell wants to integrate more tightly with VMware. It's the clear strategy, and they don't really care at this point if it's at the expense of the ecosystem. Let the ecosystem figure it out themselves. So that's one thing we're watching. Related to that is long-term, are customers going to spend more of their VMware dollars in the public cloud? Come back to Dell for a second. To me, AWS is by far the number one competitor of Dell, you know, that shift to the cloud. Clearly they've got other competitors, you know, NetApp, Huawei, you know, on and on and on, but AWS is the big one. How will cloud spending effect both Dell and AWS long-term? The numbers right now suggest that cloud's going to keep growing, $35, $40 billion run-rate company growing at 40% a year, whereas On Prem stuff's growing, you know, at best, single digits. So that trend really does favor the cloud guys. I talked to a Gartner analyst who tracks all this stuff. I said, "Can AWS continue to grow? It's so big." He said, "There's no reason, they can't stop. "The market's enormous." I tend to agree, what are your thoughts? >> Yeah, first of all, on the AWS, absolutely, I agree, Dave. They are still, if you look at the overall IT spend, AWS is still a small piece. They have, that lever that they have and the influence they have on the marketplace greatly outweighs the, you know, $30, $31 billion that they're at today, and absolutely they can keep growing. The one point, I think, what we've seen, the best success that Dell is having, it is the Dell and VMware really coming together, product development, go to market, the field is tightly, tightly, tightly alligned. The VxRail was the first real big push, and if they can do the same thing with the vCloud foundation, you know, VMware cloud on Dell hardware, that could be a real tailwind for Dell to try to grow faster as an infrastructure company, to grow more like the software companies or even the cloud companies will. Because we know, when we've run the numbers, Dave, private cloud is going to get a lot of dollars, even as public cloud continues its growth. >> I think the answer comes down to a couple things. Because right now we know that 80% of the spend and stall base is On Prem, 20% in the cloud. We're entering now the cloud 2.0, which introduces hybrid-cloud, On Prem, you know, connecting to clouds, multi-cloud, Kubernetes. So what it comes down to, to me Stu, is to what degree can Dell, VMware, and the ecosystem create that cloud experience in a hybrid world, number one? And number two, how will they be able to compete from a cost-structure standpoint? Dell's cost-structure is better than anybody else's in the On Prem world. I would argue that AWS's cost-structure is better, you know, relative to Dell, but remains to be seen. But really those two things, the cloud experience and the cost-structure, can they hold on, and how long can they hold on to that 80%? >> All right, so Dave here's the question I have for you. What are we talking about when we're talking about Dell plus VMware and even add in Pivotal? It's primarily hardware plus software. Who's the biggest in that multi-cloud space? It's IBM plus Red Hat, which you've stated emphatically, "This is a services play, and IBM has, you know, "just got, you know, services in their DNA, "and that could help supercharge where Red Hat's going "and the modernization." So is that a danger for Dell? If they bring in Pivotal, do they need to really ramp up that services? How do they do that? >> Yeah, I don't think it's a zero sum game, but I also don't think there's, it's five winners. I think that the leader, VMware right now would be my favorite, I think it's going to do very well. I think Red Hat has got, you know, a lot of good market momentum, I think they've got a captive install base, you know, with IBM and its large outsourcing business, and I think they can do pretty well, and I think number three could do okay. I think the other guys struggle. But it's so early, right now, in the hybrid-cloud world and the multi-cloud world, that if I were any one of those five I'd be going hard after it. We know Google's got the dollars, we know Microsoft has the software state, so I can see Microsoft actually doing quite well in that business, and could emerge as the, maybe they're not a long-shot right now, but they could be a, you know, three to one, four to one leader that comes out as the favorite. So, all right, we got to go. Stu, thanks very much for your insights. And thank you for watching and listening. We will be at VMworld 2019. Three days of coverage on theCUBE. Thanks for watching everybody, we'll see you next time. (upbeat music)

>> Live, from Miami Beach, Florida it's theCUBE covering VeeamON 2019. Brought to you by Veeam. >> Welcome back to Miami everybody, sunny Miami. Dave Vellante here with Peter Burris. You're watching theCUBE, the leader in live tech coverage. We go out to the events, we extract the signal from the noise, and there's a lot of noise here, and there's a lot of signal here. VeeamON 2019, this is theCUBE's third year doing Veeam's big customer show. We started doing NOLA, last year was Chicago, a very hip location here at the Fountainebleau Hotel. Carey Stanton is here. He is the Vice President of business development and corporate dev, corp-dev at Veeam and Jeff Kalat, a CUBE alum, >> Yep, you bet. >> long-time friend of theCUBE, senior director of strategic alliances at Hewlett-Packard Enterprise. Gentlemen, welcome to theCUBE, good to see you. >> Thanks for having us. >> You're very welcome. Carey let me start with you. Uh, I really want to talk about sports with you, but anyway, we won't. We'll hold that off. (laughter) >> (Carey) One day. >> Momentum. You're relatively new to Veeam. But you've been here now a couple years. Where's this momentum coming from, from your perspective, as a recent Veeam entrant. >> Yeah, no, the momentum's coming from across the board, but I think a big momentum is coming from new product innovation that we're doing with Office 365, and we're just driving up subscription business momentum that we have for the pent-up demand that we had for Euphor. But a big part is coming from our relationships like we have with HPE. We invested heavily a few years ago when we announced that joint reseller agreement. What we've done is not just continued to sell but add a plethora of new solutions to it Jeff's going to talk about what we're doing with GreenLake adding SimpliVity, adding the overall solutions that we have. But that's a team that started two years ago with two people that we now have over 20 people just working, dedicated with HPE on co-selling. And I'm happy to say that our business in first half, or I should say year-to-date is up 50% year over year on a global reseller business. >> Well Jeff, theCUBE as you know, has been documenting the ebbs and flows of HP and HPE over the last, better part of a decade. And when HP split in two, to HPE and HP Inc. One of the things that-- And then sold the software business, or a large portion of it. One of the things that went was data protection. >> (Jeff) You got it. >> (Dave) And that just opened up a whole new set of opportunities and Veeam was obviously one of those. And it's starting to pay dividends. >> You got it, yeah, to that point, that evolution through HPE.nex, we were able to focus on our core. And the benefit, the inherit benefit is that we can partner with the best of class in the marketplace. And Veeam is