>> Live from New York City, it's theCUBE. Covering, Lenovo Transform 2.0 brought to you by Lenovo. >> Welcome back everyone, we are wrapping up day one of coverage of Lenovo Transform here in New York City I'm your host Rebecca Knight, along with my co-host Stu Miniman. We have a final guest, Peter Hortensius. He is the Senior Vice President Data Center Group and CTO and Chief of Strategy. Thanks so much for coming on theCUBE Peter. >> Well thanks for having me. >> It's your first time. >> I was told, I can't believe after all these years it's my first time but it's my first time. >> It's kind of true. If you're in this industry, we're going to be on a lot more after this, trust me. So, before the cameras were rolling we were talking about how cloud is an outcome not a destination. What do you mean by that? And do you think of that as your perspective, or do you think that that is industry-wide? >> There are people in the industry who do think of it as the destination. "My life will be good when" But the reality is, when I talk to our customers and I talk to your business owners and what they are really looking for. What they are looking for is a way and a method of working. They are looking for, "How do I deploy things quickly? "How do I worry more about, "Can my applications run properly?" not "How many petabytes of storage did I need for this?" or "How many VMs did it take to run that?" And so for us, it's all around trying to provide advice and counsel around that. And we found an interesting statistic that sort of justified things we're hearing from a lot of customers, which is, while everybody has a strategy of what do they get to the cloud, eight out of 10 customers are trying to think about the things they need to bring back. So, it's not just a one-way street, which tells you it's definitely not a destination if people are telling you, "Hey there's a few things I put in there "that may not be the best place for it." >> It's interesting, 'cause in general I'd agree with you. I think we've said it is more of an operating model and there's processes there. When I evaluate companies and analysts, a lot of time it's like, okay. But tell me where your positioning is, if I give you private cloud and public cloud, do you have a real heavy leaning one way or biased towards one or the other? Of course the big public cloud providers tend to lead that way even though most of them are shifting not just all public, but, even Amazon is getting deeper into what we do in private cloud. One of the things I like about Lenovo is, we are talking about hyper-scale, we are talking about HPC, we are talking about all the various pieces. So, in your portfolio of offering, you're selling solutions into the big 10 cloud guys. So, you're not only saying, well, no, public cloud's bad. You have a measured approach to how that looks and I think pragmatic as to how the customer's going to be. >> You're right. We do sell in the six as a top 10 public clouds in the world. Enormous volumes and all the things. So, we understand what it takes to do those environments well. But we also have this huge business. We sell to people on premise and they want to all move to public clouds and private cloud technology and hybrid and multi-cloud and I can give you 100 other acronyms. The challenge is, people just want to run their business and this is, not running my business. This is a cost of doing business. So, for me it's really around, how do we provide them simple ways to get there? And I think Lenovo, because of it's legacy-free heritage we don't have a big business tied up in the old way of doing things. We can be a much more simpler vendor to work with because, okay, you want to take that to the public cloud? I get it, it makes sense. I sell to them, they are my customers, so, I'm still okay. I'm not hung up that, "No, no, no. I really don't think "that's what you want to be doing." And then vice-versa, when they wanted to look at private cloud technologies or hybrid technologies or multi-cloud technologies. Again, I have multiple ways of supporting that because I'm not hung up on why you need to buy this much storage from me of exactly this kind, I'm there. We see way too many of our competitors have a story with their customers. It sounds really good when the executive talks to them but the Regional Sales Manager is going like, "No, no, no. You don't understand. "We got to sell this or I'm done." And, so what happens? They don't sell the new thing. >> One of the challenges customers have is, they tend to do multiple things. They start out with a simple idea but, new applications and different business units pull things together. So, they are looking for partners that can help keep them up-to-date as to what's happening and help them focus on the outcomes of their business, focus on the applications and help them try to keep up in an ever changing world. So, maybe give us a little bit as to how the portfolio view from Lenovo helps customers keep up. >> We look at the, call it the "On ramp to the cloud" People want to build up their private clouds and hybrid clouds from all the parts. They are well skilled, well capable or for whatever reason they decide to do that. So we have our portfolio of products that can support you to do that all the way from our ThinkSystem lines. All the building blocks and then working closely with partners like Red Hat and so on. You carry all the way through the continuum of true turnkey solutions. You had Naj and Rod on earlier and they were really talking about a turnkey solution that we've just recently brought out with Naj's company. But Microsoft's Azure and Azure stock is another example of a turnkey hybrid cloud. As Kirk mentioned in his keynote, four times our regular market share in that market, 'cause again, we're perfectly happy to sell that. And then the big software to find on Ramp are Nutanix and VMware and a bunch of others that people have. That's another on ramp to the cloud. It's again another place where we have a lot of growth and we've been growing at, we've doubled our share basically every year, year on year share comparison every quarter for the last six quarters. We're perfectly happy going at it in all three of those paths and it works very well for us. >> I want to get back to the idea, you just started by saying, customers at the end of the day just want to run their businesses. And they want things to be easy and intuitive. So how would you say that customers are thinking that way about the cloud, or is there this pressure of, "I got to get to the cloud, "I've got to have a cloud strategy." >> I think there is some of that, I got to get to the cloud 'cause it's in vogue and if I'm not getting into the cloud, my CEO's going to think that I'm-- >> I'm not cool. >> Well, worse than not cool, not competent. That's much worse. But I think we're seeing some moderation. What we're seeing now is people are becoming more mature in how they look at this, and there are things that a public cloud environment is outstanding at, there are things that it's not as well suited for. And likewise you're seeing that as people looking at private cloud technologies and the key there really is, one of the things that makes a cloud environment so attractive is, I focus much more on managing applications than I do on managing hardware. The hardware just kind of happens for me. I think if you really going to give people those private cloud environments to do that, it's the same thing. If you look at our CP solution, it's a great example of that. I dial in, or dial on, there's my age showing on, I just connect in, I assign how I want the systems allocated to my applications and the hardware just takes care of it. That's the cloud. >> One of the real challenging things for customers is, once they've modernized that platform, what about the applications on top of it? There's so much happening in the database world, you talk about cloud native applications, AI, IoT and edge solutions are spending a lot of time for companies. Can you talk a little bit about what you're hearing from customers and how Lenovo has positioned itself for-- >> I think this is why you are seeing some of that eight out of 10 coming near as a direction. If you've written for that kind of a world as the application, this is great for you. This is what you want. There are clearly a lot of legacy applications that weren't written with the cloud in mind. There was no cloud there. So they are much harder to deploy in that model. And so, those are becoming, call it, the more stubborn and obstinate part of the business. Now, that's still a great business for us to sell to and we're very happy to support customers and in many of those instances, it doesn't pay to redo it. But, there'll be a long, long tale of those kinds of applications where they are just not written with the cloud in mind. But anything new, generally is written with that kind of environment in mind. >> Okay, so are you saying the cloud native apps should run in public clouds, or? >> They'd run everywhere. A well written app will run private, public or hybrid. >> How about AI? We've been hearing a lot this year for infrastructure, for AI, how does Lenovo play there? >> The big challenge in AI is you have to sort of step back to its core principles. What's AI about? Well AI is about crunching a lot of numbers against a very large amount of data. So, it becomes much more about, where's the data than it is about the actual algorithm or computation. That can run on almost anything, but if it's not local to the data, you got a problem. So, that becomes more and more of how that problem's defined. So, if the data is something that I'm pumping into a certain data center, whether it's cloud based or my own then that's typically where that AI algorithm will run and if it's not, then I've got to figure out how to get the data to where I want it. >> Little bit of an over-simplification when you just say, there is usually some central place where you train but it needs to be out at the edge, where there's of course autonomy vehicles leading example-- >> Training is a very different problem than you'd call it inferencing, but basically I've learned how to recognize speech, that takes a lot of computation. To recognize it doesn't take that much. Learning is what takes all the effort. >> Well, I'm actually interested in the idea of recruiting and retaining the right kind of talent, and the kind of challenges you're having. This is as we've discussed a very fast-changing technology landscape. Are you able to find the right people? >> The biggest challenge in any technology industry and since every business is getting an IT component to it, it's becoming everyone's problem. And yes, if you want to tell your kids where to go to school in, this is the place. There's going to be lots of jobs for a long time. So, we face the same challenges everybody else faces in terms of recruiting the skills. A part of that is why having cloud as the deployment model is much better for you because it is a lesser skill than what's required to manage it and deal with it and the complexities of it are simpler. Underneath the coverage, you just need fewer people that really understand that. That helps your skill problem. >> In terms of the, last year at Lenovo Transform, you announced ThinkAgile. Can you talk a little about the portfolio of customers that you have developed and what you're seeing there? >> We made a very conscious decision last year when we announced. We collected all the brands together and it was a building block, it's ThinkSystem and if it's a integrated system or cloud solution, it's ThinkAgile. Particularly integrating it in our factory and deploy. And so, we announced that, we deployed it with ThinkAgile Advantage, which is a special service that goes with it, that makes it even easier to sort of deal with the changes and IT configurations. And we've been, since then been very pleased with the kind of ramp that we've managed to get out of all our solutions in that bucket. And people really buy the idea of, hey, I'd like to get to a point where, Lenovo will configure the thing in the factory including the rack, maybe all the cables, everything. It's literally wheeled in, it's plugged in, I change my password, and I'm up. Whereas, the old world was, it shows up in 53 boxes over the course of 10 days, then I spend two weeks trying to fit it all together, pray I connected it correctly and there you go. So, it's a totally different model. >> Peter, wonder if you can help us connect the dots on some of the edge and IoT pieces. A lot of people we look at and say, okay, you've got the Motorola phones out there, you've got PC division, but the Data Center Group, how much does the Data Center Group touch and interact with the consumer in edge and other devices? >> To me, there's multiple ways to look at IoT. And when you are Lenovo, you have our own view of it, just like every other company has. So, clearly the Internet of Things, we sell a lot of things. We're going to do a lot of Internet of Things. That's what the phone and our PC and smart devices and all that stuff is about. But, there's also a lot of, we call it all that data has to get processed by something. Guess who shows up when that happens, it's the Data Center Group. So we view that as, that's just an energy whether the rest of Lenovo had all those things or not, that's just good for our business. It's just going to lift us with it. But more importantly, having that insight into what's happening at the edge, with all those devices, what's happening is customers are looking at, okay, one of the big things is now I'm starting to see movement of some of the data center to the edge. They're moving the computation, the server needs out and closer to where they think where the data is generated. That's a big opportunity for us. That's a whole new thing, and it's not something that easily moves to the cloud, 'cause there's a reason why it moved closer to the data. So for us, it's a big opportunity and it's a huge one. So, when you look at Lenovo, we all have our individual business group's view of what this thing means to me if I wasn't in, been a business. And then we layer across that then, okay, but here's what I can do with that opportunity because I do know how to make all these things, or I do know how to do that and I do know how to do that. So, that's our huge, as Wai Wai calls it our third wave. That's our real next key win. >> So you are all thinking about how, as the data center evolves, where your businesses fit in? >> Right now the bulk of our business is clearly in that data center. I would expect over time, you'll see more and more happen as these pieces over the edge come together. >> Great. That's what we'll be talking about next year. >> Hopefully, yes absolutely. We have a lot of plans in place. I think you'll see a lot from us by this time next year. >> Yeah. But maybe give us a little bit view on that as, edge has been a very hot topic, what do you see as some of the impediments and what will happen faster as you talk about that change of view of data center and edge. >> The biggest impediment is, unlike a lot of other problems in IT, there is no formula. So, if I want to run a production system, I'm going to go see Oracle, or I'm going to go see SAP, or I'm going to see someone else like that, and, they've got lots of consultants and knowhow and boom, I just got to kind of pick between ways of doing it. When you're looking at big IoT solutions, there isn't one. Everything is, "Hmm what am I going to instrument? "Hmm, what am I going to get back as the information on that? "Hmm, how am I going to justify the ROI on this? "Hmm, how am I going to deploy this at scale, "because I don't know how to do that?" All of those are things that are going on. So, what we are finding as we work, we work with a lot of system integrators, people who help people understand proof of concepts and testing and studying. So we see certainly some areas, those 20 billion things that Wai Wai talked about by 2020. Those are going to places obviously, but businesses are really struggling with, how do I do this at scale, in my business? How do I drive that intelligent transformation? That I know I've got to do, 'cause if I don't do it my competitors are going to do it. And that's to me where our opportunity sits and why it's interesting to be at Lenovo in that kind of a context. >> Great, excellent. Well, Peter Hortensius, thank you so much for coming on theCUBE. We've had a great time. >> Thank you so much. >> I enjoyed it very much, we'll have to do this again. Thank you. >> Indeed, indeed. >> I'm Rebecca Knight, for Stu Miniman, that wraps up Lenovo Transform 2018. We hope to see you back here next time on theCUBE.

>> Live from New York City, it's theCUBE. Covering Lenovo Transform 2.0. Brought to you by Lenovo. >> Welcome back to theCUBE, everyone. We are here at Lenovo Transform in New York City. I'm your host, Rebecca Knight, along with my cohost Stu Miniman. We're joined by Laura Laltrello. She is the VP Datacenter Group Services here at Lenovo. Thanks so much for coming on theCUBE. >> Thank you. It's your first time on the show. >> Yes, thank you for inviting me. >> Welcome. We're talking to you today about DevOps and blockchain, two of our favorite topics here on theCUBE. Let's start by talking about DevOps in general. About how much it has transformed the way we test and monitor and deploy new kinds of technology, and then add blockchain to this. Tell our viewers a little bit about what you do. >> DevOps has absolutely transformed many companies. The companies I've talked about today, at Transform, all three of them in the past two years have doubled their stock price. Imagine being able to double your stock price. Some have gone almost to triple, and they've done it by being able to go to market very fast and get what they want out in market. Then, adjust to the market as market demands change. They're using both agile software development along with setting up instant infrastructure and combining those techniques and the methodology and culture that goes on top of that to have small teams focused on business outcomes and that is, in summary, the DevOps process. >> I love that. Rebecca and I love talking about the cultural piece and we know a lot of times the technology piece is the easy part, the networking, it's the things upper in the stack, it's the people and processes and politics where we get tough. If I knew we were talking about DevOps, I wouldn't have worn the tie today. (all laughing) >> Yeah. >> How is Lenovo transforming internally, and how are you helping customers that are digging into this process? >> That's a really good point. DevOps is more of a mentality than a methodology. The methodology's great, but we work with our customers to ensure that they have the right project, that they have the right culture, and that they've gone through change management process they need to get everybody onboard to a new way of thinking about driving their business. We've done it internally with our blockchain process. We've implemented blockchain in our supply chain in three different areas, and they started as tiny proof of concepts and we just keep iterating and building on it like a typical DevOps model so that we're getting benefit from it, and we're starting to see it. >> You're using yourself as a case study here. >> Absolutely. >> Can you explain a little bit to our audience, a lot of times, they're going to hear blockchain and they're going to think bitcoin. >> Sure. Maybe explain, we understand that there's relationship, but it's not the same at all. >> One of our blockchain processes, we work with our suppliers, and we use it for supply and demand forecasting. If anyone knows how supply and demand forecasting works, typically by the time the person gets the information, the information's old and something's happened in the market and it's changed. With blockchain, you have access instantly to the exact same information, so you're working on the same level and the same basis, and it makes it transparent and clear to everyone. One of the other places we've used it is in software. Software licensing credits. We don't want to pay inventory costs for software licensing, so we're able to use blockchain so that when our users start using the software, then we start paying for it. It saves a ton and everybody's aware of what's happening because of the blockchain. >> You were talking about the right mindset for DevOps. Can you describe what you mean by that? >> A lot of IT teams still operate under we've got a milestone to hit, and then we've got another deliverable, and we have another milestone. With DevOps, what you're doing is you're having a very small group of people with a business outcome, which is extremely different. You want to take your time-to-quote process and cut it in half. That might be the business outcome that you're aligning your DevOps group to, and then they figure out exactly how to get there. It's very different than planning up front and saying I need this released in the U.S. by this date. Because a lot of times, by the time you get there, it's not the outcome you really wanted. >> When you talked about yourself as a case study here, how would you describe the Lenovo team and how everything changed and how the iteration process worked and whether or not you had to win over any skeptics? >> There are a ton of skeptics just on DevOps itself, and then obviously there are more on blockchain because it's so foreign, it's such a foreign concept. We started by just getting small groups of people to work together in that type of environment so that they get it and understand it and realize that the potential security risks are not as threatening as you might think because there's a DevSecOps security process. Once they realize that you can align on business outcomes and you can accomplish so much more by bringing something to market faster, they start to realize oh, I can keep making this better and we've gotten small teams, grassroot efforts involved to start doing that. >> Obviously, we've heard from Lenovo many times that service levels and how you're measured by customers, Lenovo does very well. First of all, congratulations. The question is is it enough, and of course it's a piece of the overall puzzle, so maybe help explain how support and service fit into the overall story as to how you not only maintain customers but win new customers. >> It is not enough. My service practice, my aspiration is to drive a complete, effortless experience for the customer, meaning every single time they engage with us they do not have to put any effort forward. When you start thinking about your processes internally backwards, and you're looking at it from a customer point of view and thinking what effort did they have to put in, it drives a very different mindset and it shifts people to think about doing the process very differently. We're thinking about things like entitlement. The customer doesn't get any value out of entitlement so how do we make it go away, and how do we make all unnecessary steps go away so we can continue to maintain that high customer sat. >> It's interesting, I think back, I'll date myself, 20 years in my career when I was out in the field dealing with customers. Customers loved me cause I took care of them. Where'd you become the Maytag repair man? They don't even have to see you, they don't have to know you. Certain people I talk to it's like wait, whose that Lenovo, oh wait, those are all those machines I have everywhere that I didn't even think about. >> That's OK. >> How do you balance that? >> There is so much going on right now in tech between machine learning and IoT and edge computing that we have a place, and that place should be providing value and driving business outcomes for our customers, not in repairing their machines. >> Going back to the culture, because this is just where I love to be, we heard on the mainstage so much about Kirk and (mumbles) talking about these points of pride for this company is this customer centricity but also being seen as an ethical, as a sustainable company, lauded for its social conduct. How does that feel when you're on the inside of Lenovo? How does that feel as an employee? >> I've talked to a lot of companies in the past 15 years I've been with Lenovo, and I can truly say we're one of the only companies that acts globally, and we look at a diverse set of opinions and that to me is really valued because when you're starting to try to see the elephant from every single angle, you get a better outcome. Every time I think about what's going to happen with this company, I know that foundation of thinking about things globally and looking at it from our entire customer set makes us a truly unique and different company. >> That's a great point. Do you have any examples or something you can say because there's lots of multi-national companies out there, but not that many that are truly global. >> Our Lenovo leadership team, they meet every quarter. They purposefully choose a different city to meet in every quarter and a different continent. When they do that, they go and immerse themselves in the culture of that continent so they get that flavor, and then we ensure that our board members and our LEC is a makeup of different nationalities and different perspectives. That alone gives you that tension to think about things much differently. Where a lot of our competitors, and a lot of companies out there, they really do make decisions in one city and if you're not in that city, you're not really part of the decision-making body of the company. >> They pay a lot of lip service to oh no, we care about these things, but actually what you're saying is so important by actually living that. What do you think, one of the questions that Stu and I have had for all these executives is the transformation story is great, as we know, we know by the numbers that this company has turned the corner and is really accelerating. The momentum is there. What are we looking at three to five years from now? What does success really look like for Lenovo? >> The customers will start to see us as a customer experience company more than a product company. You will see us transform our customer experience end to end, from every contact point, and even contact points within the devices. If anybody's had a chance to look at our OK Google device, they'll see that thing is based on looking at a customer experience and changing the way people use those devices. It's just a simple add of a few things in technology that's made that work. >> Laura, thank you so much for coming on the show. >> Thank you. >> It's great to have you. I'm sure you'll be back. >> Yes, I appreciate it, thank you for the time today. >> I'm Rebecca Knight, for Stu Miniman, we will have more from Lenovo Transform in just a little bit. (upbeat music)

(upbeat music) >> Live, from New York City, it's theCUBE! Covering Lenovo Transform 2.0, brought to you by Lenovo! >> Welcome back to theCUBE's live coverage of Lenovo Transform. I'm your host, Rebecca Knight, along with my co-host, Stu Miniman. We've got two guests on the show right now, we've got Naj Husain, the CEO of Cloudistics, and we're welcoming back Rod Lappin, who is the Senior Vice President of Sales and Marketing here at Lenovo. Thanks so much for coming on the show. >> Thank you very much. >> Great to be here. Nice to meet you. >> So... >> Rod, why are you so lazy at this show? MCing the show, on theCUBE twice... (laughter) >> I know, it's been an exciting day, hasn't it? I've actually done a few meetings between I saw you last time as well so, I'm living on 2 and a half hours of sleep last night, and I'm running hot so I'm looking forward to a drink at the end of the night. >> Yeah, a well-deserved drink. >> Sleep fast, sleep fast. >> Exactly. So I want to start with you Naj. >> Yeah. >> Tell our viewers a little bit about Cloudistics, it's based in western Virginia, what do you do? >> Yeah, so we build a private cloud with a premium experience. We founded the company in 2013 on the idea of simplifying infrastructures. In our previous world, we actually lived the problem. So in our previous company, we actually took Amazon as an analog, and tried to move our resources at Amazon and simplify it. Because we were tired of managing complex infrastructure. So as a company of 500 people and a software development company, we wanted to simplify our world. So we went to Amazon, we spent 3 months or so developing codes of implement QA. Great, real simple. Don't have to worry about hardware at all. It's a great value proposition. All of a sudden we started to implement this thing, after month one it was 100,000 bucks. After month two, it was 150,000 a month. After month three, we're creating the 200,000 a month in fees to run Amazon, right. While the value proposition's all about "simplicity is awesome." The problem is, it's very very expensive. So as the company of 500 like I said, we had to figure out what to do next. So I spoke to my CTO and I said, how can we solve this problem? So he said, okay I can bring the infrastructure back on prep, great. So he priced that out, it cost less than one month of opex in Amazon. So we did, and then we had a problem where okay, now we need software to run on it, to make it work. We needed a virtualization platform. So we looked up what was out there, and the cost for it at the time in 2012, 2011, it was a million dollars in commercialization software. I said we can't do this, right? We're too small, we don't have the funds to do that. So we decided at that point, we're going to found the company to solve that problem, and democretize IT to give companies of any size the ability to implement cloud computing behind the firewall, at an affordable price. >> And you call it "Composable Cloud". >> We do. So when we looked at the market at that point, there was different types of technologies out there, and there was things called hyper-converged and traditional converged infrastructure. And what we did, is we took a page out of how the public cloud operated. And the way the public cloud operates is they have composable resources so you can scale resources independently. So I can scale networks separate from computes, separate from storage. And that's a big deal when you're running a cloud because you have to worry about economics. So when we architected the product, we started there. So we started with this scale-able architecture that's composable, so company's grow as they need to grow. They don't have to tie resources together, right, so there's no resource drift, we call it. It's independent scaling. And that's one of the big differentiators in our platform. >> So Rod, why don't you help bring in some of your customer views that you hear on this. I'm sorry but I smirk a little bit when I hear, "We're going to simplify things." (laughter) In my career, I've talked to lots of companies, and everybody, we always have the goal to be simple. >> Yes. >> "But, oh wait I need to change this a little bit, I need this other thing, oh wait I've got this Lenovo product, but oh, you've got this other product that's good, how do I manage all of these?" And Cloud was supposed to be, you know, just an easy button and low-cost and everything, and it's helped but it's also added new silos, and new things that I now have to get my arms around. So maybe set up for why you-- >> Yeah, sure. Well I think to Naj's point firstly, I think the Cloudistics solution is really unique. And it's very compelling, actually. It's a very compelling offering. Firstly because I know one management said that you could basically run storage, compute, as well as networking, sitting over the top of a hypervisor, on prem, his point? So to Naj's point, you had like 50% of the cost of a normal cloud infrastructure that would be going out into the market pool, and still have the management suite sitting up in the cloud that they obviously manage for you. That's very cool. But one of the other things that's very cool about the Cloudistics offering is you can scale up and scale out, depending on customers' requirement. So once you've got yourself in this composable cloud model, right? And you're actually running with Cloudistics, instead of saying okay, my business is growing, now it's getting bigger, I have to pay this much for an extra amount of x, whatever it might be, if you want more compute, you can have more compute. If you want more storage, you can have more storage. You can actually add the components of the cloud that you require, based on the consumption that your business is actually running to. And that's one of the very very compelling events that Cloudistics' offering actually has. >> Composable and customizable. >> Yeah, and very simple. One of the key tenants of the platform is making this thing really really simple. So when we designed the product when we started, we started with the application first because at the end of the day, that's what you're trying to run. You're not here to manage infrastructure, you're here to develop being agile in your business. So we focused everything on making it really simple to deploy, and making the hardware invisible, automating all of the updates, so you never have to see hardware. And all you can focus on is delivering your services. >> So I want you to get really specific for a second. >> Yeah. >> Because many of the things that I hear, they think, oh, reminds me of what the companies that do hyper-convert say that they're doing. >> Right. >> Simplicity in the enterprise... >> Right. >> Easy to manage, things like that. >> Yes. >> Is there a software offering, is there hardware involved-- >> Correct. >> How does this all go together, is this a management suite that ties in to what I have? >> That's a great question. >> Make sure I understand. >> Yeah, so it's a completely integrated hardware-software platform, so think of it like your iPhone. When you buy an iPhone, it's hardware-software beautifully integrated... >> Motorola's the same by the way. (laughter) Yeah, okay, Motorola, fine. But it's a phone that's integrated with hardware-software. You connect to the network, you're up and running, you download your apps, and you're done. It's a beautiful experience. So we took that as an analog for our platform. So literally, it's completely plug-in play cloud, you roll it in, plug it into your network, go to our Marketplace, log in, download apps and start running. You can run Containers, you can run Docker, you can run Windows Sequel, all those apps are available for you to run with a click. So businesses now can be much more agile, right? Because now they're worried about delivering services, not messing with multi-solid hardware. Right so now generalists now can manage this platform. DevOps can manage this platform. Just like the public cloud. Yep. >> So to make this setup really simple, what we're doing is we're taking the thick agile solution, which is that pre-configured, pre-set, rackable solution. So compute, storage and networking all in one