>> From theCUBE studios in Palo Alto, in Boston, bringing you data driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vollante. >> The rise of Kubernetes came about through a combination of forces that were, in hindsight, quite a long shot. Amazon's dominance created momentum for Cloud native application development, and the need for newer and simpler experiences, beyond just easily spinning up computer as a service. This wave crashed into innovations from a startup named Docker, and a reluctant competitor in Google, that needed a way to change the game on Amazon and the Cloud. Now, add in the effort of Red Hat, which needed a new path beyond Enterprise Linux, and oh, by the way, it was just about to commit to a path of a Kubernetes alternative for OpenShift and figure out a governance structure to hurt all the cats and the ecosystem and you get the remarkable ascendancy of Kubernetes. Hello and welcome to this week's Wikibon CUBE Insights powered by ETR. In this breaking analysis, we tapped the back stories of a new documentary that explains the improbable events that led to the creation of Kubernetes. We'll share some new survey data from ETR and commentary from the many early the innovators who came on theCUBE during the exciting period since the founding of Docker in 2013, which marked a new era in computing, because we're talking about Kubernetes and developers today, the hoodie is on. And there's a new two part documentary that I just referenced, it's out and it was produced by Honeypot on Kubernetes, part one and part two, tells a story of how Kubernetes came to prominence and many of the players that made it happen. Now, a lot of these players, including Tim Hawkin Kelsey Hightower, Craig McLuckie, Joe Beda, Brian Grant Solomon Hykes, Jerry Chen and others came on theCUBE during formative years of containers going mainstream and the rise of Kubernetes. John Furrier and Stu Miniman were at the many shows we covered back then and they unpacked what was happening at the time. We'll share the commentary from the guests that they interviewed and try to add some context. Now let's start with the concept of developer defined structure, DDI. Jerry Chen was at VMware and he could see the trends that were evolving. He left VMware to become a venture capitalist at Greylock. Docker was his first investment. And he saw the future this way. >> What happens is when you define infrastructure software you can program it. You make it portable. And that the beauty of this cloud wave what I call DDI's. Now, to your point is every piece of infrastructure from storage, networking, to compute has an API, right? And, and AWS there was an early trend where S3, EBS, EC2 had API. >> As building blocks too. >> As building blocks, exactly. >> Not monolithic. >> Monolithic building blocks every little building bone block has it own API and just like Docker really is the API for this unit of the cloud enables developers to define how they want to build their applications, how to network them know as Wills talked about, and how you want to secure them and how you want to store them. And so the beauty of this generation is now developers are determining how apps are built, not just at the, you know, end user, you know, iPhone app layer the data layer, the storage layer, the networking layer. So every single level is being disrupted by this concept of a DDI and where, how you build use and actually purchase IT has changed. And you're seeing the incumbent vendors like Oracle, VMware Microsoft try to react but you're seeing a whole new generation startup. >> Now what Jerry was explaining is that this new abstraction layer that was being built here's some ETR data that quantifies that and shows where we are today. The chart shows net score or spending momentum on the vertical axis and market share which represents the pervasiveness in the survey set. So as Jerry and the innovators who created Docker saw the cloud was becoming prominent and you can see it still has spending velocity that's elevated above that 40% red line which is kind of a magic mark of momentum. And of course, it's very prominent on the X axis as well. And you see the low level infrastructure virtualization and that even floats above servers and storage and networking right. Back in 2013 the conversation with VMware. And by the way, I remember having this conversation deeply at the time with Chad Sakac was we're going to make this low level infrastructure invisible, and we intend to make virtualization invisible, IE simplified. And so, you see above the two arrows there related to containers, container orchestration and container platforms, which are abstraction layers and services above the underlying VMs and hardware. And you can see the momentum that they have right there with the cloud and AI and RPA. So you had these forces that Jerry described that were taking shape, and this picture kind of summarizes how they came together to form Kubernetes. And the upper left, Of course you see AWS and we inserted a picture from a post we did, right after the first reinvent in 2012, it was obvious to us at the time that the cloud gorilla was AWS and had all this momentum. Now, Solomon Hykes, the founder of Docker, you see there in the upper right. He saw the need to simplify the packaging of applications for cloud developers. Here's how he described it. Back in 2014 in theCUBE with John Furrier >> Container is a unit of deployment, right? It's the format in which you package your application all the files, all the executables libraries all the dependencies in one thing that you can move to any server and deploy in a repeatable way. So it's similar to how you would run an iOS app on an iPhone, for example. >> A Docker at the time was a 30% company and it just changed its name from .cloud. And back to the diagram you have Google with a red question mark. So why would you need more than what Docker had created. Craig McLuckie, who was a product manager at Google back then explains the need for yet another abstraction. >> We created the strong separation between infrastructure operations and application operations. And so, Docker has created a portable framework to take it, basically a binary and run it anywhere which is an amazing capability, but that's not enough. You also need to be able to manage that with a framework that can run anywhere. And so, the union of Docker and Kubernetes provides this framework where you're completely abstracted from the underlying infrastructure. You could use VMware, you could use Red Hat open stack deployment. You could run on another major cloud provider like rec. >> Now Google had this huge cloud infrastructure but no commercial cloud business compete with AWS. At least not one that was taken seriously at the time. So it needed a way to change the game. And it had this thing called Google Borg, which is a container management system and scheduler and Google looked at what was happening with virtualization and said, you know, we obviously could do better Joe Beda, who was with Google at the time explains their mindset going back to the beginning. >> Craig and I started up Google compute engine VM as a service. And the odd thing to recognize is that, nobody who had been in Google for a long time thought that there was anything to this VM stuff, right? Cause Google had been on containers for so long. That was their mindset board was the way that stuff was actually deployed. So, you know, my boss at the time, who's now at Cloudera booted up a VM for the first time, and anybody in the outside world be like, Hey, that's really cool. And his response was like, well now what? Right. You're sitting at a prompt. Like that's not super interesting. How do I run my app? Right. Which is, that's what everybody's been struggling with, with cloud is not how do I get a VM up? How do I actually run my code? >> Okay. So Google never really did virtualization. They were looking at the market and said, okay what can we do to make Google relevant in cloud. Here's Eric Brewer from Google. Talking on theCUBE about Google's thought process at the time. >> One interest things about Google is it essentially makes no use of virtual machines internally. And that's because Google started in 1998 which is the same year that VMware started was kind of brought the modern virtual machine to bear. And so Google infrastructure tends to be built really on kind of classic Unix processes and communication. And so scaling that up, you get a system that works a lot with just processes and containers. So kind of when I saw containers come along with Docker, we said, well, that's a good model for us. And we can take what we know internally which was called Borg a big scheduler. And we can turn that into Kubernetes and we'll open source it. And suddenly we have kind of a cloud version of Google that works the way we would like it to work. >> Now, Eric Brewer gave us the bumper sticker version of the story there. What he reveals in the documentary that I referenced earlier is that initially Google was like, why would we open source our secret sauce to help competitors? So folks like Tim Hockin and Brian Grant who were on the original Kubernetes team, went to management and pressed hard to convince them to bless open sourcing Kubernetes. Here's Hockin's explanation. >> When Docker landed, we saw the community building and building and building. I mean, that was a snowball of its own, right? And as it caught on we realized we know what this is going to we know once you embrace the Docker mindset that you very quickly need something to manage all of your Docker nodes, once you get beyond two or three of them, and we know how to build that, right? We got a ton of experience here. Like we went to our leadership and said, you know, please this is going to happen with us or without us. And I think it, the world would be better if we helped. >> So the open source strategy became more compelling as they studied the problem because it gave Google a way to neutralize AWS's advantage because with containers you could develop on AWS for example, and then run the application anywhere like Google's cloud. So it not only gave developers a path off of AWS. If Google could develop a strong service on GCP they could monetize that play. Now, focus your attention back to the diagram which shows this smiling, Alex Polvi from Core OS which was acquired by Red Hat in 2018. And he saw the need to bring Linux into the cloud. I mean, after all Linux was powering the internet it was the OS for enterprise apps. And he saw the need to extend its path into the cloud. Now here's how he described it at an OpenStack event in 2015. >> Similar to what happened with Linux. Like yes, there is still need for Linux and Windows and other OSs out there. But by and large on production, web infrastructure it's all Linux now. And you were able to get onto one stack. And how were you able to do that? It was, it was by having a truly open consistent API and a commitment into not breaking APIs and, so on. That allowed Linux to really become ubiquitous in the data center. Yes, there are other OSs, but Linux buy in large for production infrastructure, what is being used. And I think you'll see a similar phenomenon happen for this next level up cause we're treating the whole data center as a computer instead of trading one in visual instance is just the computer. And that's the stuff that Kubernetes to me and someone is doing. And I think there will be one that shakes out over time and we believe that'll be Kubernetes. >> So Alex saw the need for a dominant container orchestration platform. And you heard him, they made the right bet. It would be Kubernetes. Now Red Hat, Red Hat is been around since 1993. So it has a lot of on-prem. So it needed a future path to the cloud. So they rang up Google and said, hey. What do you guys have going on in this space? So Google, was kind of non-committal, but it did expose that they were thinking about doing something that was you know, pre Kubernetes. It was before it was called Kubernetes. But hey, we have this thing and we're thinking about open sourcing it, but Google's internal debates, and you know, some of the arm twisting from the engine engineers, it was taking too long. So Red Hat said, well, screw it. We got to move forward with OpenShift. So we'll do what Apple and Airbnb and Heroku are doing and we'll build on an alternative. And so they were ready to go with Mesos which was very much more sophisticated than Kubernetes at the time and much more mature, but then Google the last minute said, hey, let's do this. So Clayton Coleman with Red Hat, he was an architect. And he leaned in right away. He was one of the first outside committers outside of Google. But you still led these competing forces in the market. And internally there were debates. Do we go with simplicity or do we go with system scale? And Hen Goldberg from Google explains why they focus first on simplicity in getting that right. >> We had to defend of why we are only supporting 100 nodes in the first release of Kubernetes. And they explained that they know how to build for scale. They've done that. They know how to do it, but realistically most of users don't need large clusters. So why create this complexity? >> So Goldberg explains that rather than competing right away with say Mesos or Docker swarm, which were far more baked they made the bet to keep it simple and go for adoption and ubiquity, which obviously turned out to be the right choice. But the last piece of the puzzle was governance. Now Google promised to open source Kubernetes but when it started to open up to contributors outside of Google, the code was still controlled by Google and developers had to sign Google paper that said Google could still do whatever it wanted. It could sub license, et cetera. So Google had to pass the Baton to an independent entity and that's how CNCF was started. Kubernetes was its first project. And let's listen to Chris Aniszczyk of the CNCF explain >> CNCF is all about providing a neutral home for cloud native technology. And, you know, it's been about almost two years since our first board meeting. And the idea was, you know there's a certain set of technology out there, you know that are essentially microservice based that like live in containers that are essentially orchestrated by some process, right? That's essentially what we mean when we say cloud native right. And CNCF was seated with Kubernetes as its first project. And you know, as, as we've seen over the last couple years Kubernetes has grown, you know, quite well they have a large community a diverse con you know, contributor base and have done, you know, kind of extremely well. They're one of actually the fastest, you know highest velocity, open source projects out there, maybe. >> Okay. So this is how we got to where we are today. This ETR data shows container orchestration offerings. It's the same X Y graph that we showed earlier. And you can see where Kubernetes lands not we're standing that Kubernetes not a company but respondents, you know, they doing Kubernetes. They maybe don't know, you know, whose platform and it's hard with the ETR taxon economy as a fuzzy and survey data because Kubernetes is increasingly becoming embedded into cloud platforms. And IT pros, they may not even know which one specifically. And so the reason we've linked these two platforms Kubernetes and Red Hat OpenShift is because OpenShift right now is a dominant revenue player in the space and is increasingly popular PaaS layer. Yeah. You could download Kubernetes and do what you want with it. But if you're really building enterprise apps you're going to need support. And that's where OpenShift comes in. And there's not much data on this but we did find this chart from AMDA which show was the container software market, whatever that really is. And Red Hat has got 50% of it. This is revenue. And, you know, we know the muscle of IBM is behind OpenShift. So there's really not hard to believe. Now we've got some other data points that show how Kubernetes is becoming less visible and more embedded under of the hood. If you will, as this chart shows this is data from CNCF's annual survey they had 1800 respondents here, and the data showed that 79% of respondents use certified Kubernetes hosted platforms. Amazon elastic container service for Kubernetes was the most prominent 39% followed by Azure Kubernetes service at 23% in Azure AKS engine at 17%. With Google's GKE, Google Kubernetes engine behind those three. Now. You have to ask, okay, Google. Google's management Initially they had concerns. You know, why are we open sourcing such a key technology? And the premise was, it would level the playing field. And for sure it has, but you have to ask has it driven the monetization Google was after? And I would've to say no, it probably didn't. But think about where Google would've been. If it hadn't open source Kubernetes how relevant would it be in the cloud discussion. Despite its distant third position behind AWS and Microsoft or even fourth, if you include Alibaba without Kubernetes Google probably would be much less prominent or possibly even irrelevant in cloud, enterprise cloud. Okay. Let's wrap up with some comments on the state of Kubernetes and maybe a thought or two about, you know, where we're headed. So look, no shocker Kubernetes for all its improbable beginning has gone mainstream in the past year or so. We're seeing much more maturity and support for state full workloads and big ecosystem support with respect to better security and continued simplification. But you know, it's still pretty complex. It's getting better, but it's not VMware level of maturity. For example, of course. Now adoption has always been strong for Kubernetes, for cloud native companies who start with containers on day one, but we're seeing many more. IT organizations adopting Kubernetes as it matures. It's interesting, you know, Docker set out to be the system of the cloud and Kubernetes has really kind of become that. Docker desktop is where Docker's action really is. That's where Docker is thriving. It sold off Docker swarm to Mirantis has made some tweaks. Docker has made some tweaks to its licensing model to be able to continue to evolve its its business. To hear more about that at DockerCon. And as we said, years ago we expected Kubernetes to become less visible Stu Miniman and I talked about this in one of our predictions post and really become more embedded into other platforms. And that's exactly what's happening here but it's still complicated. Remember, remember the... Go back to the early and mid cycle of VMware understanding things like application performance you needed folks in lab coats to really remediate problems and dig in and peel the onion and scale the system you know, and in some ways you're seeing that dynamic repeated with Kubernetes, security performance scale recovery, when something goes wrong all are made more difficult by the rapid pace at which the ecosystem is evolving Kubernetes. But it's definitely headed in the right direction. So what's next for Kubernetes we would expect further simplification and you're going to see more abstractions. We live in this world of almost perpetual abstractions. Now, as Kubernetes improves support from multi cluster it will be begin to treat those clusters as a unified group. So kind of abstracting multiple clusters and treating them as, as one to be managed together. And this is going to create a lot of ecosystem focus on scaling globally. Okay, once you do that, you're going to have to worry about latency and then you're going to have to keep pace with security as you expand the, the threat area. And then of course recovery what happens when something goes wrong, more complexity, the harder it is to recover and that's going to require new services to share resources across clusters. So look for that. You also should expect more automation. It's going to be driven by the host cloud providers as Kubernetes supports more state full applications and begins to extend its cluster management. Cloud providers will inject as much automation as possible into the system. Now and finally, as these capabilities mature we would expect to see better support for data intensive workloads like, AI and Machine learning and inference. Schedule with these workloads becomes harder because they're so resource intensive and performance management becomes more complex. So that's going to have to evolve. I mean, frankly, many of the things that Kubernetes team way back when, you know they back burn it early on, for example, you saw in Docker swarm or Mesos they're going to start to enter the scene now with Kubernetes as they start to sort of prioritize some of those more complex functions. Now, the last thing I'll ask you to think about is what's next beyond Kubernetes, you know this isn't it right with serverless and IOT in the edge and new data, heavy workloads there's something that's going to disrupt Kubernetes. So in that, by the way, in that CNCF survey nearly 40% of respondents were using serverless and that's going to keep growing. So how is that going to change the development model? You know, Andy Jassy once famously said that if they had to start over with Amazon retail, they'd start with serverless. So let's keep an eye on the horizon to see what's coming next. All right, that's it for now. I want to thank my colleagues, Stephanie Chan who helped research this week's topics and Alex Myerson on the production team, who also manages the breaking analysis podcast, Kristin Martin and Cheryl Knight help get the word out on socials, so thanks to all of you. Remember these episodes, they're all available as podcasts wherever you listen, just search breaking analysis podcast. Don't forget to check out ETR website @etr.ai. We'll also publish. We publish a full report every week on wikibon.com and Silicon angle.com. You can get in touch with me, email me directly david.villane@Siliconangle.com or DM me at D Vollante. You can comment on our LinkedIn post. This is Dave Vollante for theCUBE insights powered by ETR. Have a great week, everybody. Thanks for watching. Stay safe, be well. And we'll see you next time. (upbeat music)

(bright upbeat music) >> Hello everyone, and welcome to the special exclusive CUBE Conversation, where we continue our coverage of the trends of the database market. With me is Nipun Agarwal, who's the vice president, MySQL HeatWave in advanced development at Oracle. Nipun, welcome. >> Thank you Dave. >> I love to have technical people on the Cube to educate, debate, inform, and we've extensively covered this market. We were all over the Snowflake IPO and at that time I remember, I challenged organizations bring your best people. Because I want to better understand what's happening at Database. After Oracle kind of won the Database wars 20 years ago, Database kind of got boring. And then it got really exciting with the big data movement, and all the, not only SQL stuff coming out, and Hadoop and blah, blah, blah. And now it's just exploding. You're seeing huge investments from many of your competitors, VCs are trying to get into the action. Meanwhile, as I've said many, many times, your chairman and head of technology, CTO, Larry Ellison, continues to invest to keep Oracle relevant. So it's really been fun to watch and I really appreciate you coming on. >> Sure thing. >> We have written extensively, we talked to a lot of Oracle customers. You get the leading mission critical database in the world. Everybody from Fortune 100, we evaluated what Gardner said about the operational databases. I think there's not a lot of question there. And we've written about that on WikiBound about you're converged databases, and the strategy there, and we're going to get into that. We've covered Autonomous Data Warehouse Exadata Cloud at Customer, and then we just want to really try to get into your area, which has been, kind of caught our attention recently. And I'm talking about the MySQL Database Service with HeatWave. I love the name, I laugh. It was an unveiled, I don't know, a few months ago. So Nipun, let's start the discussion today. Maybe you can update our viewers on what is HeatWave? What's the overall focus with Oracle? And how does it fit into the Cloud Database Service? >> Sure Dave. So HeatWave is a in-memory query accelerator for the MySQL Database Service for speeding up analytic queries as well as long running complex OLTP queries. And this is all done in the context of a single database which is the MySQL Database Service. Also, all existing MySQL applications or MySQL compatible tools and applications continue to work as is. So there is no change. And with this HeatWave, Oracle is delivering the only MySQL service which provides customers with a single unified platform for both analytic as well as transaction processing workloads. >> Okay, so, we've seen open source databases in the cloud growing very rapidly. I mentioned Snowflake, I think Google's BigQuery, get some mention, we'll talk, we'll maybe talk more about Redshift later on, but what I'm wondering, well let's talk about now, how does MySQL HeatWave service, how does that compare to MySQL-based services from other cloud vendors? I can get MySQL from others. In fact, I think we do. I think we run WikiBound on the LAMP stack. I think it's running on Amazon, but so how does your service compare? >> No other vendor, like, no other vendor offers this differentiated solution with an open source database namely, having a single database, which is optimized both for transactional processing and analytics, right? So the example is like MySQL. A lot of other cloud vendors provide MySQL service but MySQL has been optimized for transaction processing so when customs need to run analytics they need to move the data out of MySQL into some other database for any analytics, right? So we are the only vendor which is now offering this unified solution for both transactional processing analytics. That's the first point. Second thing is, most of the vendors out there have taken open source databases and they're basically hosting it in the cloud. Whereas HeatWave, has been designed from the ground up for the cloud, and it is a 100% compatible with MySQL applications. And the fact that we have designed it from the ground up for the cloud, maybe I'll spend 100s of person years of research and engineering means that we have a solution, which is very, very scalable, it's very optimized in terms of performance, and it is very inexpensive in terms of the cost. >> Are you saying, well, wait, are you saying that you essentially rewrote MySQL to create HeatWave but at the same time maintained compatibility with existing applications? >> Right. So we enhanced MySQL significantly and we wrote a whole bunch of new code which is brand new code optimized for the cloud in such a manner that yes, it is 100% compatible with all existing MySQL applications. >> What does it mean? And if I'm to optimize for the cloud, I mean, I hear that and I say, okay, it's taking advantage of cloud-native. I hear kind of the buzzwords, cloud-first, cloud-native. What does it specifically mean from a technical standpoint? >> Right. So first, let's talk about performance. What we have done is that we have looked at two aspects. We have worked with shapes like for instance, like, the compute shapes which provide the best performance for dollar, per dollar. So I'll give you a couple of examples. We have optimized for certain shifts. So, HeatWave is in-memory