considered best of class. So when it comes to data availability, data protection, we're all in. And we're actually, as a company, we're actually doubling down now in our partnership with Veeam. We've actually taken them from, maybe a traditional storage alliance, and taken them to be one of our top global strategic alliances in the line of the Microsoft's, the Veeam, or as the SAP's. Because we see great momentum, we see great customer adoption and interest and we see great innovation at the product level, but also in the whole global market chain. >> Well talk a little more about that because it was, the move allowed you to form new partnerships that dramatically expanded your TAM but, I'm interested in the nature of the partnership. Is it, just go to market, is there engineering integration? Talk about that a little bit. >> Our first step when we came together and said okay let's take this to the next level, we realized we need to narrow our focus to the core customer values and we really settled on three core areas of this relationship. One is first, data protection for, around our intelligence storage, as you know, our storage portfolio 3 Par, Nimble, we've had a great relationship there, we continue to drive co-innovation at the road map level, but also drive go-to-market activities and marketing and we have feet on the street actively selling. So the first one's really expanding our work with storage. Now we're taking it, we're extending, if you will, through consumption based data management, using, well HPE has GreenLake, Greenlake we see 40% of customers by 2020 are going to be consuming their data center IT more in a consumption model. There are inherent benefits of that. What we now have offered and launched just recently Backup,is a service through our flex capacity coming out of GreenLake, providing customers the choice, if you will, to move from a, not from a capital expenditure, but, by the drink, if you will, consumption base. So that's the second core area. And the third core area is new for us, and that's around our HCI portfolio. As you know, we purchased SimpliVity. Well, SimpliVity has a lot of inherent backup, dedupe compression in line, but there actually are some Zivik use cases that we're deploying out there that show how Simplivity in a Veeam environment can actually, customers can see actually incremental values. So, those are the three key areas we're focused on as we up-level this whole relationship and partnership. >> (Dave) So Carey, please. >> I was just going to say if you think of, we talk a lot about we go after the technical decision maker in all these, hundreds of people here at the conference. And then going towards the executive, the enterprise. And it's through relationships with HPE on this, the flex capacity, being able to go to a customer and offer a true enterprise solution that they're looking for, everyone wants as a service. And so we've closed multiple deals this year thanks to having the Greenlake. So, our relationship with HPE continues to elevate and the enterprise is a result of the solutions that we're doing. Not just selling storage, but selling a complete solution. >> Rathmeyer was kind of tongue-in-cheek this morning at the analyst and media event. He was talking about how in 2013 he predicted that Veeam would be a billion dollar company by 2018. And he said he missed it by six months. One of the reasons was because you know, you got the subscription model. So that's, you know GreenLake obviously is part of that, maybe not the predominant part yet but I think you said you have 40% you're saying will consume, as a service by 2020. >> 2020, actually soon. >> (Dave) Okay so pretty substantial. >> Yeah. >> What's driving that? Is it just CFO's want to go to opex? Or is it-- >> I think it's a, there are many, the value you get without locking yourself into every three years needing to do a total forklift upgrade of your infrastructure, that's one thing. The second thing is moving it from a capital expenditure to an opex expediture. It can be planned, it can be budgeted as well. The third thing is the customer doesn't have to mess with all the technology, updating the firmware, the drivers and all that. We will do it on their behalf, right? We give them the economics of cloud on prem and that's the beauty of that. So we believe, and lock-step in alignment with Veeam, the world is hybrid in the future. So on prem is here to live forever, but increasingly we need to leverage the assets in the cloud and this is providing the ability of doing it in a consumption model. >> And it's not just the economics it's the experience as well. >> Oh totally, if you want to, if you live in a house and you're a home owner, and you want a new bathroom, you put in a bathroom. If you're a renter you end up in a long, laborious negotiation that you're going to lose. And the same kind of notion is here as people realize there's greater strategic opportunities and options from how to use their data differently. They want access to those options. And that's the basis of agility. The opex to capex is good but you've got to put it in business context. It's how you create additional options in your data oriented investments. So, as you guys are moving forward are you starting to have that conversation with customers? And relating data, data value, asset management, Backup, Restore, to this broader picture, this broader strategic union you're putting together? >> Yeah and that is a key imperative of how we get even stronger in traction is telling the bigger picture. And you look at the world of yesterday, where it's just backup and recovery, look at the advent of edge devices and the amount of data that's being put at the edge. Now look at AI and machine learning where, the data is inherently needed to project the changes and the needs that are in the future. So, I think these all tie in to the play and I believe at GreenLake our consumption model can provide great benefits, above and beyond the traditional backup and recovery. >> And I was just going to add to it, is that it also brings in our ecosystems, so the relationship, that tier one relationship we both have within Microsoft. So when you start looking at a solution that the business owner wants, they want to be able to say I need cloud, I need on prem, I need backup recovery, and so by going through GreenLake they can encompass, we have a broader ecosystem that we're able to bring in versus just single thread in these discussions where you're going in and selling a data protection story and leaving but you didn't solve that broader customer problem, and with GreenLake, they are solving that overall problem. >> Yeah, I'd just like to say nothing really happens until you make a sale. You talked about some of the growth earlier. But why Veeam? Obviously you're getting some traction in the market but there's a lot of players out there that you could partner with. And you do partner with others. But why Veeam? What makes Veeam so special? >> I think one, inherently we are lock-step in agreement of the over-arching strategy, we talked about hybrid, we talked about portfolio. Two is we've got the engagement at all levels of our organization, which all stems truly from having a unified roadmap. Innovation has to happen at the roadmap level and you need to be lock-step aligned through the value chain in the way you take it to market, the way you align your sellers, the way you deliver a value proposition that truly