>> Announcer: Live from Las Vegas, it's the Cube, covering HPE Discover 2017. Brought to you by Hewlett Packard Enterprise. >> Okay, welcome back, everyone. We are here live in Las Vegas for the Cube's exclusive coverage, three days of HPE, Hewlett Packard Enterprises Discover 2017. I'm John Furrier. My co-host Dave Vallente. Seven years of coverage, in our seventh year, and of course, we've had many guests on over those years. And our next guest has been on every year. Steven Deitch, Vice-President Worldwide Service Provider Business. Great to see you. >> Good to see you. >> Seven year Cube alumni. You've been on every year. >> That's right. >> Great to see you. >> Good, just getting older. (laughing) >> And smarter. >> Co-Host: I think we started at VM World. >> We did, way back. >> Yeah, yeah, at Barcelona, I think you were on at Barcelona. We had no live. Alot's changed. I mean, what's up with you right now? Before we get into some of the historical on where we've been and where we're going, what's happening for you in the news here at HPE Discover? What's the big story? >> Well, you know, the headline, and what Meg and Antonio and everybody else have been talking about, is HPE strategy core belief's vision, which revolves around three elements. Making hybrid IT simple. Powering the Edge and then the expertise that goes along to bring that all together. My focus is really around that hybrid IT portion. Hybrid IT is pervasive, on prem, off prem, traditional IT, private cloud, sorry, public cloud. And customers are increasingly moving to that model given the value that they see, of optimizing their IT environment and sticking workloads or sourcing applications from the best execution venue. My personal focus right now is around the service providers that will deliver the off-premise element of HPE's hybrid strategy going forward. Because we made some very clear decisions that we weren't going to do that anymore. We had a public cloud before, that we decided to shut down. With the spinoff of enterprise services, that leaves us dependent, or actually embracing partners to deliver all of that consumption-based off-premise service element. >> I mean, a lot's changed, I mean, the elephant in the room is, obviously, the decline in people buying boxes and, or hardware, peddling hardware, but IT's not declining. IT's shifting. The services model is interesting. Service provider roles are changing. You know, anyone who's in the SAAS businesses, enterprises having SAAS products that they offer their customers. In essence, a traditional enterprise buying data center hardware and software from HPE is now providing a service to their customers. >> Steve: That's right. >> With digital. >> Steve: That's right. >> This is the digital transformation. How does that shift? How do you guys talk to customers now? Because now, the service provider definition has increased. Enterprises have, maybe a portion of traditional enterprise, but also now service provider component. How do you guys talk to customers? 'Cause this is truly where the business transformation is hitting the road. How do you guys talk to customers about this trend? >> Well, let's start at, you mentioned a digital transformation. At the end of the day and in simple terms, it's entities utilizing digital technologies to improve the experience of their constituents, partners, customers, employees, processes, systems, and so forth. Hybrid IT ultimately is one of the enablers behind the digital transformation. We're extremely passionate about that because you're right, that's where everybody's going whether you're small in the market, you're mid, you're a large enterprise, or you're a service provider. You're going through your own transformation as you go forward to be able to deliver against that digital transformation process. >> You said before we're kind of reliant on, then you sort of amended that and said embracing the cloud. In fact, if you don't have a cloud strategy today, you're toast. You are relying on your partners for a big part of that strategy. It's not just Azure. It's not a one trick pony. Can you talk about sort of beyond the big partner, what you're doing to differentiate within that next tier and how they're differentiating from the big guys like AWS. >> Right, and you're absolutely right. We firmly believe the world's going to be multi-cloud so certain work loads will stay in the data center, certain will be private cloud in the data center, others will move to managed private cloud, off premise. Then others will make a lot of sense to go to a hyper-scale provider like Amazon, Azure or Google. You want the best execution venue for that application or workload. It makes all the sense in the world. That's what we call, and you've heard us talk about this before, the right mix. As customers look to where they're going to put those workloads we're working with service providers below those big hyper-scale, big gorillas, to project or deliver value that the hyper-scale providers can not. Everything is not going to go to Amazon. It's a fact. >> It's not a winner take all game. >> It's not a winner take all. The world is way too diverse. Diverse workloads, diverse geographies, diverse business requirements. The way we look at it and we embrace the service provider's below the gorillas, we want to collectively go after opportunities that the hyper-scale providers can not deliver on. It really revolves around three things that we believe, we collectively, but more importantly those service providers should be able to do. One is embrace customer complexity. Go beyond simple services. Full stack SOAs. Drive digital transformations. Embrace customer intimacy. The big gorillas, they have a very broad set of services, very rich set of services, but when it comes time to intimacy and customization, you're not going to go there. A lot of customers remember 98% of the value in the market today is still traditional apps. Number two is geography. We all know that the big boys are in about 15 or 16% physical countries today. There's still 200 countries that don't have a physical presence and when you look at data resonancy, data privacy and so forth, or even performance in latency, you still need that physical