solution. At factory, we're setting it up with all the Cloudistics structure that we need to send it out, and basically ship it on site for customers. They only need two plugs, right? A plug for the network, and a plug for power and basically it's ready to go. >> It's amazing. >> Rod can you help, so we were just talking about the big news with NetApp. >> Right. >> You know, you've got new relationships with tenants, how does this fit in the work folio? What are the customer kind of pain points as to when Lenovo would lead with this? >> I think that's a fair question, Stu. I think if you have a look at what our go-to-market strategy is in the hyper-conversion space. This is largely guided by customer demand. So, basically at a customer demands point, we'll go in and we'll obviously lead with our customers and understand what are the pain points they actually have in their environment. Because many customers have got different environments, and three years ago, everyone was like "I'm going to be an AWS jumper, or I'm going to be..." The reality is everyone's got so many different clouds in their environment, they've got so many different environments set up. You know, whether that's the Adobe Cloud and Marketing, or AWS, whatever it might be, you've got to manage all of these different environments. So it sort of is dependent purely on what the customers' environment is, where we actually go. Now, from our perspective, this is a brand new relationship, only 6 months old, we are setting up dedicated people specifically to sell this with Cloudistics, and I feel like it's got a really good future. We just got to get this business growing, and I think we're going to be talking to more customers about it. >> Yep. >> So who is your sweet spot? You said that the emphasis of starting this company was that companies of any size could be able to do these things, and act more agile, as you said. >> Right. >> So who is your sweet spot, what's your target? >> Yeah so we target a medium-sized enterprise. So you know, 500 employees to 5,000, kind of in that range is our initial target. And we drive the applications like Window Sequels applications, applications that rely on performance potentially, or even general purpose work clouds where they just want to simplify management of the stack. And as Rod was saying, the management of the platform's pretty unique, and the fact that that's in the cloud, the management of the platform is in the cloud. So it makes it very simple to manage. So from one central spot, I can manage my multiple stacks throughout my company, and it makes it very easy to employ applications and manage everything. >> Do you have any specific examples of sort of the pain points that you helped solve? >> Yeah, so in our case, it was really around driving simplicity. So in many companies, many medium-sized companies, they struggle with the complexity of multi-tiered infrastructure. So I have to have a virtualization expert, I have to have storage expert, I have to have a network expert. And I have to have an app expert as well. Right, I've got to make all those people work together. So businesses now are trying to be more agile to push applications out the door so they can run their business. So by all those interdependencies, it creates a lot of complexity. So we've cut out all of that and we've created a platform where you don't need all of those interdependencies. It's done for you. So it's literally plug and play, so businesses can get right to their work at deploying applications. >> So, there are a number of things that we've looked at, from a research standpoint of what makes a private cloud, and a lot of it is kind of measuring the bar against a public cloud. You said, simplicity, absolutely a good one. One of the ones that we're starting to see some movement in the private cloud, it's starting to go more opex. >> Right. >> As a service office. >> Correct. >> I was walking through the show before and talking to Lenovo people about that. Is that part of the discussion today, and maybe talk about how that works. >> It is, and the platform is fully tenanted for example. We took a page out of the public cloud where, if you go into any public cloud, you create yourself a virtual data center. And within that virtual data center, you can deploy your applications. With our platform you can do the same. You can have a pool of resources, we've extracted everything to pool. RAM, cores, and stores, that's all you need. You can allocate those to your constituents, your customers, your departments. And they have a completely multi-tenanted, fully secure environment to work under. Without impacting anybody else. And with our core technology around networking, we've completely isolated the layer 3 networking layer, to make sure it's highly secure within that box. >> I understand. So they can almost be like a service provider themselves? >> Yes. >> So I guess one of the things is, what about from the financial standpoint? Are things still allowing me to scale up and scale down, is it just in that box I can carve it up? You know Lenovo has an option that was like oh hey, I need to burst up for a certain season, but I'm not going to have to pay, or are there certain things they can do financially. >> Very, very interesting. So the platform is elastic in a sense, where you can plug in and play resources. You can add memory, you can add cores, you can add storage, you can network on demand. And jack it in and scale the resources. We are working on coming out in a future period a hybrid where you can burst and scale into public clouds, which is a big deal, right? Because we have very unique layer 3 networking technology, we can potentially stretch those networks into some other cloud, which is very interesting. So that means that our Lenovo customers can then burst into on demand, on the monthly payroll system, into a public cloud if necessary. So that's a future thing we're working on. >> To your points as a service, you heard today obviously as we had a little bit of a keynote up there, Kirk hinted at the fact that we're trying to drive as a service solution around on the hardware, which really matches perfectly with the Cloudistics solution that Naj was just talking about. >> Yes. >> We're really, really close to this. I would have loved to have been one of our announcers today. But we've got a few other things going on. So we will come forward in the market as a service, fully metering as a service solution that we think is very compelling in market to match up with the Cloudistics offering very, very shortly actually. >> It's fun. >> So how are you getting the word out? I mean we already know you need to increase your budget, that was our last guest who said that. (laughter) >> Exactly, so Naj and I went on our focal about this decision this week. >> Yes. >> We need to get the word out a lot more aggressively, and a lot more compelling than we are today. So we have dedicated resources now in Western Europe and North America, we're about to expand our dedicated resources into China and the Asian Pacific, and then down into Latin America. So we start off by dedicating people on the street that are actually going to be at the start talking to customers. Then we're going to have to drive into a marketing campaign of some description, so we can actually start to drive a more compelling story to market, so they actually get to know what Naj's company has developed. Because once again, it's really compelling. >> Right, great. Well Naj, Rod, thanks so much for coming on the show, it was great having you. >> Thank you. >> Thanks very much. >> I'm Rebecca Knight with Stu Miniman, we will have more from Lenovo Transform and theCUBE's live coverage in just a little bit. (upbeat music)

>> Live from New York City it's theCube. Covering Lenovo Transform 2.0. Brought to you by Lenovo. >> Welcome back to theCube's live coverage of Lenovo Transform, I'm your host Rebecca Knight along with my co-host Stu Miniman. We're joined by Madhu Matta; He is the VP and GM High Performance Computing and Artificial Intelligence at Lenovo and Dr. Daniel Gruner the CTO of SciNet at University of Toronto. Thanks so much for coming on the show gentlemen. >> Thank you for having us. >> Our pleasure. >> So, before the cameras were rolling, you were talking about the Lenovo mission in this area to use the power of supercomputing to help solve some of society's most pressing challenges; and that is climate change, and curing cancer. Can you talk a little bit, tell our viewers a little bit about what you do and how you see your mission. >> Yeah so, our tagline is basically, Solving humanity's greatest challenges. We're also now the number one supercomputer provider in the world as measured by the rankings of the top 500 and that comes with a lot of responsibility. One, we take that responsibility very seriously, but more importantly, we work with some of the largest research institutions, universities all over the world as they do research, and it's amazing research. Whether it's particle physics, like you saw this morning, whether it's cancer research, whether it's climate modeling. I mean, we are sitting here in New York City and our headquarters is in Raleigh, right in the path of Hurricane Florence, so the ability to predict the next anomaly, the ability to predict the next hurricane is absolutely critical to get early warning signs and a lot of survival depends on that. So we work with these institutions jointly to develop custom solutions to ensure that all this research one it's powered and second to works seamlessly, and all their researchers have access to this infrastructure twenty-four seven. >> So Danny, tell us a little bit about SciNet, too. Tell us what you do, and then I want to hear how you work together. >> And, no relation with Skynet, I've been assured? Right? >> No. Not at all. It is also no relationship with another network that's called the same, but, it doesn't matter. SciNet is an organization that's basically the University of Toronto and the associated research hospitals, and we happen to run Canada's largest supercomputer. We're one of a number of computer sites around Canada that are tasked with providing resources and support, support is the most important, to academia in Canada. So, all academics, from all the different universities, in the country, they come and use our systems. From the University of Toronto, they can also go and use the other systems, it doesn't matter. Our mission is, as I said, we provide a system or a number of systems, we run them, but we really are about helping the researchers do their research. We're all scientists. All the guys that work with me, we're all scientists initially. We turned to computers because that was the way we do the research. You can not do astrophysics other than computationally, observationally and computationally, but nothing else. Climate science is the same story, you have so much data and so much modeling to do that you need a very large computer and, of course, very good algorithms and very careful physics modeling for an extremely complex system, but ultimately it needs a lot of horsepower to be able to even do a single simulation. So, what I was showing with Madhu at that booth earlier was results of a simulation that was done just prior us going into production with our Lenovo system where people were doing ocean circulation calculations. The ocean is obviously part of the big Earth system, which is part of the climate system as well. But, they took a small patch of the ocean, a few kilometers in size in each direction, but did it at very, very high resolution, even vertically going down to the bottom of the ocean so that the topography of the ocean floor can be taken into account. That allows you to see at a much smaller scale the onset of tides, the onset of micro-tides that allow water to mix, the cold water from the bottom and the hot water from the top; The mixing of nutrients, how life goes on, the whole cycle. It's super important. Now that, of course, gets coupled with the atmosphere and with the ice and with the radiation from the sun and all that stuff. That calculation was run by a group from, the main guy was from JPL in California, and he was running on 48,000 cores. Single runs at 48,000 cores for about two- to three-weeks and produced a petabyte of data, which is still being analyzed. That's the kind of resolution that's been enabled... >> Scale. >> It gives it a sense of just exactly... >> That's the scale. >> By a system the size of the one we have. It was not possible to do that in Canada before this system. >> I tell you both, when I lived on the vendor side and as an analyst, talking to labs and universities, you love geeking out. Because first of all, you always have a need for newer, faster things because the example you just gave is like, "Oh wait." "If I can get the next generation chipset." "If the networking can be improved." You know you can take that petabyte of data and process it so much faster. >> If I could only get more money to buy a bigger one. >> We've talked to the people at CERN and JPL and things like that. - Yeah. >> And it's like this is where most companies are it's like, yeah it's a little bit better, and it might make things a little better and make things nice, but no, this is critical to move along the research. So talk a little bit more about the infrastructure and what you look for and how that connects to the research and how you help close that gap over time. >> Before you go, I just want to also highlight a point that Danny made on solving humanity's greatest challenges which is our motto. He talked about the data analysis that he just did where they are looking at the surface of the ocean, as well as, going down, what is it, 264 nautical layers underneath the ocean? To analyze that much data, to start looking at marine life and protecting marine life. As you start to understand that level of nautical depth, they can start to figure out the nutrients value and other contents that are in that water to be able to start protecting the marine life. There again, another of humanity's greatest challenge right there that he's giving you... >> Nothing happens in isolation; It's all interconnected. >> Yeah. >> When you finally got a grant, you're able to buy a computer, how do you buy the computer that's going to give you the most bang for your buck? The best computer to do the science that we're all tasked with doing? It's tough, right? We don't fancy ourselves as computer architects; we engage the computer companies who really know about architecture to help us do it. The way we did our procurement was, 'Ok vendors, we have a set pot of money, we're willing to spend every last penny of this money, you give us the biggest and the baddest for our money." Now, it has to have a certain set of criteria. You have to be able to solve a number of benchmarks, some sample calculations that we provided. The ones that give you the best performance that's a bonus. It also has to be able to do it with the least amount of power, so we don't have to heat up the world and pay through the nose with power. Those are objective criteria that anybody can understand. But then, there's also the other criteria, so, how well will it run? How is it architected? How balanced is it? Did we get the iOS sub-system for all the storage that was the one that actually meets the criteria? What other extras do we have that will help us make the system run in a much smoother way and for a wide variety of disciplines because we run the biologists together with the physicists and the engineers and the humanitarians, the humanities people. Everybody uses the system. To make a long story short, the proposal that we got from Lenovo won the bid both in terms of what we got for in terms of hardware and also the way it was put together, which was quite innovative. >> Yeah. >> I want to hear about, you said give us the biggest, the baddest, we're willing to empty our coffers for this, so then where do you go from there? How closely do you work with SciNet, how does the relationship evolve and do you work together to innovate and kind of keep going? >> Yeah. I see it as not a segment or a division. I see High Performance Computing as a practice, and with any practice, it's many pieces that come together; you have a conductor, you have the orchestra, but the end of the day the delivery of that many systems is the concert. That's the way to look at it. To deliver this, our practice starts with multiple teams; one's a benchmarking team that understands the application that Dr. Gruner and SciNet will be running because they need to tune to the application the performance of the cluster. The second team is a set of solution architects that are deep engineers and understand our portfolio. Those two work together to say against this application, "Let's build," like he said, "the biggest, baddest, best-performing solution for that particular application." So, those two teams work together. Then we have the third team that kicks in once we win the business, which is coming on site to deploy, manage, and install. When Dr. Gruner talks about the infrastructure, it's a combination of hardware and software that all comes together and the software is open-source based that we built ourselves because we just felt there weren't the right tools in the industry to manage this level of infrastructure at that scale. All this comes together to essentially rack and roll onto their site. >> Let me just add to that. It's not like we went for it in a vacuum. We had already talked to the vendors, we always do. You always go, and they come to you and 'when's your next money coming,' and it's a dog and pony show. They tell you what they have. With Lenovo, at least the team, as we know it now, used to be the IBM team, iXsystems team, who built our previous system. A lot of these guys were already known to us, and we've always interacted very well with them. They were already aware of our thinking, where we were going, and that we're also open to suggestions for things that are non-conventional. Now, this can backfire, some data centers are very square they will only prescribe what they want. We're not prescriptive at all, we said, "Give us ideas about what can make this work better." These are the intangibles in a procurement process. You also have to believe in the team. If you don't know the team or if you don't know their track record then that's a no-no, right? Or, it takes points away. >> We brought innovations like DragonFly, which Dr. Dan will talk about that, as well as, we brought in for the first time, Excelero, which is a software-defined storage vendor and it was a smart part of the bid. We were able to flex muscles and be more creative versus just the standard. >> My understanding, you've been using water cooling for about a decade now, maybe? - Yes. >> Maybe you could give us a little bit about your experiences, how it's matured over time, and then Madhu will talk and bring us up to speed on project Neptune. >> Okay. Our first procurement about 10 years ago, again, that was the model we came up with. After years of wracking our brains, we could not decide how to build a data center and what computers to buy, it was like a chicken and egg process. We ended up saying, 'Okay, this is what we're going to do. Here's the money, here's is our total cost of operation that we can support." That included the power bill, the water, the maintenance, the whole works. So much can be used for infrastructure, and the rest is for the operational part. We said to the vendors, "You guys do the work. We want, again, the biggest and the baddest that we can operate within this budget." So, obviously, it has to be energy efficient, among other things. We couldn't design a data center and then put in the systems that we didn't know existed or vice-versa. That's how it started. The initial design was built by IBM, and they designed the data center for us to use water cooling for everything. They put rear door heat exchanges on the racks as a means of avoiding the use of blowing air and trying to contain the air which is less efficient, the air, and is also much more difficult. You can flow water very efficiently. You open the door of one of these racks. >> It's amazing. >> And it's hot air coming out, but you take the heat, right there in-situ, you remove it through a radiator. It's just like your car radiator. >> Car radiator. >> It works very well. Now, it would be nice if we could do even better by doing the hot water cooling and all that, but we're not in a university environment, we're in a strip mall out in the boonies, so we couldn't reuse the heat. Places like LRZ they're reusing the heat produced by the computers to heat their buildings. >> Wow. >> Or, if we're by a hospital, that always needs hot water, then we could have done it. But, it's really interesting how the option of that design that we ended up with the most efficient data center, certainly in Canada, and one of the most efficient in North America 10 years ago. Our PUE was 1.16, that was the design point, and this is not with direct water cooling through the chip. >> Right. Right. >> All right, bring us up to speed. Project Neptune, in general? >> Yes, so Neptune, as the name suggests, is the name of the God of the Sea and we chose that to brand our entire suite of liquid cooling products. Liquid cooling products is end to end in the sense that it's not just hardware, but, it's also software. The other key part of Neptune is a lot of these, in fact, most of these, products were built, not in a vacuum, but designed and built in conjunction with key partners like Barcelona Supercomputer, LRZ in Germany, in Munich. These were real-life customers working with us jointly to design these products. Neptune essentially allows you, very simplistically put, it's an entire suite of hardware and software that allows you to run very high-performance processes at a level of power and cooling utilization that's like using a much lower processor, it dissipates that much heat. The other key part is, you know, the normal way of cooling anything is run chilled water, we don't use chilled water. You save the money of chillers. We use ambient temperature, up to 50 degrees, 90% efficiency, 50 degree goes in, 60 degree comes out. It's really amazing, the entire suite. >> It's 50 Celsius, not Fahrenheit. >> It's Celsius, correct. >> Oh. >> Dr. Bruner talked about SciNet with the rado-heat exchanger. You actually got to stand in front of it to feel the magic of this, right? As geeky as that is. You open the door and it's this hot 60-, 65-degree C air. You close the door it's this cool 20-degree air that's coming out. So, the costs of running a data center drop dramatically with either the rado-heat exchanger, our direct to node product, which we just got released the SE650, or we have something call the thermal-transfer module, which replaces a normal heat sink. Where for an air cool we bring water cool goodness to an air cool product. >> Danny, I wonder if you can give us the final word, just the climate science in general, how's the community doing? Any technological things that are holding us back right now or anything that excites you about the research right now? >> Technology holds you back by the virtual size of the calculations that you need to do, but, it's also physics that hold you back. >> Yes. Because doing the actual modeling is very difficult and you have to be able to believe that the physics models actually work. This is one of the interesting things that Dick Peltier, who happens to be our scientific director and he's also one of the top climate scientists in the world, he's proven through some of his calculations that the models are actually pretty good. The models were designed for current conditions, with current data, so that they would reproduce the evolution of the climate that we can measure today. Now, what about climate that started happening 10,000 years ago, right? The climate was going on; it's been going on forever and ever. There's been glaciations; there's been all these events. It turns out that it has been recorded in history that there are some oscillations in temperature and other quantities that happen about every 1,000 years and nobody had been able to prove why they would happen. It turns out that the same models that we use for climate calculations today, if you take them back and do what's called paleoclimate, you start with approximating the conditions that happened 10,000 years ago, and then you move it forward, these things reproduce, those oscillations, exactly. It's very encouraging that the climate models actually make sense. We're not talking in a vacuum. We're not predicting the end of the world, just because. These calculations are right. They're correct. They're predicting the temperature of the earth is climbing and it's true, we're seeing it, but it will continue unless we do something. Right? It's extremely interesting. Now he's he's beginning to apply those results of the paleoclimate to studies with anthropologists and archeologists. We're trying to understand the events that happened in the Levant in the Middle East thousands of years ago and correlate them with climate events. Now, is that cool or what? >> That's very cool. >> So, I think humanity's greatest challenge is again to... >> I know! >> He just added global warming to it. >> You have a fun job. You have a fun job. >> It's all the interdisciplinarity that now has been made possible. Before we couldn't do this. Ten years ago we couldn't run those calculations, now we can. So it's really cool. - Amazing. Great. Well, Madhu, Danny, thank you so much for coming on the show. >> Thank you for having us. >> It was really fun talking to you. >> Thanks. >> I'm Rebecca Knight for Stu Miniman. We will have more from the Lenovo Transform just after this. (tech music)

>> Live from New York City, It's theCUBE! Covering Levnovo Transform 2.0. Brought to you by Lenovo. (techno music) >> Welcome back to theCUBE's live coverage of Lenovo Transform here in New York City. I'm your host Rebecca Knight along with my co-host Stu Miniman. We're joined by Rod Lappin. He is the senior vice president in marketing here at Lenovo. And Roger Cox, the research vice president at Gartner. Thank you much, gentlemen for coming on theCUBE. >> Thanks for having us! Excited. >> So the big news for the day, NetApp, Lenvovo Two global powerhouses joining forces I want to hear Rod, the Lenovo speil, and then I want to hear your analysis of the deal and what you make of it. So why don't you go ahead. >> Yes, so obviously we're really really excited, Rebecca. It's a great day for us. I think it's something that we've been really planning with NetApp for obviously a long time, and to actually have it come to fruition is really exciting for all of us, right. So as you would have known, probably, our storage offering in market has been quite small up until now. We're addressing about 15% of the market. With this new deal with NetApp we're sort of in the TAM the target market. We can after up to about 92%. We've been quite good at storage. We've been growing about 2X the market average in Flash, over 100% year on year, but we haven't really had the full product range that we've needed to really address out customers' needs, and so, now having this, having this deal now with NetApp means we can go after our customers and really bring value to them the way that we have wanted and definitely the way our customers are asking us to. >> And so that's my question. Was it customer driven? Was it them saying: We just need you to able to do more or what? >> I think if you look at our core business last quarter, Gartner, obviously, ranked us as the fastest growing server business globally. We grew 68% year on year on our revenue last quarter. And so, with the momentum we've got now as a business, we're seeing our customers want us to do more. We're number one in customer satisfaction, number one in reliability, so they see value in us generally but we had sort of what I would classify as a subsegment of the storage market that we want to address. And of course our customers are saying to us: Hey, we want you to do more for us because we like the way you've performed. So it's been good for us. We're excited >> Yeah. >> So, Rodger you know a thing or two about the storage industry and NetApp specifically. So give us the customer viewpoint. You talked to a lot of them. >> Well, first of all let's say this is one of the better kept secrets because it never leaked out. So really haven't been getting customer calls on this event yet but I'm sure we will starting today be getting a lot >> Yeah, they brought a few analysts down to RTP in July and I remember, Rodger you said: What do I do when the customers call? and they're like, shh, shh. Customers aren't going to call. We're going to keep it under wraps. >> And they did a good job of it. But anyways, what it means, I think, to Lenovo is it really elevates Lenovo's standing as a provider of IT technology for the data center. So they now have, not only a very competitive server offering, which Rod's talked about quite a bit, they have what many believe to be one of the best storage offerings in the business. And now they can go compete head to head against Dell EMC, as well as with HPE, which would be the two larger competitors that they have to deal with. So it's going to be very good in terms of providing an alternative to clients for data center technology-involved storage. Good thing. We like competition. >> Absolutely, and we want to be part of it. I think up until now we probably haven't been able to. So when you look at how we're going to market, my field sales team has been planning with the NetApp field's also. We've been basically coordinating how we go to market where do we attack together, where do we have conflict, where do we not. So we actually go in and really focus in on those core competitors that Roger's just described which is where we want to go. >> In the keynote this morning it said from a channel standpoint, there's not a lot of overlap which, on the one hand, I'm saying: Well, sounds like we'll need a lot of training then. But how do you hit the ground running fast? >> So we are already ready to go. We start shipping tomorrow, so that's the good thing about this announcement. Like Roger said, we kept it under wraps, but we are ready to manufacture and go. So, I think it's a really exciting spot for us. From a go-to-market perspective in the channel, NetApp has traditionally been very much about engaging end users, fulfilling through the channel, but engaging end users. Where Lenovo's got a much stronger forte around mid-market and SMB. And we've got a much stronger forte in emerging market, so if you actually start to split geographically the world up a little bit and then you can start to split how we got to market a little you can actually find some really big parts of the market that we don't conflict at all that we can go after. >> But you see, from my point of view, the bigger challenge they have is to go to market. Now they could say there's not much overlap, but you know there's always overlap. There's going to be certain accounts where Lenovo already has a position, and maybe NetApp has a position, too. Then, who's going to do what given a time? So, the biggest challenge that Lenovo has here is also a challenge for NetApp is how they manage together the go to market motion, as well as the service and support because Lenovo's going to have level one, level two support responsibility. They're going to have that revenue to go for support. We'll see how that works out over time. >> I want to ask you what your advice would be to Lenovo leadership in terms of, this deal enables it to go after bigger players and to take over more of the market. But when it's now going head to head with Dell EMC , what do you think it should focus on? >> I think it should focus more on marketing. The products speak for themselves. The competency of these products are well-known. Besides this, it gives Lenovo the opportunity to become more cloud-friendly, too. Because they also have access to all of the software out of NetApp's cloud data services organization. So my main advice would be to Rod, because he's responsible for this, (Rod and Rebecca laugh) is put more wood behind arrow. Get Huawei to put up more money to accentuates the marketing of the product. Create more enthusiasm about the fact that you're now up at another level in terms of being an IT provider to the data center. >> It's a well kept secret as you started out by saying >> Yeah! >> That's right so we've got a business case that we've put together that's starting today obviously. Which involves us getting out and starting to hit the ground running with a lot of media. There's a lot of social media noise today on it obviously. Thanks very much to people like yourselves which is great. And I think we're going to see a lot more marketing-based initiative that run both through the channel as well as to the end users across our, what I classify as our T-1 countries to start with. To Roger's point, though, when we look at the go-to-market, we basically categorize in all the accounts into four boxes. Those accounts where NetApp's very strong and Lenovo's very strong which means Lenovo's strong from the server perspective. NetApp's very strong from the storage perspective. >> FAP would be one of those. >> That's right. That's a very good example. And in that environment, we're going to collaborate and show them we're communicating with each other and ultimately, not fight with each other. We're going to recognize that we want to continue to protect our server business. They're protecting their storage business. We don't want to touch that. In a place where Lenovo, for example, may be weak and NetApp very strong, so they're got a very good storage relationship, we want them to bring our servers into that space. Because obviously if they don't bring us in, then one of our key competitors that is also competitive in NetApp is going to have a foot in the door there somewhere. So, we're going to drive a little bit of a different strategy in that environment. Then, we've got obviously the third environment where Lenovo's very strong from a server perspective and NetApp's nowhere. In that environment, it's free fields for Lenovo to go after that with our new storage array. And then obviously, where we're both neither engaging those customers, it's in acquisition for both. We're going to play and ultimately go after them. There's some really great things that we've been able to put together with this relationship. Like for example, comp neutrality. So, the NetApp teams when we go into that third and fourth box I was just talking about, the NetApp sales force is going to paid the same whether it goes on a Lenovo hardware or goes on the NetApp hardware. So, we've got some pieces that sort of ensure that we don't have conflicts and we're all aligned to ultimately grow and compete with Dell EMC and HPE. >> So, Roger There have been some interesting server and storage partnerships. I think back a decade ago, Dell and EMC did billions of dollars together. It eventually broke up, and then what do you know, it went back together. I think five years ago, NetApp had pretty strong server partnership there. The storage market has changed a lot in the five to ten years. Tell our audience a little bit how NetApp's different, how the storage market's different, and how customers should be thinking about an arrangement like this. >> Well, the storage market's different because there's more alternatives for storage. There's the Cloud: AWS, Azure, even Google Cloud. You get over to Asia, Alibaba over in Asia and so forth. So that's had a very large impact on on-premises storage. The other one is hyper converged. Lenovo's very much a hyper converged business. They have relationships with Nutanix. They've got them with VMware. They have them with Pivot3 and some others. And so, all of these things come together to create a different alternative to the classical three-tier infrastructure: server, networking, and storage. So, all those things are going to exist. And, the upright storage market, while it may be a declining market from a revenue perspective, has a long payoff. It's going to be like mainframe, so it'll be here forever. Like Tate, here forever. It's like me. I'll be here forever. (Rod and Rebecca laugh) So right now, Stu, we're seeing a little bit of a bubble. So we are getting a bubble interns of, this is a good time by the way for Lenovo to have this partnership because there is more likelihood of increase spending for IT. Good economy in the States, good economy over in Europe. Good economy around the world for that matter. I think it's going to last another couple years. 