is valuable to our customers. It's proven from our IDC research that customers who are deploying and purchasing HPE and Veeam solutions are seeing a 250 plus percent ROI on that investment. So there's this huge customer benefit, and why not go bigger and go bigger and go bigger with them. >> (Dave) Same question to you Carey. So why HPEE, why is HPEE so special as a partner? >> I think HPE first and foremost, being that first partner that came to us to want to go all in, as Jeff was talking about, from day one, and top down. So we're not just working with a department of HPE we have it from Antonio, from Jim Jackson down the stack in the organization. We were aligned from day one. They lead with data protection, it's no longer, it's a a nice to have, it's a requirement in every one of their sales processes. We're their lead partner that they have in data protection. And what we'd been able to do and have that enterprise visibility by them assisting us on our journey. So, from across the board, whether it's through management, through technology, or just in true go-to-market, they're by far our number one partner that we have on our sell-with motion. >> So Jeff, I want to talk to the group about GreenLake. And Carey, I'd love to hear your thoughts on it as well. What are the challenges that go into a consumption-based model for a company that's traditionally sold products. As part of this overall move in all industries, all sectors, from a product to a services orientation. How do introduce metrics that are associated with the service? Because it used to be you just sold a product. And the metrics for storage are different from the metrics from backup, different from the metrics from compute. So as you've gone to GreenLake, because I love GreenLake, what kind of specialized, or specific types of things, how are you selling it to try to tie that service into the business outcomes that your customers are trying to see? >> Well clearly, I believe, some of our first wins, early wins we were able to monitor and metric the value the customers were getting, the service levels they've received and so we have a number of different methods of capturing the data, the empirical data, on the service levels and being able to use that to then, use that in the selling motion to be able to articulate the experience and the expectations that come with that. >> What are some of the harder problems that your customers are asking you to solve? And how are you approaching it together? >> Well I think that what we're talking about with GreenLake here is a real hard problem to solve, right? Consumpton based across geographic regions, across different technologies, on prem, off prem, hybrid. And we don't have another partner that we can go to market with when we hear this from the customer. So when we hear it, we know that we can lean in. And we truly are, to follow up from your question, is the fact is that HPEE is solving all this and then bringing us in as their number one partner, is the differentiator that we love. So solving those problems at an enterprise level, and at a commercial level and doing it with one partner is easy, right? We're shortening the sales cycle, increasing the value to the customer. >> Yeah, one thing I have to say and it's always, complexity is always a problem and an issue, right? So it will always be a problem and an issue and we will always be striving to improve and improve the complexity. But you know, Veeam, we're super simple, right? And we, especially when you look in our HCI portfolio and that's all about driving simplicity, if you will, in a way you can deploy IT, you can scale it. So I think complexity is, and will always be a problem. But it's a given too and it will always be there. And we will always be striving to make it even easier and easier for our joint customers. >> Well one of the challenges that you face, especially as you go to a sevices-only model, is how do you put a price on the outcomes that you're delivering as opposed to the price on the assets that the person is taking? So I think one of the biggest challenges, and it sounds like you guys are pretty close to getting this together, but it's part of a broader portfolio, is where does this, let's put it slightly differently. We've talked about this before in some of the other interviews. backup is moved from a have to have it, for maybe compliance or it just makes good sense to have it, to a strategic business capability for a company that's increasingly differentiating itself on it's data assets. That moves this conversation about, as a service, into a different group and a different, different level. And that's what I'm wondering. Those metrics have got to be a big part of the conversation. Because the entire organization is now recognizing backup is more than just a bolt-on. >> Yeah. One example, one of our close partners, we're here with them, Island. So, disaster recovery as a service, right? They standardize on Nimble and Veeam and together, that combination to them was good enough to build their business on. So there's inherent value and we expect to continue to grow and be able to expose that value. 'Cause we believe more and more customers, not just your pure enterprises but, from your mid-market all the way up, can be able to utilize and see that value and experience it. >> Just a point of clarification if I could on the HCI piece. Specifically around SimpliVity. So SimpliVity was known for it's backup use cases. >> (Jeff) Sure. Still is. >> So where does Veeam and SimpliVity fit, versus Simplivity solo. >> Yeah, yeah. Well first and foremost yes, Simplivity has inherent, great data availability features, inherent in it. That's core to it. But in reality, for customers, let's say a mixed environment, whether it be virtualized, non-vitrualized, there are inherent benefits to having Veeam in addition to SimpliVity. Another example would be customers who want to really have the access to be able to do specific file restores. So we see capabilities in running Veeam in parallel with SimpliVity. Actually I see a lot of customers that are deploying SimpliVity are also deploying Veeam and there, it's an additive value that they're seeing. And they're able to parse out features and functionality and be able to increase their level of value that couldn't be done, just purely from a Simplivity standpoint alone. >> All right Carey, we'll give you the final word. >> The final word is-- >> Bumper sticker on VeeamON. >> (laughing) >> Bumper stickers. >> I would say that, what we're doing here with HPEE, we would say we're in the first inning. What we're seeing on the innovations that we have coming out later this year with HPEE, coming into next year, and we're just thrilled to be having them a platinum sponsor of VeeamON and look forward to another successful year. >> Awesome. Guys thanks so much for coming on. I got to ask you, Boston-based person, Bruins fan? >> (Carey) Bruins, yes. >> You worried about Tuulka, at all, a 12 day layoff? >> (Carey) Nope. >> No problem. >> (Carey) Nope, Chara's going to be nice and rested and-- >> (Dave) Chara, more Chara or less Chara? >> I'm going to, yes well. I got to take more thanks. >> Okay, all right, good. We'll see, we'll see. Go Bruins. All right guys thanks so much for coming out and thank you for watching. Keep it right there we'll be back with our next guest shortly right after this break. You're watching theCUBE from VeeamON, 2019 from Miami. Be right back.