presence. Even in the countries where the big hyper-scale providers are, you still need the girth of resources. Technical, sales and so fort and sometimes that's missing. Enterprise customers and mid-market customers want to embrace that. Finally, you know this as well as everybody else, and you made that point before, as customers evolve to hybrid, they have to manage that environment. The combination of on-prem, let's call it Tier 2/Tier 3 service providers, and then the AWSs and the Azures and the Googles of the world. That's a challenge. That's a big challenge to be able to manage that hybrid environment. The service providers that we're working with, we want them to be that hybrid manager, we want them to be that broker in order to mitigate the risk, determine the best execution venue and really deal with the challenges that these guys are going, including cost, time, and skill sets. >> If I could follow up on that in terms of the sustainability of those three differentiators. Complexity, I think you're okay. I think IT just keeps getting more and more complex. The GEOs, maybe slowly over time that changes, but your point is the local resources is probably not something that the big guys are going to put in place any time soon. Belly to belly. It was interesting to hear the CEO of Wipro talk about hyper automating, but we're still decades away from eliminating all the people required. Managing multi-cloud. That seems to be a big one that is a white space right now that nobody has really cornered. >> John: Huge. >> It's not likely that any one of the businesses, Amazon's not going to own multi-cloud management. That's really not even their interest. >> John: That's single cloud. >> To me, number three is a multi-hundred billion dollar opportunity for the market and HP specifically. >> Absolutely. We go hard at all three of those and some are more defendable than others, the geography, you're absolutely right, but the resources will continue to be a challenge for folks. Number one and number three are clearly ways that our service provider partners can take advantage of opportunities that the hyper scale providers will not be able to. >> John: Why HP? >> Why HP? At the end of the day, we bring best of class technology, we bring best in class commercial models, we bring collaborative go to markets. By the way, we don't compete with our partners. I challenge folks to look at their existing vendors and ask those questions. Particularly if you're a service provider partner. Ask those questions to your existing vendors and ask them, why are you competing against me. We are very, I'll use the word clean. Strategy is very simple, very clean, we're not competing. >> John: No hair on those partnership deals. >> No hair. >> If you take out the big hyper-scalers, AWS, Google, and FaceBooks of the world, there's a big torso mid range market that you guys are going after. You didn't have competition. You're going to have all your normal competitors that we all know and talk about going after that same space. Differentiations are what you said. How are they approaching it? They're going to try and create fud around what you guys are doing and certainly this transformation market that we're in is kind of confusing. People now being more educated on the cloud which is a good thing. There's still no real definition of what multi-cloud is. Multi-cloud is happening. how are you guys competing directly with the competitors and how are you guys going to go in to win? >> I think, the fact that we're partner first and we already understand how partners function and what they need in the requirements, it sounds a little simplistic, but at the end of the day, you have a whole lot of service provider partners out there that are pure, but you have thousands of service providers and what they've done? They've evolved from being a traditional reseller or a solution provider, to adding a third business model of being a consume oriented service provider and the fact that we understand the journey that they've been on, the challenges that they go through, I will challenge our competitors to have that deep of insight that have not been channel friendly at all. >> Is that the big transformation? That third point you mentioned, is that the big change in the service provider transformation, is that that consumer focus?L >> It is because we all recognize the big service providers whether you're a big cloud service provider or a consumer service provider like an Uber or Spotify, or a Telco. Think about all of the service providers out there, let's call them, for the lack of a better word a hybrid partner. They have a resale business where they do transactions, they have a solutions business and then they have a consume business. Those are the ones that are actually capable of pulling off the differentiation. They can get intimate with the customer - >> John: They have specialism. >> They have specialism, they have professional services, they have industry insight and they understand their customers much better. >> The channel's turning into the customer for you guys in the way the partner first message - >> It's a different type of partner. Different type of partner. Absolutely. Those three swim lanes. We look at partners will either be in one, two, or all three of them. >> Steve, thanks for coming on the Cube again. Appreciate seeing you. Big takeaway from the show here, the transformations in full swing, the market's kind of going crazy with cloud and IOT. What's your big takeaway from this show this year? >> The clarity. The clarity and the focus that Hewlett Packard has and the fact that our partners and customers are really embracing it. That's the key message that I've heard from everybody. Everybody's super excited and there's a focus. I think maybe in the past, because we've been so big and so complex, but the fact of our skinning down, going in opposite directions as some of our competitors, that clarity will lead to execution excellence, I believe. >> Awesome. Stephen, thanks for taking the time. This is the Cube live coverage from HPE Discover 2017, our 7th year we're covering the transformation. More live coverage after this short break. Stay with us. We'll be right back.