2018, 2019, maybe in the 20's before it starts tailing off again. So the way people are talking to me now, it's kind of like a flush. Hey, we got all this money. We're going to go spend it. Refresh everything. Get more over into Flash. I think they will sell a lot of Flash, even with the entry product, what they call a DE. I think they'll sell a lot of Flash there. And of course up in the DM series, which is the equivalent of NetApp's A200, A300 which are top tier products. They'll sell a lot of Flash there, too. >> I would say as what you just mentioned, the traditional storage market is reducing, but Flash is obviously growing. NetApp last quarter was the number one Flash company in the world. 27.6% market share-- >> Where do I check that out? (Rebecca laughs) That comes from another source >> That comes from another source, yeah sorry. But they hit number one last quarter according to an unknown source. But I think that's really encouraging, right? And at that part of the market Flash is about 30-40% of the overall storage market right now and easily the fastest growing. So this product range really drives an all-Flash array type solution that we can actually take advantage of. >> Rod, we want to get your perspective China, too. That's a big piece of this announcement. Maybe you an talk a little bit about that. I think Roger's got some comments on it. >> Well, think this is a good deal for NetApp. This is the reason why I think maybe the channel conflict won't be as bad as it was for the Dell EMC guys. This is the way for NetApp. NetApp wants to go more and more towards the Cloud. You look at their strategy. It's going more and more towards the Cloud with all of the Cloud data services software that they're developing. And so they're putting more and more emphasis on that. At the same time, the relationship they have with Lenovo gives them the opportunity to get really a creative revenue that otherwise would not get. Allows them maybe to reduce the burden that they would have under manufacturing SGNE expenses and stuff like that. But the big benefit is China. They JB in China is going to give NetApp a entry into China that otherwise would not be able to get because of the laws that the People's Republic of China have. It's a big deal. >> I think we're really excited about China. Obviously that's one of the cornerstones of the deal. So it's an independent organization that's going to be set up. Lenovo will have 51% ownership. NetApp will have 49. Seven board members. Four of them will be Lenovo. Three of them will be NetApp. And ultimately we are going to have that organization just purely specializing on the Lenovo product that is designed by NetApp originally. And it's going to be doing joint IP. We'll have joint developers in there. We'll be able to leverage my existing sales force in China, that's our traditional sales force, to go and drive for everything from a tier one city all the way down to a tier six, tier seven city in PRC. But, that joint venture itself will just be a specialist organization specifically on storage. It's really exciting. >> The thing about the JB it's very very important. Whatever is developed by the JB has to stay in China. That software cannot be taken outside of China because of all the geopolitical issues that you have around the world. Big point. >> Yeah, and a challenge. >> Absolutely It's a challenge that both NetApp and Lenovo have to manage with respect to each other. >> Just for the record, I'm not totally sure. If we develop something in the joint venture, I'm not totally sure that we have to keep that in China. >> I'm not saying that legally you have to. I'm saying emotionally you should. >> Emotional we should. >> Ahhh... >> I was going to say... >> There might be some government concerns on some of that. >> I think it's always going to depend on the government. And we don't want to get into a geopolitical conversation. I think Europe for example will be a lot more liberally open to that sort of stuff >> Speak a little bit about the cultures coming together. NetApp. You've been working on this deal together. sometimes that can be the strength or the challenge. >> I think company cultures are always challenging. And when you get two companies that are, especially right now, as we've heard this morning in some of the sessions, turning the corner. They're both growing. They're both doing very well at the moment. So, there's always a level of confidence, shall we say, in both those situations that you've just got to break down. And I think what we've done very successfully this time is Wei Wei, and George and Kirk, and George and Henri Ricard and myself and Brad Anderson, you saw today who was actually up on stage with us today as well working with us as the executive sponsor on that side. We're lining up our executives globally. All of the field team for Henri Ricard's team and my field team globally have all been interlocking with each other. They're account planning. They're territory planning. We're really trying to break down any of the walls the way may have from a cultural perspective. And really drive a much more open conversation, so we don't get caught out early in the deal. There's a escalation process in the deal. So it goes to a geo level up and then ends up with Henri and myself to actually manage worldwide if something was to get really out of control. But, at the moment, day one, don't see any issues. Seems to be going okay, touch wood. >> They both, Brad and Kirk, said they're complementary companies. Is that your perspective, too? Would you agree with that? >> Well, I think they gave complementary purposes. The interesting thing here is this thing's coming together when both companies are on the uptick. It's not because, go back three years ago and look at where NetApp was three years ago versus where they are today. So it's coming together when both companies, and matter of fact, go back to look at Lenovo two years ago as well >> Absolutely. >> So it's been an uptick that happened here over the last three years, so this thing's coming together when both companies are doing quite well in that respect. >> So-- >> By the way I want to mention Gartner will be publishing a report in September on this transaction from NetApp's point of view. And we'll be publishing a report on in November on this transaction from Lenovo's point of view. >> Great, so one of the things people like Roger and I have to do is, we look at how we would say whether something's successful or not. So I want to get your point first too and then when you look out six, 12, 18 months from now, whether it is successful and the thing I have to say is Kirk and Brad said, well, our goal is to number three in China, and I said isn't that a low bar? Aren't you practically on day one? I mean you're two joint companies. It's going to be there? >> I can't count on my boss to be honest with you. >> You've got the sales team. I know you can do that. >> I would love to. I think at the moment let's just talk about the joint venture for a second. I think the point is at the moment we are only 15% addressable market with our existing range. And so at the moment, we're saying, hey we can address 15% of the market. That puts us way outside of the number 10 slot in PRC. So, to say we want to be number three, is quite ambitious. Especially because we want to try to do it in the next couple of years. So, I actually feel like he's being quite aggressive from a growth perspective, so I think that's quite balanced. Outside of that, I really want to measure us on profitable growth. We really want to diversify our share of wallet and our customer base. We've got a great customer base now from a server perspective. We need to really expand that to ensure that we're taking advantage of the customer feedback we've had. So, I think that's a pretty good spot. >> At the end of the day, the success of non-success of this program is in Rod's hands. (laughing) On the one hand, >> I love the pressure you're putting me under >> And then Laura, on the services support side. People will support this program if they get good quality service and support. So, you have to keep that up for this program. >> Absolutely, and at the moment, the services model is level one and level two is run by Lenovo internally and then level three escalation runs into the NetApp program. We believe we've got a model that runs well. >> A good note to end on. Thanks so much for coming on theCUBE Rod and Roger. >> Thank you very much. >> Thanks for having us I appreciate it very much. It's my inaugural time here. >> First of many. I'm Rebecca Knight for Stu Miniman. We will have more from theCUBE at Lenovo Transform just in a little bit. (techno music)

>> Live from New York City, it's theCUBE, covering Lenovo Transform 2.0 brought to you by Lenovo. >> Welcome back to theCUBE's live coverage of Lenovo Transform here in New York City. I'm your host Rebecca Knight along with my co-host Stu Miniman. We're joined by Melissa Massa. She is the Executive Director of Hyperscale Sales. Thanks so much for coming on theCUBE. >> Thank you, thank you for having me. It's quite exciting. >> It is, it is very exciting. You're a cube newbie. >> I'm a cube newbie, yes. >> So this is very exciting. I'm sure it's the first of many visits. So Melissa we're at this real inflection point in technology and in AI as AI is ushering in this new wave with increasing use of big data and analytics and machine learning. All this means hyperscale is increasingly important. Can you just set the stage for our viewers a little bit about where we are in this-- >> Absolutely, yeah the transformation is really taking place in this industry that we know and love. And it's really amazing at how fast rapid the change is coming so if you look at in the past traditional one U two U type compute were the standard requirements right and today it's much more complex. It's becoming a much faster paced and you look at some of the big guys out there right from the top ten space. They're really helping to evolve AI and machine learning much faster as it's part of the cloud now and it's centric from the cloud space. So it's making things whether it's for personal use, for play, for business or for good humanity type areas. It's really helping involve and change the space altogether. >> One of the themes we've talked about in our kickoff there is Lenovo has a global presence, but it's also through a lot of partnerships. So Intel, Nvidia of course has to be very important in the AI space, you know, people like Microsoft and VMware. That's very much you know, some of those last ones especially look like Microsoft and VMware very much on the enterprise side. The cloud, the hyperscale, you mentioned the top 10 providers. What are the pieces, what are they looking for? What's the expertise that Lenovo brings that helps you fight in this very competitive real tight margin and very demanding ever-changing marketplace? >> You know this marketplace well? You sum it up very well, but in this in this marketplace, when you look at what the big guys are doing right and then you talk about partnerships, in our space, we don't come in and we don't have predisposition in terms of what we're going to. It's really through understanding what they're trying to do with technology and the direction they're going and it's interesting because at Lenovo we have several hundred engineers now dedicated just in our hyperscale organization, but we have 2000 engineers across the globe. So this really allows us to tap into this expertise in our organization, everything from even HPC aspects to multi socket boxes to different types of platforms, you look at ARM, you can look at AMD, look at Intel. So we don't really try to be one provider. We try to be the provider for our customers, and what their needs and where their requirements are going. >> So where have you seen the most success and we're looking forward do you see the growth coming from? >> Yeah we've started out a little bit different in this space. I think a lot of companies take a while getting their name out and getting traction, trying to grow up in what I'll call more that tier two that tier three space. Lenovo really has come into the tier one space. We're very fortunate in that aspect that we kind of are doing more of a top-down trajectory, so we've been very successful. I think you've heard Kirk talk about and you'll hear us continue to talk about the partnerships we have today with ten of the largest, truth be known, I've got pilots going on with the others. I think in a very short period of time we'll be talking about what we're doing across all of the top ten that is really unique to Lenovo, but again I think one of the reasons there's been success there is there's an availability of an engineer to engineer relationship we bring to the table that is really unique and allows our customers as they're going through this evolution with this change in the cloud space, they're realizing that there's not always the expertise they need in house. They've got to go outside and external and look for help in certain areas. One of the areas is we have an eight socket box and it's a great box with an incredibly high memory footprint and there's not a reference architecture on that box in the marketplace. Lenovo really helped develop it. So that's been a great platform for us to be able to have conversations with clients around for SAP hosting, HANA hosting and whatnot. >> Can you talk a little bit about this kind of the scale and investment Lenovo needs to have to be successful in this space? For those of us that track the hyperscales it's like you know there's tens of billions of dollars a year that they're investing in people, plant, and infrastructure. Kirk mentioned in the keynote, what was it? 42 soccer field size manufacturing facility. Is that only for hyperscale? Is it used for some of the other businesses? Help us unpack that a little yeah. >> So that's great, great question. To be in this business, you have to be incredibly committed into this business right, and I can say from YY on down through our entire leadership organization, there is a passion around this space from a hyperscale compute perspective in ensuring our success. In order to do that it really comes with making those right investments, so we can take care of these customers both near-term and long-term. This is not a short-term thing. This is an incredibly long-term plan for us and I will tell you the growth numbers they've given me over the course of the next years so that we have to make these types of investments right, so not only do we leverage our own manufacturing plants, but fortunately for Lenovo, we own. So it really helps minimize margin stacking but I've got great manufacturing facilities around the world and also now as you heard today, and the 42 football fields, we have started our own motherboard lines in our Hefei China Factory. So we'll be producing over 40,000 boards there a year with the two lines we have and then we're going to continue to grow well beyond that. >> So you are a tech veteran. You've been, at this is not your first rodeo here at Lenovo. How would you describe, I mean talking about YY's vision and the commitment he has made to hyperscale, what do you think it is that differentiates Lenovo in this very crowded and competitive tech world? >> I came from a couple of different places before Lenovo. So I had seen the OEM, I had seen the ODM aspect. And I was nervous when we launched this out of Lenovo as to how well is the market going to receive it. It's a crowded place and then you've started to see some of the other players that have been there, have faded off right. So what's really interesting about Lenovo when people ask us about what is your strategy, it's really we call it our ODM plus model and what does that mean? Well it means I'm taking the best parts of an OEM from a size, the global perspective of the markets I can get into for my clients are incredible and for an export of record, being able to get them into markets that are very challenging for others, I have a global services organization. So if you do need me to happen to come into your data center and help with other things, we have that capability too. And then also, but because I own my own manufacturing and I don't outsource anything, I keep relatively low costs to do business with. I can compete with more of that traditional ODM size and now you take the full vertical integration we have and you bring that to the table with being able to we manufacture all of our own motherboards, all the way up through our systems, it's a pretty powerful story, and I think from what we've seen the clients have really resonated with this story. They like what they're seeing from the benefits. >> Yeah it's so much we can learn, maybe you talk so much about scale, I think first of all the customer base that you talk about, 5000 servers or more is kind of the entry level for that, and just the speed that they're changing. A question we get all the time is how do people keep up with this? Give us a little bit of insight as to what you're hearing from your customers in the hyperscale market? How are they keeping to innovate, keeping to grow and how can everybody deal with kind of the pace of change today? >> It's unbelievable, I mean you look around it's immersive data. It's the network you got all this data now and you've got to get it through a pipe right and so there's all these different aspects coming. I've always told our customers look if there are areas that I can't help you with in, I'm going to tell you. I'm going to be more what's right up the middle for you guys, so we really focus on where are you going, where are you evolving, where do you need help from, how can we help to get you? I don't know if Kirk or anybody at the team has talked about it, but really breaking news for you guys because I was going to announce it in pitch today is that we are actually going to build our own white box networking products, and we're going to leave them open source from an OS perspective for our customers too, because we feel this is going to be a very key area for them. We've got the in-house talent. We've actually moved a number of engineers on our networking team directly into our hyperscale organization to get this started. >> Okay is this announcement which, congratulations by the way, is this, are you hearing that demand from the hyperscalers? Some of the hyperscalers have-- >> Absolutely. >> Kind of dipped their toe in there. I know you've been at the OCP events where we see some of the big players like Microsoft and Google. How do they fit, how does that compete against Cisco, so yeah how much of that is kind of a requirement to the customers? >> It is a requirement. I think if you're going to be all-in with these customers because we happen to have a great investment in the networking space already. Also you see Lenovo I think we're a company that we don't come with 50 years of habits right? We come as a fresh company. I never hear inside the company oh we tried that 10 years ago, and we don't want to do it again. We come with a fresh perspective and approach to building our business. We've got the networking organization inside of our company. Why not proliferate it in the next generation and why does that matter? Open matters right? Everything look at what's coming today. Open BMC, open OS. I have major customers coming into Raleigh and sitting down and talking to us about where we going from a security perspective, and how we're going to bring open security standards into this market? >> The other thing when I think about you know, YY mentioned it. Cloud network and device kind of things like IOT and the global device because everybody, AI and IOT everybody's going there. How does that play in your space? >> It just continues, the data just continues to double in massive size and scale, and there are new technologies out. People are learning to use things like the FPGA is a lot smarter and you look at like what they're able to do today from that technology and deliver one server that can take the compute power of four now. So all of that is helping to evolve this rapid pace and where we're going. >> Finally what we'll be talking about next year? I mean perhaps inked deals with the remaining four players that you are in pilot programs with. What other things are most exciting to you? >> Yeah so I think in what you're going to find is I'm launching a team that's going to go after the tier II and tier III market. And we're going to really start to invest in this space. We're going to really start to proliferate. Paul and I, you saw up on the screen. We have 33 custom boards in design today. We have a factory that we need to fill right, so we're going to continue to really push the envelope on everything we're going to be developing from a custom perspective. I think you're going to see it evolve with quite a number of products, maybe even more so beyond just your traditional server approach. We're there to help clients in other areas where they also need to manufacture maybe a part or what could be a commodity for them. And they need special attention in that particular space. We're going to continue to work with them, but I would say the biggest thing. When I'm sitting here next year is going to be the sheer size of where this hyperscale team is going and the revenue and the growth that's bringing in to Lenovo overall. >> Great well thank you so much for coming into theCUBE Melissa. >> It was nice talking to you. >> I appreciate it. Thank you. >> I'm Rebecca Knight for Stu Miniman. We will have more from theCUBE live at Lenovo Transform in just a little bit. (upbeat music)

>> Live, from New York City, it's theCUBE. Covering Lenovo Transform 2.0. Brought to you by, Lenovo. (electronic music) >> Welcome back to theCUBE's live coverage of Lenovo Transform, here in New York City. I'm your host, Rebecca Knight, along with my cohost Stu Miniman. We have two guests here on this segment, We have Kirk Skaugen, he is the president of Lenovo Data Center Group, and Brad Anderson, the Corporate Vice President of Enterprise Mobility for NetApp. Thanks for coming on the program. >> Thank you for having us. >> So the big news of the day, the NetApp Lenovo partnership, explain to our viewers exactly what this means. These are two global powerhouses joining forces. >> Yeah sure, so I think Lenovo has had an amazing year. Last year in our Transform 1.0 we announced the largest server portfolio in our history. And this year we announced the largest data center, data management storage portfolio in our history. With a partnership with NetApp, so we're creating a multi-billion dollar global alliance, a multi-year alliance and it has a place in a joint venture in China as well as we'll be distributing NetApp products in over 160 countries in the world. >> So tell us about the background to this partnership. How did it come about? >> Well, you know, for NetApp we were looking for expanding our reach, and there was two markets that were kind of underserved in. One being kind of the commercial SMB SME channel, and Lenovo has a high-velocity channel there, a strong position. So Lenovo made complete sense in that space as well as in China, where we have a strong brand but we're underserved there as well, so who is better in China than Lenovo? So for us this is all about global market and then the fact that they're a server vendor is just icing on the cake, because the other two server vendors in the marketplace are also our competitors. And then, Lenovo is so much more compatible and complementary to our entire business. >> Kirk, maybe you could spend a little more, because when you look at storage today, storage is really built on servers. You know, NetApp is, you know, at it's heart a software company, even back in the day NetApp was never, some of the other storage companies spent a lot of time and money on the hardware pieces. And of course had reliable, good, trustable hardware, but maybe explain how much, kind of, I.P. goes into this partnership. >> Yeah, sure. So I think today we have about 15 percent coverage of the overall storage market within Lenovo. We've grown our flash array business over 100 percent over the last four quarters. IDC had us at 30% quarter to quarter growth. So we've done well, but we've only cover 15% of the market. After this announcement, and shipping now today, we'll cover over 90% of the market in more than 160 countries. So we're using our global supply chain which is ranked number five in the world by Garner. Manufacturing in Europe, in China, in Mexico et cetera. Really expand this out through our channel partnership program. And in China we're taking a very unique approach to this joint venture. This isn't about taking global products and just trying to force fit them into China. China has unique software solutions, unique hyper scale requirements. So we're pooling our R and D there. Lenovo will be a 51% owner, NetApp a 49% owner. Brad's going to be on the board and there we're going to be delivering products in China for China. >> Yeah, is it, you've got a lot of experience with that. You talk about coming in the future there's an NFV software and hardware solution in China, so Lenovo has some experience doing this kind of engagement, you know. >> Yeah, I think we have a more than 50% growth now, year on year in China. We retooled a lot of the operations that we had there. We have a really nice, broad portfolio now since we launched Think System and Think Agile so it's a nice place to grow on. But today we talked about the joint venture with NetApp and also the fact that over the next year we'll be building out a telecom NFV company after having China Mobile and China Telecom with us as at Mobile World Congress. As well as new edge gateway and edge server solutions. >> Brad, I know cloud is in your title for what you are doing, when I hear NetApp talking, I see NetApp at all the cloud shows we go to. It's a very different world than when I think about NetApp ten years or twenty years ago as like, you know, the Nas Filer company. So bring us up to speed of kind of the NetApp today the momentum and what this brings. >> Yeah, I mean we are going through our own transformation where we were principally a storage company and now we want to be a data company, and increasingly to be a data company you got to be a cloud company. And so, we continue to develop what we think are the, you know, the best storage products in the world, but they are all cloud connected. 'Cause we want data to be able to flow from prim to cloud and customers be able to, you know. That's what really kind of fuels these digital enterprises is that data is the new oil. And so in doing that we have kind of expanded NetApp's charter significantly to being the data authority in hybrid cloud. Hybrid being both the private and the public. And so part of my business is really focused on providing products and solutions so customers can have the same experience in building their own private clouds that they enjoy in the public. And then on the public side we have partnerships with all the hyper scalers to put NetApp's in there so they can deliver native cloud data services. And so, this is a very different company where we're getting more and more cloudy every day. (Rebecca laughs). And that's part of our transformation intentionally. >> So, the transformation, it's the theme of this conference and you were up on the main stage talking about Lenovo's turning this corner and really accelerating its growth, and also talking about the transformation from within the company. Changing the look of the leadership team in particular. Can you tell our viewers a little bit more about that strategy. >> Sure, so we acquired the IBM system X business in late 2014 and we did some things really well and we did some things that we've learned from. So we spent, you know, basically the last 18 months transforming the whole company. New channel programs, new system integrator partnerships, new training certifying over 11,000 people in the world now. Tripling the number of our solution recipes. And we have transformed The management team as well. We have replaced about 19 executives because we wanted the right balance of external and internal perspectives from our competitors as well as from ex-Lenovo and ex-IBM employees. So we feel like we have a very customer-centric organization now and, again, Gardner now is saying we are growing 49% year on year in units, IDC said we are growing 87% year on year in revenues. So I think customers are responding to the new product line. Over the last year the Think System brand truly meant the highest customer performance, the highest reliability, the highest customer satisfaction. And as a result it does take a while to transform. And I think that over the last 12 months you've seen that and we're exponentially growing now as a company. >> And you see it in your results. I mean, they are outstanding. >> So Brad, bring us inside the products a little bit. So we've got, it's the Think System DE and DM. Of course the storage industry very much, they need to trust it, they need to understand it. Gives little to understand, I believe DE maybe has something to do with the >> The E series >> The E series there and tell us the DM series, what's underneath there and how do people understand what's different and what's the same. >> Yeah, I mean the. We're taking platforms across our E series, our FAS and our all flash arrays. So the DE corresponds to the E series. The DM will have our FAS products as well as our all flash array products in there. So that's kind of the mapping. We're putting initially I think, ten products in there. We have the capacity to expand and I'm sure we're going to learn a lot because these are serving markets that NetApp doesn't typically serve. So I think not only is this going to give Lenovo the tools to compete, it's going to give us a lot of information to even build better products, better solutions for both NetApp and our Lenovo customers. So we're super excited about that. The second thing is, it's OnTab, it's the same core software, and all the value and performance testing and validation you get with NetApp. That all goes into the Lenovo branded products as well. And we have made it one of our hallmarks is our data fabric. All of the data services that are on top of this that you can move data and manage data between platforms, that is really important for the NetApp customer. All those values extend to the Lenovo customer. So if they also have NetApp in their environment, or vice-versa, they can share or move data between both those platforms. So that's, nowhere else in the industry is that possible across vendors let alone within. >> So how does it work when you are in the product development process. Two companies, both relentlessly focused on customers. This is part of your culture, part of your DNA. So how do you work together in terms of innovating and collaborating. >> Well, I think the first thing is you just look at the core business: our server business and NetApp branded storage, or Lenovo branded storage based on NetApp's portfolio. We're going to have a better together solution. So the first thing we're looking at is a set of solution recipes so that when you use NetApp and Lenovo together, you're going to get a better experience as a customer base. So that's why I am excited today. We've launched three times as many engineered solutions as we did a year ago. And trained these 11,000 people because we have a very solution oriented sales force and a very complementary channel. From a development perspective, we're going to be building X Clarity management into our portfolio. So the same systems management software that is mission critical for Lenovo server products will now manage the big system DE and DM products. So it's a very familiar management interface for customers, there's an engineering effort gone with that. And then on service and support, we're going to use over 10,000 people around the world that Lenovo has to go service and support these products. So we can deliver a premium customer experience. Whether you're buying the server or the storage. And back to the customer base: we're going to, especially in China, have deep engineering collaborations. Where we're walking into those customer bases and asking what's unique about the China market. >> And, and. It really helps that the two companies are very complementary. So NetApp has deep storage expertise, Lenovo has tremendous compute expertise. So they are very complementary and as customers want more and more complete solutions, we are learning, our engineers are learning from each other and it doesn't hurt the fact that we have a large engineering. We NetApp, have a large engineering population in the research triangle where Kirk's people are at. >> That's right. We're probably one kilometer away from each other in research triangle park. >> Geography matters, location location location. >> No, and our two support organizations are next door as well. So I think that proximity will only contribute to the collaboration. >> Yeah, exactly. >> Alright, so the storage industry actually has a relatively good track record of some deep, long partnerships. NetApp has had a number of them over the years. Tell us, what does