>> From Gillette Stadium, in Foxborough, Massachusetts, it's theCUBE covering VTUG Winter Warmer 2019, brought to you by SiliconANGLE Media. >> Hi I'm Stu Miniman and this is theCUBE at VTUG Winter Warmer 2019 at Gillette Stadium, home of the New England Patriots, AFC Champions week out from going to Super Bowl 53. Joining me is a user from the great state of Maine, Dawnna Pease, who is the Director of Computing Infrastructure and Services for the state of Maine, thank you for joining us. >> Yes, thank you. >> Alright so Dawnna, you've been to a few VTUGs, of course the Summer Fest, which is, you know it might not be quite as big, as the winter one, but it is known even broader, I've known people come from out of the country because there's a giant lobster bake at the end of the day. I've been a few times, but you know tell us, you've been to VTUG before, yes? >> We have, so I have been to many, especially in Maine. And this is probably our fourth or fifth one that I've broughten the team from the state of Maine here and I feel it's really crucial and important because it allows them to network, to talk with their peers and to look at the technologies of how we can provide services for the constituents of the state of Maine and for our services that we offer within our office. >> Yeah so we always love talking to the users, we love to be able to help you share with your peers what you've been learning and actually I've had lots of great government discussions over the last few years, even attended, I attended a public sector show in the cloud space last year, and it's always fascinating because people have a misconception when it comes to what it's like to be IT in government, so let's dig into that a little bit. Tell us a little bit about your role, your group, what's kind of under your purview. >> Sure, I've been in state government going on 33 years as a public servant, very proud of that. I have a great group and I am the Director of Computing Infrastructure Services and it's really directory services, Microsoft stack. We have VMWare environment that we been probably nine years now and we're just implementing SimpliVity our hyperconverged, and after extensive research on that, we really solidified and selected HPE SimpliVity because in state government we had a lot of aging servers that needed to be replaced as well as our VM environment which was 44 nodes and it was a huge investment so not only on the licensing, hardware, storage, the compute part as well. So lookin' at the hyperconverged that was just one of many of our technologies that we looked at. >> So Dawnna take us back, how long ago did you start looking at that initiative? >> Oh 18 months. >> Okay, and was it a single location, multiple locations, can you give us any, how many you know servers or VMs or locations that this solution was going to span? >> For me it was actually spannin' and takin' on many of our on-prem solutions that we have. Like our SQL environment, our application hostin', the one offs, we're bringin' into that. As well as upgrading our existing VM cluster. So it's really taken on and morphed even more. We have a lot of net new as that want to participate in this environment so for us it is literally like a cloud solution, but it's for within our own private cloud solution on that. >> And these were critical business productivity applications that you're talking about? >> Absolutely >> This wasn't a new project to do, you know, early days of hyper converged, it was like oh I'm doing desktop virtualization, let me roll this out. I mean you're talking about databases and applications. >> Absolutely so we run close to, little over 600 servers for virtual and physical, so when all said and done within our hyperconverged our goal is to really be under 60 physicals left within state government. And currently today we have probably over 400 in our virtual environment today. So we're really expanding that more and bringing the services all into one knowing that we're going to have compute network and everything in our storage will all be in this environment. Plus we have a legacy storage environment, so when you're thinking of your legacy storage environment and you're looking at your refreshment of hardware and all the licenses around that our return on investment was huge for the state of Maine. So it was literally the wise choice for us to do within state government for tax payers, saving money. Also for the state as a whole. >> I have to imagine in addition to kind of the Capex piece if you're saying going from 900 to 400 and looking to get down to 60, operationally hopefully it makes the jobs of you know you and your team, a little bit easier once things are up and running. And that's one of the promises of hyperconverged, is it should be that cloud layer, it should be almost invisible when you talk about, it's just a pool that my virtualization lives on but I don't need to touch and rack and stack stuff the way that I might have in the past. >> Exactly, exactly, good point on that. Also on that we've really taken a broad look at how we can leverage the cloud so from a disaster recovery aspect and not only havin' the site resilience between two data centers, but how we can leverage the cloud for that continuity aspect. So we're really broadening that and the team's doing a fabulous, excellent job at that. >> Are you doing the Cloud DR today or is that a future plan? >> That is future. >> Okay, going to leverage a public cloud as that Are you far enough down? >> Government. So we have Azure today and we have a government tenant on that so we will use that aspect within the government tenant as well. >> Great so primarily Microsoft applications, you've moved into hyperconverged and you leveraged the Azure government certified cloud pieces. >> Correct >> Okay, awesome, when you started going down this path did you have in your mind hyperconverged or is that, how did you end up on that type of solution? >> So no, we didn't. Doin' the research on that and lookin' at all options, and really doin' the research with that, hyperconverged was more of makin' sense from the return on investment and also from a ... I want to say the simplified fashion, like you said it's simple you want to make it not so complex, it provided everything within that environment, and it was really based on how we were structured today, the investment that we would need to do if didn't go down this path. And taking in, so we did go with the hyperconverged. >> In your previous environment were you using HPE for the servers or the storage? >> So we were HPE, we are an HPE shop. And we have VMC, we have Pure Storage, we have different aspects of our storage today that exist so lookin' at that as well, we had an investment that we either needed to upgrade, replace, and, or invest. >> What I was poking at a little bit is were you HPE before, was that part of the decision to buy SimpliVity which is part of the HPE family or was that not a major factor? >> It was not a major factor, I mean we were ... We have always been a HPE shop, however we had criteria we were lookin' at, so you know after doing the research and we had 15, we were lookin' at 15 vendors at the time. We narrowed it down to like eight, and out of that we really narrowed it down to two that were in the quadrant, in the Gartner quadrant. And in doing our own research and study and bringin' all the vendors in and everything and what we had already invested what we currently had, it really came out to SimpliVity as the choice. >> And your 18 months into this, you've got some Cloud DR in the future, how are things going? What have you learned so far, is there anything you would have done differently or any advice you'd give to your peers if they're starting to go down this path? >> Do the research, do the research, be very thorough in what you're lookin' at for your requirements. And you know not only the research but look at what you've already invested in and take that into consideration and what your return on investment, what you're looking for your return on investment because you need to look just past not only your hosting environment but it really goes into can your network support that environment? Do you need to upgrade your network, your storage aspects, licensing aspects of that as well? So it's a huge investment, however look at the money they already pay in. >> Yeah licensing, one of those things when you talk about that great reduction of servers, are you today or do you expect in the future some of those licensing costs from the database, the virtualization, will those actually be able to be scaled down? >> Absolutely, and that was part of our ROI as well. By a lot, you know and that is one of the benefits of the hyperconverged as well. Once you set that up and purchase the proper licenses, I mean like data center licenses, you can put in as many VMs as you need within that environment and that's important. So you're really just looking at your compute at that, what you need for storage and compute. >> Yeah, I'm curious just spoke, cause we have, we've worked with clients for years on that and often times I've got a ELA or I've got a multi-year contract there and I have to renegotiate it, has that gone smoothly? Have there been any bumps along the road or is it pretty straightforward that licensing can be a huge chunk of your budget and like oh great, I'm two years later and I'm going to save myself a lot of money. >> So I actually am the administrator of our enterprise agreement with Microsoft, had been for many years, so I know what we have. And so I work very closely with that and I as far as the licensing and what we have, so for the renewals, I will say it gets easier. I found that being consolidated because when the agencies own their IT, at the time, we had many enterprise agreements and that was more complex so if you can actually consolidate and go into one, we have one enterprise agreement, or under the three I would say, it's much more manageable on that. So I don't find that that's a show stopper on that, it's gotten easier over the years. Simplified, it's more simplified. >> It's great to hear that and actually Microsoft has made great strides, Microsoft today is not the Microsoft of fives years ago or 10 years ago. >> Correct, I would agree. >> So, Dawnna Pease, pleasure talking to you. Thank you so much for sharing your experiences and be sure to check out thecube.net for all the recordings from the VTUG Winter Warmer 2019 as well as all of the other shows. I'm Stu Miniman and thank you for watching theCUBE.