query accelerator. So the cost of the system is dominated by the cost. So we are working with chips which provide the cheapest cost per terabyte of memory. Secondly, we are using commodity cloud services in such a manner that it's in-optimized for both performance as well as performance per dollar. So, example is, we are not using any locally-attached SSDs. We use ObjectStore because it's very inexpensive. And then I guess at some point I will get into the details of the architecture. The system has been really, really designed for massive scalability. So as you add more compute, as you add more service, the system continues to scale almost perfectly linearly. So this is what I mean in terms of being optimized for the cloud. >> All right, great. >> And furthermore, (indistinct). >> Thank you. No, carry on. >> Over the next few months, you will see a bunch of other announcements where we're adding a whole bunch of machine learning and data driven-based automation which we believe is critical for the cloud. So optimized for performance, optimized for the cloud, and machine learning-based automation which we believe is critical for any good cloud-based service. >> All right, I want to come back and ask you more about the architecture, but you mentioned some of the others taking open source databases and shoving them into the cloud. Let's take the example of AWS. They have a series of specialized data stores and, for different workloads, Aurora is for OLTP I actually think it's based on MySQL Redshift which is based on ParAccel. And so, and I've asked Amazon about this, and their response is, actually kind of made sense to me. Look, we want the right tool for the right job, we want access to the primitives because when the market changes we can change faster as opposed to, if we put, if we start building bigger and bigger databases with more functionality, it's, we're not as agile. So that kind of made sense to me. I know we, again, we use a lot, we use, I think I said MySQL in Amazon we're using DynamoDB, works, that's cool. We're not huge. And I, we fully admit and we've researched this, when you start to get big that starts to get maybe expensive. But what do you think about that approach and why is your approach better? >> Right, we believe that there are multiple drawbacks of having different databases or different services, one, optimized for transactional processing and one for analytics and having to ETL between these different services. First of all, it's expensive because you have to manage different databases. Secondly, it's complex. From an application standpoint, applications need, now need to understand the semantics of two different databases. It's inefficient because you have to transfer data at some PRPC from one database to the other one. It's not secure because there is security aspects involved when your transferring data and also the identity of users in the two different databases is different. So it's, the approach which has been taken by Amazons and such, we believe, is more costly, complex, inefficient and not secure. Whereas with HeatWave, all the data resides in one database which is MySQL and it can run both transaction processing and analytics. So in addition to all the benefits I talked about, customers can also make their decisions in real time because there is no need to move the data. All the data resides in a single database. So as soon as you make any changes, those changes are visible to customers for queries right away, which is not the case when you have different siloed specialized databases. >> Okay, that, a lot of ways to skin a cat and that what you just said makes sense. By the way, we were saying before, companies have taken off the shelf or open source database has shoved them in the cloud. I have to give Amazon some props. They actually have done engineering to Aurora and Redshift. And they've got the engineering capabilities to do that. But you can see, for example, in Redshift the way they handle separating compute from storage it's maybe not as elegant as some of the other players like a Snowflake, for example, but they get there and they, maybe it's a little bit more brute force but so I don't want to just make it sound like they're just hosting off the shelf in the cloud. But is it fair to say that there's like a crossover point? So in other words, if I'm smaller and I'm not, like doing a bunch of big, like us, I mean, it's fine. It's easy, I spin it up. It's cheaper than having to host my own servers. So there's, presumably there's a sweet spot for that approach and a sweet spot for your approach. Is that fair or do you feel like you can cover a wider spectrum? >> We feel we can cover the entire spectrum, not wider, the entire spectrum. And we have benchmarks published which are actually available on GitHub for anyone to try. You will see that this approach you have taken with the MySQL Database Service in HeatWave, we are faster, we are cheaper without having to move the data. And the mileage or the amount of improvement you will get, surely vary. So if you have less data the amount of improvement you will get, maybe like say 100 times, right, or 500 times, but smaller data sizes. If you get to lots of data sizes this improvement amplifies to 1000 times or 10,000 times. And similarly for the cost, if the data size is smaller, the cost advantage you will have is less, maybe MySQL HeatWave is one third the cost. If the data size is larger, the cost advantage amplifies. So to your point, MySQL Database Service in HeatWave is going to be better for all sizes but the amount of mileage or the amount of benefit you will get increases as the size of the data increases. >> Okay, so you're saying you got better performance, better cost, better price performance. Let me just push back a little bit on this because I, having been around for awhile, I often see these performance and price comparisons. And what often happens is a vendor will take the latest and greatest, the one they just announced and they'll compare it to an N-1 or an N-2, running on old hardware. So, is, you're normalizing for that, is that the game you're playing here? I mean, how can you, give us confidence that this is easier kind of legitimate benchmarks in your GitHub repo. >> Absolutely. I'll give you a bunch of like, information. But let me preface this by saying that all of our scripts are available in the open source in the GitHub repo for anyone to try and we would welcome feedback otherwise. So we have taken, yes, the latest version of MySQL Database Service in HeatWave, we have optimized it, and we have run multiple benchmarks. For instance, TBC-H, TPC-DS, right? Because the amount of improvement a query will get depends upon the specific query, depends upon the predicates, it depends on the selectivity so we just wanted to use standard benchmarks. So it's not the case that if you're using certain classes of query, excuse me, benefit, get them more. So, standard benchmarks. Similarly, for the other vendors or other services like Redshift, we have run benchmarks on the latest shapes of Redshift the most optimized configuration which they recommend, running their scripts. So this is not something that, hey, we're just running out of the box. We have optimized Aurora, we have optimized (indistinct) to the best and possible extent we can based on their guidelines, based on their latest release, and that's what you're talking about in terms of the numbers. >> All right. Please continue. >> Now, for some other vendors, if we get to the benchmark section, we'll talk about, we are comparing with other services, let's say Snowflake. Well there, there are issues in terms of you can't legally run Snowflake numbers, right? So there, we have looked at some reports published by Gigaom report. and we are taking the numbers published by the Gigaom report for Snowflake, Google BigQuery and as you'll see maps numbers, right? So those, we have not won ourselves. But for AWS Redshift, as well as AWS Aurora, we have run the numbers and I believe these are the best numbers anyone can get. >> I saw that Gigaom report and I got to say, Gigaom, sometimes I'm like, eh, but I got to say that, I forget the guy's name, he knew what he was talking about. He did a good job, I thought. I was curious as to the workload. I always say, well, what's the workload. And, but I thought that report was pretty detailed. And Snowflake did not look great in that report. Oftentimes, and they've been marketing the heck out of it. I forget who sponsored it. It is, it was sponsored content. But, I did, I remember seeing that and thinking, hmm. So, I think maybe for Snowflake that sweet spot is not, maybe not that performance, maybe it's the simplicity and I think that's where they're making their mark. And most of their databases are small and a lot of read-only stuff. And so they've found a market there. But I want to come back to the architecture and really sort of understand how you've able, you've been able to get this range of both performance and cost you talked about. I thought I heard that you're optimizing the chips, you're using ObjectStore. You're, you've got an architecture that's not using SSD, it's using ObjectStore. So this, is their cashing there? I wonder if you could just give us some details of the architecture and tell us how you got to where you are. >> Right, so let me start off saying like, what are the kind of numbers we are talking about just to kind of be clear, like what the improvements are. So if you take the MySQL Database Service in HeatWave in Oracle Cloud and compare it with MySQL service in any other cloud, and if you look at smaller data sizes, say data sizes which are about half a terabyte or so, HeatWave is 400 times faster, 400 times faster. And as you get to... >> Sorry. Sorry to interrupt. What are you measuring there? Faster in terms of what? >> Latency. So we take TCP-H 22 queries, we run them on HeatWave, and we run the same queries on MySQL service on any other cloud, half a terabyte and the performance in terms of latency is 400 times faster in HeatWave. >> Thank you. Okay. >> If you go to a lot of other data sites, then the other data point of view, we're looking at say something like, 4 TB, there, we did two comparisons. One is with AWS Aurora, which is, as you said, they have taken MySQL. They have done a bunch of innovations over there and we are offering it as a premier service. So on 4 TB TPC-H, MySQL Database Service with HeatWave is 1100 times faster than Aurora. It is three times faster than the fastest shape of Redshift. So Redshift comes in different flavors some talking about dense compute too, right? And again, looking at the most recommended configuration from Redshift. So 1100 times faster that Aurora, three times faster than Redshift and at one third, the cost. So this where I just really want to point out that it is much faster and much cheaper. One third the cost. And then going back to the Gigaom report, there was a comparison done with Snowflake, Google BigQuery, Redshift, Azure Synapse. I wouldn't go into the numbers here but HeatWave was faster on both TPC-H as well as TPC-DS across all these products and cheaper compared to any of these products. So faster, cheaper on both the benchmarks across all these products. Now let's come to, like, what is the technology underneath? >> Great. >> So, basically there are three parts which you're going to see. One is, improve performance, very good scale, and improve a lower cost. So the first thing is that HeatWave has been optimized and, for the cloud. And when I say that, we talked about this a bit earlier. One is we are using the cheapest shapes which are available. We're using the cheapest services which are available without having to compromise the performance and then there is this machine learning-based automation. Now, underneath, in terms of the architecture of HeatWave there are basically, I would say, four key things. First is, HeatWave is an in-memory engine that a presentation which we have in memory is a hybrid columnar representation which is optimized for vector process. That's the first thing. And that's pretty table stakes these days for anyone who wants to do in-memory analytics except that it's hybrid columnar which is optimized for vector processing. So that's the first thing. The second thing which starts getting to be novel is that HeatWave has a massively parallel architecture which is enabled by a massively partitioned architecture. So we take the data, we read the data from MySQL into the memory of the HeatWave and we massively partition this data. So as we're reading the data, we're partitioning the data based on the workload, the sizes of these partitions is such that it fits in the cache of the underlying processor and then we're able to consume these partitions really, really fast. So that's the second bit which is like, massively parallel architecture enabled by massively partitioned architecture. Then the third thing is, that we have developed new state-of-art algorithms for distributed query processing. So for many of the workloads, we find that joints are the long pole in terms of the amount of time it takes. So we at Oracle have developed new algorithms for distributed joint processing and similarly for many other operators. And this is how we're being able to consume this data or process this data, which is in-memory really, really fast. And finally, and what we have, is that we have an eye for scalability and we have designed algorithms such that there's a lot of overlap between compute and communication, which means that as you're sending data across various nodes and there could be like, dozens of of nodes or 100s of nodes that they're able to overlap the computation time with the communication time and this is what gives us massive scalability in the cloud. >> Yeah, so, some hard core database techniques that you've brought to HeatWave, that's impressive. Thank you for that description. Let me ask you, just to go to quicker side. So, MySQL is open source, HeatWave is what? Is it like, open core? Is it open source? >> No, so, HeatWave is something which has been designed and optimized for the cloud. So it can't be open source. So any, it's not open service. >> It is a service. >> It is a service. That's correct. >> So it's a managed service that I pay Oracle to host for me. Okay. Got it. >> That's right. >> Okay, I wonder if you could talk about some of the use cases that you're seeing for HeatWave, any patterns that you're seeing with customers? >> Sure, so we've had the service, we had the HeatWave service in limited availability for almost 15 months and it's been about five months since we have gone G. And there's a very interesting trend of our customers we're seeing. The first one is, we are seeing many migrations from AWS specifically from Aurora. Similarly, we are seeing many migrations from Azure MySQL we're migrations from Google. And the number one reason customers are coming is because of ease of use. Because they have their databases currently siloed. As you were talking about some for optimized for transactional processing, some for analytics. Here, what customers find is that in a single database, they're able to get very good performance, they don't need to move the data around, they don't need to manage multiple databaes. So we are seeing many migrations from these services. And the number one reason is reduce complexity of ease of use. And the second one is, much better performance and reduced costs, right? So that's the first thing. We are very excited and delighted to see the number of migrations we're getting. The second thing which we're seeing is, initially, when we had the service announced, we were like, targeting really towards analytics. But now what are finding is, many of these customers, for instance, who have be running on Aurora, when they are moving from MySQL in HeatWave, they are finding that many of the OLTP queries as well, are seeing significant acceleration with the HeatWave. So now customers are moving their entire applications or, to HeatWave. So that's the second trend we're seeing. The third thing, and I think I kind of missed mentioning this earlier, one of the very key and unique value propositions we provide with the MySQL Database Service in HeatWave, is that we provide a mechanism where if customers have their data stored on premise they can still leverage the HeatWave service by enabling MySQL replication. So they can have their data on premise, they can replicate this data in the Oracle Cloud and then they can run analytics. So this deployment which we are calling the hybrid deployment is turning out to be very, very popular because there are customers, there are some customers who for various reasons, compliance or regulatory reasons cannot move the entire data to the cloud or migrate the data to the cloud completely. So this provides them a very good setup where they can continue to run their existing database and when it comes to getting benefits of HeatWave for query acceleration, they can set up this replication. >> And I can run that on anyone, any available server capacity or is there an appliance to facilitate that? >> No, this is just standard MySQL replication. So if a customer is running MySQL on premise they can just turn off this application. We have obviously enhanced it to support this inbound replication between on-premise and Oracle Cloud with something which can be enabled as long as the source and destination are both MySQL. >> Okay, so I want to come back to this sort of idea of the architecture a little bit. I mean, it's hard for me to go toe to toe with the, I'm not an engineer, but I'm going to try anyway. So you've talked about OLTP queries. I thought, I always thought HeatWave was optimized for analytics. But so, I want to push on this notion because people think of this the converged database, and what you're talking about here with HeatWave is sort of the Swiss army knife which is great 'cause you got a screwdriver and you got Phillips and a flathead and some scissors, maybe they're not as good. They're not as good necessarily as the purpose-built tool. But you're arguing that this is best of breed for OLTP and best of breed for analytics, both in terms of performance and cost. Am I getting that right or is this really a Swiss army knife where that flathead is really not as good as the big, long screwdriver that I have in my bag? >> Yes, so, you're getting it right but I did want to make a clarification. That HeatWave is definitely the accelerator for all your queries, all analytic queries and also for the long running complex transaction processing inquiries. So yes, HeatWave the uber query accelerator engine. However, when it comes to transaction processing in terms of your insert statements, delete statements, those are still all done and served by the MySQL database. So all, the transactions are still sent to the MySQL database and they're persistent there, it's the queries for which HeatWave is the accelerator. So what you said is correct. For all query acceleration, HeatWave is the engine. >> Makes sense. Okay, so if I'm a MySQL customer and I want to use HeatWave, what do I have to do? Do I have to make changes to my existing applications? You applied earlier that, no, it's just sort of plugs right in. But can you clarify that. >> Yes, there are absolutely no changes, which any MySQL or MySQL compatible application needs to make to take advantage of HeatWave. HeatWave is an in-memory accelerator and it's completely transparent to the application. So we have like, dozens and dozens of like, applications which have migrated to HeatWave, and they are seeing the same thing, similarly tools. So if you look at various tools which work for analytics like, Tableau, Looker, Oracle Analytics Cloud, all of them will work just seamlessly. And this is one of the reasons we had to do a lot of heavy lifting in the MySQL database itself. So the MySQL database engineering team was, has been very actively working on this. And one of the reasons is because we did the heavy lifting and we meet enhancements to the MySQL optimizer in the MySQL storage layer to do the integration of HeatWave in such a seamless manner. So there is absolutely no change which an application needs to make in order to leverage or benefit from HeatWave. >> You said earlier, Nipun, that you're seeing migrations from, I think you said Aurora and Google BigQuery, you might've said Redshift as well. Do you, what kind of tooling do you have to facilitate migrations? >> Right, now, there are multiple ways in which customers may want to do this, right? So the first tooling which we have is that customers, as I was talking about the replication or the inbound replication mechanism, customers can set up heat HeatWave in the Oracle Cloud and they can send the data, they can set up replication within their instances in their cloud and HeatWave. Second thing is we have various kinds of tools to like, facilitate the data migration in terms of like, fast ingestion sites. So there are a lot of such customers we are seeing who are kind of migrating and we have a plethora of like, tools and applications, in addition to like, setting up this inbound application, which is the most seamless way of getting customers started with HeatWave. >> So, I think you mentioned before, I have my notes, machine intelligence and machine learning. We've seen that with autonomous database it's a big, big deal obviously. How does HeatWave take advantage of machine intelligence and machine learning? >> Yeah, and I'm probably going to be talking more about this in the future, but what we have already is that HeatWave uses machine learning to intelligently automate many operations. So we know that when there's a service being offered in the cloud, our customers expect automation. And there're a lot of vendors and a lot of services which do a good job in automation. One of the places where we're going to be very unique is that HeatWave uses machine learning to automate many of these operations. And I'll give you one such example which is provisioning. Right now with HeatWave, when a customer wants to determine how many nodes are needed for running their workload, they don't need to make a guess. They invoke a provisioning advisor and this advisor uses machine learning to sample a very small percentage of the data. We're talking about, like, 0.1% sampling and it's able to predict the amount of memory with 95% accuracy, which this data is going to take. And based on that, it's able to make a prediction of how many servers are needed. So just a simple operation, the first step of provisioning, this is something which is done manually across, on any of the service, whereas at HeatWave, we have machine learning-based advisor. So this is an example of what we're doing. And in the future, we'll be offering many such innovations as a part of the MySQL Database and the HeatWave service. >> Well, I've got to say I was skeptic but I really appreciate it, you're, answering my questions. And, a lot of people when you made the acquisition and inherited MySQL, thought you were going to kill it because they thought it would be competitive to Oracle Database. I'm happy to see that you've invested and figured out a way to, hey, we can serve our community and continue to be the steward of MySQL. So Nipun, thanks very much for coming to the CUBE. Appreciate your time. >> Sure. Thank you so much for the time, Dave. I appreciate it. >> And thank you for watching everybody. This is Dave Vellante with another CUBE Conversation. We'll see you next time. (bright upbeat music)