success look like if we look back three years from now, what's this partnership. >> Well, what we said publicly is we plan to have a multi-billion dollar, multi-year alliance. So that's going to be fantastic as we grow in over 160 countries. We're going to use Lenovo's extensive supply chain network. So you know as one of the largest kind of procurers of componentry and things around the world, we get to leverage this global factory network to build even more value into that situation. And in China specifically, we've set a goal of being a top three storage player. So we both have probably single digit share in China but together with this collaboration we are setting sights quite high to be in the top three over the next several years. >> I think that's exactly right and I think those are all achievable goals. But right now, we want to get out the gate fast. I mean this is a partnership with two companies with a lot of momentum and I see this as a huge opportunity for both our companies to kind of amplify that momentum near term. And so while there's a lot of excitement on the future, I think success is going to look like, you know, some very exciting results that Kirk can share at Transform 3.0 next year. >> That's right. And for our customer base, we have already gone into production. Taking orders, as of today and tons of engineering, tons of manufacturing development. So we'll have a whole host of seed units and early access units. Our customers can get their hands on this stuff right away and start testing it in their environment. >> As you said, it is an audacious vision. You announced an audacious vision last year, you did another one again this year. So when you think about what you want to be talking about next year. You said what success looks like. What are some other things that you're working on? You said, this is a process, Lenovo has turned the corner and it's got a lot of momentum. But what else are you, what else do you have on tap that you're... >> Well, if we tell all of you that, (Rebecca laughs) we won't have this here next year. >> Yeah >> But I think today is about entry and midrange. About expanding Lenovo's breadth from 15 to 90% of the market and being very aggressive against our top competitors that have a combined server storage portfolio. And I think as I've gone around the world, I've been in Latin America, in India, our channel partners are incredibly excited about this. So I think while other customers might be taking business more direct, we've traditionally been very channel-centric. So, I've seen a lot of pull for choice in the market and I think that's what we're going to deliver to our channel partners. But we will have a lot more in store, that I can promise you. This is phase one of a multi-phase, multi-year plan. >> I think there's a lot of things, there's a lot of possibilities on the product development side and how we can do better products, but I think a lot of success is going to look, it's going to come in our global market. Already, Kirk, since I've been here, I've had a channel partner come up and said "Hey, this makes me rethink my channel partners all over again", because now that channel partner who's a Lenovo has the full breadth of the storage portfolio. So I think this is going to be really good for both of us. Particularly when, you know, Lenovo and NetApp are both very channel friendly partners and companies and I think this I going to be a catalyst to have more people on our side than ever before. >> Kirk, just last thing, just give you the opportunity to talk about some of the other breadth and choice and other things that Lenovo has going on. We're going to talk to some of your team about, you know, hyper converge and hyper scale and other hyper things, but yeah. (Rebecca laughs) >> Well I think the good news about our growth now is that we're doing it across multiple segments in the industry. There isn't just one part of the market that growing. So last year we set an audacious goal of being the largest supercomputer company in the world by 2020. We've now crossed that actually this year. So we are the largest supercomputer company in the world. About one in every four supercomputers now are there. And we're expanding that into a lot of AI offerings as well with our four artificial intelligence centers, from China, Germany, Taipei, Beijing. All having customers bring their AI workloads into a controlled environment with our partners where there's intel and video or the FGBA vendors. So super-computing is alive and well and we continue to innovate with our warm-water cooling technology that's going to be here on display. We think we're building one of the largest supercomputers in Europe right now using that technology. So not just helping solve global warming but being more energy-efficient while we are computing on that as well. In hyper scale we've grown to about delivering six of the top ten hyper scalers products. And we're doing that through, basically starting with a white sheet of paper with our customers and building more than thirty customized products. In the motherboard, in the system, in putting it through our entire supply chain. Versus just, in the past maybe two years ago, maybe just leveraging ODM products, so. Significant growth in hyper scale where we're bringing on new billion dollar customers on a regular basis now. And then in flash arrays, our traditional business, we were over 100% growth year on year. So we're building off of momentum. We had great products but only covering 15% of the market, now much larger. Last but not least, we did announce since Transform, new divisions in embedded and IoT as well as in telecommunications NFVF software. We think each of those can be billion dollar groups within Lenovo, so that's probably a lot of what we would be talking about next year is announcements and innovations we've had. Would be Transform 3.0 probably. (Rebecca laughs) >> Well, we're already looking forward to the next Transform. >> 3.0 will be CUBEd so we look forward to that. >> Stu, very nice. Very nice. Excellent. Well thank you so much Brad and Kirk for being on the show, I really appreciate it. >> Thank you very much. >> I'm Rebecca Knight for Stu Miniman. We will have more from Lenovo Transform and theCUBE's live coverage, just after this. (intense electronic music)

live from New York City it's the cube covering Lenovo transform 2.0 brought to you by Lenovo cubes live coverage of vote transform here in New York City I'm your host Rebecca night along with my co-host stu minimun so Stu this is the second ever Lenovo transform event and yet it's the third time the cube has been at a Lenovo explain to me what's going on here first first of all I mean Rebecca set the stage here we're at basketball city in New York City right on the water it feels like you know we just hit intermission time everybody got let out after after the keynotes of a good energy yes absolutely yes two years ago we were actually at a Lenovo show and the Enterprise Group is a small piece of it so ashton kutcher was there showing off the cool new note moto foam that has like the snap-on things that now they have like a 5g upgradable version of that so there is still the consumer group I saw some really cool gaming headsets that I might know myself but our focus today really talked about the enterprise the data center group is the ones that bring us in and we're gonna have a bunch of their guests on but you know Lenovo obviously company been around for a long time even though I know some people like wait who's Lenovo and they like wait look at the laptop their company gave them oh that's all I know is it every day right absolutely and they drive a lot of the things behind the scenes just cuz that's the IT business you know I still most people I talk to they're like what do you do I'm like it's computer stuff you know you don't understand so the big news of the day obviously is the net up Lenovo partnership to global powerhouse is coming together I want to unpack that with you but but first of all let's just talk about where Lenovo is at this moment in time this is a company that is really turning the corner and and we're starting to see a lot of positive growth explain tell our viewers where we are get our computers up to speed so so absolutely really good point we're gonna get to that that NetApp which is the big news of the day but to set the stage if you think over a decade ago when Lenovo acquired the PC division out of IBM ThinkPad brand people knew everything like that couple of years they went down and then they grew it become the number one PC manufacturer worldwide well they picked up the server division last year we were talking about 25 years of these x86 servers in the history and everything like that well history seems to be repeating yourself lenovo hopes it all repeats itself because they had about two years of well revenue to crime a little bit where do they focus and now they're starting to see growth you know some good growth and you know I think if it's you know year-over-year that the fastest growing you know vendor in the space you know large global presence so a lot of excitement there on all of the pieces from Lenovo hyper scale I'd love to talk about we're gonna have some segments here you know the storage piece as those solutions go together things like hyper-converged were there their large growth with new panics so a lot of things happening Lenovo and starting to see the fruits of the big Motorola Mobility and x86 server acquisitions really starting to hit on all cylinders ok so now so we and we are going to talk about all of those things later on the show I've got a lot of great guests coming but but but Lenovo NetApp so we're having Kurtz Kagan and Brett Anderson of net upcoming on the show right up after this what do you make of the deal and is it is it going to be the game changer that these two executives are predicting so when you look at Lenovo and say ok you know they didn't form you know a server group when they they bought the server division it's a datacenter group and if you have the data center let's not forget they actually have some nice networking pieces which what's the old the BNT pieces but when they talked about really their global scale you know the whole data center piece and mobility go together you've got to have storage and lenovo has a bunch of storage pieces they have a lot of partnerships we mentioned lenovo companies like pivot three scale computing are helping them but you know you bring that up and up is the largest independent storage company today now last numbers i saw friends at IDC we're putting out the numbers that you know net up is number two overall Dell and its various pieces of course Dell EMC from the EMC acquisition is number one but you know net up is there a broad portfolio getting in there with the all flash or a markets and this will be joint development ten products and two families but net offers very strong position in the all flashier a market and if you look at what storage is today there's really servers inside and this is servers there so this is not just wrapping these together you know and go to market but you know they are going to do joint development they're gonna work on innovation together they've got a joint venture in China because while Lenovo is global it is their positioning in China that will help them I remember if I saw right just you know they announced it today they start shipping tomorrow like overnight they will be the number three player in China and they have you know goal to drive them to be a force number one there and that's the story you hit with Lenovo they've got growth they've got a good usually at least top three position in many pieces of the market and through partnerships to requisitions that you know they are they are helping to themselves to broaden their portfolio move up the stack on some of these and deliver these solutions to help as they Kirk said it you know they're helping solve some of humanity's biggest challenges we're gonna talk about like supercomputers and the like that do some of those really cool things well I want to get back to what you chose to the strategy of the company in terms of the relationships because that really has been lenovo's their operating model is is are these collaborations these partnerships and they have them with with the big companies that everyone sort of the Amazon the Google the Microsoft and then they also have them with a lot of small smaller players is that in this fast-moving fast changing IT environment is that smart yeah absolutely they have to no single vendor can do it all usually we had a you know a decade or so where it was like well let's vertically integrate and put it all together then people thought well maybe it's just gonna be commoditized I mean come on Intel's the big sponsor here you know arm and arm of course that's probably you know the number one partner that lenovo has everybody's partnering with Intel everybody's parking with Nvidia VMware and Microsoft are the same you and I are going to be at Microsoft ignite in two weeks we're gonna be talking to a Lenovo executive they're one of the four biggest sponsors at that show working on as your staff working on the solutions I was at VMworld a couple of weeks ago Lenovo at a big booth they're talking about first that they have with VMware visa and moving in that market so of course Dell has a very strong relationship to VMware but Lenovo partners across a lot of these environments and to speak to how do you differentiate the story I really like is there's you know this is a multi-faceted market so yes there's the enterprise there's traditional markets that Lenovo from server early well there's new changing markets like Pike hyper-converged but as I mentioned like the hyper scale their strategy there is what they call odium Plus which means they do some customization but it massive scale these are tens or hundreds thousand plus servers that they will build for a vendor in a specific environment and it's not just off-the-shelf Intel that they do for that and there are some players in the server market that have just left not specifically HPE pretty sure that they're not touching that market it is relatively low margin it is very hard to get there you need that global scale so lenovo differentiating how they compete against the you know Dell Dell AMC and HP ease of the world as well as the ODMs out there kind of a generic brands so that they're making good progress and the partnerships absolutely are going to help them get there I'm glad we not only have a couple of partners we have you know one of the supercomputer customers on to really talk about some of those cool use cases you mentioned this idea of how Lenovo competes and the the theme that we keep hearing from all of the Lenovo executives is this relentless focus on the customer and really trying to comport itself as this brand that can be trusted that is ethical that is responsible is is that enough is that enough to just to just be to win your heart customers hearts and minds or do you need to be a little more so so so look it if there's one thing that you want to stick and start on focusing on the customer is a great place you're not gonna lose customers because they love you and you support them that's great when you talk about trust the storage world that's what we buy buy on trust and risk is what the storage and networking people buy so that's a great thing but it's not enough and I'm excited Rebekah we've got a whole bunch of interviews be able to dig in got the net up one kicking off and then some of the other pieces to really help us answer that question as to right start with the customer and everything leads from there so they're gonna be a great show thank you so much always a pleasure co-hosting with you alright excited for 6:00 with us at the cube we will have more from Lenovo transform here in New York City in just a few minutes

(electronic dance music) (Intel Jingle) (ethereal electronic dance music) ♪ Okay ♪ (upbeat techno dance music) ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh oh ♪ ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh oh ♪ ♪ Take it back take it back ♪ ♪ Take it back ♪ ♪ Take it back take it back ♪ ♪ Take it back ♪ ♪ Take it back take it back ♪ ♪ Yeah everybody get loose yeah ♪ ♪ Yeah ♪ ♪ Ye-yeah yeah ♪ ♪ Yeah yeah ♪ ♪ Everybody everybody yeah ♪ ♪ Whoo whoo ♪ ♪ Whoo whoo ♪ ♪ Whoo yeah ♪ ♪ Everybody get loose whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ >> As a courtesy to the presenters and those around you, please silence all mobile devices, thank you. (electronic dance music) ♪ Everybody get loose ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ (upbeat salsa music) ♪ Ha ha ha ♪ ♪ Ah ♪ ♪ Ha ha ha ♪ ♪ So happy ♪ ♪ Whoo whoo ♪ (female singer scatting) >> Ladies and gentlemen, please take your seats. Our program will begin momentarily. ♪ Hey ♪ (female singer scatting) (male singer scatting) ♪ Hey ♪ ♪ Whoo ♪ (female singer scatting) (electronic dance music) ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ Red don't go ♪ ♪ All hands are in don't go ♪ ♪ In don't go ♪ ♪ Oh red go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are red don't go ♪ ♪ All hands are in red red red red ♪ ♪ All hands are in don't go ♪ ♪ All hands are in red go ♪ >> Ladies and gentlemen, there are available seats. Towards house left, house left there are available seats. If you are please standing, we ask that you please take an available seat. We will begin momentarily, thank you. ♪ Let go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ (upbeat electronic dance music) ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ I live ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Hey ♪ ♪ Yeah ♪ ♪ Oh ♪ ♪ Ah ♪ ♪ Ah ah ah ah ah ah ♪ ♪ Just make me ♪ ♪ Just make me ♪ (bouncy techno music) >> Ladies and gentlemen, once again we ask that you please take the available seats to your left, house left, there are many available seats. If you are standing, please make your way there. The program will begin momentarily, thank you. Good morning! This is Lenovo Transform 2.0! (keyboard clicks) >> Progress. Why do we always talk about it in the future? When will it finally get here? We don't progress when it's ready for us. We need it when we're ready, and we're ready now. Our hospitals and their patients need it now, our businesses and their customers need it now, our cities and their citizens need it now. To deliver intelligent transformation, we need to build it into the products and solutions we make every day. At Lenovo, we're designing the systems to fight disease, power businesses, and help you reach more customers, end-to-end security solutions to protect your data and your companies reputation. We're making IT departments more agile and cost efficient. We're revolutionizing how kids learn with VR. We're designing smart devices and software that transform the way you collaborate, because technology shouldn't just power industries, it should power people. While everybody else is talking about tomorrow, we'll keep building today, because the progress we need can't wait for the future. >> Please welcome to the stage Lenovo's Rod Lappen! (electronic dance music) (audience applauding) >> Alright. Good morning everyone! >> Good morning. >> Ooh, that was pretty good actually, I'll give it one more shot. Good morning everyone! >> Good morning! >> Oh, that's much better! Hope everyone's had a great morning. Welcome very much to the second Lenovo Transform event here in New York. I think when I got up just now on the steps I realized there's probably one thing in common all of us have in this room including myself which is, absolutely no one has a clue what I'm going to say today. So, I'm hoping very much that we get through this thing very quickly and crisply. I love this town, love New York, and you're going to hear us talk a little bit about New York as we get through here, but just before we get started I'm going to ask anyone who's standing up the back, there are plenty of seats down here, and down here on the right hand side, I think he called it house left is the professional way of calling it, but these steps to my right, your left, get up here, let's get you all seated down so that you can actually sit down during the keynote session for us. Last year we had our very first Lenovo Transform. We had about 400 people. It was here in New York, fantastic event, today, over 1,000 people. We have over 62 different technology demonstrations and about 15 breakout sessions, which I'll talk you through a little bit later on as well, so it's a much bigger event. Next year we're definitely going to be shooting for over 2,000 people as Lenovo really transforms and starts to address a lot of the technology that our commercial customers are really looking for. We were however hampered last year by a storm, I don't know if those of you who were with us last year will remember, we had a storm on the evening before Transform last year in New York, and obviously the day that it actually occurred, and we had lots of logistics. Our media people from AMIA were coming in. They took the, the plane was circling around New York for a long time, and Kamran Amini, our General Manager of our Data Center Infrastructure Group, probably one of our largest groups in the Lenovo DCG business, took 17 hours to get from Raleigh, North Carolina to New York, 17 hours, I think it takes seven or eight hours to drive. Took him 17 hours by plane to get here. And then of course this year, we have Florence. And so, obviously the hurricane Florence down there in the Carolinas right now, we tried to help, but still Kamran has made it today. Unfortunately, very tragically, we were hoping he wouldn't, but he's here today to do a big presentation a little bit later on as well. However, I do want to say, obviously, Florence is a very serious tragedy and we have to take it very serious. We got, our headquarters is in Raleigh, North Carolina. While it looks like the hurricane is just missing it's heading a little bit southeast, all of our thoughts and prayers and well wishes are obviously with everyone in the Carolinas on behalf of Lenovo, everyone at our headquarters, everyone throughout the Carolinas, we want to make sure everyone stays safe and out of harm's way. We have a great mixture today in the crowd of all customers, partners, industry analysts, media, as well as our financial analysts from all around the world. There's over 30 countries represented here and people who are here to listen to both YY, Kirk, and Christian Teismann speak today. And so, it's going to be a really really exciting day, and I really appreciate everyone coming in from all around the world. So, a big round of applause for everyone whose come in. (audience applauding) We have a great agenda for you today, and it starts obviously a very consistent format which worked very successful for us last year, and that's obviously our keynote. You'll hear from YY, our CEO, talk a little bit about the vision he has in the industry and how he sees Lenovo's turned the corner and really driving some great strategy to address our customer's needs. Kirk Skaugen, our Executive Vice President of DCG, will be up talking about how we've transformed the DCG business and once again are hitting record growth ratios for our DCG business. And then you'll hear from Christian Teismann, our SVP and General Manager for our commercial business, get up and talk about everything that's going on in our IDG business. There's really exciting stuff going on there and obviously ThinkPad being the cornerstone of that I'm sure he's going to talk to us about a couple surprises in that space as well. Then we've got some great breakout sessions, I mentioned before, 15 breakout sessions, so while this keynote section goes until about 11:30, once we get through that, please go over and explore, and have a look at all of the breakout sessions. We have all of our subject matter experts from both our PC, NBG, and our DCG businesses out to showcase what we're doing as an organization to better address your needs. And then obviously we have the technology pieces that I've also spoken about, 62 different technology displays there arranged from everything IoT, 5G, NFV, everything that's really cool and hot in the industry right now is going to be on display up there, and I really encourage all of you to get up there. So, I'm going to have a quick video to show you from some of the setup yesterday on a couple of the 62 technology displays we've got on up on stage. Okay let's go, so we've got a demonstrations to show you today, one of the greats one here is the one we've done with NC State, a high-performance computing artificial intelligence demonstration of fresh produce. It's about modeling the population growth of the planet, and how we're going to supply water and food as we go forward. Whoo. Oh, that is not an apple. Okay. (woman laughs) Second one over here is really, hey Jonas, how are you? Is really around virtual reality, and how we look at one of the most amazing sites we've got, as an install on our high-performance computing practice here globally. And you can see, obviously, that this is the Barcelona supercomputer, and, where else in New York can you get access to being able to see something like that so easily? Only here at Lenovo Transform. Whoo, okay. (audience applauding) So there's two examples of some of the technology. We're really encouraging everyone in the room after the keynote to flow into that space and really get engaged, and interact with a lot of the technology we've got up there. It seems I need to also do something about my fashion, I've just realized I've worn a vest two days in a row, so I've got to work on that as well. Alright so listen, the last thing on the agenda, we've gone through the breakout sessions and the demo, tonight at four o'clock, there's about 400 of you registered to be on the cruise boat with us, the doors will open behind me. the boat is literally at the pier right behind us. You need to make sure you're on the boat for 4:00 p.m. this evening. Outside of that, I want everyone to have a great time today, really enjoy the experience, make it as experiential as you possibly can, get out there and really get in and touch the technology. There's some really cool AI displays up there for us all to get involved in as well. So ladies and gentlemen, without further adieu, it gives me great pleasure to introduce to you a lover of tennis, as some of you would've heard last year at Lenovo Transform, as well as a lover of technology, Lenovo, and of course, New York City. I am obviously very pleasured to introduce to you Yang Yuanqing, our CEO, as we like to call him, YY. (audience applauding) (upbeat funky music) >> Good morning, everyone. >> Good morning. >> Thank you Rod for that introduction. Welcome to New York City. So, this is the second year in a row we host our Transform event here, because New York is indeed one of the most transformative cities in the world. Last year on this stage, I spoke about the Fourth Industrial Revolution, and our vision around the intelligent transformation, how it would fundamentally change the nature of business and the customer relationships. And why preparing for this transformation is the key for the future of our company. And in the last year I can assure you, we were being very busy doing just that, from searching and bringing global talents around the world to the way we think about every product and every investment we make. I was here in New York just a month ago to announce our fiscal year Q1 earnings, which was a good day for us. I think now the world believes it when we say Lenovo has truly turned the corner to a new phase of growth and a new phase of acceleration in executing the transformation strategy. That's clear to me is that the last few years of a purposeful disruption at Lenovo have led us to a point where we can now claim leadership of the coming intelligent transformation. People often asked me, what is the intelligent transformation? I was saying this way. This is the unlimited potential of the Fourth Industrial Revolution driven by artificial intelligence being realized, ordering a pizza through our speaker, and locking the door with a look, letting your car drive itself back to your home. This indeed reflect the power of AI, but it just the surface of it. The true impact of AI will not only make our homes smarter and offices more efficient, but we are also completely transformed every value chip in every industry. However, to realize these amazing possibilities, we will need a structure built around the key components, and one that touches every part of all our lives. First of all, explosions in new technology always lead to new structures. This has happened many times before. In the early 20th century, thousands of companies provided a telephone service. City streets across the US looked like this, and now bundles of a microscopic fiber running from city to city bring the world closer together. Here's what a driving was like in the US, up until 1950s. Good luck finding your way. (audience laughs) And today, millions of vehicles are organized and routed daily, making the world more efficient. Structure is vital, from fiber cables and the interstate highways, to our cells bounded together to create humans. Thankfully the structure for intelligent transformation has emerged, and it is just as revolutionary. What does this new structure look like? We believe there are three key building blocks, data, computing power, and algorithms. Ever wondered what is it behind intelligent transformation? What is fueling this miracle of human possibility? Data. As the Internet becomes ubiquitous, not only PCs, mobile phones, have come online and been generating data. Today it is the cameras in this room, the climate controls in our offices, or the smart displays in our kitchens at home. The number of smart devices worldwide will reach over 20 billion in 2020, more than double the number in 2017. These devices and the sensors are connected and generating massive amount of data. By 2020, the amount of data generated will be 57 times more than all the grains of sand on Earth. This data will not only make devices smarter, but will also fuel the intelligence of our homes, offices, and entire industries. Then we need engines to turn the fuel into power, and the engine is actually the computing power. Last but not least the advanced algorithms combined with Big Data technology and industry know how will form vertical industrial intelligence and produce valuable insights for every value chain in every industry. When these three building blocks all come together, it will change the world. At Lenovo, we have each of these elements of intelligent transformations in a single place. We have built our business around the new structure of intelligent transformation, especially with mobile and the data center now firmly part of our business. I'm often asked why did you acquire these businesses? Why has a Lenovo gone into so many fields? People ask the same questions of the companies that become the leaders of the information technology revolution, or the third industrial transformation. They were the companies that saw the future and what the future required, and I believe Lenovo is the company today. From largest portfolio of devices in the world, leadership in the data center field, to the algorithm-powered intelligent vertical solutions, and not to mention the strong partnership Lenovo has built over decades. We are the only company that can unify all these essential assets and deliver end to end solutions. Let's look at each part. We now understand the important importance data plays as fuel in intelligent transformation. Hundreds of billions of devices and smart IoTs in the world are generating better and powering the intelligence. Who makes these devices in large volume and variety? Who puts these devices into people's home, offices, manufacturing lines, and in their hands? Lenovo definitely has the front row seats here. We are number one in PCs and tablets. We also produces smart phones, smart speakers, smart displays. AR/VR headsets, as well as commercial IoTs. All of these smart devices, or smart IoTs are linked to each other and to the cloud. In fact, we have more than 20 manufacturing facilities in China, US, Brazil, Japan, India, Mexico, Germany, and more, producing various devices around the clock. We actually make four devices every second, and 37 motherboards every minute. So, this factory located in my hometown, Hu-fi, China, is actually the largest laptop factory in the world, with more than three million square feet. So, this is as big as 42 soccer fields. Our scale and the larger portfolio of devices gives us access to massive amount of data, which very few companies can say. So, why is the ability to scale so critical? Let's look again at our example from before. The early days of telephone, dozens of service providers but only a few companies could survive consolidation and become the leader. The same was true for the third Industrial Revolution. Only a few companies could scale, only a few could survive to lead. Now the building blocks of the next revolution are locking into place. The (mumbles) will go to those who can operate at the scale. So, who could foresee the total integration of cloud, network, and the device, need to deliver intelligent transformation. Lenovo is that company. We are ready to scale. Next, our computing power. Computing power is provided in two ways. On one hand, the modern supercomputers are providing the brute force to quickly analyze the massive data like never before. On the other hand the cloud computing data centers with the server storage networking capabilities, and any computing IoT's, gateways, and miniservers are making computing available everywhere. Did you know, Lenovo is number one provider of super computers worldwide? 