>> Narrator: Live from the Bill Graham Auditorium in San Francisco, it's theCUBE, covering Pure Storage Accelerate, 2018, brought to you by Pure Storage. >> Welcome back to theCUBE's coverage of Pure Storage Accelerate 2018. I'm Lisa Martin. Been here all day with Dave Vellante. We're joined by David Floyer now. Guys, really interesting, very informative day. We got to talk to a lot of puritans, but also a breadth of customers, from Mercedes Formula One, to Simpson Strong-Tie to UCLA's School of Medicine. Lot of impact that data is making in a diverse set of industries. Dave, you've been sitting here, with me, all day. What are some of the key takeaways that you have from today? >> Well, Pure's winning in the marketplace. I mean, Pure said, "We're not going to bump along. "We're going to go for it. "We're going to drive growth. "We don't care if we lose money, early on." They bet that the street would reward that model, it has. Kind of a little mini Amazon, version of Amazon model. Grow, grow, grow, worry about profits down the road. They're eking out a slight, little positive free cashflow, on a non-gap basis, so that's good. And they were first with All-Flash, really kind of early on. They kind of won that game. You heard David, today. The NVMe, the first with NVMe. No uplifts on pricing for NVMe. So everybody's going to follow that. They can do the Evergreen model. The can do these things and claim these things as we were first. Of course, we know, David Floyer, you were first to make the call, back in 2008, (laughs) on Flash and the All-Flash data center, but Pure was right there with you. So they're winning in that respect. Their ecosystem is growing. But, you know, storage companies never really have this massive ecosystem that follow them. They really have to do integration. So that's, that's a good thing. So, you know, we're watching growth, we're watching continued execution. It seems like they are betting that their product portfolio, their platform, can serve a lot of different workloads. And it's going to be interesting to see if they can get to two billion, the kind of, the next milestone. They hit a billion. Can they get to two billion with the existing sort of product portfolio and roadmap, or do they have to do M&A? >> David: You're right. >> That's one thing to watch. The other is, can Pure remain independent? David, you know well, we used to have this conversation, all the time, with the likes of David Scott, at 3PAR, and the guys at Compellent, Phil Soran and company. They weren't able, Frank Slootman at Data Domain, they weren't able to stay independent. They got taken out. They weren't pricey enough for the market not to buy them. They got bought out. You know, Pure, five billion dollar market cap, that's kind of rich for somebody to absorb. So it was kind of like NetApp. NetApp got too expensive to get acquired. So, can they achieve that next milestone, two billion. Can they get to five billion. The big difference-- >> Or is there any hiccup, on the way, which will-- >> Yeah, right, exactly. Well the other thing, too, is that, you know, NetApp's market was growing, pretty substantially, at the time, even though they got hit in the dot-com boom. The overall market for Pure isn't really growing. So they have to gain share in order to get to that two billion, three billion, five billion dollar mark. >> If you break the market into the flash and non flash, then they're in the much better half of the market. That one is still growing, from that perspective. >> Well, I kind of like to look at the service end piece of it. I mean, they use this term, by Gartner, today, the something, accelerated, it's a new Gartner term, in 2018-- >> Shared Accelerated Storage >> Shared Accelerated Storage. Gartner finally came up with a category that we called service end. I've been joking all day. Gartner has a better V.P. of naming than we do. (chuckles) We're looking' at service end. I mean, I started, first talking about it, in 2009, thanks to your guidance. But that chart that you have that shows the sort of service end, which is essentially Pure, right? It's the, it's not-- >> Yes. It's a little more software than Pure is. But Pure is an awful lot of software, yes. And showing it growing, at the expense of the other segments, you know. >> David: Particularly sad. >> Particularly sad. Very particularly sad. >> So they're really well positioned, from that standpoint. And, you know, the other thing, Lisa, that was really interesting, we heard from customers today, that they switched for simplicity. Okay, not a surprise. But they were relatively unhappy with some of their existing suppliers. >> Right. >> They got kind of crummy service from some of their existing suppliers. >> Right. >> Now these are, maybe, smaller companies. One customer called out SimpliVity, specifically. He said, "I loved 'em when they were an independent company, "now they're part of HPE, meh, "I don't get service like the way I used to." So, that's a sort of a warning sign and a concern. Maybe their, you know, HPE's prioritizing the bigger customers, maybe the more profitable customers, but that can come back to bite you. >> Lisa: Right. >> So Pure, the point is, Pure has the luxury of being able to lose money, service, like crazy, those customers that might not be as profitable, and grow from it's position of a smaller company, on up. >> Yeah, besides the Evergreen model and the simplicity being, resoundingly, drivers and benefits, that customers across, you know, from Formula One to medical schools, are having, you're right. The independence that Pure has currently is a selling factor for them. And it's also probably a big factor in retention. I mean, they've got a Net Promoter Score of over 83, which is extremely high. >> It's fantastic, isn't it? I think there would be VMI, that I know of, has even higher one, but it's a very, very high score. >> It's very high. They added 300 new customers, last quarter alone, bringing their global customer count to over 4800. And that was a resounding benefit that we were hearing. They, no matter how small, if it's Mercedes Formula One or the Department of Revenue in Mississippi, they all feel important. They feel like they're supported. And that's really key for driving something like a Net Promoter Score. >> Pure had definitely benefited from, it's taken share from EMC. It did early on with VMAX and Symmetrix and VNX. We've seen Dell EMC storage business, you know, decline. It probably has hit bottom, maybe it starts to grow again. When it starts to grow again, I think, even last quarter, it's growth, in dollars, was probably the size of Pure. (chuckles) You know, so, but Pure has definitely benefited from stealing share. The flip side of all this, is when you talk to you know, the CxOs, the big customers, they're doing these big digital transformations. They're not buying products, you know, they're buying transformations. They're buying sets of services. They're buying relationships, and big companies like Dell and IBM and HPE, who have large services arms, can vie for certain business that Pure, necessarily, can't. So, they've got the advantage of being smaller, nimbler, best of breed product, but they don't have this huge portfolio of capabilities that gives them a seat at the CxO table. And you saw that, today. Charlie Giancarlo, his talk, he's a techie. The guys here, Kicks, Hat, they're techies. They're hardcore storage guys. They love storage. It reminds me of the early days of EMC, you know, it's-- >> David: Or NetApp. Yeah. Yeah, or NetApp, right. They're really focused on that. So there's plenty of market for them, right now. But I wonder, David, if you could talk about, sort of architecturally, people used to criticize the two controller, you know, approach. It obviously seems to be doing very well. People take shots at their, the Evergreen model, saying "Oh, we can do that