>> Narrator: From around the globe, it's theCUBE. With coverage of KubeCon, and CloudNativeCon Europe 2020 virtual, brought to you by Red Hat, the Cloud Native Computing Foundation, and ecosystem partners. >> Hi, I'm Stuart Miniman, and this is theCUBE's coverage of KubeCon, CloudNativeCon, the European show, which of course for 2020 is virtual. Always love when we get to talk to the practitioners, as well as many of them heavily involved in what happens at the CNCF, you know, all these open source communities. Happy to welcome to the program, first time guest Katie Gamanji. She is a Cloud Platform Engineer with American Express, and she's also a member of the CNCF's TOC, which is the technical oversight committee. Katie, thanks so much for joining us. >> Thank you for having me today. I'm quite excited to be here. >> Excellent. Well, you are, as I mentioned, you're part of the TOC. You also present at the show last year. You presented at one of the KubeCon shows this year. As I mentioned, you were with American Express now. I believe it was Conde Nast, You shared some of the journey along those lines. Maybe for our audience, give us a little bit about, you know, your background, and what's got you involved in, you know, some of these projects in communities. >> Absolutely. Oh, such a good question. I can talk forever about that. My passion about Cloud Native. So, my name is Katie Gamanji, and I am one of the Cloud Platform Engineer for American Express. I joined American Express around five months ago, and I am part of the team that aims to transform the current platform, by embracing the Cloud Native principles, and making the best use of the open source tools. As mentioned previously, I've been working for Conde Nast. I've been in that role for almost two years. And as part of that role, we aim to create a centralized globally distributed platform that had Kubernetes as a central piece. And that was the role which actually got me involved more into the Cloud Native tooling, and I've been exploring them quite heavily since then. And that's why I wanted to get more in terms more contribution to the community. I've been doing that previously for different talks, and actually writing blog posts on different, giving different guides on how to start using some of the tooling. However, this year I decided to apply for TOC. And I've been elected as a TOC from the end user perspective, so I'm representing pretty much the overview of what end users think that the next direction should be within the Cloud Native landscape. And for the last, actually for the past five months, I've been on the TOC, with the CNCF, and it's only 11 of us. And we are in charge to make sure that we can guide, and set this technical vision for this year for the CNCF landscape. >> Yeah. Katie, I definitely want to talk about the TOC piece, but I want to back up a little bit. And you talked about some of the tooling, you talked about the community. Help me understand a little bit, you know, from a business standpoint, why you know, Conde Nast, American Express, looking towards using, Kubernetes and all of these open tours toolings. What was the charter, the challenge put before them, that felt that doing things this new way would help them. >> I think this actually goes a couple of years back. In my previous role before Conde Nast, I was in a team which aimed to provision infrastructure, but it was in a more, how can I say old fashioned manner? We had to configure our data centers manually, configure the VMs and processes. We had (indistinct) of automation. But at the time, this was maybe three years ago. I started to look into Kubertetes, and it was still baby steps, like, there was interest from the community, and I really wanted to, kind of get my hands on it more. And when I was looking for a role, which was at Conde Nast, I was looking for something which aimed to introduce containers in the entire infrastructure. And I think Conde Nast actually was very appealing as a role because not many expect for a media company to invest in technology, and actually the underlined infrastructure. So, from that perspective, I thought it's actually quite a good use case to change this perspective in the community. As well, with Conde Nast, it was a very international company. We had different business units around the world. All of them had different tech stacks. So, the challenge itself, how do we unify that? How do we centralize the deployment process of the application and serving our requests? But at the same time, have these individualized layer for every single market to still personalize their content. So, it was a very good project, I think, for me to further go into the Cloud Native to link, and actually definitely proved to be the right role for that. And currently I am in a different role. It's actually a financial company. But I think this is my personal challenge. I think there is a perception of financial companies moving towards modernization of their infrastructure, but it's still going quite slowly. And I think my personal challenge in this perspective is to make sure that actually FinTech is a thing, but FinTech in Cloud Native, actually using open source tooling is possible. Obviously, we can transition that to some of the secondary base, maybe not the core base of the business, but this transition, actually getting the change going is the most important bit. Once actual goes, it's just a boulder like, downhill, which is going to take everything around, and refactoring bit by bit. >> Yeah. Katie, you brought up a really important point. You know, in today's world, especially, you know, this year 2020 with the global pandemic going on, being able to react fast is so important regardless of what industry you're in. You talked about in your previous role, you had a global rollout to work across a lot of environments. Help us understand a little bit underneath the covers. You know, using this tool set, how does this help you move faster? How does it, you know, in some ways unify teams, regardless of what challenges they have? >> I think for us at least at Conde Nast, it was quite important to have one platform, so actually centralized all of our required, actually gather all our requirements, and translate them in within the platform. So, what we actually wanted, was to us to have Kubernetes as the gravitational point. Now, with Kubernetes, we'd have some of the main functionalities such as portability or flexibility. We'd be able to scale to very easily without, actually with minimal effort, but more importantly, we'll be able to transport our platform to different regions. So, to actually replicate the entire tech stat. So once we have these centralized platform, it was very easy for us to distribute them. For example, in regions across the US. And that time I was working there at least. There was an intentional strategy to replicate the tech stack in China. And that'll be very easy because with Kubernetes you just have this lifting shift capabilities. As long as you have BMs, you'll be able or compute, you'll be able to run the entire Conde Nast tech stack. So that was a very kind of big point for us to move to Kubernetes. Whilst I think in American Express, the strategy is completely different. It's still a lot of heritage infrastructure we have at the moment, actually we are running on Kubernetes. There is but the provider itself is Open shave This proving to be showcasing some of the issues for us moving forward, and we'd like to transition to a more neater way to run Kubernetes. And this potentially means, we haven't finalized the decision yet but it might we'd be using probably a cloud provider, or it might be the case of actually running Kubernetes self service. So we've actually got to maintain our clusters. This is not defined, but the underlying idea is that we want to be more kind of modern version of Kubernetes or managing Kubernetes moving forward. So this is one of the strategies. But I think within American express, the main underlying idea is that we really want to inner source most of the configuration. Historically we had different contractors and vendors working on our bits and pieces, we'd like to actually get all of these in house and have a centralized way to manage our infrastructure. So this is the underlying project which I think is going to take a while, but again there is an intention to include Cloud Native to link and technologies, and I think it's a very healthy thinking in terms of technology. >> Well Katie, you highlighted two really important topics that we've seen out there. Number one is exactly where my infrastructure is, it's going to change and I don't need to think about it. So you talked about public cloud, data centers, it might change in the future. And number two, making sure that you have the skill set in house. Something we definitely learnt from the outsourcing trends of the past was, when things need to be changed, if I had to rely on someone else it became very difficult. So if you're leveraging Kubernetes and you have the developer chops to be able to respond to the business in an agile way, you're going to be much more ready to be able to handle whatever happens in the future. >> Exactly >> So important. >> I want to switch and talk a little bit about your TOC work, presenting at the show. It's great to see companies enabling their employees to participate in this sort of thing. Help me understand how for you personally and what is the support that you get from your last job, your current job to participate in these open source projects in communities. >> Right. I think both of the companies, Conde Nast and American express, they're quite interested in been part of the Cloud Native community. With Conde Nast, they actually a part of end users. With American Express I think there is a thinking to actually join the end user community. So this might be something which will happen in future. I cannot guarantee but I'm hoping. This is going to be again one of my personal challenges, making sure we get in the community and share some of our used cases. But for now I think both of the companies actually understand the value of been part of actually using Open Source, but more importantly, understanding how other companies use that. Not one use case, especially when it come to Kubernetes, not one Kubernetes platform is going to be the same. There's always going to be different underlying technologies that plug in into it. There's always going to be different ways to use different tooling. And having these concentrated community and source of information, I think the companies actually understand the value in that and contributing to that. So I think, this is something which I've been quite passionate about to actually understand some of the strengths, to understand how some of the tooling are used, and if there is an actual hope for a project, or it's something which actually specialize into a very minimal kind of niche problem, and is going to be useful for maybe one or two big companies, it depends. So I think this is something I've been passionate about and I've actually had a support throughout. In my previous company and my current company I have very strong support from my higher ups to actually contribute more and be part of the end users community, and as such being a TOC as well. Which comes with a bunch of responsibilities as well. But I think in terms of either support, definitely I had the necessary support all the way through which I'm quite thankful. >> Katie, you mentioned some of your passions, I know from what I've read online that you're passionate about some of the tooling there, and that's some of what you're sharing through your presentations. So, I'd love if you could share a little bit about what we're going to be talking about at the Europe show right now and any other kind of tools that are getting your time and attention these days. >> So I think lately, I've been exploring Cluster API the new release. I've been waiting for new release. Actually everyone has been waiting for the new release for a couple of months. Now we actually have v1L for three end points with some of the cool features such as, manage control place for Cluster. And the second tool or set of toolings I'm working lately are the ones which concentrate on the Gitops model. So during the session at Kubecon in Europe this year, I will be presenting Cluster API, a guide on how to get started. So an overview of all the components necessary to create your own Clusters. In different cloud providers as well. But I will crown that presentation by delivering a demo of how can you provision your Custer with Gitops. And I'm going to use Argo CD at the moment. And the end result is going to be provisioning your Cluster in AWS by having maybe one click, and you have a Cluster refill masters, maybe five nodes and you just wait. Pretty much you can have a coffee while your Cluster is provisioning. But more importantly with Cluster API, again we have usable manifest which will allow us to have this one interface to integrate with different cloud providers. So we actually have this interoperobility Of manifest across different cloud providers. So look forward to that. >> Excellent. Katie, last question I have for you, what advice would you give your peers? Where do you see need for more participation, as people that are getting into this environment. Where do you think they can help? >> Oh such a good question. I think contribution is necessary in most of the sags In the Kubernetes community. So, I think it depends on the passion everyone has, if they're quite passionate about the networking, or storage or even service, there is going to be a group of people that have the same passion and interest with you. So please reach out and contribute. I think I never think I'll like to mention, you done necessarily need to be an active coder to be part of the sags or to be part of the Cloud Native. Because being in technology of course is an advantage, however, most of the ideas in actually making sure that we cover used cases for different tooling, comes from a diverse user base as well. So if you have an interest I think that's going to be very good engine for to further enable different ideas within the sags. So I wouldn't be able to recommend a particular project, I think this is very specific to everyone's daily role (indistinct) But yeah I think within the CNCF, we have a collection of sags for which you pretty much would find a place for yourself and your skills. >> Well Katie thank you so much for sharing your journey and participating so actively in the community. Thanks so much for joining us. >> Thank you for having me today. >> All right stay tuned much more coverage from Kubecon, CloudNativeCon Europe 2020 virtual edition, I'm Stuartt Miniman, and thank you for watching theCUBE. (gentle music)

>> [] From around the globe, it's theCUBE with coverage of KubeCon and CloudNativeCon Europe 2020. Virtual, brought to you by Red Hat, the cloud native computing foundation and the ecosystem partners. >> Hi, I'm Stu Miniman. And this is theCUBE coverage of KubeCon CloudNativeCon 2020 in Europe the virtual edition and you've reached the final stage. This is our last interview so hopefully, learned a lot talking to the CNCF members. We've had a few great practitioners, of course, some of the important vendors and startups in this space. And when we talk about what's happening in this, this cloud native space, one of the things that gets bandied about a lot is scale. What does that mean? You know, when it first rolled out, of course, there is only one Google out there, and only a handful of true hyperscalers. But there absolutely are some companies that really need scale, performance global and so happy to bring in he is the final boss. It is Alexandria McLean. He's a technical architect at Ubisoft. And yes, I do have a little bit of background in gaming. But here's someone that is helping enable in one of the largest gaming companies in the globe. So Alexandra, thanks so much for joining us. >> Hey, thanks for the invitation, happy to be here. >> All right, so you're no novice to this ecosystem. I know you and I have both been at many of the Docker cons, the KubeCons over the years. So if you could just give our audience a little bit of your background and what is your team responsible for Ubisoft? >> Okay, sure, so I am part of the one of the IT teams inside Ubisoft. So we're responsible mainly to provide cloud computing resources and Kubernetes infrastructure for the whole company. So again, and if you want to know more about basically, I've been, I've been leading the Kubernetes initiative, the past few years right now. So we started the journey maybe in 2016. We're already pretty busy, you know, working on the growth for the cloud, the cloud industry to stand Ubisoft, for the growth of the expansion, different data centers and supporting the needs of the different teams and development teams inside Ubisoft. And one thing we wanted to do back then was really to enable and accelerate the adoption of cloud native, the cloud native mindset and cloud native architectures. So what we did back then is did, we did a short analysis of our different technologies that was available at the time, and we decided to jump full head on Kubernetes and make this as the foundation for the different workloads, container workloads that will be that will enable drive adoption inside Ubisoft to grow and boost the productivity of many things. >> Alright, I'm really glad you brought up that cloud native mindset, if you could just up-level a little bit for, you know, the business leaders out there, they hear about, you know, Kubernetes and they won't know how to spell it. They hear something like a cloud native mindset, and they say, you know, I don't understand, what does this mean for our business? So what architecturally are you doing and what does that mean for you know, your games and ultimately your end users? >> Yeah, so I would say that basically, I mean, if you want to have a cloud native architecture, really want to make your application, first of all, very portable, very easy to deploy and manageable, and at the same time very resilient to failure. So you want to make sure that your application once it's deployed, that it's highly resilient to failure, that it was built for failures and that you can manage the project and the service to meet the expectation of either the gamers or the service owners basically. >> Yeah, you know, absolutely. I'm curious, here in 2020, we see the ripple effects of what the global pandemic has. I have to imagine that from a gaming standpoint, that has had an impact. So maybe if we use that as an analogy, if it's valid from your standpoint, I have to imagine more people are using it. What did this mean to your infrastructure? How were you ready from an IT's perspective to support that, you know, increased usage, kind of rippling around the globe as more people are home all the time? >> Hmm, yeah, that's a good question I guess. I mean, we really have like two kind of, I would say, audience inside Ubisoft in the IT team that I serve. So we have the people who are building the softwares and the applications to help the developers to, I mean the game developers in general, so we have different services, internal services, and tooling that needs to be hosted somewhere. And we need to enable these people in these teams to have a way to manage applications efficiently. And the other side we are looking at right now, I mean, we the game server and the gaming industry, is really, I think there's a shift right now in the way that she prefer doing, the way that you're going to manage the game servers in the future. And I would say that back then, there was a lot of in house tooling, things that were really, I mean, appropriately proprietary to each gaming company. But right now, what we wanted to do in the past few years, we work for instance on a solution called hygienist. So we were involved in the beginning to design this kind of next gen game server, dedicated server hosting infrastructure that was all built around communities. So, in the future, we were already started to work on that, and the next gen of games are going to be difficult to stay on top of Kubernetes, which is going to enable a lot more efficiency of resource usage and now at the same time, we'd say manageability and the profitability about all these services. Because I think that one key thing about cloud native and Kubernetes is that, once you know Kubernetes, I mean, basically, it's very easy to onboard new people in the team, the project, because they know what is Kubernetes how to operate it. So it will be much more efficient in the future for all the workflows that we have internally and the next game server infrastructure as well to be hosted in Kubernetes, it's going to be much more easy to standardize and unify that whole stack. >> Well, the skill sets are so critically important. And it's great to hear you say that onboarding somebody in Kubernetes, is easier than it might have been a couple of years ago. If you could bring us inside a little bit, you know, what's your stack look like? You know, you know, can you say what cloud or cloud you use? When it comes to Kubernetes, you know, what are the key tools that you're using and partners that you have? >> Yeah, sure. So early on, I would say, almost 10 years ago, we really started to focus on adding on prem cloud infrastructure and the technology that we chose back then was OpenStack. So we have a large footprint of OpenStack called install, installed internally and different data centers all over the world so people and different teams and anyone at Ubisoft can easily have computers or compute resources available for them. And with Kubernetes, we initially we wanted to have, you know, to make your Kubernetes a commodity. We wanted to ask people be very I mean in a position to easily experiment new things, new applications on top of Kubernetes. And for that we decided to go with Rancher. So Rancher is an open source solution made by Rancher labs, and we, initially after we started to build and in our solution, the first year because we talked back then the landscape was quite different and we thought it was the best choice for us to do. But we realized shortly after, I mean, when Rancher 2.2 came out, I think it was in something like April 2018, that we will benefit a lot go with this kind of solution which was open sourced, there was a lot of traction behind it and it will enable us to I mean, accelerate, accelerate the adoption of Kubernetes and cloud native in general, much more faster, than the you know solutions that we had built at that time. So we went with Rancher and right now we have, I would say, I mean, we have maybe 10 data centers with the cloud installed on top of it, much more data centers was going to grow in the next couple of months and years, and we have over 200 clusters and 1000 nodes that are managed by Rancher and people can just deploy on demand, to own Kubernetes cluster and get started with it if they want to. >> Okay, so if I heard you right, it's Rancher on top of the OpenStack solution in your data centers. >> Yes. >> You talk about how many clusters you have, you know, what's the state of managing those environments? You said, you're using Rancher that's one of the things we've seen a lot of discussion over the last couple of years is you know, went from managing containers to managing you know, part or cluster to now, multi clusters around multi sites, you know, what's the maturity today? Anything that you're looking for that would make your life easier to manage such a broad environment? >> Yeah, well, I would say that's one of the drawback, I mean, when we enabled that solution with Rancher we didn't see, I mean, here's the views of launching provisioning new clusters, is that right now, we have a lot of clusters, maybe too many, because we try to consolidate, I mean, the next, the next logical step for us is we try to consolidate the workloads maybe as much as possible, and see if there's really a need for people to have their own dedicated cluster for them. And initially, there was a lot of demand for that, because people basically they came to us and they said, you know, we want to use Kubernetes. And what we want to do is we want to have films which we have access to it, we want to be able to do whatever we want with it, upgrade it at our own pace. And I don't want to have any neighbor on it. I want to be completely isolated in terms of computer resources. So we said all right, we're going to make a solution that is going to provision new clusters on demand for everyone. And the intro stuff may very well. But now, after a while some people and we as especially as an IT provider and operator, we realized that, you know, maybe people don't have to be completing alone to cluster, maybe we should try to consolidate that a little bit. So we're trying to migrate workloads from certain services and tooling and say maybe you can, instead of running your own cluster, you can use this one that is going to be shared. And there will be a team dedicated I mean dedicated to support and operate is faster for you because we want to in the end, we want to offload the burden of infrastructure and Kubernetes although it's I mean, it brings a lot of abstraction in simplicity, you still have to manage your cluster in the end. So we'd rather have people focus on the application side than on the Kubernetes infrastructure side. So we will start a path of maybe try to consolidated friend workloads, and see if we can reduce the amount of clusters that we have and also to unify the way that people are using the different providers because although we have, a huge open OpenStack cloud offering internally on prem, there are still people who need to use GKE or EKS and a couple of other external cloud providers. So for these people, some of them are not using really Rancher, although it's possible with Rancher to just directly using the providers. But what we want to do is try to unify the way that you're going to get access to this cluster, try to make a central governance model for people to pass through a central team to get access and prevent the cluster. So they will be standardized, we will be able to add more maybe security policies and compliance and rules and everything. So the cluster will be created in certain ways and that too much fragmented as they are today. >> Yeah, that's ultimately what I was trying to understand is most customers I talked to, they have hybrid environments, they're using multiple clouds, if you're using Kubernetes you know, how do you get your arms around that. So I'd love to get your viewpoint just 'cause you've been involved since, kind of the early Kubernetes days, you know, what's, what's better now than it was a few years ago? You know, I heard you say that you looked at possibly, you know, creating a solution to yourself so a company like Rancher helps simplify things. So when you look at the maturity, you know, how happy are you with what you have now? And are there any things that you say, boy, I'd love my team to not have to worry about this. You know, maybe the industry as a whole would be able to, you know, standardize or make things simpler? >> Well, you know, when we started to use Rancher maybe there were a couple of things that we wanted to simplify for the users because what Rancher does is essentially is that, there's a lot of configuration options. It's very flexible because it's first mining providers. So the first few things that we did was try to simplify the user experience who we will extend we modified ventures in some ways to make It's simpler to be consumed. And also, the experience is much more simpler than it was, let's say two years ago when we started, we still want to simplify it even further, we want to ideally provide a fully manage experience. So peoples don't even have to worry about the control plane components that is currently being deployed with their competitors clusters. We want to remove that away from them so that we, once again fully focus on the application side of development. And I think one other aspect that we need to maybe improve in the future is that, when you want to deploy your application and make it resilient and geographically distributed, then you need to manage multiple clusters, and you need to deploy your applications and performance cluster. So, the whole multi cluster aspect of things like, how do I deploy my application from a version? How do I make it like consistent between the different clusters that where it needs to be deployed. How do I make service discovery possible? Or do I mesh everything all the application together to make sure that it's easy to operate, it's easy for the developers, and that it's resilient in the end. So we will start to look at the, I mean, the multi cluster multi region aspect for Kubernetes. Because that's a big challenge to us. >> All right, well, Alexandre, want to shift for a second, let's talk about the conference, KubeCon, CloudNativeCon, obviously, it's virtual this year, so there is a little bit of shift but you know, you've attended many of these in the past. What are their projects that you're interested in learning more or are there you know, peers of yours that you're looking to collaborate with? What have you seen in the past that that you're hoping you still get, from a virtual event like we have this year? >> Well, you know, I think that it has become so big, it's hard to keep up with everything that's happening at the same time, you know, nowadays, but, things that we're looking at really, is maybe like, I think chapters maybe, in terms of service mesh to a lot of technologies, I think it's maturing slowly. So we'll have, we'll always try to have a look about what is the most, the best fit for us and the use cases that we have. And some people thought you're using Kubernetes, some other people are using, you know more traditional stacks, So we try to bridge that together and see what's possible to migrate the existing workloads from the traditional cloud VMs, and call applications toward Kubernetes and everything. So maybe try to see if it's possible to bridge that path and migrate gradually for the users that we have. And other things in general, I think that it will be very interesting to see the whole bear setups, I mean, evolving to run out and see are we can try to add conformance and compliance rules to different clusters that we have to manage to make sure that it's no longer like, just add a matter of I want to create a cluster, I get access to it. We need to centralize the governance. We need to centralize that, the rules of our everything's going to be managing the end and make sure that security is a big aspect to it so make sure that there's no vulnerabilities and everything's being audited. And especially for the game students is going to be a big factor for us. So we definitely our interested into all the security discussion that's happening right now. >> All right, no shortage of lots of information. Alexandre, by the way, that there's no way that anybody can keep up on everything that's happening in this very robust community. But thank you so much for sharing your journey. It's always great to hear from the practitioner. Thanks so much for joining us. >> Thanks for having me, awesome. >> All right, and thank you for joining us, for all the coverage. Be sure to go to theCUBE.net, you can see not only all the interviews from this show, you can go search find previous shows as well as see what events we will be at, of course right now all virtually, so, am Stu Miniman and thank you as always for watching theCUBE. (upbeat music)