170 of the top 500 supercomputers, run on Lenovo. We hold 89 World Records in key workloads. We are number one in x86 server reliability for five years running, according to ITIC. a respected provider of industry research. We are also the fastest growing provider of hyperscale public cloud, hyper-converged and aggressively growing in edge computing. cur-ges target, we are expand on this point soon. And finally to run these individual nodes into our symphony, we must transform the data and utilize the computing power with advanced algorithms. Manufactured, industry maintenance, healthcare, education, retail, and more, so many industries are on the edge of intelligent transformation to improve efficiency and provide the better products and services. We are creating advanced algorithms and the big data tools combined with industry know-how to provide intelligent vertical solutions for several industries. In fact, we studied at Lenovo first. Our IT and research teams partnered with our global supply chain to develop an AI that improved our demand forecasting accuracy. Beyond managing our own supply chain we have offered our deep learning supply focused solution to other manufacturing companies to improve their efficiency. In the best case, we have improved the demand, focused the accuracy by 30 points to nearly 90 percent, for Baosteel, the largest of steel manufacturer in China, covering the world as well. Led by Lenovo research, we launched the industry-leading commercial ready AR headset, DaystAR, partnering with companies like the ones in this room. This technology is being used to revolutionize the way companies service utility, and even our jet engines. Using our workstations, servers, and award-winning imaging processing algorithms, we have partnered with hospitals to process complex CT scan data in minutes. So, this enable the doctors to more successfully detect the tumors, and it increases the success rate of cancer diagnosis all around the world. We are also piloting our smart IoT driven warehouse solution with one of the world's largest retail companies to greatly improve the efficiency. So, the opportunities are endless. This is where Lenovo will truly shine. When we combine the industry know-how of our customers with our end-to-end technology offerings, our intelligent vertical solutions like this are growing, which Kirk and Christian will share more. Now, what will drive this transformation even faster? The speed at which our networks operate, specifically 5G. You may know that Lenovo just launched the first-ever 5G smartphone, our Moto Z3, with the new 5G Moto model. We are partnering with multiple major network providers like Verizon, China Mobile. With the 5G model scheduled to ship early next year, we will be the first company to provide a 5G mobile experience to any users, customers. This is amazing innovation. You don't have to buy a new phone, just the 5G clip on. What can I say, except wow. (audience laughs) 5G is 10 times the fast faster than 4G. Its download speed will transform how people engage with the world, driverless car, new types of smart wearables, gaming, home security, industrial intelligence, all will be transformed. Finally, accelerating with partners, as ready as we are at Lenovo, we need partners to unlock our full potential, partners here to create with us the edge of the intelligent transformation. The opportunities of intelligent transformation are too profound, the scale is too vast. No company can drive it alone fully. We are eager to collaborate with all partners that can help bring our vision to life. We are dedicated to open partnerships, dedicated to cross-border collaboration, unify the standards, share the advantage, and market the synergies. We partner with the biggest names in the industry, Intel, Microsoft, AMD, Qualcomm, Google, Amazon, and Disney. We also find and partner with the smaller innovators as well. We're building the ultimate partner experience, open, shared, collaborative, diverse. So, everything is in place for intelligent transformation on a global scale. Smart devices are everywhere, the infrastructure is in place, networks are accelerating, and the industries demand to be more intelligent, and Lenovo is at the center of it all. We are helping to drive change with the hundreds of companies, companies just like yours, every day. We are your partner for intelligent transformation. Transformation never stops. This is what you will hear from Kirk, including details about Lenovo NetApp global partnership we just announced this morning. We've made the investments in every single aspect of the technology. We have the end-to-end resources to meet your end-to-end needs. As you attend the breakout session this afternoon, I hope you see for yourself how much Lenovo has transformed as a company this past year, and how we truly are delivering a future of intelligent transformation. Now, let me invite to the stage Kirk Skaugen, our president of Data Center growth to tell you about the exciting transformation happening in the global Data C enter market. Thank you. (audience applauding) (upbeat music) >> Well, good morning. >> Good morning. >> Good morning! >> Good morning! >> Excellent, well, I'm pleased to be here this morning to talk about how we're transforming the Data Center and taking you as our customers through your own intelligent transformation journey. Last year I stood up here at Transform 1.0, and we were proud to announce the largest Data Center portfolio in Lenovo's history, so I thought I'd start today and talk about the portfolio and the progress that we've made over the last year, and the strategies that we have going forward in phase 2.0 of Lenovo's transformation to be one of the largest data center companies in the world. We had an audacious vision that we talked about last year, and that is to be the most trusted data center provider in the world, empowering customers through the new IT, intelligent transformation. And now as the world's largest supercomputer provider, giving something back to humanity, is very important this week with the hurricanes now hitting North Carolina's coast, but we take this most trusted aspect very seriously, whether it's delivering the highest quality products on time to you as customers with the highest levels of security, or whether it's how we partner with our channel partners and our suppliers each and every day. You know we're in a unique world where we're going from hundreds of millions of PCs, and then over the next 25 years to hundred billions of connected devices, so each and every one of you is going through this intelligent transformation journey, and in many aspects were very early in that cycle. And we're going to talk today about our role as the largest supercomputer provider, and how we're solving humanity's greatest challenges. Last year we talked about two special milestones, the 25th anniversary of ThinkPad, but also the 25th anniversary of Lenovo with our IBM heritage in x86 computing. I joined the workforce in 1992 out of college, and the IBM first personal server was launching at the same time with an OS2 operating system and a free mouse when you bought the server as a marketing campaign. (audience laughing) But what I want to be very clear today, is that the innovation engine is alive and well at Lenovo, and it's really built on the culture that we're building as a company. All of these awards at the bottom are things that we earned over the last year at Lenovo. As a Fortune now 240 company, larger than companies like Nike, or AMEX, or Coca-Cola. The one I'm probably most proud of is Forbes first list of the top 2,000 globally regarded companies. This was something where 15,000 respondents in 60 countries voted based on ethics, trustworthiness, social conduct, company as an employer, and the overall company performance, and Lenovo was ranked number 27 of 2000 companies by our peer group, but we also now one of-- (audience applauding) But we also got a perfect score in the LGBTQ Equality Index, exemplifying the diversity internally. We're number 82 in the top working companies for mothers, top working companies for fathers, top 100 companies for sustainability. If you saw that factory, it's filled with solar panels on the top of that. And now again, one of the top global brands in the world. So, innovation is built on a customer foundation of trust. We also said last year that we'd be crossing an amazing milestone. So we did, over the last 12 months ship our 20 millionth x86 server. So, thank you very much to our customers for this milestone. (audience applauding) So, let me recap some of the transformation elements that have happened over the last year. Last year I talked about a lot of brand confusion, because we had the ThinkServer brand from the legacy Lenovo, the System x, from IBM, we had acquired a number of networking companies, like BLADE Network Technologies, et cetera, et cetera. Over the last year we've been ramping based on two brand structures, ThinkAgile for next generation IT, and all of our software-defined infrastructure products and ThinkSystem as the world's highest performance, highest reliable x86 server brand, but for servers, for storage, and for networking. We have transformed every single aspect of the customer experience. A year and a half ago, we had four different global channel programs around the world. Typically we're about twice the mix to our channel partners of any of our competitors, so this was really important to fix. We now have a single global Channel program, and have technically certified over 11,000 partners to be technical experts on our product line to deliver better solutions to our customer base. Gardner recently recognized Lenovo as the 26th ranked supply chain in the world. And, that's a pretty big honor, when you're up there with Amazon and Walmart and others, but in tech, we now are in the top five supply chains. You saw the factory network from YY, and today we'll be talking about product shipping in more than 160 countries, and I know there's people here that I've met already this morning, from India, from South Africa, from Brazil and China. We announced new Premier Support services, enabling you to go directly to local language support in nine languages in 49 countries in the world, going directly to a native speaker level three support engineer. And today we have more than 10,000 support specialists supporting our products in over 160 countries. We've delivered three times the number of engineered solutions to deliver a solutions orientation, whether it's on HANA, or SQL Server, or Oracle, et cetera, and we've completely reengaged our system integrator channel. Last year we had the CIO of DXE on stage, and here we're talking about more than 175 percent growth through our system integrator channel in the last year alone as we've brought that back and really built strong relationships there. So, thank you very much for amazing work here on the customer experience. (audience applauding) We also transformed our leadership. We thought it was extremely important with a focus on diversity, to have diverse talent from the legacy IBM, the legacy Lenovo, but also outside the industry. We made about 19 executive changes in the DCG group. This is the most senior leadership team within DCG, all which are newly on board, either from our outside competitors mainly over the last year. About 50 percent of our executives were now hired internally, 50 percent externally, and 31 percent of those new executives are diverse, representing the diversity of our global customer base and gender. So welcome, and most of them you're going to be able to meet over here in the breakout sessions later today. (audience applauding) But some things haven't changed, they're just keeping getting better within Lenovo. So, last year I got up and said we were committed with the new ThinkSystem brand to be a world performance leader. You're going to see that we're sponsoring Ducati for MotoGP. You saw the Ferrari out there with Formula One. That's not a surprise. We want the Lenovo ThinkSystem and ThinkAgile brands to be synonymous with world record performance. So in the last year we've gone from 39 to 89 world records, and partners like Intel would tell you, we now have four times the number of world record workloads on Lenovo hardware than any other server company on the planet today, with more than 89 world records across HPC, Java, database, transaction processing, et cetera. And we're proud to have just brought on Doug Fisher from Intel Corporation who had about 10-17,000 people on any given year working for him in workload optimizations across all of our software. It's just another testament to the leadership team we're bringing in to keep focusing on world-class performance software and solutions. We also per ITIC, are the number one now in x86 server reliability five years running. So, this is a survey where CIOs are in a blind survey asked to submit their reliability of their uptime on their x86 server equipment over the last 365 days. And you can see from 2016 to 2017 the downtime, there was over four hours as noted by the 750 CXOs in more than 20 countries is about one percent for the Lenovo products, and is getting worse generation from generation as we went from Broadwell to Pearlie. So we're taking our reliability, which was really paramount in the IBM System X heritage, and ensuring that we don't just recognize high performance but we recognize the highest level of reliability for mission-critical workloads. And what that translates into is that we at once again have been ranked number one in customer satisfaction from you our customers in 19 of 22 attributes, in North America in 18 of 22. This is a survey by TVR across hundreds of customers of us and our top competitors. This is the ninth consecutive study that we've been ranked number one in customer satisfaction, so we're taking this extremely seriously, and in fact YY now has increased the compensation of every single Lenovo employee. Up to 40 percent of their compensation bonus this year is going to be based on customer metrics like quality, order to ship, and things of this nature. So, we're really putting every employee focused on customer centricity this year. So, the summary on Transform 1.0 is that every aspect of what you knew about Lenovo's data center group has transformed, from the culture to the branding to dedicated sales and marketing, supply chain and quality groups, to a worldwide channel program and certifications, to new system integrator relationships, and to the new leadership team. So, rather than me just talk about it, I thought I'd share a quick video about what we've done over the last year, if you could run the video please. Turn around for a second. (epic music) (audience applauds) Okay. So, thank you to all our customers that allowed us to publicly display their logos in that video. So, what that means for you as investors, and for the investor community out there is, that our customers have responded, that this year Gardner just published that we are the fastest growing server company in the top 10, with 39 percent growth quarter-on-quarter, and 49 percent growth year-on-year. If you look at the progress we've made since the transformation the last three quarters publicly, we've grown 17 percent, then 44 percent, then 68 percent year on year in revenue, and I can tell you this quarter I'm as confident as ever in the financials around the DCG group, and it hasn't been in one area. You're going to see breakout sessions from hyperscale, software-defined, and flash, which are all growing more than a 100 percent year-on-year, supercomputing which we'll talk about shortly, now number one, and then ultimately from profitability, delivering five consecutive quarters of pre-tax profit increase, so I think, thank you very much to the customer base who's been working with us through this transformation journey. So, you're here to really hear what's next on 2.0, and that's what I'm excited to talk about today. Last year I came up with an audacious goal that we would become the largest supercomputer company on the planet by 2020, and this graph represents since the acquisition of the IBM System x business how far we were behind being the number one supercomputer. When we started we were 182 positions behind, even with the acquisition for example of SGI from HP, we've now accomplished our goal actually two years ahead of time. We're now the largest supercomputer company in the world. About one in every four supercomputers, 117 on the list, are now Lenovo computers, and you saw in the video where the universities are said, but I think what I'm most proud of is when your customers rank you as the best. So the awards at the bottom here, are actually Readers Choice from the last International Supercomputing Show where the scientific researchers on these computers ranked their vendors, and we were actually rated the number one server technology in supercomputing with our ThinkSystem SD530, and the number one storage technology with our ThinkSystem DSS-G, but more importantly what we're doing with the technology. You're going to see we won best in life sciences, best in data analytics, and best in collaboration as well, so you're going to see all of that in our breakout sessions. As you saw in the video now, 17 of the top 25 research institutions in the world are now running Lenovo supercomputers. And again coming from Raleigh and watching that hurricane come across the Atlantic, there are eight supercomputers crunching all of those models you see from Germany to Malaysia to Canada, and we're happy to have a SciNet from University of Toronto here with us in our breakout session to talk about what they're doing on climate modeling as well. But we're not stopping there. We just announced our new Neptune warm water cooling technology, which won the International Supercomputing Vendor Showdown, the first time we've won that best of show in 25 years, and we've now installed this. We're building out LRZ in Germany, the first ever warm water cooling in Peking University, at the India Space Propulsion Laboratory, at the Malaysian Weather and Meteorological Society, at Uninett, at the largest supercomputer in Norway, T-Systems, University of Birmingham. This is truly amazing technology where we're actually using water to cool the machine to deliver a significantly more energy-efficient computer. Super important, when we're looking at global warming and some of the electric bills can be millions of dollars just for one computer, and could actually power a small city just with the technology from the computer. We've built AI centers now in Morrisville, Stuttgart, Taipei, and Beijing, where customers can bring their AI workloads in with experts from Intel, from Nvidia, from our FPGA partners, to work on their workloads, and how they can best implement artificial intelligence. And we also this year launched LICO which is Lenovo Intelligent Compute Orchestrator software, and it's a software solution that simplifies the management and use of distributed clusters in both HPC and AI model development. So, what it enables you to do is take a single cluster, and run both HPC and AI workloads on it simultaneously, delivering better TCO for your environment, so check out LICO as well. A lot of the customers here and Wall Street are very excited and using it already. And we talked about solving humanity's greatest challenges. In the breakout session, you're going to have a virtual reality experience where you're going to be able to walk through what as was just ranked the world's most beautiful data center, the Barcelona Supercomputer. So, you can actually walk through one of the largest supercomputers in the world from Barcelona. You can see the work we're doing with NC State where we're going to have to grow the food supply of the world by 50 percent, and there's not enough fresh water in the world in the right places to actually make all those crops grow between now and 2055, so you're going to see the progression of how they're mapping the entire globe and the water around the world, how to build out the crop population over time using AI. You're going to see our work with Vestas is this largest supercomputer provider in the wind turbine areas, how they're working on wind energy, and then with University College London, how they're working on some of the toughest particle physics calculations in the world. So again, lots of opportunity here. Take advantage of it in the breakout sessions. Okay, let me transition to hyperscale. So in hyperscale now, we have completely transformed our business model. We are now powering six of the top 10 hyperscalers in the world, which is a significant difference from where we were two years ago. And the reason we're doing that, is we've coined a term called ODM+. We believe that hyperscalers want more procurement power than an ODM, and Lenovo is doing about $18 billion of procurement a year. They want a broader global supply chain that they can get from a local system integrator. We're more than 160 countries around the world, but they want the same world-class quality and reliability like they get from an MNC. So, what we're doing now is instead of just taking off the shelf motherboards from somewhere, we're starting with a blank sheet of paper, we're working with the customer base on customized SKUs and you can see we already are developing 33 custom solutions for the largest hyperscalers in the world. And then we're not just running notebooks through this factory where YY said, we're running 37 notebook boards a minute, we're now putting in tens and tens and tens of thousands of server board capacity per month into this same factory, so absolutely we can compete with the most aggressive ODM's in the world, but it's not just putting these things in in the motherboard side, we're also building out these systems all around the world, India, Brazil, Hungary, Mexico, China. This is an example of a new hyperscale customer we've had this last year, 34,000 servers we delivered in the first six months. The next 34,000 servers we delivered in 68 days. The next 34,000 servers we delivered in 35 days, with more than 99 percent on-time delivery to 35 data centers in 14 countries as diverse as South Africa, India, China, Brazil, et cetera. And I'm really ashamed to say it was 99.3, because we did have a forklift driver who rammed their forklift right through the middle of the one of the server racks. (audience laughing) At JFK Airport that we had to respond to, but I think this gives you a perspective of what it is to be a top five global supply chain and technology. So last year, I said we would invest significantly in IP, in joint ventures, and M and A to compete in software defined, in networking, and in storage, so I wanted to give you an update on that as well. Our newest software-defined partnership is with Cloudistics, enabling a fully composable cloud infrastructure. It's an exclusive agreement, you can see them here. I think Nag, our founder, is going to be here today, with a significant Lenovo investment in the company. So, this new ThinkAgile CP series delivers the simplicity of the public cloud, on-premise with exceptional support and a marketplace of essential enterprise applications all with a single click deployment. So simply put, we're delivering a private cloud with a premium experience. It's simple in that you need no specialists to deploy it. An IT generalist can set it up and manage it. It's agile in that you can provision dozens of workloads in minutes, and it's transformative in that you get all of the goodness of public cloud on-prem in a private cloud to unlock opportunity for use. So, we're extremely excited about the ThinkAgile CP series that's now shipping into the marketplace. Beyond that we're aggressively ramping, and we're either doubling, tripling, or quadrupling our market share as customers move from traditional server technology to software-defined technology. With Nutanix we've been public, growing about more than 150 percent year-on-year, with Nutanix as their fastest growing Nutanix partner, but today I want to set another audacious goal. I believe we cannot just be Nutanix's fastest growing partner but we can become their largest partner within two years. On Microsoft, we are already four times our market share on Azure stack of our traditional business. We were the first to launch our ThinkAgile on Broadwell and on Skylake with the Azure Stack Infrastructure. And on VMware we're about twice our market segment share. We were the first to deliver an Intel-optimized Optane-certified VSAN node. And with Optane technology, we're delivering 50 percent more VM density than any competitive SSD system in the marketplace, about 10 times lower latency, four times the performance of any SSD system out there, and Lenovo's first to market on that. And at VMworld you saw CEO Pat Gelsinger of VMware talked about project dimension, which is Edge as a service, and we're the only OEM beyond the Dell family that is participating today in project dimension. Beyond that you're going to see a number of other partnerships we have. I'm excited that we have the city of Bogota Columbia here, an eight million person city, where we announced a 3,000 camera video surveillance solution last month. With pivot three you're going to see city of Bogota in our breakout sessions. You're going to see a new partnership with Veeam around backup that's launching today. You're going to see partnerships with scale computing in IoT and hyper-converged infrastructure working on some of the largest retailers in the world. So again, everything out in the breakout session. Transitioning to storage and data management, it's been a great year for Lenovo, more than a 100 percent growth year-on-year, 2X market growth in flash arrays. IDC just reported 30 percent growth in storage, number one in price performance in the world and the best HPC storage product in the top 500 with our ThinkSystem DSS G, so strong coverage, but I'm excited today to announce for Transform 2.0 that Lenovo is launching the largest data management and storage portfolio in our 25-year data center history. (audience applauding) So a year ago, the largest server portfolio, becoming the largest fastest growing server OEM, today the largest storage portfolio, but as you saw this morning we're not doing it alone. Today Lenovo and NetApp, two global powerhouses are joining forces to deliver a multi-billion dollar global alliance in data management and storage to help customers through their intelligent transformation. As the fastest growing worldwide server leader and one of the fastest growing flash array and data management companies in the world, we're going to deliver more choice to customers than ever before, global scale that's never been seen, supply chain efficiencies, and rapidly accelerating innovation and solutions. So, let me unwrap this a little bit for you and talk about what we're announcing today. First, it's the largest portfolio in our history. You're going to see not just storage solutions launching today but a set of solution recipes from NetApp that are going to make Lenovo server and NetApp or Lenovo storage work better together. The announcement enables Lenovo to go from covering 15 percent of the global storage market to more than 90 percent of the global storage market and distribute these products in more than 160 countries around the world. So we're launching today, 10 new storage platforms, the ThinkSystem DE and ThinkSystem DM platforms. They're going to be centrally managed, so the same XClarity management that you've been using for server, you can now use across all of your storage platforms as well, and it'll be supported by the same 10,000 plus service personnel that are giving outstanding customer support to you today on the server side. And we didn't come up with this in the last month or the last quarter. We're announcing availability in ordering today and shipments tomorrow of the first products in this portfolio, so we're excited today that it's not just a future announcement but something you as customers can take advantage of immediately. (audience applauding) The second part of the announcement is we are announcing a joint venture in China. Not only will this be a multi-billion dollar global partnership, but Lenovo will be a 51 percent owner, NetApp a 49 percent owner of a new joint venture in China with the goal of becoming in the top three storage companies in the largest data and storage market in the world. We will deliver our R and D in China for China, pooling our IP and resources together, and delivering a single route to market through a complementary channel, not just in China but worldwide. And in the future I just want to tell everyone this is phase one. There is so much exciting stuff. We're going to be on the stage over the next year talking to you about around integrated solutions, next-generation technologies, and further synergies and collaborations. So, rather than just have me talk about it, I'd like to welcome to the stage our new partner NetApp and Brad Anderson who's the senior vice president and general manager of NetApp Cloud Infrastructure. (upbeat music) (audience applauding) >> Thank You Kirk. >> So Brad, we've known each other a long time. It's an exciting day. I'm going to give you the stage and allow you to say NetApp's perspective on this announcement. >> Very good, thank you very much, Kirk. Kirk and I go back to I think 1994, so hey good morning and welcome. My name is Brad Anderson. I manage the Cloud Infrastructure Group at NetApp, and I am honored and privileged to be here at Lenovo Transform, particularly today on today's announcement. Now, you've heard a lot about digital transformation about how companies have to transform their IT to compete in today's global environment. And today's announcement with the partnership between NetApp and Lenovo is what that's all about. This is the joining of two global leaders bringing innovative technology in a simplified solution to help customers modernize their IT and accelerate their global digital transformations. Drawing on the strengths of both companies, Lenovo's high performance compute world-class supply chain, and NetApp's hybrid cloud data management, hybrid flash and all flash storage solutions and products. And both companies providing our customers with the global scale for them to be able to meet their transformation goals. At NetApp, we're very excited. This is a quote from George Kurian our CEO. George spent all day yesterday with YY and Kirk, and would have been here today if it hadn't been also our shareholders meeting in California, but I want to just convey how excited we are for all across NetApp with this partnership. This is a partnership between two companies with tremendous market momentum. Kirk took you through all the amazing results that Lenovo has accomplished, number one in supercomputing, number one in performance, number one in x86 reliability, number one in x86 customers sat, number five in supply chain, really impressive and congratulations. Like Lenovo, NetApp is also on a transformation journey, from a storage company to the data authority in hybrid cloud, and we've seen some pretty impressive momentum as well. Just last week we became number one in all flash arrays worldwide, catching EMC and Dell, and we plan to keep on going by them, as we help customers modernize their their data centers with cloud connected flash. We have strategic partnerships with the largest hyperscalers to provide cloud native data services around the globe and we are having success helping our customers build their own private clouds with just, with a new disruptive hyper-converged technology that allows them to operate just like hyperscalers. These three initiatives has fueled NetApp's transformation, and has enabled our customers to change the world with data. And oh by the way, it has also fueled us to have meet or have beaten Wall Street's expectations for nine quarters in a row. These are two companies with tremendous market momentum. We are also building this partnership for long term success. We think about this as phase one and there are two important components to phase one. Kirk took you through them but let me just review them. Part one, the establishment of a multi-year commitment and a collaboration agreement to offer Lenovo branded flash products globally, and as Kurt said in 160 countries. Part two, the formation of a joint venture in PRC, People's Republic of China, that will provide long term commitment, joint product development, and increase go-to-market investment to meet the unique needs to China. Both companies will put in storage technologies and storage expertise to form an independent JV that establishes a data management company in China for China. And while we can dream about what phase two looks like, our entire focus is on making phase one incredibly successful and I'm pleased to repeat what Kirk, is that the first products are orderable and shippable this week in 160 different countries, and you will see our two companies focusing on the here and now. On our joint go to market strategy, you'll see us working together to drive strategic alignment, focused execution, strong governance, and realistic expectations and milestones. And it starts with the success of our customers and our channel partners is job one. Enabling customers to modernize their legacy IT with complete data center solutions, ensuring that our customers get the best from both companies, new offerings the fuel business success, efficiencies to reinvest in game-changing initiatives, and new solutions for new mission-critical applications like data analytics, IoT, artificial intelligence, and machine learning. Channel partners are also top of mind for both our two companies. We are committed to the success of our existing and our future channel partners. For NetApp channel partners, it is new pathways to new segments and to new customers. For Lenovo's channel partners, it is the competitive weapons that now allows you to compete and more importantly win against Dell, EMC, and HP. And the good news for both companies is that our channel partner ecosystem is highly complementary with minimal overlap. Today is the first day of a very exciting partnership, of a partnership that will better serve our customers today and will provide new opportunities to both our companies and to our partners, new products to our customers globally and in China. I am personally very excited. I will be on the board of the JV. And so, I look forward to working with you, partnering with you and serving you as we go forward, and with that, I'd like to invite Kirk back up. (audience applauding) >> Thank you. >> Thank you. >> Well, thank you, Brad. I think it's an exciting overview, and these products will be manufactured in China, in Mexico, in Hungary, and around the world, enabling this amazing supply chain we talked about to deliver in over 160 countries. So thank you Brad, thank you George, for the amazing partnership. So again, that's not all. In Transform 2.0, last year, we talked about the joint ventures that were coming. I want to give you a sneak peek at what you should expect at future Lenovo events around the world. We have this Transform in Beijing in a couple weeks. We'll then be repeating this in 20 different locations roughly around the world over the next year, and I'm excited probably more than ever about what else is coming. Let's talk about Telco 5G and network function virtualization. Today, Motorola phones are certified on 46 global networks. We launched the world's first 5G upgradable phone here in the United States with Verizon. Lenovo DCG sells to 58 telecommunication providers around the world. At Mobile World Congress in Barcelona and Shanghai, you saw China Telecom and China Mobile in the Lenovo booth, China Telecom showing a video broadband remote access server, a VBRAS, with video streaming demonstrations with 2x less jitter than they had seen before. You saw China Mobile with a virtual remote access network, a VRAN, with greater than 10 times the throughput and 10x lower latency running on Lenovo. And this year, we'll be launching a new NFV company, a software company