too." But, again, Pure was first. Architecturally, what's your assessment of Pure? >> So, the Evergreen, I think, is excellent. They've gone about that, well. I think, from a straighforward architecture, they kept it very simple. They made a couple of slightly, odd decisions. They went with their own NAND chips, putting them into their own stuff, which made them much smaller, much more compact, completely in charge of the storage stack. And that was a very important choice they made, and it's come out well for them. I have a feeling. My own view is that M.2 is actually going to be the form factor of the future, not the SSD. The Ssd just fitted into a hard disk slot. That was it's only benefit. So, when that comes along, and the NAND vendors want to increase the value that they get from these stacks, etc., I'm a little bit nervous about that. But, having said that, they can convert back. >> Yeah, I mean, that seems like something they could respond to, right? >> Yeah, absolutely. >> I was at the Micron financial analysts' meeting, this week. And a lot of people were expecting that, you know, the memory business has always been very cyclical, it's like the disk drive business. But, it looks like, because of the huge capital expenses required, it looks like supply, looks like they've got a good handle on supply. Micron made a good strong case to the street that, you know, the pricing is probably going to stay pretty favorable for them. So, I don't know what your thoughts are on that, but that could be a little bit of a head wind for some of the systems suppliers. >> I take that with a pinch of salt. They always want to have the market saying it's not going to go down. >> Of course, yeah. And then it crashes. (chuckles) >> The normal market place is, for any of that, is go through this series of S-curves, as you reach a certain point of volume, and 3D NAND has reached that point, that it will go down, inevitably, and then cue comes in,and then that there will go down, again, through that curve. So, I don't see the marketplace changes. I also think that there's plenty of room in the marketplace for enterprise, because the biggest majority of NAND production is for consumer, 80% goes to consumer. So there's plenty of space, in the marketplace, for enterprise to grow. >> But clearly, the prices have not come down as fast as expected because of supply constraints And the way in which companies like Pure have competed with spinning disks, go through excellent data reduction algorithms, right? >> Yes. >> So, at one point, you had predicted there would be a crossover between the cost per bit of flash and spinning disk. Has that crossover occurred, or-- >> Well, I added in the concept of sharing. >> Raw. >> Yeah, raw. But, added in the cost of sharing, the cost-benefit of sharing, and one of the things that really impresses me is their focus on sharing, which is to be able to share that data, for multiple workloads, in one place. And that's excellent technology, they have. And they're extending that from snapshots to cloud snaps, as well. >> Right. >> And I understand that benefit, but from a pure cost per bit standpoint, the crossover hasn't occurred? >> Oh no. No, they're never going to. I don't think they'll ever get to that. The second that happens, disks will just disappear, completely. >> Gosh, guys, I wish we had more time to wrap things up, but thanks, so much, Dave, for joining me all day-- >> Pleasure, Lisa. >> And sporting The Who to my Prince symbol. >> Awesome. >> David, thanks for joining us in the wrap. We appreciate you watching theCUBE, from Pure Storage Accelerate, 2018. I'm Lisa Martin, for Dave and David, thanks for watching.

>> Announcer: Live from the Bill Graham Auditorium in San Francisco it's theCUBE. Covering Pure Storage Accelerate 2018. Brought to you by Pure Storage. >> Welcome back to theCUBE's coverage of Pure Accelerate 2018. I'm Lisa Martin with Dave Vellante. We're here in San Francisco at the really cool historic Bill Graham Civic Auditorium. We've been here all day talking with lots of great folks, and we're happy to welcome back another Pure customer, Patrick Welch, the network services manager for the Mississippi Department of Revenue. Welcome Patrick. >> Thank you, appreciate it. >> Tell us a little bit about the Department of Revenue. What do you guys do? What kind of information do you collect? >> Okay, we bring in all tax revenue for the state of Mississippi, including vehicle services. We register all the car tags in Mississippi. Income tax, corporate tax, any revenue that's generated in Mississippi comes through us. >> Tax refunds too? Or do you just take, you give? >> We take and give. I have to do it too. (laughing) >> So talk to us about some of the challenges that you had in your environment. I was reading your case study and what you guys are taking in is totalling $7.8 billion a year. As we just identified, some of it's being given back, but what were some of the, what was the infrastructure like to support that before you became a Pure Storage customer? >> We used an internal Mississippi, they're called ITS, they handle all internal infrastructure, that kind of thing. They were using a mixture of Dell, EMC, Compel that type of thing. We use a third party vendor who has an office shelf software package. And they have about 50 to 60 customers in different states and municipalities and countries around the world. In that environment of Dell, EMC, Compel we were about 47th on their list of productive sites. So we were way far down. We were not performing, latency across the board was horrible. The user experience was the worst. If you've ever been on a website and click the button and seen the spinning wheel, we had that in droves. And not just tax payers, but our internal people that worked DOR were not able to work efficiently. We came in and evaluated, and I looked at the infrastructure, and I said my team can do it better. Then when they said, we'll do it better I was like okay now I have to go out and actually do it better. I started researching other companies, and Pure kind of rose to the top of the list. We talked with other customers and partners, kind of how they tackle those type of challenges. We went through a lot of POC process talked with a lot of vendors, things like that. We ended up buying Pure. We are now number three. We went from almost 50 to three. Out of 50, to three. The only two sites that are ahead of us are smaller sites, their transactions aren't nearly as high as ours. >> Okay hang on, how much of that effect could be attributed to the storage infrastructure? Do you have a sense of that? >> 99% >> Really? >> Yeah because before we had, to be fair Pure is all-flash storage, right? And with Compel and EMC or hybrid arrays, at the end of the day, the latency that we saw was due to read and write input being very low. We implemented Pure, through the roof. Storage is not something we would ever look at if we had a problem. We know that that is performing well above capacity. >> Okay I got another follow up. I asked this earlier to another customer, so you're basically comparing an all-flash array to a sort of previous generation hybrid. So it could have been three, four, five, six years old, it could have been 10 years old, so, you had the option obviously of bringing in an all-flash array from the competition. >> We did. >> And you had processes and procedures tied to that, your data protection and you know those products well, but you chose to switch vendors. Why, you could have gotten comparable all-flash, but you chose Pure. Why did you choose that switch and that disruption? What business benefit did that bring you? >> There were several things that led to that. One of the things that we really liked was the proactive support, in terms of every three years they swap out your controller as part of your support and maintenance agreement. Which is huge