>> PA Announcer: Off the plastic tab, and we'll turn on the colors. Welcome to New Orleans. ♪ This is it ♪ ♪ The part when I say I don't want ya ♪ ♪ I'm stronger than I've been before ♪ ♪ This is the part when I set your free ♪ (New Orleans jazz music) ("When the Saints Go Marching In") (rock music) >> PA Announcer: Ladies and gentleman, would you please welcome state of Louisiana chief design officer Matthew Vince and Choice Hotels director of infrastructure services Stacy Nigh. (rock music) >> Well good morning New Orleans, and welcome to my home state. My name is Matt Vince. I'm the chief design office for state of Louisiana. And it's my pleasure to welcome you all to .Next 2018. State of Louisiana is currently re-architecting our cloud infrastructure and Nutanix is the first domino to fall in our strategy to deliver better services to our citizens. >> And I'd like to second that warm welcome. I'm Stacy Nigh director of infrastructure services for Choice Hotels International. Now you may think you know Choice, but we don't own hotels. We're a technology company. And Nutanix is helping us innovate the way we operate to support our franchisees. This is my first visit to New Orleans and my first .Next. >> Well Stacy, you're in for a treat. New Orleans is known for its fabulous food and its marvelous music, but most importantly the free spirit. >> Well I can't wait, and speaking of free, it's my pleasure to introduce the Nutanix Freedom video, enjoy. ♪ I lose everything, so I can sing ♪ ♪ Hallelujah I'm free ♪ ♪ Ah, ah, ♪ ♪ Ah, ah, ♪ ♪ I lose everything, so I can sing ♪ ♪ Hallelujah I'm free ♪ ♪ I lose everything, so I can sing ♪ ♪ Hallelujah I'm free ♪ ♪ I'm free, I'm free, I'm free, I'm free ♪ ♪ Gritting your teeth, you hold onto me ♪ ♪ It's never enough, I'm never complete ♪ ♪ Tell me to prove, expect me to lose ♪ ♪ I push it away, I'm trying to move ♪ ♪ I'm desperate to run, I'm desperate to leave ♪ ♪ If I lose it all, at least I'll be free ♪ ♪ Ah, ah ♪ ♪ Ah, ah ♪ ♪ Hallelujah, I'm free ♪ >> PA Announcer: Ladies and gentlemen, please welcome chief marketing officer Ben Gibson ♪ Ah, ah ♪ ♪ Ah, ah ♪ ♪ Hallelujah, I'm free ♪ >> Welcome, good morning. >> Audience: Good morning. >> And welcome to .Next 2018. There's no better way to open up a .Next conference than by hearing from two of our great customers. And Matthew, thank you for welcoming us to this beautiful, your beautiful state and city. And Stacy, this is your first .Next, and I know she's not alone because guess what It's my first .Next too. And I come properly attired. In the front row, you can see my Nutanix socks, and I think my Nutanix blue suit. And I know I'm not alone. I think over 5,000 people in attendance here today are also first timers at .Next. And if you are here for the first time, it's in the morning, let's get moving. I want you to stand up, so we can officially welcome you into the fold. Everyone stand up, first time. All right, welcome. (audience clapping) So you are all joining not just a conference here. This is truly a community. This is a community of the best and brightest in our industry I will humbly say that are coming together to share best ideas, to learn what's happening next, and in particular it's about forwarding not only your projects and your priorities but your careers. There's so much change happening in this industry. It's an opportunity to learn what's coming down the road and learn how you can best position yourself for this whole new world that's happening around cloud computing and modernizing data center environments. And this is not just a community, this is a movement. And it's a movement that started quite awhile ago, but the first .Next conference was in the quiet little town of Miami, and there was about 800 of you in attendance or so. So who in this hall here were at that first .Next conference in Miami? Let me hear from you. (audience members cheering) Yep, well to all of you grizzled veterans of the .Next experience, welcome back. You have started a movement that has grown and this year across many different .Next conferences all over the world, over 20,000 of your community members have come together. And we like to do it in distributed architecture fashion just like here in Nutanix. And so we've spread this movement all over the world with .Next conferences. And this is surging. We're also seeing just today the current count 61,000 certifications and climbing. Our Next community, close to 70,000 active members of our online community because .Next is about this big moment, and it's about every other day and every other week of the year, how we come together and explore. And my favorite stat of all. Here today in this hall amongst the record 5,500 registrations to .Next 2018 representing 71 countries in whole. So it's a global movement. Everyone, welcome. And you know when I got in Sunday night, I was looking at the tweets and the excitement was starting to build and started to see people like Adile coming from Casablanca. Adile wherever you are, welcome buddy. That's a long trip. Thank you so much for coming and being here with us today. I saw other folks coming from Geneva, from Denmark, from Japan, all over the world coming together for this moment. And we are accomplishing phenomenal things together. Because of your trust in us, and because of some early risk candidly that we have all taken together, we've created a movement in the market around modernizing data center environments, radically simplifying how we operate in the services we deliver to our businesses everyday. And this is a movement that we don't just know about this, but the industry is really taking notice. I love this chart. This is Gartner's inaugural hyperconvergence infrastructure magic quadrant chart. And I think if you see where Nutanix is positioned on there, I think you can agree that's a rout, that's a homerun, that's a mic drop so to speak. What do you guys think? (audience clapping) But here's the thing. It says Nutanix up there. We can honestly say this is a win for this hall here. Because, again, without your trust in us and what we've accomplished together and your partnership with us, we're not there. But we are there, and it is thanks to everyone in this hall. Together we have created, expanded, and truly made this market. Congratulations. And you know what, I think we're just getting started. The same innovation, the same catalyst that we drove into the market to converge storage network compute, the next horizon is around multi-cloud. The next horizon is around whether by accident or on purpose the strong move with different workloads moving into public cloud, some into private cloud moving back and forth, the promise of application mobility, the right workload on the right cloud platform with the right economics. Economics is key here. If any of you have a teenager out there, and they have a hold of your credit card, and they're doing something online or the like. You get some surprises at the end of the month. And that surprise comes in the form of spiraling public cloud costs. And this isn't to say we're not going to see a lot of workloads born and running in public cloud, but the opportunity is for us to take a path that regains control over infrastructure, regain control over workloads and where they're run. And the way I look at it for everyone in this hall, it's a journey we're on. It starts with modernizing those data center environments, continues with embracing the full cloud stack and the compelling opportunity to deliver that consumer experience to rapidly offer up enterprise compute services to your internal clients, lines of businesses and then out into the market. It's then about how you standardize across an enterprise cloud environment, that you're not just the infrastructure but the management, the automation, the control, and running any tier one application. I hear this everyday, and I've heard this a lot already this week about customers who are all in with this approach and running those tier one applications on Nutanix. And then it's the promise of not only hyperconverging infrastructure but hyperconverging multiple clouds. And if we do that, this journey the way we see it what we are doing is building your enterprise cloud. And your enterprise cloud is about the private cloud. It's about expanding and managing and taking back control of how you determine what workload to run where, and to make sure there's strong governance and control. And you're radically simplifying what could be an awfully complicated scenario if you don't reclaim and put your arms around that opportunity. Now how do we do this different than anyone else? And this is going to be a big theme that you're going to see from my good friend Sunil and his good friends on the product team. What are we doing together? We're taking all of that legacy complexity, that friction, that inability to be able to move fast because you're chained to old legacy environments. I'm talking to folks that have applications that are 40 years old, and they are concerned to touch them because they're not sure if they can react if their infrastructure can meet the demands of a new, modernized workload. We're making all that complexity invisible. And if all of that is invisible, it allows you to focus on what's next. And that indeed is the spirit of this conference. So if the what is enterprise cloud, and the how we do it different is by making infrastructure invisible, data centers, clouds, then why are we all here today? What is the binding principle that spiritually, that emotionally brings us all together? And we think it's a very simple, powerful word, and that word is freedom. And when we think about freedom, we think about as we work together the freedom to build the data center that you've always wanted to build. It's about freedom to run the applications where you choose based on the information and the context that wasn't available before. It's about the freedom of choice to choose the right cloud platform for the right application, and again to avoid a lot of these spiraling costs in unanticipated surprises whether it be around security, whether it be around economics or governance that come to the forefront. It's about the freedom to invent. It's why we got into this industry in the first place. We want to create. We want to build things not keep the lights on, not be chained to mundane tasks day by day. And it's about the freedom to play. And I hear this time and time again. My favorite tweet from a Nutanix customer to this day is just updated a lot of nodes at 38,000 feed on United Wifi, on my way to spend vacation with my family. Freedom to play. This to me is emotionally what brings us all together and what you saw with the Freedom video earlier, and what you see here is this new story because we want to go out and spread the word and not only talk about the enterprise cloud, not only talk about how we do it better, but talk about why it's so compelling to be a part of this hall here today. Now just one note of housekeeping for everyone out there in case I don't want anyone to take a wrong turn as they come to this beautiful convention center here today. A lot of freedom going on in this convention center. As luck may have it, there's another conference going on a little bit down that way based on another high growth, disruptive industry. Now MJBizCon Next, and by coincidence it's also called next. And I have to admire the creativity. I have to admire that we do share a, hey, high growth business model here. And in case you're not quite sure what this conference is about. I'm the head of marketing here. I have to show the tagline of this. And I read the tagline from license to launch and beyond, the future of the, now if I can replace that blank with our industry, I don't know, to me it sounds like a new, cool Sunil product launch. Maybe launching a new subscription service or the like. Stay tuned, you never know. I think they're going to have a good time over there. I know we're going to have a wonderful week here both to learn as well as have a lot of fun particularly in our customer appreciation event tonight. I want to spend a very few important moments on .Heart. .Heart is Nutanix's initiative to promote diversity in the technology arena. In particular, we have a focus on advancing the careers of women and young girls that we want to encourage to move into STEM and high tech careers. You have the opportunity to engage this week with this important initiative. Please role the video, and let's learn more about how you can do so. >> Video Plays (electronic music) >> So all of you have received these .Heart tokens. You have the freedom to go and choose which of the four deserving charities can receive donations to really advance our cause. So I thank you for your engagement there. And this community is behind .Heart. And it's a very important one. So thank you for that. .Next is not the community, the moment it is without our wonderful partners. These are our amazing sponsors. Yes, it's about sponsorship. It's also about how we integrate together, how we innovate together, and we're about an open community. And so I want to thank all of these names up here for your wonderful sponsorship of this event. I encourage everyone here in this room to spend time, get acquainted, get reacquainted, learn how we can make wonderful music happen together, wonderful music here in New Orleans happen together. .Next isn't .Next with a few cool surprises. Surprise number one, we have a contest. This is a still shot from the Freedom video you saw right before I came on. We have strategically placed a lucky seven Nutanix Easter eggs in this video. And if you go to Nutanix.com/freedom, watch the video. You may have to use the little scrubbing feature to slow down 'cause some of these happen quickly. You're going to find some fun, clever Easter eggs. List all seven, tweet that out, or as many as you can, tweet that out with hashtag nextconf, C, O, N, F, and we'll have a random drawing for an all expenses paid free trip to .Next 2019. And just to make sure everyone understands Easter egg concept. There's an eighth one here that's actually someone that's quite famous in our circles. If you see on this still shot, there's someone in the back there with a red jacket on. That's not just anyone. We're targeting in here. That is our very own Julie O'Brien, our senior vice president of corporate marketing. And you're going to hear from Julie later on here at .Next. But Julie and her team are the engine and the creativity behind not only our new Freedom campaign but more importantly everything that you experience here this week. Julie and her team are amazing, and we can't wait for you to experience what they've pulled together for you. Another surprise, if you go and visit our Freedom booths and share your stories. So they're like video booths, you share your success stories, your partnerships, your journey that I talked about, you will be entered to win a beautiful Nutanix brand compliant, look at those beautiful colors, bicycle. And it's not just any bicycle. It's a beautiful bicycle made by our beautiful customer Trek. I actually have a Trek bike. I love cycling. Unfortunately, I'm not eligible, but all of you are. So please share your stories in the Freedom Nutanix's booths and put yourself in the running, or in the cycling to get this prize. One more thing I wanted to share here. Yesterday we had a great time. We had our inaugural Nutanix hackathon. This hackathon brought together folks that were in devops practices, many of you that are in this room. We sold out. We thought maybe we'd get four or five teams. We had to shutdown at 14 teams that were paired together with a Nutanix mentor, and you coded. You used our REST APIs. You built new apps that integrated in with Prism and Clam. And it was wonderful to see this. Everyone I talked to had a great time on this. We had three winners. In third place, we had team Copper or team bronze, but team Copper. Silver, Not That Special, they're very humble kind of like one of our key mission statements. And the grand prize winner was We Did It All for the Cookies. And you saw them coming in on our Mardi Gras float here. We Did It All for Cookies, they did this very creative job. They leveraged an Apple Watch. They were lighting up VMs at a moments notice utilizing a lot of their coding skills. Congratulations to all three, first, second, and third all receive $2,500. And then each of them, then were able to choose a charity to deliver another $2,500 including Ronald McDonald House for the winner, we did it all for the McDonald Land cookies, I suppose, to move forward. So look for us to do more of these kinds of events because we want to bring together infrastructure and application development, and this is a great, I think, start for us in this community to be able to do so. With that, who's ready to hear form Dheeraj? You ready to hear from Dheeraj? (audience clapping) I'm ready to hear from Dheeraj, and not just 'cause I work for him. It is my distinct pleasure to welcome on the stage our CEO, cofounder and chairman Dheeraj Pandey. ("Free" by Broods) ♪ Hallelujah, I'm free ♪ >> Thank you Ben and good morning everyone. >> Audience: Good morning. >> Thank you so much for being here. It's just such an elation when I'm thinking about the Mardi Gras crowd that came here, the partners, the customers, the NTCs. I mean there's some great NTCs up there I could relate to because they're on Slack as well. How many of you are in Slack Nutanix internal Slack channel? Probably 5%, would love to actually see this community grow from here 'cause this is not the only even we would love to meet you. We would love to actually do this in a real time bite size communication on our own internal Slack channel itself. Now today, we're going to talk about a lot of things, but a lot of hard things, a lot of things that take time to build and have evolved as the industry itself has evolved. And one of the hard things that I want to talk about is multi-cloud. Multi-cloud is a really hard problem 'cause it's full of paradoxes. It's really about doing things that you believe are opposites of each other. It's about frictionless, but it's also about governance. It's about being simple, and it's also about being secure at the same time. It's about delight, it's about reducing waste, it's about owning, and renting, and finally it's also about core and edge. How do you really make this big at a core data center whether it's public or private? Or how do you really shrink it down to one or two nodes at the edge because that's where your machines are, that's where your people are? So this is a really hard problem. And as you hear from Sunil and the gang there, you'll realize how we've actually evolved our solutions to really cater to some of these. One of the approaches that we have used to really solve some of these hard problems is to have machines do more, and I said a lot of things in those four words, have machines do more. Because if you double-click on that sentence, it really means we're letting design be at the core of this. And how do you really design data centers, how do you really design products for the data center that hush all the escalations, the details, the complexities, use machine-learning and AI and you know figure our anomaly detection and correlations and patter matching? There's a ton of things that you need to do to really have machines do more. But along the way, the important lesson is to make machines invisible because when machines become invisible, it actually makes something else visible. It makes you visible. It makes governance visible. It makes applications visible, and it makes services visible. A lot of things, it makes teams visible, careers visible. So while we're really talking about invisibility of machines, we're talking about visibility of people. And that's how we really brought all of you together in this conference as well because it makes all of us shine including our products, and your careers, and your teams as well. And I try to define the word customer success. You know it's one of the favorite words that I'm actually using. We've just hired a great leader in customer success recently who's really going to focus on this relatively hard problem, yet another hard problem of customer success. We think that customer success, true customer success is possible when we have machines tend towards invisibility. But along the way when we do that, make humans tend towards freedom. So that's the real connection, the yin-yang of machines and humans that Nutanix is really all about. And that's why design is at the core of this company. And when I say design, I mean reducing friction. And it's really about reducing friction. And everything we do, the most mundane of things which could be about migrating applications, spinning up VMs, self-service portals, automatic upgrades, and automatic scale out, and all the things we do is about reducing friction which really makes machines become invisible and humans gain freedom. Now one of the other convictions we have is how all of us are really tied at the hip. You know our success is tied to your success. If we make you successful, and when I say you, I really mean Main Street. Main Street being customers, and partners, and employees. If we make all of you successful, then we automatically become successful. And very coincidentally, Main Street and Wall Street are also tied in that very same relation as well. If we do a great job at Main Street, I think the Wall Street customer, i.e. the investor, will take care of itself. You'll have you know taken care of their success if we took care of Main Street success itself. And that's the narrative that our CFO Dustin Williams actually went and painted to our Wall Street investors two months ago at our investor day conference. We talked about a $3 billion number. We said look as a company, as a software company, we can go and achieve $3 billion in billings three years from now. And it was a telling moment for the company. It was really about talking about where we could be three years from now. But it was not based on a hunch. It was based on what we thought was customer success. Now realize that $3 billion in pure software. There's only 10 to 15 companies in the world that actually have that kind of software billings number itself. But at the core of this confidence was customer success, was the fact that we were doing a really good job of not over promising and under delivering but under promising starting with small systems and growing the trust of the customers over time. And this is one of the statistics we actually talk about is repeat business. The first dollar that a Global 2000 customer spends in Nutanix, and if we go and increase their trust 15 times by year six, and we hope to actually get 17 1/2 and 19 times more trust in the years seven and eight. It's very similar numbers for non Global 2000 as well. Again, we go and really hustle for customer success, start small, have you not worry about paying millions of dollars upfront. You know start with systems that pay as they grow, you pay as they grow, and that's the way we gain trust. We have the same non Global 2000 pay $6 1/2 for the first dollar they've actually spent on us. And with this, I think the most telling moment was when Dustin concluded. And this is key to this audience here as well. Is how the current cohorts which is this audience here and many of them were not here will actually carry the weight of $3 billion, more than 50% of it if we did a great job of customer success. If we were humble and honest and we really figured out what it meant to take care of you, and if we really understood what starting small was and having to gain the trust with you over time, we think that more than 50% of that billings will actually come from this audience here without even looking at new logos outside. So that's the trust of customer success for us, and it takes care of pretty much every customer not just the Main Street customer. It takes care of Wall Street customer. It takes care of employees. It takes care of partners as well. Now before I talk about technology and products, I want to take a step back 'cause many of you are new in this audience. And I think that it behooves us to really talk about the history of this company. Like we've done a lot of things that started out as science projects. In fact, I see some tweets out there and people actually laugh at Nutanix cloud. And this is where we were in 2012. So if you take a step back and think about where the company was almost seven, eight years ago, we were up against giants. There was a $30 billion industry around network attached storage, and storage area networks and blade servers, and hypervisors, and systems management software and so on. So what did we start out with? Very simple premise that we will collapse the architecture of the data center because three tier is wasteful and three tier is not delightful. It was a very simple hunch, we said we'll take rack mount servers, we'll put a layer of software on top of it, and that layer of software back then only did storage. It didn't do networks and security, and it ran on top of a well known hypervisor from VMware. And we said there's one non negotiable thing. The fact that the design must change. The control plane for this data center cannot be the old control plane. It has to be rethought through, and that's why Prism came about. Now we went and hustled hard to add more things to it. We said we need to make this diverse because it can't just be for one application. We need to make it CPU heavy, and memory heavy, and storage heavy, and flash heavy and so on. And we built a highly configurable HCI. Now all of them are actually configurable as you know of today. And this was not just innovation in technologies, it was innovation in business and sizing, capacity planning, quote to cash business processes. A lot of stuff that we had to do to make this highly configurable, so you can really scale capacity and performance independent of each other. Then in 2014, we did something that was very counterintuitive, but we've done this on, and on, and on again. People said why are you disrupting yourself? You know you've been doing a good job of shipping appliances, but we also had the conviction that HCI was not about hardware. It was about a form factor, but it was really about an operating system. And we started to compete with ourselves when we said you know what we'll do arm's length distribution, we'll do arm's length delivery of products when we give our software to our Dell partner, to Dell as a partner, a loyal partner. But at the same time, it was actually seen with a lot of skepticism. You know these guys are wondering how to really make themselves vanish because they're competing with themselves. But we also knew that if we didn't compete with ourselves someone else will. Now one of the most controversial decisions was really going and doing yet another hypervisor. In the year 2015, it was really preposterous to build yet another hypervisor. It was a very mature market. This was coming probably 15 years too late to the market, or