in China for China to drive the entire NFV stack, delivering not just hardware solutions, but software solutions, and we've recently hired a new CEO. You're going to hear more about that over the next several quarters. Very exciting as we try to drive new economics into the networks to deliver these 20 billion devices. We're going to need new economics that I think Lenovo can uniquely deliver. The second on IoT and edge, we've integrated on the device side into our intelligent devices group. With everything that's going to consume electricity computes and communicates, Lenovo is in a unique position on the device side to take advantage of the communications from Motorola and being one of the largest device companies in the world. But this year, we're also going to roll out a comprehensive set of edge gateways and ruggedized industrial servers and edge servers and ISP appliances for the edge and for IoT. So look for that as well. And then lastly, as a service, you're going to see Lenovo delivering hardware as a service, device as a service, infrastructure as a service, software as a service, and hardware as a service, not just as a glorified leasing contract, but with IP, we've developed true flexible metering capability that enables you to scale up and scale down freely and paying strictly based on usage, and we'll be having those announcements within this fiscal year. So Transform 2.0, lots to talk about, NetApp the big news of the day, but a lot more to come over the next year from the Data Center group. So in summary, I'm excited that we have a lot of customers that are going to be on stage with us that you saw in the video. Lots of testimonials so that you can talk to colleagues of yourself. Alamos Gold from Canada, a Canadian gold producer, Caligo for data optimization and privacy, SciNet, the largest supercomputer we've ever put into North America, and the largest in Canada at the University of Toronto will be here talking about climate change. City of Bogota again with our hyper-converged solutions around smart city putting in 3,000 cameras for criminal detection, license plate detection, et cetera, and then more from a channel mid market perspective, Jerry's Foods, which is from my home state of Wisconsin, and Minnesota which has about 57 stores in the specialty foods market, and how they're leveraging our IoT solutions as well. So again, about five times the number of demos that we had last year. So in summary, first and foremost to the customers, thank you for your business. It's been a great journey and I think we're on a tremendous role. You saw from last year, we're trying to build credibility with you. After the largest server portfolio, we're now the fastest-growing server OEM per Gardner, number one in performance, number one in reliability, number one in customer satisfaction, number one in supercomputing. Today, the largest storage portfolio in our history, with the goal of becoming the fastest growing storage company in the world, top three in China, multibillion-dollar collaboration with NetApp. And the transformation is going to continue with new edge gateways, edge servers, NFV solutions, telecommunications infrastructure, and hardware as a service with dynamic metering. So thank you for your time. I've looked forward to meeting many of you over the next day. We appreciate your business, and with that, I'd like to bring up Rod Lappen to introduce our next speaker. Rod? (audience applauding) >> Thanks, boss, well done. Alright ladies and gentlemen. No real secret there. I think we've heard why I might talk about the fourth Industrial Revolution in data and exactly what's going on with that. You've heard Kirk with some amazing announcements, obviously now with our NetApp partnership, talk about 5G, NFV, cloud, artificial intelligence, I think we've hit just about all the key hot topics. It's with great pleasure that I now bring up on stage Mr. Christian Teismann, our senior vice president and general manager of commercial business for both our PCs and our IoT business, so Christian Teismann. (techno music) Here, take that. >> Thank you. I think I'll need that. >> Okay, Christian, so obviously just before we get down, you and I last year, we had a bit of a chat about being in New York. >> Exports. >> You were an expat in New York for a long time. >> That's true. >> And now, you've moved from New York. You're in Munich? >> Yep. >> How does that feel? >> Well Munich is a wonderful city, and it's a great place to live and raise kids, but you know there's no place in the world like New York. >> Right. >> And I miss it a lot, quite frankly. >> So what exactly do you miss in New York? >> Well there's a lot of things in New York that are unique, but I know you spent some time in Japan, but I still believe the best sushi in the world is still in New York City. (all laughing) >> I will beg to differ. I will beg to differ. I think Mr. Guchi-san from Softbank is here somewhere. He will get up an argue very quickly that Japan definitely has better sushi than New York. But obviously you know, it's a very very special place, and I have had sushi here, it's been fantastic. What about Munich? Anything else that you like in Munich? >> Well I mean in Munich, we have pork knuckles. >> Pork knuckles. (Christian laughing) Very similar sushi. >> What is also very fantastic, but we have the real, the real Oktoberfest in Munich, and it starts next week, mid-September, and I think it's unique in the world. So it's very special as well. >> Oktoberfest. >> Yes. >> Unfortunately, I'm not going this year, 'cause you didn't invite me, but-- (audience chuckling) How about, I think you've got a bit of a secret in relation to Oktoberfest, probably not in Munich, however. >> It's a secret, yes, but-- >> Are you going to share? >> Well I mean-- >> See how I'm putting you on the spot? >> In the 10 years, while living here in New York, I was a regular visitor of the Oktoberfest at the Lower East Side in Avenue C at Zum Schneider, where I actually met my wife, and she's German. >> Very good. So, how about a big round of applause? (audience applauding) Not so much for Christian, but more I think, obviously for his wife, who obviously had been drinking and consequently ended up with you. (all laughing) See you later, mate. >> That's the beauty about Oktoberfest, but yes. So first of all, good morning to everybody, and great to be back here in New York for a second Transform event. New York clearly is the melting pot of the world in terms of culture, nations, but also business professionals from all kind of different industries, and having this event here in New York City I believe is manifesting what we are trying to do here at Lenovo, is transform every aspect of our business and helping our customers on the journey of intelligent transformation. Last year, in our transformation on the device business, I talked about how the PC is transforming to personalized computing, and we've made a lot of progress in that journey over the last 12 months. One major change that we have made is we combined all our device business under one roof. So basically PCs, smart devices, and smart phones are now under the roof and under the intelligent device group. But from my perspective makes a lot of sense, because at the end of the day, all devices connect in the modern world into the cloud and are operating in a seamless way. But we are also moving from a device business what is mainly a hardware focus historically, more and more also into a solutions business, and I will give you during my speech a little bit of a sense of what we are trying to do, as we are trying to bring all these components closer together, and specifically also with our strengths on the data center side really build end-to-end customer solution. Ultimately, what we want to do is make our business, our customer's businesses faster, safer, and ultimately smarter as well. So I want to look a little bit back, because I really believe it's important to understand what's going on today on the device side. Many of us have still grown up with phones with terminals, ultimately getting their first desktop, their first laptop, their first mobile phone, and ultimately smartphone. Emails and internet improved our speed, how we could operate together, but still we were defined by linear technology advances. Today, the world has changed completely. Technology itself is not a limiting factor anymore. It is how we use technology going forward. The Internet is pervasive, and we are not yet there that we are always connected, but we are nearly always connected, and we are moving to the stage, that everything is getting connected all the time. Sharing experiences is the most driving force in our behavior. In our private life, sharing pictures, videos constantly, real-time around the world, with our friends and with our family, and you see the same behavior actually happening in the business life as well. Collaboration is the number-one topic if it comes down to workplace, and video and instant messaging, things that are coming from the consumer side are dominating the way we are operating in the commercial business as well. Most important beside technology, that a new generation of workforce has completely changed the way we are working. As the famous workforce the first generation of Millennials that have now fully entered in the global workforce, and the next generation, it's called Generation Z, is already starting to enter the global workforce. By 2025, 75 percent of the world's workforce will be composed out of two of these generations. Why is this so important? These two generations have been growing up using state-of-the-art IT technology during their private life, during their education, school and study, and are taking these learnings and taking these behaviors in the commercial workspace. And this is the number one force of change that we are seeing in the moment. Diverse workforces are driving this change in the IT spectrum, and for years in many of our customers' focus was their customer focus. Customer experience also in Lenovo is the most important thing, but we've realized that our own human capital is equally valuable in our customer relationships, and employee experience is becoming a very important thing for many of our customers, and equally for Lenovo as well. As you have heard YY, as we heard from YY, Lenovo is focused on intelligent transformation. What that means for us in the intelligent device business is ultimately starting with putting intelligence in all of our devices, smartify every single one of our devices, adding value to our customers, traditionally IT departments, but also focusing on their end users and building products that make their end users more productive. And as a world leader in commercial devices with more than 33 percent market share, we can solve problems been even better than any other company in the world. So, let's talk about transformation of productivity first. We are in a device-led world. Everything we do is connected. There's more interaction with devices than ever, but also with spaces who are increasingly becoming smart and intelligent. YY said it, by 2020 we have more than 20 billion connected devices in the world, and it will grow exponentially from there on. And users have unique personal choices for technology, and that's very important to recognize, and we call this concept a digital wardrobe. And it means that every single end-user in the commercial business is composing his personal wardrobe on an ongoing basis and is reconfiguring it based on the work he's doing and based where he's going and based what task he is doing. I would ask all of you to put out all the devices you're carrying in your pockets and in your bags. You will see a lot of you are using phones, tablets, laptops, but also cameras and even smartwatches. They're all different, but they have one underlying technology that is bringing it all together. Recognizing digital wardrobe dynamics is a core factor for us to put all the devices under one roof in IDG, one business group that is dedicated to end-user solutions across mobile, PC, but also software services and imaging, to emerging technologies like AR, VR, IoT, and ultimately a AI as well. A couple of years back there was a big debate around bring-your-own-device, what was called consumerization. Today consumerization does not exist anymore, because consumerization has happened into every single device we build in our commercial business. End users and commercial customers today do expect superior display performance, superior audio, microphone, voice, and touch quality, and have it all connected and working seamlessly together in an ease of use space. We are already deep in the journey of personalized computing today. But the center point of it has been for the last 25 years, the mobile PC, that we have perfected over the last 25 years, and has been the undisputed leader in mobility computing. We believe in the commercial business, the ThinkPad is still the core device of a digital wardrobe, and we continue to drive the success of the ThinkPad in the marketplace. We've sold more than 140 million over the last 26 years, and even last year we exceeded nearly 11 million units. That is about 21 ThinkPads per minute, or one Thinkpad every three seconds that we are shipping out in the market. It's the number one commercial PC in the world. It has gotten countless awards but we felt last year after Transform we need to build a step further, in really tailoring the ThinkPad towards the need of the future. So, we announced a new line of X1 Carbon and Yoga at CES the Consumer Electronics Show. And the reason is not we want to sell to consumer, but that we do recognize that a lot of CIOs and IT decision makers need to understand what consumers are really doing in terms of technology to make them successful. So, let's take a look at the video. (suspenseful music) >> When you're the number one business laptop of all time, your only competition is yourself. (wall shattering) And, that's different. Different, like resisting heat, ice, dust, and spills. Different, like sharper, brighter OLA display. The trackpoint that reinvented controls, and a carbon fiber roll cage to protect what's inside, built by an engineering and design team, doing the impossible for the last 25 years. This is the number one business laptop of all time, but it's not a laptop. It's a ThinkPad. (audience applauding) >> Thank you very much. And we are very proud that Lenovo ThinkPad has been selected as the best laptop in the world in the second year in a row. I think it's a wonderful tribute to what our engineers have been done on this one. And users do want awesome displays. They want the best possible audio, voice, and touch control, but some users they want more. What they want is super power, and I'm really proud to announce our newest member of the X1 family, and that's the X1 extreme. It's exceptionally featured. It has six core I9 intel chipset, the highest performance you get in the commercial space. It has Nvidia XTX graphic, it is a 4K UHD display with HDR with Dolby vision and Dolby Atmos Audio, two terabyte in SSD, so it is really the absolute Ferrari in terms of building high performance commercial computer. Of course it has touch and voice, but it is one thing. It has so much performance that it serves also a purpose that is not typical for commercial, and I know there's a lot of secret gamers also here in this room. So you see, by really bringing technology together in the commercial space, you're creating productivity solutions of one of a kind. But there's another category of products from a productivity perspective that is incredibly important in our commercial business, and that is the workstation business . Clearly workstations are very specifically designed computers for very advanced high-performance workloads, serving designers, architects, researchers, developers, or data analysts. And power and performance is not just about the performance itself. It has to be tailored towards the specific use case, and traditionally these products have a similar size, like a server. They are running on Intel Xeon technology, and they are equally complex to manufacture. We have now created a new category as the ultra mobile workstation, and I'm very proud that we can announce here the lightest mobile workstation in the industry. It is so powerful that it really can run AI and big data analysis. And with this performance you can go really close where you need this power, to the sensors, into the cars, or into the manufacturing places where you not only wannna read the sensors but get real-time analytics out of these sensors. To build a machine like this one you need customers who are really challenging you to the limit. and we're very happy that we had a customer who went on this journey with us, and ultimately jointly with us created this product. So, let's take a look at the video. (suspenseful music) >> My world involves pathfinding both the hardware needs to the various work sites throughout the company, and then finding an appropriate model of desktop, laptop, or workstation to match those needs. My first impressions when I first seen the ThinkPad P1 was I didn't actually believe that we could get everything that I was asked for inside something as small and light in comparison to other mobile workstations. That was one of the I can't believe this is real sort of moments for me. (engine roars) >> Well, it's better than general when you're going around in the wind tunnel, which isn't alway easy, and going on a track is not necessarily the best bet, so having a lightweight very powerful laptop is extremely useful. It can take a Xeon processor, which can support ECC from when we try to load a full car, and when we're analyzing live simulation results. through and RCFT post processor or example. It needs a pretty powerful machine. >> It's come a long way to be able to deliver this. I hate to use the word game changer, but it is that for us. >> Aston Martin has got a lot of different projects going. There's some pretty exciting projects and a pretty versatile range coming out. Having Lenovo as a partner is certainly going to ensure that future. (engine roars) (audience applauds) >> So, don't you think the Aston Martin design and the ThinkPad design fit very well together? (audience laughs) So if Q, would get a new laptop, I think you would get a ThinkPad X P1. So, I want to switch gears a little bit, and go into something in terms of productivity that is not necessarily on top of the mind or every end user but I believe it's on top of the mind of every C-level executive and of every CEO. Security is the number one threat in terms of potential risk in your business and the cost of cybersecurity is estimated by 2020 around six trillion dollars. That's more than the GDP of Japan and we've seen a significant amount of data breach incidents already this years. Now, they're threatening to take companies out of business and that are threatening companies to lose a huge amount of sensitive customer data or internal data. At Lenovo, we are taking security very, very seriously, and we run a very deep analysis, around our own security capabilities in the products that we are building. And we are announcing today a new brand under the Think umbrella that is called ThinkShield. Our goal is to build the world's most secure PC, and ultimately the most secure devices in the industry. And when we looked at this end-to-end, there is no silver bullet around security. You have to go through every aspect where security breaches can potentially happen. That is why we have changed the whole organization, how we look at security in our device business, and really have it grouped under one complete ecosystem of solutions, Security is always something where you constantly are getting challenged with the next potential breach the next potential technology flaw. As we keep innovating and as we keep integrating, a lot of our partners' software and hardware components into our products. So for us, it's really very important that we partner with companies like Intel, Microsoft, Coronet, Absolute, and many others to really as an example to drive full encryption on all the data seamlessly, to have multi-factor authentication to protect your users' identity, to protect you in unsecured Wi-Fi locations, or even simple things like innovation on the device itself, to and an example protect the camera, against usage with a little thing like a thinkShutter that you can shut off the camera. SO what I want to show you here, is this is the full portfolio of ThinkShield that we are announcing today. This is clearly not something I can even read to you today, but I believe it shows you the breadth of security management that we are announcing today. There are four key pillars in managing security end-to-end. The first one is your data, and this has a lot of aspects around the hardware and the software itself. The second is identity. The third is the security around online, and ultimately the device itself. So, there is a breakout on security and ThinkShield today, available in the afternoon, and encourage you to really take a deeper look at this one. The first pillar around productivity was the device, and around the device. The second major pillar that we are seeing in terms of intelligent transformation is the workspace itself. Employees of a new generation have a very different habit how they work. They split their time between travel, working remotely but if they do come in the office, they expect a very different office environment than what they've seen in the past in cubicles or small offices. They come into the office to collaborate, and they want to create ideas, and they really work in cross-functional teams, and they want to do it instantly. And what we've seen is there is a huge amount of investment that companies are doing today in reconfiguring real estate reconfiguring offices. And most of these kind of things are moving to a digital platform. And what we are doing, is we want to build an entire set of solutions that are just focused on making the workspace more productive for remote workforce, and to create technology that allow people to work anywhere and connect instantly. And the core of this is that we need to be, the productivity of the employee as high as possible, and make it for him as easy as possible to use these kind of technologies. Last year in Transform, I announced that we will enter the smart office space. By the end of last year, we brought the first product into the market. It's called the Hub 500. It's already deployed in thousands of our customers, and it's uniquely focused on Microsoft Skype for Business, and making meeting instantly happen. And the product is very successful in the market. What we are announcing today is the next generation of this product, what is the Hub 700, what has a fantastic audio quality. It has far few microphones, and it is usable in small office environment, as well as in major conference rooms, but the most important part of this new announcement is that we are also announcing a software platform, and this software platform allows you to run multiple video conferencing software solutions on the same platform. Many of you may have standardized for one software solution or for another one, but as you are moving in a world of collaborating instantly with partners, customers, suppliers, you always will face multiple software standards in your company, and Lenovo is uniquely positioned but providing a middleware platform for the device to really enable multiple of these UX interfaces. And there's more to come and we will add additional UX interfaces on an ongoing base, based on our customer requirements. But this software does not only help to create a better experience and a higher productivity in the conference room or the huddle room itself. It really will allow you ultimately to manage all your conference rooms in the company in one instance. And you can run AI technologies around how to increase productivity utilization of your entire conference room ecosystem in your company. You will see a lot more devices coming from the node in this space, around intelligent screens, cameras, and so on, and so on. The idea is really that Lenovo will become a core provider in the whole movement into the smart office space. But it's great if you have hardware and software that is really supporting the approach of modern IT, but one component that Kirk also mentioned is absolutely critical, that we are providing this to you in an as a service approach. Get it what you want, when you need it, and pay it in the amount that you're really using it. And within UIT there is also I think a new philosophy around IT management, where you're much more focused on the value that you are consuming instead of investing into technology. We are launched as a service two years back and we already have a significant number of customers running PC as a service, but we believe as a service will stretch far more than just the PC device. It will go into categories like smart office. It might go even into categories like phone, and it will definitely go also in categories like storage and server in terms of capacity management. I want to highlight three offerings that we are also displaying today that are sort of building blocks in terms of how we really run as a service. The first one is that we collaborated intensively over the last year with Microsoft to be the launch pilot for their Autopilot offering, basically deploying images easily in the same approach like you would deploy a new phone on the network. The purpose really is to make new imaging and enabling new PC as seamless as it's used to be in the phone industry, and we have a complete set of offerings, and already a significant number customers have deployed Autopilot with Lenovo. The second major offering is Premier Support, like in the in the server business, where Premier Support is absolutely critical to run critical infrastructure, we see a lot of our customers do want to have Premier Support for their end users, so they can be back into work basically instantly, and that you have the highest possible instant repair on every single device. And then finally we have a significant amount of time invested into understanding how the software as a service really can get into one philosophy. And many of you already are consuming software as a service in many different contracts from many different vendors, but what we've created is one platform that really can manage this all together. All these things are the foundation for a device as a service offering that really can manage this end-to-end. So, implementing an intelligent workplace can be really a daunting prospect depending on where you're starting from, and how big your company ultimately is. But how do you manage the transformation of technology workspace if you're present in 50 or more countries and you run an infrastructure for more than 100,000 people? Michelin, famous for their tires, infamous for their Michelin star restaurant rating, especially in New York, and instantly recognizable by the Michelin Man, has just doing that. Please welcome with me Damon McIntyre from Michelin to talk to us about the challenges and transforming collaboration and productivity. (audience applauding) (electronic dance music) Thank you, David. >> Thank you, thank you very much. >> We on? >> So, how do you feel here? >> Well good, I want to thank you first of all for your partnership and the devices you create that helped us design, manufacture, and distribute the best tire in the world, okay? I just had to say it and put out there, alright. And I was wondering, were those Michelin tires on that Aston Martin? >> I'm pretty sure there is no other tire that would fit to that. >> Yeah, no, thank you, thank you again, and thank you for the introduction. >> So, when we talk about the transformation happening really in the workplace, the most tangible transformation that you actually see is the drastic change that companies are doing physically. They're breaking down walls. They're removing cubes, and they're moving to flexible layouts, new desks, new huddle rooms, open spaces, but the underlying technology for that is clearly not so visible very often. So, tell us about Michelin's strategy, and the technology you are deploying to really enable this corporation. >> So we, so let me give a little bit a history about the company to understand the daunting tasks that we had before us. So we have over 114,000 people in the company under 170 nationalities, okay? If you go to the corporate office in France, it's Clermont. It's about 3,000 executives and directors, and what have you in the marketing, sales, all the way up to the chain of the global CIO, right? Inside of the Americas, we merged in Americas about three years ago. Now we have the Americas zone. There's about 28,000 employees across the Americas, so it's really, it's really hard in a lot of cases. You start looking at the different areas that you lose time, and you lose you know, your productivity and what have you, so there, it's when we looked at different aspects of how we were going to manage the meeting rooms, right? because we have opened up our areas of workspace, our CIO, CEOs in our zones will no longer have an office. They'll sit out in front of everybody else and mingle with the crowd. So, how do you take those spaces that were originally used by an individual but now turn them into like meeting rooms? So, we went through a large process, and looked at the Hub 500, and that really met our needs, because at the end of the day what we noticed was, it was it was just it just worked, okay? We've just added it to the catalog, so we're going to be deploying it very soon, and I just want to again point that I know everybody struggles with this, and if you look at all the minutes that you lose in starting up a meeting, and we know you know what I'm talking about when I say this, it equates to many many many dollars, okay? And so at the end the day, this product helps us to be more efficient in starting up the meeting, and more productive during the meeting. >> Okay, it's very good to hear. Another major trend we are seeing in IT departments is taking a more hands-off approach to hardware. We're seeing new technologies enable IT to create a more efficient model, how IT gets hardware in the hands of end-users, and how they are ultimately supporting themselves. So what's your strategy around the lifecycle management of the devices? >> So yeah you mentioned, again, we'll go back to the 114,000 employees in the company, right? You imagine looking at all the devices we use. I'm not going to get into the number of devices we have, but we have a set number that we use, and we have to go through a process of deploying these devices, which we right now service our own image. We build our images, we service them through our help desk and all that process, and we go through it. If you imagine deploying 25,000 PCs in a year, okay? The time and the daunting task that's behind all that, you can probably add up to 20 or 30 people just full-time doing that, okay? So, with partnering with Lenovo and their excellent technology, their technical teams, and putting together the whole process of how we do imaging, it now lifts that burden off of our folks, and it shifts it into a more automated process through the cloud, okay? And, it's with the Autopilot on the end of the project, we'll have Autopilot fully engaged, but what I really appreciate is how Lenovo really, really kind of got with us, and partnered with us for the whole process. I mean it wasn't just a partner between Michelin and Lenovo. Microsoft was also partnered during that whole process, and it really was a good project that we put together, and we hope to have something in a full production mode next year for sure. >> So, David thank you very, very much to be here with us on stage. What I really want to say, customers like you, who are always challenging us on every single aspect of our capabilities really do make the big difference for us to get better every single day and we really appreciate the partnership. >> Yeah, and I would like to say this is that I am, I'm doing what he's exactly said he just said. I am challenging Lenovo to show us how we can innovate in our work space with your devices, right? That's a challenge, and it's going to be starting up next year for sure. We've done some in the past, but I'm really going to challenge you, and my whole aspect about how to do that is bring you into our workspace. Show you how we make how we go through the process of making tires and all that process, and how we distribute those tires, so you can brainstorm, come back to the table and say, here's a device that can do exactly what you're doing right now, better, more efficient, and save money, so thank you. >> Thank you very much, David. (audience applauding) Well it's sometimes really refreshing to get a very challenging customers feedback. And you know, we will continue to grow this business together, and I'm very confident that your challenge will ultimately help to make our products even more seamless together. So, as we now covered productivity and how we are really improving our devices itself, and the transformation around the workplace, there is one pillar left I want to talk about, and that's really, how do we make businesses smarter than ever? What that really means is, that we are on a journey on trying to understand our customer's business, deeper than ever, understanding our customer's processes even better than ever, and trying to understand how we can help our customers to become more competitive by injecting state-of-the-art technology in this intelligent transformation process, into core processes. But this cannot be done without talking about a fundamental and that is the journey towards 5G. I really believe that 5G is changing everything the way we are operating devices today, because they will be connected in a way like it has never done before. YY talked about you know, 20 times 10 times the amount of performance. There are other studies that talk about even 200 times the performance, how you can use these devices. What it will lead to ultimately is that we will build devices that will be always connected to the cloud. And, we are preparing for this, and Kirk already talked about, and how many operators in the world we already present with our Moto phones, with how many Telcos we are working already on the backend, and we are working on the device side on integrating 5G basically into every single one of our product in the future. One of the areas that will benefit hugely from always connected is the world of virtual reality and augmented reality. And I'm going to pick here one example, and that is that we have created a commercial VR solution for classrooms and education, and basically using consumer type of product like our Mirage Solo with Daydream and put a solution around this one that enables teachers and schools to use these products in the classroom