for us because we don't have a lot of money, our budget is very small for IT, so I can't afford to replace equipment as often as some people can. Their proactive support model, not just in terms of swapping out equipment, but personnel, our sales team that we deal with, our engineering team that we deal with, we're on a personal basis with these people. I have cellphone numbers, I know who to call. We found that out through talking to other customers that, hey you call these guys, they're going to be there for you. Coming from not having that before, we knew that the people we had before, were not going to perform that same level of service. Even if we went to their all-flash product, we were going to have the same support, that we had had before, which was not good. >> And you didn't have that previously because, why? You weren't like a big bank or you just didn't spend enough? >> Because you're a number and in our business, we didn't spend near enough money to be considered. That's a theory of mine, I'm not sure exactly what the actual issue was, but it felt like we were not big enough to get that kind of attention. >> You're the little guy. Pure makes you feel like you're the big guy. >> We think we're doing okay. We have six arrays now, so were not tiny tiny, but we're not also we're not Citibank. But I've never felt any different than a Citibank type customer with Pure Accelerate. >> You're in two years you said? >> A little over two years, yeah. >> You've had enough experience to, you know when you first buy something, you go on Amazon you see the reviews this is great, you wonder if it's still great two years in. >> Patrick: Oh absolutely. >> You would still give a five star rating? >> Oh absolutely, I've done a case study, customers call me and I'm happy to talk about Pure to anybody. I have a lot of friends in state government, I try to head them off from making bad decisions. I'm like if you like your job, you want to keep your job, buy this. >> It's interesting to me, now one of the things that the customers tell us is they love a lot about Pure, but they really like the simplicity. You mentioned Compellent before, Compellent, in its day, was known for simplicity, compared to the old main frame storage. It's interesting to note how technology has changed in whatever 10, 12 years, comments? >> Yeah Compellent was a great product. Back in the day when it came time to evaluate products, they had not performed along the same track as a company like Pure, which consistently innovates its products. If this is again about feeling like the big guy, even though you're a small guy, they keep us in the loop of what they're bringing down the pipe, and it really makes us feel like we're invested in that ecosystem, and we know exactly how they're transforming, how they're going to develop their business going forward. It helps keep us as a happy partner. >> So it's, from what I'm hearing, Patrick, better experience all around, very happy. Did it save you any time? Are you able to now do things differently, add more value to your organization as a result of bringing in Pure? I wonder if you can talk about that. >> Oh absolutely, we spent a good chunk of time troubleshooting issues directly related to storage before whether it was storage creep where we had too much data versus the capacity of the array, or the input output problems in terms of IO, latency those types of issues. We don't see any of that anymore. So that frees our engineers up to work on other problems in the environment. >> What workloads are you running on Flashdeck? >> Mostly production sequel, high sequel workloads mostly. >> You mentioned the dreaded spinning color wheel or whatever kind of computer we're running, and that was affecting not just employees, but also Mississippi citizens. Problem gone? >> The problem is gone from the aspect of our side of things, now this is Mississippi so you still got a lot of rural customers who are still on some dial up internet, so we can't solve that problem for them, but in terms of our side of the fence, we know they're not going to see any latency because of us. We're delivering the application as best you can. Like I said, we're number three in the list of their sites, and we came 44 spots down. >> How quickly in the last couple of years alone? >> Patrick: Immediately, yeah. >> You have to wear a neck brace from the whiplash. >> Yeah we put it in and I'm just crossing my fingers, 'cause if I told them I could do this, and we're 45th, what did we really solve? We didn't solve the problem really, but we came from that high up to all the way down to three, it like felt my team had accomplished something really great. >> And pretty dramatic improvements to your database. I was reading the case study, within the context of your IT transformation, that you improved database transaction performance by as much as 20X. Big, also data reduction rates. So I want to get your perspective on the impact of TCO, and why that's so important for a public agency. >> A lot of things go into TCO. I think user experience is one of those things, downtime for the state. The biggest cost we had was not really something you could see before because our system went down all the time due to not being able to meet the requirements of the taxpayers and the people that work at the Department of Revenue. We don't have that problem anymore. We would spend days of downtime before, that's revenue lost for us. So TCO in that instance is kind of hard to calculate, but I know that the number is big. I know we've saved a lot of time and money. >> Why not just forget all this IT stuff, and throw everything into the cloud. I know as an IT pro, them might be fighting words, but it's talked about in the industry all the time. Why the decision to stay on Pram, and was that discussed? >> We definitely look at the cloud, we definitely have Azure workloads that are in testing right now. Unfortunately it's not just as simple as us saying okay let's go to the cloud, 'cause if it was up to me, with limited funding and that type of thing, I would love to move workloads into the cloud. Where it was applicable. The problem for us is IRS. We have a lot of IRS regulations around cloud. So the core infrastructure that we have, has to remain on premise. There's some things that we can do, but the regulations are a mile long. So we have to make sure that we always stay in compliance with the IRS. That limits our mobility a little bit in the cloud, but we're getting there slowly but surely. I feel like in the next 60 years we'll be there. I joke, but everything we do, we have to go through compliance measures, and we have to make sure we're checking all the boxes. There's one thing you don't want to have, and that's the IRS to write you up for non-compliance. If you're attacked or hit by some vector afterwards, then you're on the hook. You weren't in compliance that's why you were vulnerable. We just have to be very careful, but we're definitely interested. And we'll look into the future with the cloud. >> A lot of talk at this show every show we go to about artificial intelligence, machine intelligence. What do you make of it? How does it apply to your organization? Can you use it? Do you plan on using machine intelligence, whether it's fraud detection or tax evasion, et cetera? What's the state of AI in your world? >> I'd say infancy, but we know that due to the fact that the state hasn't kept up in terms of pay and that type of thing with the private industry. We're going to have to rely on artificial intelligence and automation and things like that to remain ahead of the curve in terms of compliance, performance all the metrics we've talked about. You have to have either a very talented and well paid staff or you're going to have to leverage these types of technologies to stay ahead of the game. >> So you have made some big impacts from an IT transformation