at least 10 years too late to market. And most people said it shouldn't be done because hypervisor is a commodity. And that's the word we latched on to. That this commodity should not have to be paid for. It shouldn't have a team of people managing it. It should actually be part of your overall stack, but it should be invisible. Just like storage needs to be invisible, virtualization needs to be invisible. But it was a bold step, and I think you know at least when we look at our current numbers, 1/3rd of our customers are actually using AHV. At least every quarter that we look at it, our new deployments, at least 35% of it is actually being used on AHV itself. And again, a very preposterous thing to have said five years ago, four years ago to where we've actually come. Thank you so much for all of you who've believed in the fact that virtualization software must be invisible and therefore we should actually try out something that is called AHV today. Now we went and added Lenovo to our OEM mix, started to become even more of a software company in the year 2016. Went and added HP and Cisco in some of very large deals that we talk about in earnings call, our HP deals and Cisco deals. And some very large customers who have procured ELAs from us, enterprise license agreements from us where they want to mix and match hardware. They want to mix Dell hardware with HP hardware but have common standard Nutanix entitlements. And finally, I think this was another one of those moments where we say why should HCI be only limited to X86. You know this operating systems deserves to run on a non X86 architecture as well. And that gave birth to this idea of HCI and Power Systems from IBM. And we've done a great job of really innovating with them in the last three, four quarters. Some amazing innovation that has come out where you can now run AIX 7.x on Nutanix. And for the first time in the history of data center, you can actually have a single software not just a data plane but a control plane where you can manage an IBM farm, an Power farm, and open Power farm and an X86 farm from the same control plane and have you know the IBM farm feed storage to an Intel compute farm and vice versa. So really good things that we've actually done. Now along the way, something else was going on while we were really busy building the private cloud, we knew there was a new consumption model on computing itself. People were renting computing using credit cards. This is the era of the millennials. They were like really want to bypass people because at the end of the day, you know why can't computing be consumed the way like eCommerce is? And that devops movement made us realize that we need to add to our stack. That stack will now have other computing clouds that is AWS and Azure and GCP now. So similar to the way we did Prism. You know Prism was really about going and making hypervisors invisible. You know we went ahead and said we'll add Calm to our portfolio because Calm is now going to be what Prism was to us back when we were really dealing with multi hypervisor world. Now it's going to be multi-cloud world. You know it's one of those things we had a gut around, and we really come to expect a lot of feedback and real innovation. I mean yesterday when we had the hackathon. The center, the epicenter of the discussion was Calm, was how do you automate on multiple clouds without having to write a single line of code? So we've come a long way since the acquisition of Calm two years ago. I think it's going to be a strong pillar in our overall product portfolio itself. Now the word multi-cloud is going to be used and over used. In fact, it's going to be blurring its lines with the idea of hyperconvergence of clouds, you know what does it mean. We just hope that hyperconvergence, the way it's called today will morph to become hyperconverged clouds not just hyperconverged boxes which is a software defined infrastructure definition itself. But let's focus on the why of multi-cloud. Why do we think it can't all go into a public cloud itself? The one big reason is just laws of the land. There's data sovereignty and computing sovereignty, regulations and compliance because of which you need to be in where the government with the regulations where the compliance rules want you to be. And by the way, that's just one reason why the cloud will have to disperse itself. It can't just be 10, 20 large data centers around the world itself because you have 200 plus countries and half of computing actually gets done outside the US itself. So it's a really important, very relevant point about the why of multi-cloud. The second one is just simple laws of physics. You know if there're machines at the edge, and they're producing so much data, you can't bring all the data to the compute. You have to take the compute which is stateless, it's an app. You take the app to where the data is because the network is the enemy. The network has always been the enemy. And when we thought we've made fatter networks, you've just produced more data as well. So this just goes without saying that you take something that's stateless that's without gravity, that's lightweight which is compute and the application and push it close to where the data itself is. And the third one which is related is just latency reasons you know? And it's not just about machine latency and electrons transferring over the speed light, and you can't defy the speed of light. It's also about human latency. It's also about multiple teams saying we need to federate and delegate, and we need to push things down to where the teams are as opposed to having to expect everybody to come to a very large computing power itself. So all the ways, the way they are, there will be at least three different ways of looking at multi-cloud itself. There's a centralized core cloud. We all go and relate to this because we've seen large data centers and so on. And that's the back office workhorse. It will crunch numbers. It will do processing. It will do a ton of things that will go and produce results for you know how we run our businesses, but there's also the dispersal of the cloud, so ROBO cloud. And this is the front office server that's really serving. It's a cloud that's going to serve people. It's going to be closer to people, and that's what a ROBO cloud is. We have a ton of customers out here who actually use Nutanix and the ROBO environments themselves as one node, two node, three node, five node servers, and it just collapses the entire server closet room in these ROBOs into something really, really small and minuscule. And finally, there's going to be another dispersed edge cloud because that's where the machines are, that's where the data is. And there's going to be an IOT machine fog because we need to miniaturize computing to something even smaller, maybe something that can really land in the palm in a mini server which is a PC like server, but you need to run everything that's enterprise grade. You should be able to go and upgrade them and monitor them and analyze them. You know do enough computing up there, maybe event-based processing that can actually happen. In fact, there's some great innovation that we've done at the edge with IOTs that I'd love for all of you to actually attend some sessions around as well. So with that being said, we have a hole in the stack. And that hole is probably one of the hardest problems that we've been trying to solve for the last two years. And Sunil will talk a lot about that. This idea of hybrid. The hybrid of multi-cloud is one of the hardest problems. Why? Because we're talking about really blurring the lines with owning and renting where you have a single-tenant environment which is your data center, and a multi-tenant environment which is the service providers data center, and the two must look like the same. And the two must look like the same is that hard a problem not just for burst out capacity, not just for security, not just for identity but also for networks. Like how do you blur the lines between networks? How do you blur the lines for storage? How do you really blur the lines for a single pane of glass where you can think of availability zones that look highly symmetric even though they're not because one of 'em is owned by you, and it's single-tenant. The other one is not owned by you, that's multi-tenant itself. So there's some really hard problems in hybrid that you'll hear Sunil talk about and the team. And some great strides that we've actually made in the last 12 months of really working on Xi itself. And that completes the picture now in terms of how we believe the state of computing will be going forward. So what are the must haves of a multi-cloud operating system? We talked about marketplace which is catalogs and automation. There's a ton of orchestration that needs to be done for multi-cloud to come together because now you have a self-service portal which is providing an eCommerce view. It's really about you know getting to do a lot of requests and workflows without having people come in the way, without even having tickets. There's no need for tickets if you can really start to think like a self-service portal as if you're just transacting eCommerce with machines and portals themselves. Obviously the next one is networking security. You need to blur the lines between on-prem and off-prem itself. These two play a huge role. And there's going to be a ton of details that you'll see Sunil talk about. But finally, what I want to focus on the rest of the talk itself here is what governance and compliance. This is a hard problem, and it's a hard problem because things have evolved. So I'm going to take a step back. Last 30 years of computing, how have consumption models changed? So think about it. 30 years ago, we were making decisions for 10 plus years, you know? Mainframe, at least 10 years, probably 20 plus years worth of decisions. These were decisions that were extremely waterfall-ish. Make 10s of millions of dollars worth of investment for a device that we'd buy for at least 10 to 20 years. Now as we moved to client-server, that thing actually shrunk. Now you're talking about five years worth of decisions, and these things were smaller. So there's a little bit more velocity in our decisions. We were not making as waterfall-ish decision as we used to with mainframes. But still five years, talk about virtualized, three tier, maybe three to five year decisions. You know they're still relatively big decisions that we were making with computer and storage and SAN fabrics and virtualization software and systems management software and so on. And here comes Nutanix, and we said no, no. We need to make it smaller. It has to become smaller because you know we need to make more agile decisions. We need to add machines every week, every month as opposed to adding you know machines every three to five years. And we need to be able to upgrade them, you know any point in time. You can do the upgrades every month if you had to, every week if you had to and so on. So really about more agility. And yet, we were not complete because there's another evolution going on, off-prem in the public cloud where people are going and doing reserved instances. But more than that, they were doing on demand stuff which no the decision was days to weeks. Some of these things that unitive compute was being rented for days to weeks, not years. And if you needed something more, you'd shift a little to the left and use reserved instances. And then spot pricing, you could do spot pricing for hours and finally lambda functions. Now you could to function as a service where things could actually be running only for minutes not even hours. So as you can see, there's a wide spectrum where when you move to the right, you get more elasticity, and when you move to the left, you're talking about predictable decision making. And in fact, it goes from minutes on one side to 10s of years on the other itself. And we hope to actually go and blur the lines between where NTNX is today where you see Nutanix right now to where we really want to be with reserved instances and on demand. And that's the real ask of Nutanix. How do you take care of this discontinuity? Because when you're owning things, you actually end up here, and when you're renting things, you end up here. What does it mean to really blur the lines between these two because people do want to make decisions that are better than reserved instance in the public cloud. We'll talk about why reserved instances which looks like a proxy for Nutanix it's still very, very wasteful even though you might think it's delightful, it's very, very wasteful. So what does it mean for on-prem and off-prem? You know you talk about cost governance, there's security compliance. These high velocity decisions we're actually making you know where sometimes you could be right with cost but wrong on security, but sometimes you could be right in security but wrong on cost. We need to really figure out how machines make some of these decisions for us, how software helps us decide do we have the right balance between cost, governance, and security compliance itself? And to get it right, we have introduced our first SAS service called Beam. And to talk more about Beam, I want to introduce Vijay Rayapati who's the general manager of Beam engineering to come up on stage and talk about Beam itself. Thank you Vijay. (rock music) So you've been here a couple of months now? >> Yes. >> At the same time, you spent the last seven, eight years really handling AWS. Tell us more about it. >> Yeah so we spent a lot of time trying to understand the last five years at Minjar you know how customers are really consuming in this new world for their workloads. So essentially what we tried to do is understand the consumption models, workload patterns, and also build algorithms and apply intelligence to say how can we lower this cost and you know improve compliance of their workloads.? And now with Nutanix what we're trying to do is how can we converge this consumption, right? Because what happens here is most customers start with on demand kind of consumption thinking it's really easy, but the total cost of ownership is so high as the workload elasticity increases, people go towards spot or a scaling, but then you need a lot more automation that something like Calm can help them. But predictability of the workload increases, then you need to move towards reserved instances, right to lower costs. >> And those are some of the things that you go and advise with some of the software that you folks have actually written. >> But there's a lot of waste even in the reserved instances because what happens it while customers make these commitments for a year or three years, what we see across, like we track a billion dollars in public cloud consumption you know as a Beam, and customers use 20%, 25% of utilization of their commitments, right? So how can you really apply, take the data of consumption you know apply intelligence to essentially reduce their you know overall cost of ownership. >> You said something that's very telling. You said reserved instances even though they're supposed to save are still only 20%, 25% utilized. >> Yes, because the workloads are very dynamic. And the next thing is you can't do hot add CPU or hot add memory because you're buying them for peak capacity. There is no convergence of scaling that apart from the scaling as another node. >> So you actually sized it for peak, but then using 20%, 30%, you're still paying for the peak. >> That's right. >> Dheeraj: That can actually add up. >> That's what we're trying to say. How can we deliver visibility across clouds? You know how can we deliver optimization across clouds and consumption models and bring the control while retaining that agility and demand elasticity? >> That's great. So you want to show us something? >> Yeah absolutely. So this is Beam as just Dheeraj outlined, our first SAS service. And this is my first .Next. And you know glad to be here. So what you see here is a global consumption you know for a business across different clouds. Whether that's in a public cloud like Amazon, or Azure, or Nutanix. We kind of bring the consumption together for the month, the recent month across your accounts and services and apply intelligence to say you know what is your spent efficiency across these clouds? Essentially there's a lot of intelligence that goes in to detect your workloads and consumption model to say if you're spending $100, how efficiently are you spending? How can you increase that? >> So you have a centralized view where you're looking at multiple clouds, and you know you talk about maybe you can take an example of an account and start looking at it? >> Yes, let's go into a cloud provider like you know for this business, let's go and take a loot at what's happening inside an Amazon cloud. Here we get into the deeper details of what's happening with the consumption of a specific services as well as the utilization of both on demand and RI. You know what can you do to lower your cost and detect your spend efficiency of a dollar to see you know are there resources that are provisioned by teams for applications that are not being used, or are there resources that we should go and rightsize because you know we have all this monitoring data, configuration data that we crunch through to basically detect this? >> You think there's billions of events that you look at everyday. You're already looking at a billon dollars worth of AWS spend. >> Right, right. >> So billions of events, billing, metering events every year to really figure out and optimize for them. >> So what we have here is a very popular international government organization. >> Dheeraj: Wow, so it looks like Russians are everywhere, the cloud is everywhere actually. >> Yes, it's quite popular. So when you bring your master account into Beam, we kind of detect all the linked accounts you know under that. Then you can go and take a look at not just at the organization level within it an account level. >> So these are child objects, you know. >> That's right. >> You can think of them as ephemeral accounts that you create because you don't want to be on the record when you're doing spams on Facebook for example. >> Right, let's go and take a look at what's happening inside a Facebook ad spend account. So we have you know consumption of the services. Let's go deeper into compute consumption, and you kind of see a trendline. You can do a lot of computing. As you see, looks like one campaign has ended. They started another campaign. >> Dheeraj: It looks like they're not stopping yet, man. There's a lot of money being made in Facebook right now. (Vijay laughing) >> So not only just get visibility at you know compute as a service inside a cloud provider, you can go deeper inside compute and say you know what is a service that I'm really consuming inside compute along with the CPUs n'stuff, right? What is my data transfer? You know what is my network? What is my load blancers? So essentially you get a very deeper visibility you know as a service right. Because we have three goals for Beam. How can we deliver visibility across clouds? How can we deliver visibility across services? And how can we deliver, then optimization? >> Well I think one thing that I just want to point out is how this SAS application was an extremely teachable moment for me to learn about the different resources that people could use about the public cloud. So all of you who actually have not gone deep enough into the idea of public cloud. This could be a great app for you to learn about things, the resources, you know things that you could do to save and security and things of that nature. >> Yeah. And we really believe in creating the single pane view you know to mange your optimization of a public cloud. You know as Ben spoke about as a business, you need to have freedom to use any cloud. And that's what Beam delivers. How can you make the right decision for the right workload to use any of the cloud of your choice? >> Dheeraj: How 'about databases? You talked about compute as well but are there other things we could look at? >> Vijay: Yes, let's go and take a look at database consumption. What you see here is they're using inside Facebook ad spending, they're using all databases except Oracle. >> Dheeraj: Wow, looks like Oracle sales folks have been active in Russia as well. (Vijay laughing) >> So what we're seeing here is a global view of you know what is your spend efficiency and which is kind of a scorecard for your business for the dollars that you're spending. And the great thing is Beam kind of brings together you know through its intelligence and algorithms to detect you know how can you rightsize resources and how can you eliminate things that you're not using? And we deliver and one click fix, right? Let's go and take a look at resources that are maybe provisioned for storage and not being used. We deliver the seamless one-click philosophy that Nutanix has to eliminate it. >> So one click, you can actually just pick some of these wasteful things that might be looking delightful because using public cloud, using credit cards, you can go in and just say click fix, and it takes care of things. >> Yeah, and not only remove the resources that are unused, but it can go and rightsize resources across your compute databases, load balancers, even past services, right? And this is where the power of it kind of comes for a business whether you're using on-prem and off-prem. You know how can you really converge that consumption across both? >> Dheeraj: So do you have something for Nutanix too? >> Vijay: Yes, so we have basically been working on Nutanix with something that we're going to deliver you know later this year. As you can see here, we're bringing together the consumption for the Nutanix, you know the services that you're using, the licensing and capacity that is available. And how can you also go and optimize within Nutanix environments >> That's great. >> for the next workload. Now let me quickly show you what we have on the compliance side. This is an extremely powerful thing that we've been working on for many years. What we deliver here just like in cost governance, a global view of your compliance across cloud providers. And the most powerful thing is you can go into a cloud provider, get the next level of visibility across cloud regimes for hundreds of policies. Not just policies but those policies across different regulatory compliances like HIPA, PCI, CAS. And that's very powerful because-- >> So you're saying a lot of what you folks have done is codified these compliance checks in software to make sure that people can sleep better at night knowing that it's PCI, and HIPA, and all that compliance actually comes together? >> And you can build this not just by cloud accounts, you can build them across cloud accounts which is what we call security centers. Essentially you can go and take a deeper look at you know the things. We do a whole full body scan for your cloud infrastructure whether it's AWS Amazon or Azure, and you can go and now, again, click to fix things. You know that had been probably provisioned that are violating the security compliance rules that should be there. Again, we have the same one-click philosophy to say how can you really remove things. >> So again, similar to save, you're saying you can go and fix some of these security issues by just doing one click. >> Absolutely. So the idea is how can we give our people the freedom to get visibility and use the right cloud and take the decisions instantly through one click. That's what Beam delivers you know today. And you know get really excited, and it's available at beam.nutanix.com. >> Our first SAS service, ladies and gentleman. Thank you so much for doing this, Vijay. It looks like there's going to be a talk here at 10:30. You'll talk more about the midterm elections there probably? >> Yes, so you can go and write your own security compliances as well. You know within Beam, and a lot of powerful things you can do. >> Awesome, thank you so much, Vijay. I really appreciate it. (audience clapping) So as you see, there's a lot of work that we're doing to really make multi-cloud which is a hard problem. You know think about working the whole body of it and what about cost governance? What about security compliance? Obviously what about hybrid networks, and security, and storage, you know compute, many of the things that you've actually heard from us, but we're taking it to a level where the business users can now understand the implications. A CFO's office can understand the implications of waste and delight. So what does customer success mean to us? You know again, my favorite word in a long, long time is really go and figure out how do you make you, the customer, become operationally efficient. You know there's a lot of stuff that we deliver through software that's completely uncovered. It's so latent, you don't even know you have it, but you've paid for it. So you've got to figure out what does it mean for you to really become operationally efficient, organizationally proficient. And it's really important for training, education, stuff that you know you're people might think it's so awkward to do in Nutanix, but it could've been way simpler if you just told you a place where you can go and read about it. Of course, I can just use one click here as opposed to doing things the old way. But most importantly to make it financially accountable. So the end in all this is, again, one of the things that I think about all the time in building this company because obviously there's a lot of stuff that we want to do to create orphans, you know things above the line and top line and everything else. There's also a bottom line. Delight and waste are two sides of the same coin. You know when we're talking about developers who seek delight with public cloud at the same time you're looking at IT folks who're trying to figure out governance. They're like look you know the CFOs office, the CIOs office, they're trying to figure out how to curb waste. These two things have to go hand in hand in this era of multi-cloud where we're talking about frictionless consumption but also governance that looks invisible. So I think, at the end of the day, this company will do a lot of stuff around one-click delight but also go and figure out how do you reduce waste because there's so much waste including folks there who actually own Nutanix. There's so much software entitlement. There's so much waste in the public cloud itself that if we don't go and put our arms around, it will not lead to customer success. So to talk more about this, the idea of delight and the idea of waste, I'd like to bring on board a person who I think you know many of you actually have talked about it have delightful hair but probably wasted jokes. But I think has wasted hair and delightful jokes. So ladies and gentlemen, you make the call. You're the jury. Sunil R.M.J. Potti. ("Free" by Broods) >> So that was the first time I came out from the bottom of a screen on a stage. I actually now know what it feels to be like a gopher. Who's that laughing loudly at the back? Okay, do we have the... Let's see. Okay, great. We're about 15 minutes late, so that means we're running right on time. That's normally how we roll at this conference. And we have about three customers and four demos. Like I think there's about three plus six, about nine folks coming onstage. So we'll have our own