experience. So, students now can have immersive learning. They can studying sciences. They can look at environmental issues. They can exploring their careers, or they can even taking a tour in the next college they're going to go after this one. And no matter what grade level, this is how people will continue to learn in the future. It's quite a departure from the old world of textbooks. In our area that we are looking is IoT, And as YY already elaborated, we are clearly learning from our own processes around how we improve our supply chain and manufacturing and how we improve also retail experience and warehousing, and we are working with some of the largest companies in the world on pilots, on deploying IoT solutions to make their businesses, their processes, and their businesses, you know, more competitive, and some of them you can see in the demo environment. Lenovo itself already is managing 55 million devices in an IoT fashion connecting to our own cloud, and constantly improving the experience by learning from the behavior of these devices in an IoT way, and we are collecting significant amount of data to really improve the performance of these systems and our future generations of products on a ongoing base. We have a very strong partnership with a company called ADLINK from Taiwan that is one of the leading manufacturers of manufacturing PC and hardened devices to create solutions on the IoT platform. The next area that we are very actively investing in is commercial augmented reality. I believe augmented reality has by far more opportunity in commercial than virtual reality, because it has the potential to ultimately improve every single business process of commercial customers. Imagine in the future how complex surgeries can be simplified by basically having real-time augmented reality information about the surgery, by having people connecting into a virtual surgery, and supporting the surgery around the world. Visit a furniture store in the future and see how this furniture looks in your home instantly. Doing some maintenance on some devices yourself by just calling the company and getting an online manual into an augmented reality device. Lenovo is exploring all kinds of possibilities, and you will see a solution very soon from Lenovo. Early when we talked about smart office, I talked about the importance of creating a software platform that really run all these use cases for a smart office. We are creating a similar platform for augmented reality where companies can develop and run all their argumented reality use cases. So you will see that early in 2019 we will announce an augmented reality device, as well as an augmented reality platform. So, I know you're very interested on what exactly we are rolling out, so we will have a first prototype view available there. It's still a codename project on the horizon, and we will announce it ultimately in 2019, but I think it's good for you to take a look what we are doing here. So, I just wanted to give you a peek on what we are working beyond smart office and the device productivity in terms of really how we make businesses smarter. It's really about increasing productivity, providing you the most secure solutions, increase workplace collaboration, increase IT efficiency, using new computing devices and software and services to make business smarter in the future. There's no other company that will enable to offer what we do in commercial. No company has the breadth of commercial devices, software solutions, and the same data center capabilities, and no other company can do more for your intelligent transformation than Lenovo. Thank you very much. (audience applauding) >> Thanks mate, give me that. I need that. Alright, ladies and gentlemen, we are done. So firstly, I've got a couple of little housekeeping pieces at the end of this and then we can go straight into going and experiencing some of the technology we've got on the left-hand side of the room here. So, I want to thank Christian obviously. Christian, awesome as always, some great announcements there. I love the P1. I actually like the Aston Martin a little bit better, but I'll take either if you want to give me one for free. I'll take it. We heard from YY obviously about the industry and how the the fourth Industrial Revolution is impacting us all from a digital transformation perspective, and obviously Kirk on DCG, the great NetApp announcement, which is going to be really exciting, actually that Twitter and some of the social media panels are absolutely going crazy, so it's good to see that the industry is really taking some impact. Some of the publications are really great, so thank you for the media who are obviously in the room publishing right no. But now, I really want to say it's all of your turn. So, all of you up the back there who are having coffee, it's your turn now. I want everyone who's sitting down here after this event move into there, and really take advantage of the 15 breakouts that we've got set there. There are four breakout sessions from a time perspective. I want to try and get you all out there at least to use up three of them and use your fourth one to get out and actually experience some of the technology. So, you've got four breakout sessions. A lot of the breakout sessions are actually done twice. If you have not downloaded the app, please download the app so you can actually see what time things are going on and make sure you're registering correctly. There's a lot of great experience of stuff out there for you to go do. I've got one quick video to show you on some of the technology we've got and then we're about to close. Alright, here we are acting crazy. Now, you can see obviously, artificial intelligence machine learning in the browser. God, I hate that dance, I'm not a Millenial at all. It's effectively going to be implemented by healthcare. I want you to come around and test that out. Look at these two guys. This looks like a Lenovo management meeting to be honest with you. These two guys are actually concentrating, using their brain power to race each others in cars. You got to come past and give that a try. Give that a try obviously. Fantastic event here, lots of technology for you to experience, and great partners that have been involved as well. And so, from a Lenovo perspective, we've had some great alliance partners contribute, including obviously our number one partner, Intel, who's been a really big loyal contributor to us, and been a real part of our success here at Transform. Excellent, so please, you've just seen a little bit of tech out there that you can go and play with. I really want you, I mean go put on those black things, like Scott Hawkins our chief marketing officer from Lenovo's DCG business was doing and racing around this little car with his concentration not using his hands. He said it's really good actually, but as soon as someone comes up to speak to him, his car stops, so you got to try and do better. You got to try and prove if you can multitask or not. Get up there and concentrate and talk at the same time. 62 different breakouts up there. I'm not going to go into too much detai, but you can see we've got a very, very unusual numbering system, 18 to 18.8. I think over here we've got a 4849. There's a 4114. And then up here we've got a 46.1 and a 46.2. So, you need the decoder ring to be able to understand it. Get over there have a lot of fun. Remember the boat leaves today at 4:00 o'clock, right behind us at the pier right behind us here. There's 400 of us registered. Go onto the app and let us know if there's more people coming. It's going to be a great event out there on the Hudson River. Ladies and gentlemen that is the end of your keynote. I want to thank you all for being patient and thank all of our speakers today. Have a great have a great day, thank you very much. (audience applauding) (upbeat music) ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ba do ♪

>> From Boston, Massachusetts, it's The Cube, covering WTG Transform 2018. Brought to you by Winslow Technology Group. >> Welcome back to The Cube here at WTG Transform 2018, I'm Stu Miniman and happy to welcome to the program, a first time guest, Claude Lavigne, who's the director of product management and servers at Dell EMC. Claude, thanks so much for joining us. >> Thank you, Stu. >> All right, so I had David Singer on this morning, who is from the EMC legacy side of things >> Yes. >> talking about storage, so you're from the legacy Dell side, if we will. You know we're working on servers. So tell us a little bit about your background and what you work on these days. >> So yes, so I'm doing planning for several powers. I've been on the server team for about 18 years. So, all the way from the beginning to now I'm #1 in the world, so it feels very, very good after 18 years. But yeah, that's why we do it. So I'm based in Austin with the product group over there and our role is to optimize and plan the best possible road map and portfolio of servers for rack towers and module. >> Yeah, it's funny, I remember back, you go back 5-10 years ago >> Yes >> and some people were like: wait, Dell does servers? You know, aren't they, you know, here's a Dell laptop sitting in front of me, and it was like Dell's done a lot of servers. I mean, I remember when Dell's Blade server first came out. A lot of pieces, but you know, so get us at a high level. You know, what's Dell's position in the marketplace these days? >> I mean, #1, but also to me, at the profile level #1, but at the platform level, we have one rack, the rack, the R740, our mainstream rack. It's the #1 server sold in the world. So, we're #1 profile, even at the platform level, and the 740 is used across, it's kind of a bedrock, it's used for as a server, but also in all of the EMC solution. It's used for virtualization, VDI, so that platform is kind of the, it's doing very, very well these days. >> Yeah, it's one of those things: see, people sometimes forget that a server isn't just something that does the compute for, you know, when an operating system sits on it, there's servers in lots of devices. Every year when I go to Dell World, I would see that giant OEM rack, >> Yes. >> and it was servers, OEM storage, OEM, HCI of course all has servers inside of it. And it was one of those things when the acquisition was initially announced of EMC, it was like, well, look, EMC both in their products and bundled with their solutions really pushes a lot of servers >> Yes. >> that didn't get talked about, you know, in the discussion. >> So now it's great for us. We have the full portfolio. I mean, every day you're going to see new announcements. We're going to have the best VFC solution, the best VxRail. We have best in class, you know, performance, and all that, I mean, the big part I mean, it's the research of years and investments and the system management we have at the server level. Because we have a great automation and system management, we're able to kind of reimagine or create profile on our servers, so it can be a VDI server again, but the best VSUN server or the best VxRail server. And all that because we have a great system management engine called the iTrack 9 inside our servers. And that's years of engineering and6 development, but now finally, now you have the hardware on the system management. We get the reconnection from the customers, and I think that's what made us #1. I mean, we see a lot of acceptance in 14G, a lot of demand for our security and system management capabilities. So I think that's the overall solution that help us, I mean, get to the point. >> All right, so Claude actually as an industry the server business is doing pretty well. >> Yeah. >> Especially for the last few quarters. What's driving growth? You're working on the product strategy, you know, what are some of the interesting nuggets in the portfolio? >> All, I mean, so how much we have to call. So the, like I just mentioned, the one year and two year servers but there is a couple pockets on innovations, so that's what we did in the last few months. So, I mean, the first one is, you see different key or card architecture that something to be very interesting not on the AMD, so we're trying to balance the portfolio to really showcase each of the goodness of this architecture. So that's why we launched the full AMD portfolio not a long time ago. Then, the other one is in the full circuit. What's really interesting, something I've never seen in 15 years, more and more people are doing, not on the database, machine learning, AI on full server, they're requiring more chip use and all flash solution within the server to get the best possible performance. So that's what we did, we announced that a month ago at the award and now in the future, it's the, we're moving to kinetic architectures. So we had a preview at the award of our Annex platform that we're going to launch later this year. And that one is really going to take the IT infrastructure to the next level. So, it's designed for the next 10 years of, again, modular, flexible, kinetic architecture that not only can optimize the right balance between compute and storage, but future technology like all flash and in-memory compute with the right fabric. So that's what you're going to see from us. It's going from the traditional rack servers to this advanced, modular architecture for the big design for the next 10 years. >> Claude, maybe give us a little compare and contrast. How is the module architecture different from what we saw on traditional racks or even blade servers? >> Yeah, so the traditional blade servers, I mean the, we don't blade for, I don't know, 10-15 years. And in the past it was, compute and then outer storage will external to a send. It was very traditional, but now with scale out storage, #1, scale out storage and all this HCI solution, customers asking us have very flexible computer and storage architecture. So that's kind of the first step and most of the blade architecture today are out there. It's like storage and compute, but moving forward we're going to go way beyond that. It's, we're going to have blocks of memory and GPU and flash storage, you know, and different cares of, you know, architecture ahead of the traditional storage. And if you look at the modular architecture, nobody else can deal with that today. Annex is going to be the first platform that can handle all that. It's not going to happen in the next three months, but the chassis is designed to be ready for this architecture of the future. Because we have very unique design in the bag. You know, we're getting rid of the traditional midplane that we have in the past and our competition is still using today. So it's going to be much more open to future, flexible, connectivity in the back of the chassis. So, that's why they never asked us to be ready for these next 10 years of IT innovation. >> Alright, so, Claude we're here at the Winslow Technology user event. What kind of feedback are you hearing from Winslow and their customers and what kind of things are you talking to the channel about these days? >> I mean, we've been in this conference for the last few years and we still think it's a great, great poniverse and they are part of what we call the technical council back in Austin. So, they are CTO sits with us on the PG side to help us plan future warmups, so they are very, very close now. And that's what we're doing, I mean, this, we're trying to optimize the portfolio with these guys. But right now, it's mostly the trying to improve the server, I mean, around storage and compute. So what you're going to see us launching toward the end of the year on the storage side. We're going to have a, remember the #1 server mentioned the alt 740, #1 in the world. Again, talking to the Winslow team and their customers, that server is great, but not good enough, so you're going to see us later this year, based on that feedback launching a new, improved version that will still base, use the 740 base, but be even more optimized for HCI and this several story solution. And that's the perfect example of the feedback we're getting from the Winslow team that we're integrating into the roadmap. So yeah, we are here every year because, I mean these guys are very sharp, they are good. >> Claude, last thing I wanted to ask you is, you know, for a very long time when you thought about the server market, it was, let's watch the intel, the tick-tock, the roadmap. So every few months you could expect something happened. That was what drove the innovation. >> Yes. >> What's the cadence today and what's driving innovation going forward? >> I mean, the cadence is getting faster, so for serving planning it makes it a little bit difficult. Also, now you have again you have these two vendors. Before it's really the innovation and I think that's what made us #1 is beyond the server, beyond the two processors and the storage solution. It's how we manage, how we make sure we have the best security end-to-end. So, our system management, the way we can provision servers, make sure we can do the update in the most secure way. The premise, that's kind of what makes a difference for PowerEdge and I think that's why, I mean, it took years of investment from, you know, the pitching team but I think that's what is making a difference, and the differentiation right now. It's like, you know, our servers are not just like any other servers. They're much easier to, much more secure, much easier to manage, you know, through the entire life cycle. So, I think that's the key differentiation is how we manage the server, you know, so not just at the server level, but we have deployments of thousands of servers. So we have a new console called OpenManage Enterprise. We just launched that, I think that was, what, six months ago, and that's the latest and greatest of one too many managements of servers and it's free. I mean, it's, that's another good think about PowerEdge. You can get OpenImage Enterprise for free. >> Alright, well Claude Lavigne really appreciate the update on everything happening in the server world. Lots more coverage. Check out theCUBE.net for everything we're doing, as well as, we actually take some of the key analysis from the shows that we go to, put that in our podcast that's called theCUBE Insights. Find that on iTunes, GooglePlay, Spotify, your favorite podcast player. I'm Stu Miniman. Thanks so much for watching theCUBE. (techno music)

>> From Boston, Massachusetts, it's the Cube, covering WTG Transform 2018, brought to you by Winslow Technology Group. >> Welcome back, I'm Stu Miniman and this is the Cube's coverage of WTG Transform 2018. We're excited, we've actually gotten to speak to quite a few end users here at the show which always is one of our favorite things to do on the Cube. Joining me, first time on the program, Todd McIlroy, who's Vice President and Systems Engineering Manager, Eastern Bank, thanks so much for joining me. >> You're welcome, glad to be here. >> All right, so first of all, how many of these shows have you been to. >> This is my first WTG event, but I tend to go to several smaller type conferences per year to keep on top of the technology, network, and with so much rapid innovation these days, you need to get out there and talk to people and learn little tidbits of information each one, do a couple of conferences each year. >> Yeah, you said, technology's changing really fast, which is great, my joke usually is like you're in financial, things don't change fast, there's nothing going on. What is happening in your role these days? >> Eastern Bank is a 200 year old bank, we're celebrating our 200th anniversary this month. >> Hey, congratulations. >> A big celebration next week. A lot of traditional architecture, it's a very large bank, it's a 11 billion dollar bank, but very small community feel as well. Even our team is very tight, and very close together. Even though it's an older bank, we have a lot of innovation and technology going on, in the last few years, especially. >> It's one of those things, if I was going to start a company, or had started a company in the last five or ten years, here's the technology I'd choose, here's the applications I'd roll out. It's a 200 year old bank, walk us through a little bit about the pros and cons of having that legacy if you will. >> We have been around for like I said 200 years and even a lot of the technology we have on premises has a lot of legacy applications. We have to keep supporting that for a long time. We're challenged with keeping those older systems up and running as well as providing new technology to the business so they can innovate and bring new and better products to the market. Both worlds. >> Tell me what's under your purview when it comes to the bank. >> When it comes to the bank, I manage the systems engineering team, I manage the team that does servers and virtualization, storage, we're getting into the cloud as well, this is a big push to start innovating in the cloud as well to allow our developers to use services to help them innovate faster and better. That sort of thing. >> Okay, so in the keynotes this morning, there's the discussion really of hybrid cloud. When you say in the cloud, that tends to make me think of public cloud, maybe some SAAS in there, tell me what cloud means to your organization. >> Well, right now our cloud footprint is primarily software and service type applications, like Office 365. We had a major migration to move our email and Skype and users facing applications to the cloud. But we're also trying to expand our footprint in the cloud so we can enable services to our customers, internal customers, to innovate as well. That's why we're looking at technology like Nutanix, the innovation that they're bringing to market to allow our developers to be more self-sufficient, provide the platform for them, allow them to innovate and develop on a platform, both on premises to keep it secure as well as in the cloud to keep it secure as well. >> Okay, it's interesting. I was actually talking to some of the Nutanix team here and been talking to customers that are doing development, playing with the containers, things like that, a couple years ago, if you talking about developers, you'd say, oh, okay, they're building something in the public cloud. >> Right. >> Because that's where it is. Help us understand how you decide, what do I start playing with in the cloud, where does the Nutanix fit into that discussion? >> We're a relatively new Nutanix customer, within the last year or two. We started with a small concept to give some of our workloads for the developers to work on, but now we've expanded upon that it's now become our primary production platform. It's going to take a lot of our older Hypervisor virtualization technology and move it to Nutanix so we're trying to grow that footprint because the amount of innovation that they're bringing with Calm and Flow and all those sorts of new services is going to enable us to build a platform that they can develop on a lot better. >> Great, what virtualization are you using on this? >> For? >> For the Nutanix, like are you using VMware, >> No, we're HV, Native HV. >> Using all HV? >> All HV, yup. >> Okay, were you VMware before? >> Not at Eastern, no. We have a small VMware footprint for specialized application, but the rest of our virtualization platform is Hyper-V. >> Okay, and you said you're running in production, does Nutanix run all of your on-premises applications? >> No it doesn't, we have a lot of still physical infrastructure as well, but anything that new is going towards Nutanix. We have some older hardware that we're aging out, as those age out and we have to expand the new hardware, we're going to go with Nutanix platform. >> You've got some I-series sitting in the back, I'm sure, the old AS/400, most banks have, things like that. >> Exactly, exactly, yeah. >> Great, tell us a little more from a cloud standpoint, how did you determine what goes where? >> We haven't really determined that yet, we're really in the early stages of our own adoption to the cloud. We're really taking the first steps and making sure we are governing it properly, and we're finding the right use case for it. Really we're trying to find the right use case for our developers. We had some meetings recently and we outlined a few things that we could target. So we're really taking our first steps, getting our own competencies up with our own engineers and our developers and making sure we, learning from the people that already done it, and maybe learning from some mistakes they've made and using partners like Winslow to help us get there. >> Great, can you speak a little about from an operational standpoint? You've talked about developers, you've got public cloud, you've got your infrastructure, how do those all play together? >> Well today I mean systems engineering and my department is really the go to department when they request a service, or request a new server, request a new application be built. We interface with a lot of different teams at the bank so we're really the go to team that is going to help them innovate. They know what applications they need to run, they need, they make requests for services. We're trying to reduce the time to fulfillment, allowing them to have a platform where they can build on, innovate and be more self-sufficient. >> Yeah, you bring up a really interesting thing. How long people think it will take from when I ask for something to where I get it. Used to be I put in a support ticket, 24, 48 hours that was great. Some things it's like ah, heck, we're going to have to buy a server, or allocate different pieces. Today it's come on, it's instantaneous. >> Yeah, everybody's ready to go. >> Talk to that, the good and the bad of that from your standpoint. >> That's what we want to be in the business of allowing them to self-sufficient, build the platform for them, we don't want to be managing building VMs over and over again. We want to templatize things and allow them to be on their own timeline, to be able to develop, deploy, break down, so we're really trying to innovate in that way. I think that's our job as an engineering team to provide that to the business so they can innovate more quickly. >> Love the idea of self-service. The concern always is sprawl. Used to be I stuck a server in the corner and then I forgot about it. Now VMs pop up and I forget about them all the time, doesn't the CFO ever come say, hey, am I really using all this stuff? >> That's the big driving factor is cost, making sure you don't going to drive over a huge cost in the cloud. I think governance and managing that and using tools and using some of the use cases and some of the knowledge others have been before to help you build that framework so you're not breaking the budget, or what not, you find the right use case, whether it's on premises cloud or in the public cloud. >> Great, last thing, Todd, as you look forward through the rest of 2018, any interesting new technologies you're looking at or other things coming down the pike other than celebrating the big 200th anniversary. >> Well I mean, I'm really excited about the bank has really made a commitment to move towards innovation and using cloud technology so I'm really excited to be part of the team that's going to help innovate and drive the business forward in that regard. >> Todd McIlroy, I really appreciate the updates here, Eastern Bank a 200 year old company driving innovation forward. This has been our live coverage here from WTG Transform 2018. Be sure to check out thecube.net for all the shows we're going to be at, all the replays that we've been at before. Stu Miniman, once again thank you so much to Winslow Technology Group, their partners and of course all the customers, thanks so much, for the viewers also for watching, thank you. (techno music)

(electronic music) >> From Boston, Massachusetts, it's theCUBE. Covering WTG Transform 2018. Brought to you by Winslow Technology Group. >> Welcome back to theCUBE. I'm Stu Miniman, and we're at WTG Transform 2018, happy to be welcoming one of the users at this show, Jerry Flick, who's with Belmond. He's the Divisional Director of I.T. Thanks so much for joining us. >> Thank you for having me. >> All right, and welcome to the Boston area. You're from Charleston, South Carolina. >> I live in Charleston now, yeah. But I'm familiar with the area. I'm from the Northeast, but I love being here. Boston's a great town. >> Yeah, we had a lovely weather. It's in the low '70s, you know, the Sox should have a nice game here, so. Have you been to this event before? >> I have, this is my third year. >> Okay, excellent. You've been to more of 'em than me. >> Okay. >> So, let's start with Belmond. Tell us a little bit about the organization, for those that don't know. >> Absolutely, so Belmond is a worldwide luxury hotel experience, hospitality industry. So we have hotels, we have restaurants, there's train excursions, river cruises, and really, the focus on Belmond is providing a superior level of service to the guests that take part in our experiences. >> Well Jerry, the great thing I love talking about users is, their lives are pretty stable. There's not these things like Airbnb, and you know, other technologies left that are just saying oh yeah, we'll spin up an app and just put your company that's been around for decades out of business, right? It's nice and stable. >> Yeah, that sounds like a little sarcasm, but. (laughs) >> I've been known to be a little sarcastic. So yeah, Jerry, tell us how long has Belmond been in business? You said it's worldwide, how many employees, and how does Belmond deal with the digital transformation? >> Oh, absolutely. >> That's, you know, coming down? >> Well, they took the name five years ago. They used to be Orient Express prior to that, and many people know the Orient Express from the Agatha Christie novels. >> My wife loved the new movie, so. >> Yes, so did mine actually. But what they do is, we have over 50 properties worldwide. I joined about seven months ago, and one of the initiatives they have now is to double the amount of properties and experiences they have by 2020. So, as part of what I do in the division I manage, I have North America, Central America, Mexico, and the Caribbean, and I have about eight properties under my belt, and we have to make sure that we coordinate with corporate for our company policies, our I.T. structure, which is kind of complicated because you're dealing with multiple countries, and different technologies that people like, different flavors, so it certainly presents its own challenges. >> All right, so Jerry, when you say you've got those properties, and really the I.T., what does that mean? What's under your purview from an I.T. perspective? >> Sure, so each property has either an I.T. director or a manager, and then depending on the size of the property they have different I.T. personnel that handle everything from the infrastructure, the servers, as well as through user support and even interfacing with the clients. Guest wifi is a big thing, so people want to come to our properties and make sure that they can get on the internet well, they can watch T.V., and they can do that, and that all comes down to what we have to provide them. >> Yeah, I love that. Yeah, help connect us a little bit, you know, the role of I.T. and the pressures put on you, versus wow, we've got lots of challenges from the business side these days. I'm sure cost pressure are there, you need to able to know when things are available, know that the client is getting great service when they're at your facilities. >> Yeah, actually they like to use the term, we need to be cost neutral. >> Okay. >> So everything that we do, of course I.T. is a cost within itself, but when the clients come in, and again, they expect that high quality of service, that internet connectivity, and really just whatever it is that the technology can drive to make their experience better, they look to us. But from a standpoint of support, we're 24/7. We have to keep the systems running, we have to make sure that everything from property management is going, and that we keep them moving, we keep business running. >> Yeah, so in my career in I.T., I've gotten to get under the covers sometimes in hospitality. When you've got hundreds or thousands of rooms, just even the basic phone system, let alone the internet and everything, there's a lot that goes into it. There's a lot of gear, maintaining. People talk about their data centers, but boy, you've got so many properties to deal with. What are some of the challenges there, and you know, bring us inside that infrastructure as to, how you have to build and architect it to fit that cost neutral mandate that you have. >> Yeah, we definitely want to be innovative, so for example with our Charleston facility, we recently deployed a Nutanix cluster on a Dell XC series, and we did that through Winslow Technology. And some of the things that we look to that for is, we don't have a lot of data, we don't have big data. And recently, we had to implement a GDPR policy, because we are worldwide, so that really kind of limits, you know, we're going to have even less data within our system. So having an implementation of Nutanix is really a great way to provision the service we need. We do have a mix of Cloud systems, as well as on-prem, so definitely a hybrid Cloud model would be something that I would like to see moving forward, as well as within the division, try to synchronize everything. Make everybody synergized, so that we can try to be like a flagship to the brand, and really set the standard for what is the best in technology. >> Yeah, so a lot of conversation in the keynote this morning about hybrid cloud. Want to get your reaction as to what you heard, as well as, you know, the big question is, how do you figure out what to put where? >> Yeah, that's a good question, and I've had a lot of sessions with Rick. I think he's really in tune with what's going on, so, pretty much the whole Winslow staff. You can reach out to them, and if you don't specialize in something, you know, you're not going to know everything in I.T., especially when you're dealing with as you mentioned, what's underneath. But to be able to reach out to a partner like that and say hey, do you have a subject matter expert in this? It really gives you a good idea of where the industry's going, and that's my goal is to make sure we stay ahead of that, so that we can provide the business what's a cost neutral way to make it better, and continue to provide that superior service. >> Okay. You said that you've deployed the OEM Nutanix solution with Dell. Can you give us a little bit of insight, you know, what applications sit there? What kind of scale do you go to with that? Is it something that mostly just runs, and you don't need to touch it, or is it something that's growing over time? >> Yeah, I mean, we recently did it within the last month. So what we did, fortunately we were able to just build it, and not initially have to migrate anything over. But for our use, property management, we have an Opera property management system, and that's going to be key to keeping that running, and we are looking to keep that on-prem. Everything else, like our point of sale service, they do need a cached systems within the infrastructure. And then we're looking to upgrade our phone system which depending on if we do that Cloud based or not, having a Nutanix cluster in play like that, and really just the reactions I'm getting from my team that's working with it, they've used other systems. They've used the huge SAN systems of the past, and to be able to spin up a Windows server in less than six minutes, you know, they really love it. We're using the Acropolis Hypervisor, and the simplivity of it, it's easy to use. The buttons, it's real, it's just very simple. It's not as layered as a lot of the systems, so I think as we move forward the performance of it, we're really going to see a quick turnaround, and it's going to make the employees happy working with it, as well. >> Awesome, Jerry. Last thing I want to ask you, you've been to this show for three years. What bring you up besides, you know, the beautiful Boston weather. You mentioned talking to Rick and the team, maybe checking out the Red Sox. What's the value of coming to events like this? >> Well, you know, and again, Winslow's a unique company. They're smaller, and they have a certain niche in an area, but you know, I've worked with several of the account reps, I've worked with the engineers, and they really have a good foothold on technology, but their process of getting to know the customers, and being able to really anticipate what they need, as well as they're not going to oversell you. They're not going to sell you something you don't need, and even if they present something and you're not interested, there's no pressure there. So, they really make it easy to work with them. And so, aside from being here in Boston and loving it, I do enjoy being with the Winslow team, and being treated so nicely by them. >> All right. Jerry, pleasure meeting you. Thanks so much, and congrats on the progress with Belmond. >> Awesome, thank you. >> All right, always love talking to the users, and we'll be back with lots more coverage. Thanks for watching theCUBE. (electronic music)