perspective we talked about a minute ago. Where are you on this journey of digital transformation? What does that digital transformation mean to the Mississippi Department of Revenue? And what stage would you say you're at? >> We're getting there. Like I said before some of Mississippi is still very rural, for the first time ever, we had more online returns processed than mail. Believe it or not, Mississippians still like to mail their returns in. A lot of that is rural location, internet access that type of thing. We're getting there slowly but surely. I feel like in the next five years, we'll be probably 75% to 80% online refund based. I hope anyway, I hope we're still not at 50%. It's a slow crawl, but we're getting there. We do things a little slower than most people, but we get there eventually. >> You're friendlier down in Mississippi. >> We are definitely, you got to have something. >> You do, so in terms of next steps, you've solved the performance challenges, you're kind of on this road to digital transformation. How have you improved the efficiency of your IT team? >> Say that one more time. >> How have you improved the efficiency within network services? >> I think most of it comes down to not having to worry about the equipment and the environment. We have more time to focus on each other, the tasks we have in front of us. Before it was tackling issues that we knew were related to either vendor or product or storage or server. And now we're focused on expanding the skill set of the current staff. It allows us to leverage things like cloud and automation. We didn't have time to look at that stuff before. So when you ask me where we at with automation, we're still in the infancy because before all we did was fight issues related to previous vendors, previous products, that kind of thing. And this, while it's not a magic bullet, we still have, you're always going to have challenges it frees us up to be able to work on those types of-- >> Dave: Close to firefighting and whack-a-mole. >> That's all we did before. This guy is fighting this problem, he's fighting this one, then they don't get time to learn and grow as employees and as people. >> So automation is big priority, what kind of other fun projects you working on? Or techs that you're researching that get you excited? >> So right now we've deployed both of our major applications using Pure. Our big projects are kind of done. Now we're leveraging towards disaster recovery, modern day DR, BCDR, business continuity that type of thing. How do we recover in case of a disaster? That's kind of where my focus lays right now, to make sure the Department of Revenue, if we are affected by some type of disaster, that we're ready for the taxpayers of Mississippi to come up and running in a sister site and be ready to go. >> Okay that's a combination of infrastructure, probably going to use snapshots, remote replication, but there's also got to be a software component as well. What are you thinking about whether if you don't have a specific vendor product, but just architecturally what are you thinking about? >> So we absolutely right now leverage Zerto with Pure. Which is a very good combination, they work very well together and we have a co-low facility, it's about 200 miles north of us. We'd like to get more geographically diverse as budget frees up and that kind of thing, maybe move out into the Colorados or something like that. But our sister site, all of our data is replicated using Zerto. We're on, I believe, every 15 seconds we're tracking journal history. In the event of a disaster, and we've test fail overs. 'Cause you've got RPO and RTO. Real time objective and recovery point objective. It's important for us to be under 10 minutes, in terms of how quickly we can recover the environment. It's a real time objective. The last time we did a test fail over, we were about four minutes. So our business has completely transformed. Before if we had a disaster, we would be lucky to have data available to us number one and within three to five days. Now we are being able to turn around and operate in another location within minutes. >> And your RPO you said was 15 minutes, did I hear that right? >> Recovery point objectives, that is 15 seconds. Recovery points are every 15 seconds. Our recovery times, the total time it takes us to come back up and running, we hope to be under 10 and we got it around four. Now that depends on a lot of different things. Every situation is not the same. >> Very tight RPO. >> Patrick: Oh yeah, absolutely. >> 'Cause you're moving money, I guess. >> We're moving money. And it's very important that we stay up at all times. Obviously there is going to be a little bit of downtime, but we want to minimize that as much as we can. >> Patrick last question before we wrap here, this is your first time at Pure Storage Accelerate. A whole bunch of announcements this morning, anything that you've heard that excites you for expanding this foundation that you have with Flashtech? >> A lot of the stuff we talked about around automation and that kind of thing. We're definitely interested in how Pure is going to evolve to the cloud because we know you all we be ahead of us I say you all, so you all will be ahead of us whenever we do get ready, and that's another big benefit for us. We know that when we get ready to transition to the cloud, you guys are going to have your ducks in a row, and be ready for us to do that. >> You all as in Pure? We all aren't Pure. >> You know what I meant. >> We're the blue guys. >> It's real exciting to hear about automation, And where they're going with the cloud, and storage as a service and that type of thing is very neat. I love reading about and hearing about that stuff, we can't always be there like I said because of compliance issues, but as we can, we will if it makes sense for us. >> How important is it to you, I was asking a couple of the Pure execs what their thoughts were on staying independent. You see a lot of storage companies get bought, they get consolidated. EMC, 20 plus billion they got acquired. How important is it to you as a customer to have a company like Pure be an independent storage company? >> I mean, it's enormous. I can give you an example. We were a SimpliVity customer so HP bought SimpliVity, our experience before the merger, fantastic. We would give them very high marks in every category. After the merger, not so much. Support dropped off for us after SimpliVity was bought by HP. For us it's huge that Pure is, now that's not to say, we know that this is a business, and that things may happen, but we hope that if they don't stay independent, somebody that has the same level of focus and effort and determination and support keeps that going. >> We hope so too, we love the competition on theCUBE. We love the growth that drives innovation. Pure seems to be leading the way. We talked about this earlier, what they're doing with NVME a lot of good marketing, but still they're throwing down the gauntlet. What they've done with Evergreen. Obviously first with AllFlash or at least early on with AllFlash, so got a leader. >> That's what you worry about too, the Evergreen type things are the things you worry about going away. If they get bought by somebody, is that the first casualty? That's the kind of things that happen to companies when they get bought. We do love the fact that they are independent, but we know it's a business at the end of the day. But hopefully that remains the same. >> Keep that feedback coming, I'm sure they appreciate that. And Patrick thanks so much for stopping by theCUBE and sharing the impact that you guys are making at the Mississippi Department of Revenue. >> Sure, thanks for having me, appreciate it. >> We want to thank you for watching theCUBE, I'm Lisa Martin with Dave Vellante from Pure Accelerate 2018. Stick around we'll be right back with our next guest.