version of the parade as well on the main stage for the next 70 minutes. So let's just jump right into it. I think we've been pretty consistent in terms of our longterm plans since we started the company. And it's become a lot more clearer over the last few years about our plans to essentially make computing invisible as Dheeraj mentioned. We're doing this across multiple acts. We started with HCI. We call it making infrastructure invisible. We extended that to making data centers invisible. And then now we're in this mode of essentially extending it to converging clouds so that you can actually converge your consumption models. And so today's conference and essentially the theme that you're going to be seeing throughout the breakout sessions is about a journey towards invisible clouds, but make sure that you internalize the fact that we're investing heavily in each of the three phases. It's just not about the hybrid cloud with Nutanix, it's about actually finishing the job about making infrastructure invisible, expanding that to kind of go after the full data center, and then of course embark on some real meaningful things around invisible clouds, okay? And to start the session, I think you know the part that I wanted to make sure that we are all on the same page because most of us in the room are still probably in this phase of the journey which is about invisible infrastructure. And there the three key products and especially two of them that most of you guys know are Acropolis and Prism. And they're sort of like the bedrock of our company. You know especially Acropolis which is about the web scale architecture. Prism is about consumer grade design. And with Acropolis now being really mature. It's in the seventh year of innovation. We still have more than half of our company in terms of R and D spend still on Acropolis and Prism. So our core product is still sort of where we think we have a significant differentiation on. We're not going to let our foot off the peddle there. You know every time somebody comes to me and says look there's a new HCI render popping out or an existing HCI render out there, I ask a simple question to our customers saying show me 100 customers with 100 node deployments, and it will be very hard to find any other render out there that does the same thing. And that's the power of Acropolis the code platform. And then it's you know the fact that the velocity associated with Acropolis continues to be on a fast pace. We came out with various new capabilities in 5.5 and 5.6, and one of the most complicated things to get right was the fact to shrink our three node cluster to a one node, two node deployment. Most of you actually had requirements on remote office, branch office, or the edge that actually allowed us to kind of give us you know sort of like the impetus to kind of go design some new capabilities into our core OS to get this out. And associated with Acropolis and expanding into Prism, as you will see, the first couple of years of Prism was all about refactoring the user interface, doing a good job with automation. But more and more of the investments around Prism is going to be based on machine learning. And you've seen some variants of that over the last 12 months, and I can tell you that in the next 12 to 24 months, most of our investments around infrastructure operations are going to be driven by AI techniques starting with most of our R and D spend also going into machine-learning algorithms. So when you talk about all the enhancements that have come on with Prism whether it be formed by you know the management console changing to become much more automated, whether now we give you automatic rightsizing, anomaly detection, or a series of functionality that have gone into it, the real core sort of capabilities that we're putting into Prism and Acropolis are probably best served by looking at the quality of the product. You probably have seen this slide before. We started showing the number of nodes shipped by Nutanix two years ago at this conference. It was about 35,000 plus nodes at that time. And since then, obviously we've you know continued to grow. And we would draw this line which was about enterprise class quality. That for the number of bugs found as a percentage of nodes shipped, there's a certain line that's drawn. World class companies do about probably 2% to 3%, number of CFDs per node shipped. And we were just broken that number two years ago. And to give you guys an idea of how that curve has shown up, it's now currently at .95%. And so along with velocity, you know this focus on being true to our roots of reliability and stability continues to be, you know it's an internal challenge, but it's also some of the things that we keep a real focus on. And so between Acropolis and Prism, that's sort of like our core focus areas to sort of give us the confidence that look we have this really high bar that we're sort of keeping ourselves accountable to which is about being the most advanced enterprise cloud OS on the planet. And we will keep it this way for the next 10 years. And to complement that, over a period of time of course, we've added a series of services. So these are services not just for VMs but also for files, blocks, containers, but all being delivered in that single one-click operations fashion. And to really talk more about it, and actually probably to show you the real deal there it's my great pleasure to call our own version of Moses inside the company, most of you guys know him as Steve Poitras. Come on up, Steve. (audience clapping) (rock music) >> Thanks Sunil. >> You barely fit in that door, man. Okay, so what are we going to talk about today, Steve? >> Absolutely. So when we think about when Nutanix first got started, it was really focused around VDI deployments, smaller workloads. However over time as we've evolved the product, added additional capabilities and features, that's grown from VDI to business critical applications as well as cloud native apps. So let's go ahead and take a look. >> Sunil: And we'll start with like Oracle? >> Yeah, that's one of the key ones. So here we can see our Prism central user interface, and we can see our Thor cluster obviously speaking to the Avengers theme here. We can see this is doing right around 400,000 IOPs at around 360 microseconds latency. Now obviously Prism central allows you to mange all of your Nutanix deployments, but this is just running on one single Nutanix cluster. So if we hop over here to our explore tab, we can see we have a few categories. We have some Kubernetes, some AFS, some Xen desktop as well as Oracle RAC. Now if we hope over to Oracle RAC, we're running a SLOB workload here. So obviously with Oracle enterprise applications performance, consistency, and extremely low latency are very critical. So with this SLOB workload, we're running right around 300 microseconds of latency. >> Sunil: So this is what, how many node Oracle RAC cluster is this? >> Steve: This is a six node Oracle RAC deployment. >> Sunil: Got it. And so what has gone into the product in recent releases to kind of make this happen? >> Yeah so obviously on the hardware front, there's been a lot of evolutions in storage mediums. So with the introduction of NVME, persistent memory technologies like 3D XPoint, that's meant storage media has become a lot faster. Now to allow you to full take advantage of that, that's where we've had to do a lot of optimizations within the storage stack. So with AHV, we have what we call AHV turbo mode which allows you to full take advantage of those faster storage mediums at that much lower latency. And then obviously on the networking front, technologies such as RDMA can be leveraged to optimize that network stack. >> Got it. So that was Oracle RAC running on a you know Nutanix cluster. It used to be a big deal a couple of years ago. Now we've got many customers doing that. On the same environment though, we're going to show you is the advent of actually putting file services in the same scale out environment. And you know many of you in the audience probably know about AFS. We released it about 12 to 14 months ago. It's been one of our most popular new products of all time within Nutanix's history. And we had SMB support was for user file shares, VDI deployments, and it took awhile to bake, to get to scale and reliability. And then in the last release, in the recent release that we just shipped, we now added NFS for support so that we can no go after the full scale file server consolidation. So let's take a look at some of that stuff. >> Yep, let's do it. So hopping back over to Prism, we can see our four cluster here. Overall cluster-wide latency right around 360 microseconds. Now we'll hop down to our file server section. So here we can see we have our Next A File Server hosting right about 16.2 million files. Now if you look at our shares and exports, we can see we have a mix of different shares. So one of the shares that you see there is home directories. This is an SMB share which is actually mapped and being leveraged by our VDI desktops for home folders, user profiles, things of that nature. We can also see this Oracle backup share here which is exposed to our rack host via NFS. So RMAN is actually leveraging this to provide native database backups. >> Got it. So Oracle VMs, backup using files, or for any other file share requirements with AFS. Do we have the cluster also showing, I know, so I saw some Kubernetes as well on it. Let's talk about what we're thinking of doing there. >> Yep, let's do it. So if we think about cloud, cloud's obviously a big buzz word, so is containers in Kubernetes. So with ACS 1.0 what we did is we introduced native support for Docker integration. >> And pause there. And we screwed up. (laughing) So just like the market took a left turn on Kubernetes, obviously we realized that, and now we're working on ACS 2.0 which is what we're going to talk about, right? >> Exactly. So with ACS 2.0, we've introduced native Kubernetes support. Now when I think about Kubernetes, there's really two core areas that come to mind. The first one is around native integration. So with that, we have our Kubernetes volume integration, we're obviously doing a lot of work on the networking front, and we'll continue to push there from an integration point of view. Now the other piece is around the actual deployment of Kubernetes. When we think about a lot of Nutanix administrators or IT admins, they may have never deployed Kubernetes before, so this could be a very daunting task. And true to the Nutanix nature, we not only want to make our platform simple and intuitive, we also want to do this for any ecosystem products. So with ACS 2.0, we've simplified the full Kubernetes deployment and switching over to our ACS two interface, we can see this create cluster button. Now this actually pops up a full wizard. This wizard will actually walk you through the full deployment process, gather the necessary inputs for you, and in a matter of a few clicks and a few minutes, we have a full Kubernetes deployment fully provisioned, the masters, the workers, all the networking fully done for you, very simple and intuitive. Now if we hop back over to Prism, we can see we have this ACS2 Kubernetes category. Clicking on that, we can see we have eight instances of virtual machines. And here are Kubernetes virtual machines which have actually been deployed as part of this ACS2 installer. Now one of the nice things is it makes the IT administrator's job very simple and easy to do. The deployment straightforward monitoring and management very straightforward and simple. Now for the developer, the application architect, or engineers, they interface and interact with Kubernetes just like they would traditionally on any platform. >> Got it. So the goal of ACS is to ensure that the developer ecosystem still uses whatever tools that they are you know preferring while at that same time allowing this consolidation of containers along with VMs all on that same, single runtime, right? So that's ACS. And then if you think about where the OS is going, there's still some open space at the end. And open space has always been look if you just look at a public cloud, you look at blocks, files, containers, the most obvious sort of storage function that's left is objects. And that's the last horizon for us in completing the storage stack. And we're going to show you for the first time a preview of an upcoming product called the Acropolis Object Storage Services Stack. So let's talk a little bit about it and then maybe show the demo. >> Yeah, so just like we provided file services with AFS, block services with ABS, with OSS or Object Storage Services, we provide native object storage, compatibility and capability within the Nutanix platform. Now this provides a very simply common S3 API. So any integrations you've done with S3 especially Kubernetes, you can actually leverage that out of the box when you've deployed this. Now if we hop back over to Prism, I'll go here to my object stores menu. And here we can see we have two existing object storage instances which are running. So you can deploy however many of these as you wanted to. Now just like the Kubernetes deployment, deploying a new object instance is very simple and easy to do. So here I'll actually name this instance Thor's Hammer. >> You do know he loses it, right? He hasn't seen the movies yet. >> Yeah, I don't want any spoilers yet. So once we specified the name, we can choose our capacity. So here we'll just specify a large instance or type. Obviously this could be any amount or storage. So if you have a 200 node Nutanix cluster with petabytes worth of data, you could do that as well. Once we've selected that, we'll select our expected performance. And this is going to be the number of concurrent gets and puts. So essentially how many operations per second we want this instance to be able to facilitate. Once we've done that, the platform will actually automatically determine how many virtual machines it needs to deploy as well as the resources and specs for those. And once we've done that, we'll go ahead and click save. Now here we can see it's actually going through doing the deployment of the virtual machines, applying any necessary configuration, and in the matter of a few clicks and a few seconds, we actually have this Thor's Hammer object storage instance which is up and running. Now if we hop over to one of our existing object storage instances, we can see this has three buckets. So one for Kafka-queue, I'm actually using this for my Kafka cluster where I have right around 62 million objects all storing ProtoBus. The second one there is Spark. So I actually have a Spark cluster running on our Kubernetes deployed instance via ACS 2.0. Now this is doing analytics on top of this data using S3 as a storage backend. Now for these objects, we support native versioning, native object encryption as well as worm compliancy. So if you want to have expiry periods, retention intervals, that sort of thing, we can do all that. >> Got it. So essentially what we've just shown you is with upcoming objects as well that the same OS can now support VMs, files, objects, containers, all on the same one click operational fabric. And so that's in some way the real power of Nutanix is to still keep that consistency, scalability in place as we're covering each and every workload inside the enterprise. So before Steve gets off stage though, I wanted to talk to you guys a little bit about something that you know how many of you been to our Nutanix headquarters in San Jose, California? A few. I know there's like, I don't know, 4,000 or 5,000 people here. If you do come to the office, you know when you land in San Jose Airport on the way to longterm parking, you'll pass our office. It's that close. And if you come to the fourth floor, you know one of the cubes that's where I sit. In the cube beside me is Steve. Steve sits in the cube beside me. And when I first joined the company, three or four years ago, and Steve's if you go to his cube, it no longer looks like this, but it used to have a lot of this stuff. It was like big containers of this. I remember the first time. Since I started joking about it, he started reducing it. And then Steve eventually got married much to our surprise. (audience laughing) Much to his wife's surprise. And then he also had a baby as a bigger surprise. And if you come over to our office, and we welcome you, and you come to the fourth floor, find my cube or you'll find Steve's Cube, it now looks like this. Okay, so thanks a lot, my man. >> Cool, thank you. >> Thanks so much. (audience clapping) >> So single OS, any workload. And like Steve who's been with us for awhile, it's my great pleasure to invite one of our favorite customers, CSC Karen who's also been with us for three to four years. And I'll share some fond memories about how she's been with the company for awhile, how as partners we've really done a lot together. So without any further ado, let me bring up Karen. Come on up, Karen. (rock music) >> Thank you for having me. >> Yeah, thank you. So I remember, so how many of you guys were with Nutanix first .Next in Miami? I know there was a question like that asked last time. Not too many. You missed it. We wished we could go back to that. We wouldn't fit 3/4s of this crowd. But Karen was our first customer in the keynote in 2015. And we had just talked about that story at that time where you're just become a customer. Do you want to give us some recap of that? >> Sure. So when we made the decision to move to hyperconverged infrastructure and chose Nutanix as our partner, we rapidly started to deploy. And what I mean by that is Sunil and some of the Nutanix executives had come out to visit with us and talk about their product on a Tuesday. And on a Wednesday after making the decision, I picked up the phone and said you know what I've got to deploy for my VDI cluster. So four nodes showed up on Thursday. And from the time it was plugged in to moving over 300 VDIs and 50 terabytes of storage and turning it over for the business for use was less than three days. So it was really excellent testament to how simple it is to start, and deploy, and utilize the Nutanix infrastructure. Now part of that was the delight that we experienced from our customers after that deployment. So we got phone calls where people were saying this report it used to take so long that I'd got out and get a cup of coffee and come back, and read an article, and do some email, and then finally it would finish. Those reports are running in milliseconds now. It's one click. It's very, very simple, and we've delighted our customers. Now across that journey, we have gone from the simple workloads like VDIs to the much more complex workloads around Splunk and Hadoop. And what's really interesting about our Splunk deployment is we're handling over a billion events being logged everyday. And the deployment is smaller than what we had with a three tiered infrastructure. So when you hear people talk about waste and getting that out and getting to an invisible environment where you're just able to run it, that's what we were able to achieve both with everything that we're running from our public facing websites to the back office operations that we're using which include Splunk and even most recently our Cloudera and Hadoop infrastructure. What it does is it's got 30 crawlers that go out on the internet and start bringing data back. So it comes back with over two terabytes of data everyday. And then that environment, ingests that data, does work against it, and responds to the business. And that again is something that's smaller than what we had on traditional infrastructure, and it's faster and more stable. >> Got it. And it covers a lot of use cases as well. You want to speak a few words on that? >> So the use cases, we're 90%, 95% deployed on Nutanix, and we're covering all of our use cases. So whether that's a customer facing app or a back office application. And what are business is doing is it's handling large portfolios of data for fortune 500 companies and law firms. And these applications are all running with improved stability, reliability, and performance on the Nutanix infrastructure. >> And the plan going forward? >> So the plan going forward, you actually asked me that in Miami, and it's go global. So when we started in Miami and that first deployment, we had four nodes. We now have 283 nodes around the world, and we started with about 50 terabytes of data. We've now got 3.8 petabytes of data. And we're deployed across four data centers and six remote offices. And people ask me often what is the value that we achieved? So simplification. It's all just easier, and it's all less expensive. Being able to scale with the business. So our Cloudera environment ended up with one day where it spiked to 1,000 times more load, 1,000 times, and it just responded. We had rally cries around improved productivity by six times. So 600% improved productivity, and we were able to actually achieve that. The numbers you just saw on the slide that was very, very fast was we calculated a 40% reduction in total cost of ownership. We've exceeded that. And when we talk about waste, that other number on the board there is when I saved the company one hour of maintenance activity or unplanned downtime in a month which we're now able to do the majority of our maintenance activities without disrupting any of our business solutions, I'm saving $750,000 each time I save that one hour. >> Wow. All right, Karen from CSE. Thank you so much. That was great. Thank you. I mean you know some of these data points frankly as I started talking to Karen as well as some other customers are pretty amazing in terms of the genuine value beyond financial value. Kind of like the emotional sort of benefits that good products deliver to some of our customers. And I think that's one of the core things that we take back into engineering is to keep ourselves honest on either velocity or quality even hiring people and so forth. Is to actually the more we touch customers lives, the more we touch our partner's lives, the more it allows us to ensure that we can put ourselves in their shoes to kind of make sure that we're doing the right thing in terms of the product. So that was the first part, invisible infrastructure. And our goal, as we've always talked about, our true North is to make sure that this single OS can be an exact replica, a truly modern, thoughtful but original design that brings the power of public cloud this AWS or GCP like architectures into your mainstream enterprises. And so when we take that to the next level which is about expanding the scope to go beyond invisible infrastructure to invisible data centers, it starts with a few things. Obviously, it starts with virtualization and a level of intelligent management, extends to automation, and then as we'll talk about, we have to embark on encompassing the network. And that's what we'll talk about with Flow. But to start this, let me again go back to one of our core products which is the bedrock of our you know opinionated design inside this company which is Prism and Acropolis. And Prism provides, I mentioned, comes with a ton of machine-learning based intelligence built into the product in 5.6 we've done a ton of work. In fact, a lot of features are coming out now because now that PC, Prism Central that you know has been decoupled from our mainstream release strain and will continue to release on its own cadence. And the same thing when you actually flip it to AHV on its own train. Now AHV, two years ago it was all about can I use AHV for VDI? Can I use AHV for ROBO? Now I'm pretty clear about where you cannot use AHV. If you need memory overcome it, stay with VMware or something. If you need, you know Metro, stay with another technology, else it's game on, right? And if you really look at the adoption of AHV in the mainstream enterprise, the customers now speak for themselves. These are all examples of large global enterprises with multimillion dollar ELAs in play that have now been switched over. Like I'll give you a simple example here, and there's lots of these that I'm sure many of you who are in the audience that are in this camp, but when you look at the breakout sessions in the pods, you'll get a sense of this. But I'll give you one simple example. If you look at the online payment company. I'm pretty sure everybody's used this at one time or the other. They had the world's largest private cloud on open stack, 21,000 nodes. And they were actually public about it three or four years ago. And in the last year and a half, they put us through a rigorous VOC testing scale, hardening, and it's a full blown AHV only stack. And they've started cutting over. Obviously they're not there yet completely, but they're now literally in hundreds of nodes of deployment of Nutanix with AHV as their primary operating system. So it is primetime from a deployment perspective. And with that as the base, no cloud is complete without actually having self-service provisioning that truly drives one-click automation, and can you do that in this consumer grade design? And Calm was acquired, as you guys know, in 2016. We had a choice of taking Calm. It was reasonably feature complete. It supported multiple clouds. It supported ESX, it supported Brownfield, It supported AHV. I mean they'd already done the integration with Nutanix even before the acquisition. And we had a choice. The choice was go down the path of dynamic ops or some other products where you took it for revenue or for acceleration, you plopped it into the ecosystem and sold it at this power sucking alien on top of our stack, right? Or we took a step back, re-engineered the product, kept some of the core essence like the workflow engine which was good, the automation, the object model and all, but refactored it to make it look like a natural extension of our operating system. And that's what we did with Calm. And we just launched it in December, and it's been one of our most popular new products now that's flying off the shelves. If you saw the number of registrants, I got a notification of this for the breakout sessions, the number one session that has been preregistered with over 500 people, the first two sessions are around Calm. And justifiably so because it just as it lives up to its promise, and it'll take its time to kind of get to all the bells and whistles, all the capabilities that have come through with AHV or Acropolis in the past. But the feature functionality, the product market fit associated with Calm is dead on from what the feedback that we can receive. And so Calm itself is on its own rapid cadence. We had AWS and AHV in the first release. Three or four months later, we now added ESX support. We added GCP support and a whole bunch of other capabilities, and I think the essence of Calm is if you can combine Calm and along with private cloud automation but also extend it to multi-cloud automation, it really sets Nutanix on its first genuine path towards multi-cloud. But then, as I said, if you really fixate on a software defined data center message, we're not complete as a full blown AWS or GCP like IA stack until we do the last horizon of networking. And you probably heard me say this before. You heard Dheeraj and others talk about it before is our problem in networking isn't the same in storage. Because the data plane in networking works. Good L2 switches from Cisco, Arista, and so forth, but the real