from Boston Massachusetts it's the cube covering wtg transform 2018 brought to you by Winslow technology group this is the cubes cover of wtg transform 2018 happy to welcome to the program the keynote speaker and first time on the program David singer who's the senior vice president and chief operating officer of storage at Dell EMC David great to see you great to see you Stu thanks for having me all right so I liked we talked a lot about transformation and boy there's a lot of transformations going on from the technology to the workforce you know security is top of my night 'm you know let's start there you know what is what is transformation mean in that with the customers that you're talking to these days transformation for our customers is delivering next generation business outcomes really ensuring that they could find a way to to remould their businesses for the digital economy and figure out how to drive tremendous amounts of value and they understand that it all starts with IT and being digital and so it's one of the key things that we hear from our customers as they as they engage with us and look to move forward yeah it's an interesting conversation because there's there's two things that have kind of struck me as a little bit funny lately number one is data is really important and to WoW intelligence is really going to transform all these environments and the reason I think you kind of agree with me we've been talking about these things for decades I mean you know you and I both started back at EMC back similar times when storing was really one of the main things you're doing but of course that data was very important in the eight years since I left EMC boy you know it's not like a storage isn't any less important but you know it's data and it's everywhere and it's distributed so we speak a little bit to you know the value of data to your customers and we'll keep going with that commerce date data is the next asset class you know and for our customers it should be their gold it's it's not how they just manage their business it's actually how they start making money we called ourselves a storage business and we probably did ourselves a disservice they want to engage and they want ensure their data safe and they want to figure out how to monetize it and monetizing it means retaining it moving it keeping it safe and then ensuring that you can inject it into the right applications and get the right the right knowledge and efficiency out of it and what we've seen in a storage industry over 18 years that the technologies keep changing applications have greater and greater demands there's more and more need to consume adjust and analyze this data and we need to keep up and we need to deliver more intelligent infrastructure and storage solutions that can move this data and help us help applications deliver tremendous performance let's talk about the company itself so when I think about Dell you know I think back you know even talk to my parents you know they know who Dell is they'd use Dell computers for many years over your shoulder this Fenway Park you know the club level is the Dell level you know you've got such a broad portfolio and your keynote you kind of put together this do you know comprehensive everything from Dell and Dell EMC and VMware and pivotal and everything but to you know the global companies or small companies what is you know what where does Dell sit in the picture I think I think the the merger has been a major transformation for the company itself we talk we evangelize transformations for other companies were undergoing one ourselves and the transformation we're undergoing is understanding what other companies needs and applying it to ourselves and drinking our own champagne and making it a reality the the brand Association is changing and customers are starting to realize that we can become the essential infrastructure provider and they could look to us to solve a holistic set of their needs as opposed to pinpoint so their needs and make it an easier journey themselves you spent a bunch of time talking about the operating model when we talk about cloud it's you know use the line actually we've used many times you know cloud is not a destination really is an operating model how does that impact the portfolio you know you're helping to put together really the long-term strategy so the first is the operating model is all about simplicity right we need to make infrastructure more simple for our customers and that means re-engaging and re-architecting our software stacks from the ground up to be more nimble more accessible via api's and other automation engines that that will really drive more value and allow IT professionals to spend more time partnering with the business to drive revenue as opposed to problem-solving and punching out bugs David that was what one of the knocks that competition of you know EMC back in the day always had was MC has a broad portfolio and leadership in many positions but simple was never the word to describe the the offerings how does del and LEM see from a storage perspective how will we be looking at that differently you know come a year or two from now and so I think that's a fair point it's a great point simplicity was probably not a great synonym for what we did but what we did was was accumulate a tremendous amount of intellectual property and assets that we've been able to mold and transform and adapt for the future well when the process of doing is making it simpler for customers to consume it and delivering and deploying it in simpler ways to make that to make it easier to choose and implement and what we're in the process doing is take the lessons of the past integrate the technology from the past and drive something that's going to be easier to understand and to drive value alright help connect the dots we're here at one of one of Dell's uh you know larger partners maybe not larger in size but you know very important partner when the Technology Group was a dell partner of the year for a couple of years what is that you know that simplification and you know change in the portfolio mean you know and how's the relationship changing with the channel so you know very fair the the channel community is extremely important to Dell and and we know that we've not made their lives very easy right they have they have sales engineers and sales sales professionals that are trying to deliver solutions and applications for customers and it's hard for them to choose which building blocks or which piece parts to build and by simplifying and putting together better better technologies and better intellectual properties that are easier for them to consume and understand make it easier for them to do their jobs and and our outcomes for their customers right when I focus a little bit on the customers you know what do you see some of the biggest challenges that they're facing in their business you know not not just from a storage standpoint but you know the business side sure well every business including our own is it's a balance of priorities right the customers know that they want to take their business forward they want to drive growth they want to drive profitability and there's so many different opportunities to go after and just how do you prioritize and and and trying to manage those discrete priorities and ideas and initiatives is is not easy and then implementing actions especially with an IT to go solve some of those problems is resource intensive right and so we need to do a better job of thinking about transformation and simplifying our structure to really really alright so you're an Operations guy you've you've got you know so some business background what one of the things I look at in my career is you know boy you know we've looked at the pace of change but you know technology is an enabler for you know how we change operations has been pretty amazing the last last 20 years of wondering if you have some ruminations on that as to you know what you've been seeing in your career and you know especially over the last you know five years or so yeah the the pace is confusing it really is you know at times we feel like we're moving at light speed and other times we feel like we're gonna crawl and I think the interesting aspect is it's it's a journey and every customer is approaching it differently there are some customers that are in the bleeding edge and looking for us to keep them on the bleeding edge and there are other customers that are that are more more steady in their operations and looking to take baby steps as they transform and it's been a really interesting challenge trying to solve and maximize outcomes for both those types of yeah absolutely I'd say it's usually it's it's dizzying and you need to be careful one of my favorite Ben Franklin lines is you know don't confuse activity with with progress because it's easy to chase the new shiny but you know what am I actually doing to drive the business and drive efficiency of what weird and can actually get any value out of the new shiny there are so many buzzwords that we have in our industry right now some of which customers consume can consume really easily and get a tremendous amount of value some that customers just are having a hard time understanding how they actually implement to get value yeah so you know what's the biggest threat for for businesses these days you talk about them going through transformation there there's everybody's concerned about you know - over the overuse term you're gonna be over eyes or Netflix or you know choose your point you know how do you balance I need to transform and move faster but you know I I don't want to be you know chasing my shadow yeah I think I think the person that had the perfect answer to that would be would be amazingly wealthy right now I think you know that's the dichotomy that we're trying to deal with and the industry has dealt with for a very very long time great point you know we talked about it's not always about chasing the technologies what's interesting you in the marketplace these days - I think that the pace of change in the pace of innovation has really kicked up it goes through cycles and right now the new technologies that are getting introduced by a lot of startup communities and and and and ourselves organically has been amazing and I love the innovative spirit that is coming back together as we formed Dell EMC and the new and the new company and the collaboration that we're seeing with the intellectual property across the family of companies delivers really exciting results right last thing I wanted to ask you really about the merger you know personally you've so you've been with you up from the EMC side of things you know there are many similarities and culture but some significant differences between these two cultures well you know what could you share you know so everything changes right I think we learned a long time ago at EMC and there's probably some acronym about change using the EMC letters you need to be able to adapt to change and both cultures we're very very much the same the businesses are very very interesting and I like to think of them and in a let ik metaphor right there are very different flywheels to the paces of the businesses we have we have a portion of our business that is a flier that spills really really fast and very and very transactional and we have another flywheel that is solution oriented and solution driven it drives a different speed and the miracle the mergers we've been able to figure out how to operate both those flywheel in the same ace David singer definitely the customer flywheels keep a lot of things going and the feedback from our users is one of the flywheels that keeps us going here at the cube so btran sure to check out all the content and as always you can reach us hitting us up on the website hit is up on social media and welcome your feedback so thank you so much for watching the Q

from Boston Massachusetts it's the cube covering wtg transform 2018 brought to you by Winslow technology group I'm Stu minimun and you're watching the Q's coverage of wtg transform 2018 happy to welcome to the program got a CIO in the house Russ Roderick who is the with chin bro that's correct how you doing to be here excellent so third year for yourself at the show first first impressions at the show what brings you back yeah third year I've really enjoyed it each of previous years I skipped a year last year travel related issue but I think the layout I like the naming convention change I like everything about it I think this is an excellent program that technology excellent they felt pity on me when they did the name change if you heard because saying the whole user group Dell EMC winslet Technology Group was a bit of a tongue twister but that's you know first world problems so Russ wrote for people that don't know tell us a little bit about chin bro yeah so Tim bro is a construction company headquartered in Pittsfield Maine we're nationwide where we do our projects we're in numerous markets from building infrastructure oil gas chemical industrial manufacturing we have a lot of projects done every year in the hundreds range and we were a little under a billion dollars got about 2,500 team members across the country okay and is the CIO you know how BIG's your team how many locations do you manage and you know tell us yeah let's go there for sure yes so I have 30 person team we have everything from application development to help desk to data analytics business intelligence teams I have infrastructure organization I have field support business analysts and we're a full-service organization all right so restless first start with with chin bro would you know what are some of the biggest challenges you're facing into business what does that term digital transformation resonate with with with your world it does the construction industry is very interesting it's a low margin industry right and so as a result of that we're always always looking to save money we're always looking to be lean we have a major initiative in the company around lean transformation some of that is digital related you know getting off of paper moving into paper forms into electronic forms and then not having to touch the data too many times so we have been moving too for quite a few years now so it's not new to the organization but it is a big challenge okay so absolutely we see that a lot what is the role of IT to the business these days so we have gone from being the elevator music as I like to call it like we're in the background you know we're kind of there to a strategic partner and I've reported from finance and I've moved to into the up to the CFO from CFO excuse me into the CEO role and it's been a great challenge there's some other organizational changes that we're looking at but we're no longer that background music we're very strategic in what we do we actually run several committees for the company looking at project prioritization workflow prioritizations and helping the organization to build an application roadmap new strategy yeah I love that I mean when you talk to us organizationally it says a lot you know under the CFO your call center we are moving under the CEO your strategic to the business right all right you talked about application so let's go there first because that's you know that application modernization is big challenge when I talk about modernization I always say you know application is a long pole in the tabs so what what does that mean to you what what kind of transformations are you going through inside yeah again our industry is dealing with a lot of fragmented software and it's a it's a problem a lot of industries face but ours I feel is we're on the very tail end of the industries that have moved to digital that have moved to modernization of our apps a lot of our products are on-premise our ERP system we've been on for 20 years for example and they've they've modernized we're getting it to mobile our imaging and workflow systems are starting to get more modernized but they're their legacy products and it's difficult when you have to deal with infrastructure that we have in the construction world we don't always have connectivity so we have to have a lot of offline we do all work with Citrix and it can be very problematic yeah you've been doing with the issues that we talked about with edge computing and IOT is you know something you've been living with for years right absolutely so IOT is one of those transformational pieces for us as well you know we have a lot of equipment that's one of the parts of our business you know 25,000 pieces of gear and heavy iron and we don't have a really good solution in place today that we're monitor all of the the meters and the performance and the of those devices so we're looking to IOT to help us get a better picture of that at an aggregate data level okay so I love we started up the stack with the applications let's come down a little bit tell us about your infrastructure what what are you using today how long you been using it for Winslow's in in the mix there's o windows absolutely in the next Dave we've moved from the traditional data center I had a lot of servers and racks and and moved to a V block and the X block with the X rail and our disaster recovery center out in Chicago and we did that because we had you know all the traditional problems of maintenance and and patching and licensing and everything and we never really had to deal with any of the power and heat and energy problems were up in Maine so we don't we're not an issue with cooling but that was a challenge for us having to manage all that stuff so we worked with Winslow and Dell EMC to figure out how do we get into the hyper converge to move away from all those server for administration and management and we did that project a little over a year ago implemented a little year ago and we've seen tremendous opportunities and for how we how we provision equipment and how we manage that need for the applications you know standing up new environments virtualizations really helped us do yeah so did you roll up the VX block and the VX rail together or the were those two sever they were slightly delayed so we did the X block first and then a few months later we did the the VX ray okay so the V block and the VX block after it been around for a number of years that you know 8 10 years at this point VX rails a little bit newer there's some people out there that are like oh wait HCI takes over the whole market tell us why each of those solutions and you know what was it an application price thing what what how did that go yeah we looked at it wasn't necessarily that we were in you know any position where you had to have this massive return on our investment right we built our business case around disaster recovery we our data center our primary or secondary were in the same town you know so we had all those elements of disaster recovery that were a problem for us so when we looked at the solution we wanted to be able to replicate our data more effectively get away from the traditional tape backup models and really help provision the equipment as quickly as we could in the event of you know a disaster and get ourselves recovered business continuity wise so it was a financial decision obviously that we had that we had thing had to pay for itself in which it did but we didn't spend a lot of time really kind of honing in on it has to be an ROI and a payback it was it was really about performance and disaster so is the VIX Bach in the primary and the BX rail and the secondary correct okay really cool on any you know what would you sell your peers is you after you've rolled us out any learnings that you had or the things that you'd go back and you know adjuster tweak no actually we had a really incredible experience working with with Winslow they were able to help us work through all of our any of our production issues very quickly we did replication through zurdo so that's moving our data very efficiently and my my IT team feels very confident that should and we're doing a test later this year but should we have a production incident we'd be able to recover lessons learned you know I think it's it's more about planning your work you know making sure that you've got your activities planned and that you're looking at the operational performance of the applications great all right Russ last question I have for you as a CIO how things been changing yeah you've been in the role for seven years you've moved inside the organization what are some of the things that are changing and some of the things that aren't yeah so the CIO role I believe personally is really kind of gearing towards more of a strategic element you know being part of that business making sure that we're not just providing those generic services of you know ping power and pipe right we're there for the business to understand what their business processes are all about and how they run their workflows and use their applications on a daily basis most of my conversations with my vice-president peers and and business leaders isn't around the technology that's being used yeah they're interested in iPhones and tablet devices but they're really geared at how do I help them solve their business problems and that's where IT is really evolving and the CIO role is doing a lot of that it wraps around that you know the teams you have around you and the strategic elements of the organization and just to follow up on that to do the SAS applications that your business using following under you is there any public cloud in there - what we do we have we have a hybrid cloud solution so we do a lot of on-premise solutions but we have several cloud and they're they're growing as needed but we have a business model that basically says let's look at our infrastructure internally first as a as an employee-owned private company we tend to gravitate towards keeping in-house but we have several business solutions that are in the cloud that are providing value all right well rust pleasure to meet you take so much for you to us and Congrats on everything that Kimbrough is done thank you very much back with lots more coverage here at wtt transform 2018 I'm Stu minimun and thanks so much for watching the Q [Music]

from Boston Massachusetts it's the cube covering wtg transform 2018 brought to you by Winslow technology group welcome back I'm Stu minimun and you're watching the cube at wtg transform 2018 happy to welcome to the program two gentlemen from the Boston Architectural College to my left is Carl Jasperson who is the systems administrator and to his left is Jason O'Brien who's the director of IT gentlemen thanks so much for joining us thank you for having us all right so Jason why don't we start with you help us power up this conversation to tell us a little bit about the college so Boston Architectural college we started in the late 1800s it's a small design at school and we offer programs in landscape interior and traditional architecture yeah so I love that to talk to a little bit more about you know that the charter of the school and how IT fits into that so we we are a mission of the schools to provide excellent education to a diverse population technology factors in is very important and over the last ten years the Carll I've been at the school technology has use has increased immensely our students are using it more and more every year and meeting those needs has become you know difficult and it's a challenge we we strive to achieve every year well Design Thinking is is so important these days I I studied engineering as an undergrad in which I've learned more about design one of my favorite authors so I have an interview about a month ago Walter Isaacson you know the ones he studies are the ones that can take that design thinking and technology and bring them together Carles bring us up to speed on from from the IT standpoint you know how big of a team do you have what are you involved with I said you know things have been changing over the last few years yeah so I mean we've got Jason in addition to running the department he runs our online learning system I'm responsible for all the backend its infrastructure servers networking backup virtualization we recently hired a junior systems administrator to help me out we've got a web guy we've got a DBA to the woodshop is under IT because we have a fabrication guy so 3d printing laser cutting we have the help desk and the help desk manager who also does our purchasing and she and I will take escalations so it's there's not a lot of crossover you know skill crossover in the group but we managed to keep everything going yeah but as you said they've been you know woodworking not something you think of in Italy as you know an IT thing IT an OT or you know really converging a lot when you talk about manufacturing as you know we talk about sensors and IOT it's it's hitting everywhere yeah for us you know 3d printing and laser cutting and we also have a CNC router they all started as experiments at the school and have turned into a major factor in for our students it's a resource that they demand and the increasing use every single year and how we meet those demands is is becoming tricky to accomplish in our you know we're in the Back Bay real estate is very expensive and we have to make our space do amazing things Jason that's great points I mean I've talked to lots of higher education and even you talk to the K 2 through 12 it was you know what mobility has had a huge impact you know therefore stresses and strains on wireless you know how do I get devices into the classroom how do I manage it I had gentleman from bu who's here at the show last year we were talking a lot about MOOCs so you know it's that that role of i TS but it's expanding but luckily they're throwing way more money at you I'm sure well we've been flat headcount over the last eight years we lost someone last year and gain someone this year so you know we we basically have to do more with less every year like most IT departments so you know we've we redesign our spaces periodically to meet those our students needs you know and turn returning what was labs just computer labs into more flexible space where students are can move the tables around and you the computers are available sometimes there we have high end alien wares in a in a cabinet they pull out news or they can use it to make models we have they can put up their designs on a 3d TV they're using VR headsets to walk around their own designs it's really fascinating where the technologies okay I wish we could spend more time anywhere in VR stuff and everything like that our production crews gamers my son's into this stuff but but Karl I'm hearing things like space constrained we need to do more with less we need to simplify this environment wow that seems like a really good set up for kind of infrastructure modernization so how long have you guys been there about 10 years right yeah so it's a change don't want one in ten years so walk us back 10 years ago and give us that point when you went to modernize yeah well when we started there's no virtualization 3 server racks in a room in the basement for 10 years that we've been there there's been water in that room twice so that always gave us the warm fuzzies you're saying it wasn't water cooling I mean no we tried for that but it didn't you know it didn't work out last year we moved to Colo facility in Summerville so and by the time we did that move yeah we did we started virtualization with VMware like three five within a year or two of me starting and the racks got you know less and less full and now in the fall we rolled out VX rail and we're in a single rack in a data center and there's I think three physical servers in that rack that aren't the VX rail at this point so it's it's consolidation power savings stuffs in a much better physical location than it used to be moving that server room out we were able to free up that space for you know the students to be able to have it's a it's a meditation space now so it's it's been really interesting kind of going through all that great what I wanted you know we don't have a ton of time but let's talk about that VX rail was your team were you looking for HCI was it you know just time for a server refresh you know what what kind of led to that was there a specific application that you started with so this event two years ago we saw Brian from bu give this presentation on their tan and that really turns us on to the whole hyper-converged option we we worked with Winslow we actually talked to another vendor and we looked at Nutanix we looked at pivot three we looked at rolling our own you know visa non FX 2 and after kind of comparing everything and seeing the pros and cons VX rail made the most sense from management perspective and a price perspective our old cluster was coming up on the five-year mark things were going out of warranty we had ecologic sand with 7200 rpm drives one gig I scuzzy just flow for most of its life we were just doing lightweight servers and applications two years ago we needed to virtualize our database server and we threw her Knicks in there with 800 gig on VM e drives and that was a great stopgap but you know we we needed something more permanent more robust - that's how we got to be X ray from a management standpoint the hyper-converged model gave us more flexibility it's easier to expand and since we're small we're not talking about you know racks and racks working together ryote you started with just three hosts so from a overview standpoint it's easy for us as we grow to just add another node and we get the compute we get the storage and we get the memory all at once as an expansion so it's the model is just fantastic for our workload that we put on it we've got like 70 servers in there the only stuff that's not in there yet is our student file server and exchange and they're going in there in the next six months yeah yeah good great and that's so so it sounds like you're real happy with the solution you've been with Dell for four years so from an Operations standpoint was there you know a lot of steep learning curve or was this pretty straightforward and very easy I mean I was I was already really familiar with the VMware piece going into this so that you know that wasn't a big deal we were already on Ruby sphere 6 and we started in the it's row of B so 6px role manager is it's kind of a stupid easy interface you know you can go in you can see are there alerts is there an update you know can it see my hardware is all that good there's not a whole lot to learn from there if we were doing V San on our own my understanding is that some a lot more complicated to stand up once you have it going you're good until you try to make a change so the VX rail manager extract abstracts all that away and just kind of gives you the the VMware experience that you're used to yeah any commentary on the economic service you know we actually found it was very interesting because our original assessment of our own needs were there was no way we could afford all flash and we started we focused exclusively on hybrid solutions and after a certain point we saw I think a presentation from Rick on the external platform and we saw the VX rail as inline dedupe and compression with the all flash and we thought wait maybe we could make this work with all flash and so we actually had a very slight reduction in RAW storage in our new platform but the percentage that we're actually consuming is far less than on our old platform simply because of those gains and it is the performance is far far faster and it's a we've just been very pleased with the implementation from a cost perspective the all-flash VX rail came in under the hybrid pivot 3 and the hybrid Nutanix products so you know we it was a huge win from that perspective we were shocked we could be able to do it thrilled with it ok final word it sounds like you're real happy with the solution when it smoothly operates well economics were good what final takeaways would you give for your peers I mean I'd say the implementation was you know the VX rail platform the the installation is as advertised it was it's basically a wizard that walks you through the installation process the very few minor issues we encountered the winslow team and the is EMC no support support people had no problem solving for us it was really a pretty easy migration to the new platform and we were able to do it with essentially zero downtime yeah awesome well gentlemen thanks so much for joining that's the promise is to get that easy button for IT HD I definitely helping to move in that direction next time we'll get to talk a little bit more about cloud and everything like that be back with lots more coverage here from wtg transform 2018 I'm Stu minimun thanks for watching the Q