problem networking is in the control plane. When something goes wrong at a VM level in Nutanix, you're able to identify whether it's a storage problem or a compute problem, but we don't know whether it's a VLAN that's mis-configured, or there've been some packets dropped at the top of the rack. Well that all ends now with Flow. And with Flow, essentially what we've now done is take the work that we've been working on to create built-in visibility, put some network automation so that you can actually provision VLANs when you provision VMs. And then augment it with micro segmentation policies all built in this easy to use, consume fashion. But we didn't stop there because we've been talking about Flow, at least the capabilities, over the last year. We spent significant resources building it. But we realized that we needed an additional thing to augment its value because the world of applications especially discovering application topologies is a heady problem. And if we didn't address that, we wouldn't be fulfilling on this ambition of providing one-click network segmentation. And so that's where Netsil comes in. Netsil might seem on the surface yet another next generation application performance management tool. But the innovations that came from Netsil started off at the research project at the University of Pennsylvania. And in fact, most of the team right now that's at Nutanix is from the U Penn research group. And they took a really original, fresh look at how do you sit in a network in a scale out fashion but still reverse engineer the packets, the flow through you, and then recreate this application topology. And recreate this not just on Nutanix, but do it seamlessly across multiple clouds. And to talk about the power of Flow augmented with Netsil, let's bring Rajiv back on stage, Rajiv. >> How you doing? >> Okay so we're going to start with some Netsil stuff, right? >> Yeah, let's talk about Netsil and some of the amazing capabilities this acquisition's bringing to Nutanix. First of all as you mentioned, Netsil's completely non invasive. So it installs on the network, it does all its magic from there. There're no host agents, non of the complexity and compatibility issues that entails. It's also monitoring the network at layer seven. So it's actually doing a deep packet inspection on all your application data, and can give you insights into services and APIs which is very important for modern applications and the way they behave. To do all this of course performance is key. So Netsil's built around a completely distributed architecture scaled to really large workloads. Very exciting technology. We're going to use it in many different ways at Nutanix. And to give you a flavor of that, let me show you how we're thinking of integrating Flow and Nestil together, so micro segmentation and Netsil. So to do that, we install Netsil in one of our Google accounts. And that's what's up here now. It went out there. It discovered all the VMs we're running on that account. It created a map essentially of all their interactions, and you can see it's like a Google Maps view. I can zoom into it. I can look at various things running. I can see lots of HTTP servers over here, some databases. >> Sunil: And it also has stats, right? You can go, it actually-- >> It does. We can take a look at that for a second. There are some stats you can look at right away here. Things like transactions per second and latencies and so on. But if I wanted to micro segment this application, it's not really clear how to do so. There's no real pattern over here. Taking the Google Maps analogy a little further, this kind of looks like the backstreets of Cairo or something. So let's do this step by step. Let me first filter down to one application. Right now I'm looking at about three or four different applications. And Netsil integrates with the metadata. So this is that the clouds provide. So I can search all the tags that I have. So by doing that, I can zoom in on just the financial application. And when I do this, the view gets a little bit simpler, but there's still no real pattern. It's not clear how to micro segment this, right? And this is where the power of Netsil comes in. This is a fairly naive view. This is what tool operating at layer four just looking at ports and TCP traffic would give you. But by doing deep packet inspection, Netsil can get into the services layer. So instead of grouping these interactions by hostname, let's group them by service. So you go service tier. And now you can see this is a much simpler picture. Now I have some patterns. I have a couple of load balancers, an HA proxy and an Nginx. I have a web application front end. I have some application servers running authentication services, search services, et cetera, a database, and a database replica. I could go ahead and micro segment at this point. It's quite possible to do it at this point. But this is almost too granular a view. We actually don't usually want to micro segment at individual service level. You think more in terms of application tiers, the tiers that different services belong to. So let me go ahead and group this differently. Let me group this by app tier. And when I do that, a really simple picture emerges. I have a load balancing tier talking to a web application front end tier, an API tier, and a database tier. Four tiers in my application. And this is something I can work with. This is something that I can micro segment fairly easily. So let's switch over to-- >> Before we dot that though, do you guys see how he gave himself the pseudonym called Dom Toretto? >> Focus Sunil, focus. >> Yeah, for those guys, you know that's not the Avengers theme, man, that's the Fast and Furious theme. >> Rajiv: I think a year ahead. This is next years theme. >> Got it, okay. So before we cut over from Netsil to Flow, do we want to talk a few words about the power of Flow, and what's available in 5.6? >> Sure so Flow's been around since the 5.6 release. Actually some of the functionality came in before that. So it's got invisibility into the network. It helps you debug problems with WLANs and so on. We had a lot of orchestration with other third party vendors with load balancers, with switches to make publishing much simpler. And then of course with our most recent release, we GA'ed our micro segmentation capabilities. And that of course is the most important feature we have in Flow right now. And if you look at how Flow policy is set up, it looks very similar to what we just saw with Netsil. So we have load blancer talking to a web app, API, database. It's almost identical to what we saw just a moment ago. So while this policy was created manually, it is something that we can automate. And it is something that we will do in future releases. Right now, it's of course not been integrated at that level yet. So this was created manually. So one thing you'll notice over here is that the database tier doesn't get any direct traffic from the internet. All internet traffic goes to the load balancer, only specific services then talk to the database. So this policy right now is in monitoring mode. It's not actually being enforced. So let's see what happens if I try to attack the database, I start a hack against the database. And I have my trusty brute force password script over here. It's trying the most common passwords against the database. And if I happen to choose a dictionary word or left the default passwords on, eventually it will log into the database. And when I go back over here in Flow what happens is it actually detects there's now an ongoing a flow, a flow that's outside of policy that's shown up. And it shows this in yellow. So right alongside the policy, I can visualize all the noncompliant flows. This makes it really easy for me now to make decisions, does this flow should it be part of the policy, should it not? In this particular case, obviously it should not be part of the policy. So let me just switch from monitoring mode to enforcement mode. I'll apply the policy, give it a second to propagate. The flow goes away. And if I go back to my script, you can see now the socket's timing out. I can no longer connect to the database. >> Sunil: Got it. So that's like one click segmentation and play right now? >> Absolutely. It's really, really simple. You can compare it to other products in the space. You can't get simpler than this. >> Got it. Why don't we got back and talk a little bit more about, so that's Flow. It's shipping now in 5.6 obviously. It'll come integrated with Netsil functionality as well as a variety of other enhancements in that next few releases. But Netsil does more than just simple topology discovery, right? >> Absolutely. So Netsil's actually gathering a lot of metrics from your network, from your host, all this goes through a data pipeline. It gets processed over there and then gets captured in a time series database. And then we can slice and dice that in various different ways. It can be used for all kinds of insights. So let's see how our application's behaving. So let me say I want to go into the API layer over here. And I instantly get a variety of metrics on how the application's behaving. I get the most requested endpoints. I get the average latency. It looks reasonably good. I get the average latency of the slowest endpoints. If I was having a performance problem, I would know exactly where to go focus on. Right now, things look very good, so we won't focus on that. But scrolling back up, I notice that we have a fairly high error rate happening. We have like 11.35% of our HTTP requests are generating errors, and that deserves some attention. And if I scroll down again, and I see the top five status codes I'm getting, almost 10% of my requests are generating 500 errors, HTTP 500 errors which are internal server errors. So there's something going on that's wrong with this application. So let's dig a little bit deeper into that. Let me go into my analytics workbench over here. And what I've plotted over here is how my HTTP requests are behaving over time. Let me filter down to just the 500 ones. That will make it easier. And I want the 500s. And I'll also group this by the service tier so that I can see which services are causing the problem. And the better view for this would be a bar graph. Yes, so once I do this, you can see that all the errors, all the 500 errors that we're seeing have been caused by the authentication service. So something's obviously wrong with that part of my application. I can go look at whether Active Directory is misbehaving and so on. So very quickly from a broad problem that I was getting a high HTTP error rate. In fact, usually you will discover there's this customer complaining about a lot of errors happening in your application. You can quickly narrow down to exactly what the cause was. >> Got it. This is what we mean by hyperconvergence of the network which is if you can truly isolate network related problems and associate them with the rest of the hyperconvergence infrastructure, then we've essentially started making real progress towards the next level of hyperconvergence. Anyway, thanks a lot, man. Great job. >> Thanks, man. (audience clapping) >> So to talk about this evolution from invisible infrastructure to invisible data centers is another customer of ours that has embarked on this journey. And you know it's not just using Nutanix but a variety of other tools to actually fulfill sort of like the ambition of a full blown cloud stack within a financial organization. And to talk more about that, let me call Vijay onstage. Come on up, Vijay. (rock music) >> Hey. >> Thank you, sir. So Vijay looks way better in real life than in a picture by the way. >> Except a little bit of gray. >> Unlike me. So tell me a little bit about this cloud initiative. >> Yeah. So we've won the best cloud initiative twice now hosted by Incisive media a large magazine. It's basically they host a bunch of you know various buy side, sell side, and you can submit projects in various categories. So we've won the best cloud twice now, 2015 and 2017. The 2017 award is when you know as part of our private cloud journey we were laying the foundation for our private cloud which is 100% based on hyperconverged infrastructure. So that was that award. And then 2017, we've kind of built on that foundation and built more developer-centric next gen app services like PAS, CAS, SDN, SDS, CICD, et cetera. So we've built a lot of those services on, and the second award was really related to that. >> Got it. And a lot of this was obviously based on an infrastructure strategy with some guiding principles that you guys had about three or four years ago if I remember. >> Yeah, this is a great slide. I use it very often. At the core of our infrastructure strategy is how do we run IT as a business? I talk about this with my teams, they were very familiar with this. That's the mindset that I instill within the teams. The mission, the challenge is the same which is how do we scale infrastructure while reducing total cost of ownership, improving time to market, improving client experience and while we're doing that not lose sight of reliability, stability, and security? That's the mission. Those are some of our guiding principles. Whenever we take on some large technology investments, we take 'em through those lenses. Obviously Nutanix went through those lenses when we invested in you guys many, many years ago. And you guys checked all the boxes. And you know initiatives change year on year, the mission remains the same. And more recently, the last few years, we've been focused on converged platforms, converged teams. We've actually reorganized our teams and aligned them closer to the platforms moving closer to an SRE like concept. >> And then you've built out a full stack now across computer storage, networking, all the way with various use cases in play? >> Yeah, and we're aggressively moving towards PAS, CAS as our method of either developing brand new cloud native applications or even containerizing existing applications. So the stack you know obviously built on Nutanix, SDS for software fine storage, compute and networking we've got SDN turned on. We've got, again, PAS and CAS built on this platform. And then finally, we've hooked our CICD tooling onto this. And again, the big picture was always frictionless infrastructure which we're very close to now. You know 100% of our code deployments into this environment are automated. >> Got it. And so what's the net, net in terms of obviously the business takeaway here? >> Yeah so at Northern we don't do tech for tech. It has to be some business benefits, client benefits. There has to be some outcomes that we measure ourselves against, and these are some great metrics or great ways to look at if we're getting the outcomes from the investments we're making. So for example, infrastructure scale while reducing total cost of ownership. We're very focused on total cost of ownership. We, for example, there was a build team that was very focus on building servers, deploying applications. That team's gone down from I think 40, 45 people to about 15 people as one example, one metric. Another metric for reducing TCO is we've been able to absorb additional capacity without increasing operating expenses. So you're actually building capacity in scale within your operating model. So that's another example. Another example, right here you see on the screen. Faster time to market. We've got various types of applications at any given point that we're deploying. There's a next gen cloud native which go directly on PAS. But then a majority of the applications still need the traditional IS components. The time to market to deploy a complex multi environment, multi data center application, we've taken that down by 60%. So we can deliver server same day, but we can deliver entire environments, you know add it to backup, add it to DNS, and fully compliant within a couple of weeks which is you know something we measure very closely. >> Great job, man. I mean that's a compelling I think results. And in the journey obviously you got promoted a few times. >> Yep. >> All right, congratulations again. >> Thank you. >> Thanks Vijay. >> Hey Vijay, come back here. Actually we forgot our joke. So razzled by his data points there. So you're supposed to wear some shoes, right? >> I know my inner glitch. I was going to wear those sneakers, but I forgot them at the office maybe for the right reasons. But the story behind those florescent sneakers, I see they're focused on my shoes. But I picked those up two years ago at a Next event, and not my style. I took 'em to my office. They've been sitting in my office for the last couple years. >> Who's received shoes like these by the way? I'm sure you guys have received shoes like these. There's some real fans there. >> So again, I'm sure many of you liked them. I had 'em in my office. I've offered it to so many of my engineers. Are you size 11? Do you want these? And they're unclaimed? >> So that's the only feature of Nutanix that you-- >> That's the only thing that hasn't worked, other than that things are going extremely well. >> Good job, man. Thanks a lot. >> Thanks. >> Thanks Vijay. So as we get to the final phase which is obviously as we embark on this multi-cloud journey and the complexity that comes with it which Dheeraj hinted towards in his session. You know we have to take a cautious, thoughtful approach here because we don't want to over set expectations because this will take us five, 10 years to really do a good job like we've done in the first act. And the good news is that the market is also really, really early here. It's just a fact. And so we've taken a tiered approach to it as we'll start the discussion with multi-cloud operations, and we've talked about the stack in the prior session which is about look across new clouds. So it's no longer Nutanix, Dell, Lenova, HP, Cisco as the new quote, unquote platforms. It's Nutanix, Xi, GCP, AWS, Azure as the new platforms. That's how we're designing the fabric going forward. On top of that, you obviously have the hybrid OS both on the data plane side and control plane side. Then what you're seeing with the advent of Calm doing a marketplace and automation as well as Beam doing governance and compliance is the fact that you'll see more and more such capabilities of multi-cloud operations burnt into the platform. And example of that is Calm with the new 5.7 release that they had. Launch supports multiple clouds both inside and outside, but the fundamental premise of Calm in the multi-cloud use case is to enable you to choose the right cloud for the right workload. That's the automation part. On the governance part, and this we kind of went through in the last half an hour with Dheeraj and Vijay on stage is something that's even more, if I can call it, you know first order because you get the provisioning and operations second. The first order is to say look whatever my developers have consumed off public cloud, I just need to first get our arm around to make sure that you know what am I spending, am I secure, and then when I get comfortable, then I am able to actually expand on it. And that's the power of Beam. And both Beam and Calm will be the yin and yang for us in our multi-cloud portfolio. And we'll have new products to complement that down the road, right? But along the way, that's the whole private cloud, public cloud. They're the two ends of the barbell, and over time, and we've been working on Xi for awhile, is this conviction that we've built talking to many customers that there needs to be another type of cloud. And this type of a cloud has to feel like a public cloud. It has to be architected like a public cloud, be consumed like a public cloud, but it needs to be an extension of my data center. It should not require any changes to my tooling. It should not require and changes to my operational infrastructure, and it should not require lift and shift, and that's a super hard problem. And this problem is something that a chunk of our R and D team has been burning the midnight wick on for the last year and a half. Because look this is not about taking our current OS which does a good job of scaling and plopping it into a Equinix or a third party data center and calling it a hybrid cloud. This is about rebuilding things in the OS so that we can deliver a true hybrid cloud, but at the same time, give those functionality back on premises so that even if you don't have a hybrid cloud, if you just have your own data centers, you'll still need new services like DR. And if you think about it, what are we doing? We're building a full blown multi-tenant virtual network designed in a modern way. Think about this SDN 2.0 because we have 10 years worth of looking backwards on how GCP has done it, or how Amazon has done it, and now sort of embodying some of that so that we can actually give it as part of this cloud, but do it in a way that's a seamless extension of the data center, and then at the same time, provide new services that have never been delivered before. Everyone obviously does failover and failback in DR it just takes months to do it. Our goal is to do it in hours or minutes. But even things such as test. Imagine doing a DR test on demand for you business needs in the middle of the day. And that's the real bar that we've set for Xi that we are working towards in early access later this summer with GA later in the year. And to talk more about this, let me invite some of our core architects working on it, Melina and Rajiv. (rock music) Good to see you guys. >> You're messing up the names again. >> Oh Rajiv, Vinny, same thing, man. >> You need to back up your memory from Xi. >> Yeah, we should. Okay, so what are we going to talk about, Vinny? >> Yeah, exactly. So today we're going to talk about how Xi is pushing the envelope and beyond the state of the art as you were saying in the industry. As part of that, there's a whole bunch of things that we have done starting with taking a private cloud, seamlessly extending it to the public cloud, and then creating a hybrid cloud experience with one-click delight. We're going to show that. We've done a whole bunch of engineering work on making sure the operations and the tooling is identical on both sides. When you graduate from a private cloud to a hybrid cloud environment, you don't want the environments to be different. So we've copied the environment for you with zero manual intervention. And finally, building on top of that, we are delivering DR as a service with unprecedented simplicity with one-click failover, one-click failback. We're going to show you one click test today. So Melina, why don't we start with showing how you go from a private cloud, seamlessly extend it to consume Xi. >> Sounds good, thanks Vinny. Right now, you're looking at my Prism interface for my on premises cluster. In one-click, I'm going to be able to extend that to my Xi cloud services account. I'm doing this using my my Nutanix credential and a password manager. >> Vinny: So here as you notice all the Nutanix customers we have today, we have created an account for them in Xi by default. So you don't have to log in somewhere and create an account. It's there by default. >> Melina: And just like that we've gone ahead and extended my data center. But let's go take a look at the Xi side and log in again with my my Nutanix credentials. We'll see what we have over here. We're going to be able to see two availability zones, one for on premises and one for Xi right here. >> Vinny: Yeah as you see, using a log in account that you already knew mynutanix.com and 30 seconds in, you can see that you have a hybrid cloud view already. You have a private cloud availability zone that's your own Prism central data center view, and then a Xi availability zone. >> Sunil: Got it. >> Melina: Exactly. But of course we want to extend my network connection from on premises to my Xi networks as well. So let's take a look at our options there. We have two ways of doing this. Both are one-click experience. With direct connect, you can create a dedicated network connection between both environments, or VPN you can use a public internet and a VPN service. Let's go ahead and enable VPN in this environment. Here we have two options for how we want to enable our VPN. We can bring our own VPN and connect it, or we will deploy a VPN for you on premises. We'll do the option where we deploy the VPN in one-click. >> And this is another small sign or feature that we're building net new as part of Xi, but will be burned into our core Acropolis OS so that we can also be delivering this as a stand alone product for on premises deployment as well, right? So that's one of the other things to note as you guys look at the Xi functionality. The goal is to keep the OS capabilities the same on both sides. So even if I'm building a quote, unquote multi data center cloud, but it's just a private cloud, you'll still get all the benefits of Xi but in house. >> Exactly. And on this second step of the wizard, there's a few inputs around how you want the gateway configured, your VLAN information and routing and protocol configuration details. Let's go ahead and save it. >> Vinny: So right now, you know what's happening is we're taking the private network that our customers have on premises and extending it to a multi-tenant public cloud such that our customers can use their IP addresses, the subnets, and bring their own IP. And that is another step towards making sure the operation and tooling is kept consistent on both sides. >> Melina: Exactly. And just while you guys were talking, the VPN was successfully created on premises. And we can see the details right here. You can track details like the status of the connection, the gateway, as well as bandwidth information right in the same UI. >> Vinny: And networking is just tip of the iceberg of what we've had to work on to make sure that you get a consistent experience on both sides. So Melina, why don't we show some of the other things we've done? >> Melina: Sure, to talk about how we preserve entities from my on-premises to Xi, it's better to use my production environment. And first thing you might notice is the log in screen's a little bit different. But that's because I'm logging in using my ADFS credentials. The first thing we preserved was our users. In production, I'm running AD obviously on-prem. And now we can log in here with the same set of credentials. Let me just refresh this. >> And this is the Active Directory credential that our customers would have. They use it on-premises. And we allow the setting to be set on the Xi cloud services as well, so it's the same set of users that can access both sides. >> Got it. There's always going to be some networking problem onstage. It's meant to happen. >> There you go. >> Just launching it again here. I think it maybe timed out. This is a good sign that we're running on time with this presentation. >> Yeah, yeah, we're running ahead of time. >> Move the demos quicker, then we'll time out. So essentially when you log into Xi, you'll be able to see what are the environment capabilities that we have copied to the Xi environment. So for example, you just saw that the same user is being used to log in. But after the use logs in, you'll be able to see their images, for example, copied to the Xi side. You'll be able to see their policies and categories. You know when you define these policies on premises, you spend a lot of effort and create them. And now when you're extending to the public cloud, you don't want to do it again, right? So we've done a whole lot of syncing mechanisms making sure that the two sides are consistent. >> Got it. And on top of these policies, the next step is to also show capabilities to actually do failover and failback, but also do integrated testing as part of this compatibility. >> So one is you know just the basic job of making the environments consistent on two sides, but then it's also now talking about the data part, and that's what DR is about. So if you have a workload running on premises, we can take the data and replicate it using your policies that we've already synced. Once the data is available on the Xi side, at that point, you have to define a run book. And the run book essentially it's a recovery plan. And that says okay I already have the backups of my VMs in case of disaster. I can take my recovery plan and hit you know either failover or maybe a test. And then my application comes up. First of all, you'll talk about the boot order for your VMs to come up. You'll talk about networking mapping. Like when I'm running on-prem, you're using a particular subnet. You have an option of using the same subnet on the Xi side. >> Melina: There you go. >> What happened? >> Sunil: It's finally working.? >> Melina: Yeah. >> Vinny, you can stop talking. (audience clapping) By the way, this is logging into a live Xi data center. We have two regions West Coat, two data centers East Coast, two data centers. So everything that you're seeing is essentially coming off the mainstream Xi profile. >> Vinny: Melina, why don't we show the recovery plan. That's the most interesting piece here. >> Sure. The recovery plan is set up to help you specify how you want to recover your applications in the event of a failover or a test failover. And it specifies all sorts of details like the boot sequence for the VMs as well as network mappings. Some of the network mappings are things like the production network I have running on premises and how it maps to my production network on Xi or the test network to the test network. What's really cool here though is we're actually automatically creating your subnets on Xi from your on premises subnets. All that's part of the recovery plan. While we're on the screen, take a note of the .100 IP address. That's a floating IP address that I have set up to ensure that I'm going to be able to access my three tier web app that I have protected with this plan after a failover. So I'll be able to access it from the public internet really easily from my phone or check that it's all running. >> Right, so given how we make the environment consistent on both sides, now we're able to create a very simple DR experience including failover in one-click, failback. But we're going to show you test now. So Melina, let's talk about test because that's one of the most common operations you would do. Like some of our customers do it every month. But usually it's very hard. So let's see how the experience looks like in what we built. >> Sure. Test and failover are both one-click experiences as you know and come to expect from Nutanix. You can see it's failing over from my primary location to my recovery location. Now what we're doing right now is we're running a series of validation checks because we want to make sure that you have your network configured properly, and there's other configuration details in place for the test to be successful. Looks like the failover was initiated successfully. Now while that failover's happening though, let's make sure that I'm going to be able to access my three tier web app once it fails over. We'll do that by looking at my network policies that I've configured on my test network. Because I want to access the application from the public internet but only port 80. And if we look here under our policies, you can see I have port 80 open to permit. So that's good. And if I needed to create a new one, I could in one click. But it looks like we're good to go. Let's go back and check the status of my recovery plan. We click in, and what's really cool here is you can actually see the individual tasks as they're being completed from that initial validation test to individual VMs being powered on as part of the recovery plan. >> And to give you guys an idea behind the scenes, the entire recovery plan is actually a set of workflows that are built on Calm's automation engine. So this is an example of where we're taking some of power of workflow and automation that Clam has come to be really strong at and burning that into how we actually operationalize many of these workflows for Xi. >> And so great, while you were explaining that, my three tier web app has restarted here on Xi right in front of you. And you can see here there's a floating IP that I mentioned early that .100 IP address. But let's go ahead and launch the console and make sure the application started up correctly. >> Vinny: Yeah, so that .100 IP address is a floating IP that's a publicly visible IP. So it's listed here, 206.80.146.100. And that's essentially anybody in the audience here can go use your laptop or your cell phone and hit that and start to work. >> Yeah so by the way, just to give you guys an idea while you guys maybe use the IP to kind of hit it, is a real set of VMs that we've just failed over from Nutanix's corporate data center into our West region. >> And this is running live on the Xi cloud. >> Yeah, you guys should all go and vote. I'm a little biased towards Xi, so vote for Xi. But all of them are really good features. >> Scroll up a little bit. Let's see where Xi is. >> Oh Xi's here. I'll scroll down a little bit, but keep the... >> Vinny: Yes. >> Sunil: You guys written a block or something? >> Melina: Oh good, it looks like Xi's winning. >> Sunil: Okay, great job, Melina. Thank you so much. >> Thank you, Melina. >> Melina: Thanks. >> Thank you, great job. Cool and calm under pressure. That's good. So that was Xi. What's something that you know we've been doing around you know in addition to taking say our own extended enterprise public cloud with Xi. You know we do recognize that there are a ton of workloads that are going to be residing on AWS, GCP, Azure. And to sort of really assist in the try and call it transformation of enterprises to choose the right cloud for the right workload. If you guys remember, we actually invested in a tool over last year which became actually quite like one of those products that took off based on you know groundswell movement. Most of you guys started using it. It's essentially extract for VMs. And it was this product that's obviously free. It's a tool. But it enables customers to really save tons of time to actually migrate from legacy environments to Nutanix. So we took that same framework, obviously re-platformed it for the multi-cloud world to kind of solve the problem of migrating from AWS or GCP to Nutanix or vice versa. >> Right, so you know, Sunil as you said, moving from a private cloud to the public cloud is a lift and shift, and it's a hard you know operation. But moving back is not only expensive, it's a very hard problem. None of the cloud vendors provide change block tracking capability. And what that means is when you have to move back from the cloud, you have an extended period of downtime because there's now way of figuring out what's changing while you're moving. So you have to keep it down. So what we've done with our app mobility product is we have made sure that, one, it's extremely simple to move back. Two, that the downtime that you'll have is as small as possible. So let me show you what we've done. >> Got it. >> So here is our app mobility capability. As you can see, on the left hand side we have a source environment and target environment. So I'm calling my AWS environment Asgard. And I can add more environments. It's very simple. I can select AWS and then put in my credentials for AWS. It essentially goes and discovers all the VMs that are running and all the regions that they're running. Target environment, this is my Nutanix environment. I call it Earth. And I can add target environment similarly, IP address and credentials, and we do the rest. Right, okay. Now migration plans. I have Bifrost one as my migration plan, and this is how migration works. First you create a plan and then say start seeding. And what it does is takes a snapshot of what's running in the cloud and starts migrating it to on-prem. Once it is an on-prem and the difference between the two sides is minimal, it says I'm ready to cutover. At that time, you move it. But let me show you how you'd create a new migration plan. So let me name it, Bifrost 2. Okay so what I have to do is select a region, so US West 1, and target Earth as my cluster. This is my storage container there. And very quickly you can see these are the VMs that are running in US West 1 in AWS. I can select SQL server one and two, go to next. Right now it's looking at the target Nutanix environment and seeing it had enough space or not. Once that's good, it gives me an option. And this is the step where it enables the Nutanix service of change block tracking overlaid on top of the cloud. There are two options one is automatic where you'll give us the credentials for your VMs, and we'll inject our capability there. Or manually you could do. You could copy the command either in a windows VM or Linux VM and run it once on the VM. And change block tracking since then in enabled. Everything is seamless after that. Hit next. >> And while Vinny's setting it up, he said a few things there. I don't know if you guys caught it. One of the hardest problems in enabling seamless migration from public cloud to on-prem which makes it harder than the other way around is the fact that public cloud doesn't have things like change block tracking. You can't get delta copies. So one of the core innovations being built in this app mobility product is to provide that overlay capability across multiple clouds. >> Yeah, and the last step here was to select the target network where the VMs will come up on the Nutanix environment, and this is a summary of the migration plan. You can start it or just save it. I'm saving it because it takes time to do the seeding. I have the other plan which I'll actually show the cutover with. Okay so now this is Bifrost 1. It's ready to cutover. We started it four hours ago. And here you can see there's a SQL server 003. Okay, now I would like to show the AWS environment. As you can see, SQL server 003. This VM is actually running in AWS right now. And if you go to the Prism environment, and if my login works, right? So we can go into the virtual machine view, tables, and you see the VM is not there. Okay, so we go back to this, and we can hit cutover. So this is essentially telling our system, okay now it the time. Quiesce the VM running in AWS, take the last bit of changes that you have to the database, ship it to on-prem, and in on-prem now start you know configure the target VM and start bringing it up. So let's go and look at AWS and refresh that screen. And you should see, okay so the SQL server is now stopping. So that means it has quiesced and stopping the VM there. If you go back and look at the migration plan that we had, it says it's completed. So it has actually migrated all the data to the on-prem side. Go here on-prem, you see the production SQL server is running already. I can click launch console, and let's see. The Windows VM is already booting up. >> So essentially what Vinny just showed was a live cutover of an AWS VM to Nutanix on-premises. >> Yeah, and what we have done. (audience clapping) So essentially, this is about making two things possible, making it simple to migrate from cloud to on-prem, and making it painless so that the downtime you have is very minimal. >> Got it, great job, Vinny. I won't forget your name again. So last step. So to really talk about this, one of our favorite partners and customers has been in the cloud environment for a long time. And you know Jason who's the CTO of Cyxtera. And he'll introduce who Cyxtera is. Most of you guys are probably either using their assets or not without knowing their you know the new name. But is someone that was in the cloud before it was called cloud as one of the original founders and technologists behind Terremark, and then later as one of the chief architects of VMware's cloud. And then they started this new company about a year or so ago which I'll let Jason talk about. This journey that he's going to talk about is how a partner, slash customer is working with us to deliver net new transformations around the traditional industry of colo. Okay, to talk more about it, Jason, why don't you come up on stage, man? (rock music) Thank you, sir. All right so Cyxtera obviously a lot of people don't know the name. Maybe just give a 10 second summary of why you're so big already. >> Sure, so Cyxtera was formed, as you said, about a year ago through the acquisition of the CenturyLink data centers. >> Sunil: Which includes Savvis and a whole bunch of other assets. >> Yeah, there's a long history of those data centers, but we have all of them now as well as the software companies owned by Medina capital. So we're like the world's biggest startup now. So we have over 50 data centers around the world, about 3,500 customers, and a portfolio of security and analytics software. >> Sunil: Got it, and so you have this strategy of what we're calling revolutionizing colo deliver a cloud based-- >> Yeah so, colo hasn't really changed a lot in the last 20 years. And to be fair, a lot of what happens in data centers has to have a person physically go and do it. But there are some things that we can simplify and automate. So we want to make things more software driven, so that's what we're doing with the Cyxtera extensible data center or CXD. And to do that, we're deploying software defined networks in our facilities and developing automations so customers can go and provision data center services and the network connectivity through a portal or through REST APIs. >> Got it, and what's different now? I know there's a whole bunch of benefits with the integrated platform that one would not get in the traditional kind of on demand data center environment. >> Sure. So one of the first services we're launching on CXD is compute on demand, and it's powered by Nutanix. And we had to pick an HCI partner to launch with. And we looked at players in the space. And as you mentioned, there's actually a lot of them, more than I thought. And we had a lot of conversations, did a lot of testing in the lab, and Nutanix really stood out as the best choice. You know Nutanix has a lot of focus on things like ease of deployment. So it's very simple for us to automate deploying compute for customers. So we can use foundation APIs to go configure the servers, and then we turn those over to the customer which they can then manage through Prism. And something important to keep in mind here is that you know this isn't a manged service. This isn't infrastructure as a service. The customer has complete control over the Nutanix platform. So we're turning that over to them. It's connected to their network. They're using their IP addresses, you know their tools and processes to operate this. So it was really important for the platform we picked to have a really good self-service story for things like you know lifecycle management. So with one-click upgrade, customers have total control over patches and upgrades. They don't have to call us to do it. You know they can drive that themselves. >> Got it. Any other final words around like what do you see of the partnership going forward? >> Well you know I think this would be a great platform for Xi, so I think we should probably talk about that. >> Yeah, yeah, we should talk about that separately. Thanks a lot, Jason. >> Thanks. >> All right, man. (audience clapping) So as we look at the full journey now between obviously from invisible infrastructure to invisible clouds, you know there is one thing though to take away beyond many updates that we've had so far. And the fact is that everything that I've talked about so far is about completing a full blown true IA stack from all the way from compute to storage, to vitualization, containers to network services, and so forth. But every public cloud, a true cloud in that sense, has a full blown layer of services that's set on top either for traditional workloads or for new workloads, whether it be machine-learning, whether it be big data, you know name it, right? And in the enterprise, if you think about it, many of these services are being provisioned or provided through a bunch of our partners. Like we have partnerships with Cloudera for big data and so forth. But then based on some customer feedback and a lot of attention from what we've seen in the industry go out, just like AWS, and GCP, and Azure, it's time for Nutanix to have an opinionated view of the past stack. It's time for us to kind of move up the stack with our own offering that obviously adds value but provides some of our core competencies in data and takes it to the next level. And it's in that sense that we're actually launching Nutanix Era to simplify one of the hardest problems in enterprise IT and short of saving you from true Oracle licensing, it solves various other Oracle problems which is about truly simplifying databases much like what RDS did on AWS, imagine enterprise RDS on demand where you can provision, lifecycle manage your database with one-click. And to talk about this powerful new functionality, let me invite Bala and John on stage to give you one final demo. (rock music) Good to see you guys. >> Yep, thank you. >> All right, so we've got lots of folks here. They're all anxious to get to the next level. So this demo, really rock it. So what are we going to talk about? We're going to start with say maybe some database provisioning? Do you want to set it up? >> We have one dream, Sunil, one single dream to pass you off, that is what Nutanix is today for IT apps, we want to recreate that magic for devops and get back those weekends and freedom to DBAs. >> Got it. Let's start with, what, provisioning? >> Bala: Yep, John. >> Yeah, we're going to get in provisioning. So provisioning databases inside the enterprise is a significant undertaking that usually involves a myriad of resources and could take days. It doesn't get any easier after that for the longterm maintence with things like upgrades and environment refreshes and so on. Bala and team have been working on this challenge for quite awhile now. So we've architected Nutanix Era to cater to these enterprise use cases and make it one-click like you said. And Bala and I are so excited to finally show this to the world. We think it's actually Nutanix's best kept secrets. >> Got it, all right man, let's take a look at it. >> So we're going to be provisioning a sales database today. It's a four-step workflow. The first part is choosing our database engine. And since it's our sales database, we want it to be highly available. So we'll do a two node rack configuration. From there, it asks us where we want to land this service. We can either land it on an existing service that's already been provisioned, or if we're starting net new or for whatever reason, we can create a new service for it. The key thing here is we're not asking anybody how to do the work, we're asking what work you want done. And the other key thing here is we've architected this concept called profiles. So you tell us how much resources you need as well as what network type you want and what software revision you want. This is actually controlled by the DBAs. So DBAs, and compute administrators, and network administrators, so they can set their standards without having a DBA. >> Sunil: Got it, okay, let's take a look. >> John: So if we go to the next piece here, it's going to personalize their database. The key thing here, again, is that we're not asking you how many data files you want or anything in that regard. So we're going to be provisioning this to Nutanix's best practices. And the key thing there is just like these past services you don't have to read dozens of pages of best practice guides, it just does what's best for the platform. >> Sunil: Got it. And so these are a multitude of provisioning steps that normally one would take I guess hours if not days to provision and Oracle RAC data. >> John: Yeah, across multiple teams too. So if you think about the lifecycle especially if you have onshore and offshore resources, I mean this might even be longer than days. >> Sunil: Got it. And then there are a few steps here, and we'll lead into potentially the Time Machine construct too? >> John: Yeah, so since this is a critical database, we want data protection. So we're going to be delivering that through a feature called Time Machines. We'll leave this at the defaults for now, but the key thing to not here is we've got SLAs that deliver both continuous data protection as well as telescoping checkpoints for historical recovery. >> Sunil: Got it. So that's provisioning. We've kicked off Oracle, what, two node database and so forth? >> John: Yep, two node database. So we've got a handful of tasks that this is going to automate. We'll check back in in a few minutes. >> Got it. Why don't we talk about the other aspects then, Bala, maybe around, one of the things that, you know and I know many of you guys have seen this, is the fact that if you look at database especially Oracle but in general even SQL and so forth is the fact that look if you really simplified it to a developer, it should be as simple as I copy my production database, and I paste it to create my own dev instance. And whenever I need it, I need to obviously do it the opposite way, right? So that was the goal that we set ahead for us to actually deliver this new past service around Era for our customers. So you want to talk a little bit more about it? >> Sure Sunil. If you look at most of the data management functionality, they're pretty much like flavors of copy paste operations on database entities. But the trouble is the seemingly simple, innocuous operations of our daily lives becomes the most dreaded, complex, long running, error prone operations in data center. So we actually planned to tame this complexity and bring consumer grade simplicity to these operations, also make these clones extremely efficient without compromising the quality of service. And the best part is, the customers can enjoy these services not only for databases running on Nutanix, but also for databases running on third party systems. >> Got it. So let's take a look at this functionality of I guess snapshoting, clone and recovery that you've now built into the product. >> Right. So now if you see the core feature of this whole product is something we call Time Machine. Time Machine lets the database administrators actually capture the database tape to the granularity of seconds and also lets them create clones, refresh them to any point in time, and also recover the databases if the databases are running on the same Nutanix platform. Let's take a look at the demo with the Time Machine. So here is our customer relationship database management database which is about 2.3 terabytes. If you see, the Time Machine has been active about four months, and SLA has been set for continuously code revision of 30 days and then slowly tapers off 30 days of daily backup and weekly backups and so on, so forth. On the right hand side, you will see different colors. The green color is pretty much your continuously code revision, what we call them. That lets you to go back to any point in time to the granularity of seconds within those 30 days. And then the discreet code revision lets you go back to any snapshot of the backup that is maintained there kind of stuff. In a way, you see this Time Machine is pretty much like your modern day car with self driving ability. All you need to do is set the goals, and the Time Machine will do whatever is needed to reach up to the goal kind of stuff. >> Sunil: So why don't we quickly do a snapshot? >> Bala: Yeah, some of these times you need to create a snapshot for backup purposes, Time Machine has manual controls. All you need to do is give it a snapshot name. And then you have the ability to actually persist this snapshot data into a third party or object store so that your durability and that global data access requirements are met kind of stuff. So we kick off a snapshot operation. Let's look at what it is doing. If you see what is the snapshot operation that this is going through, there is a step called quiescing the databases. Basically, we're using application-centric APIs, and here it's actually RMAN of Oracle. We are using the RMan of Oracle to quiesce the database and performing application consistent storage snapshots with Nutanix technology. Basically we are fusing application-centric and then Nutanix platform and quiescing it. Just for a data point, if you have to use traditional technology and create a backup for this kind of size, it takes over four to six hours, whereas on Nutanix it's going to be a matter of seconds. So it almost looks like snapshot is done. This is full sensitive backup. You can pretty much use it for database restore kind of stuff. Maybe we'll do a clone demo and see how it goes. >> John: Yeah, let's go check it out. >> Bala: So for clone, again through the simplicity of command Z command, all you need to do is pick the time of your choice maybe around three o'clock in the morning today. >> John: Yeah, let's go with 3:02. >> Bala: 3:02, okay. >> John: Yeah, why not? >> Bala: You select the time, all you need to do is click on the clone. And most of the inputs that are needed for the clone process will be defaulted intelligently by us, right? And you have to make two choices that is where do you want this clone to be created with a brand new VM database server, or do you want to place that in your existing server? So we'll go with a brand new server, and then all you need to do is just give the password for you new clone database, and then clone it kind of stuff. >> Sunil: And this is an example of personalizing the database so a developer can do that. >> Bala: Right. So here is the clone kicking in. And what this is trying to do is actually it's creating a database VM and then registering the database, restoring the snapshot, and then recoding the logs up to three o'clock in the morning like what we just saw that, and then actually giving back the database to the requester kind of stuff. >> Maybe one finally thing, John. Do you want to show us the provision database that we kicked off? >> Yeah, it looks like it just finished a few seconds ago. So you can see all the tasks that we were talking about here before from creating the virtual infrastructure, and provisioning the database infrastructure, and configuring data protection. So I can go access this database now. >> Again, just to highlight this, guys. What we just showed you is an Oracle two node instance provisioned live in a few minutes on Nutanix. And this is something that even in a public cloud when you go to RDS on AWS or anything like that, you still can't provision Oracle RAC by the way, right? But that's what you've seen now, and that's what the power of Nutanix Era is. Okay, all right? >> Thank you. >> Thanks. (audience clapping) >> And one final thing around, obviously when we're building this, it's built as a past service. It's not meant just for operational benefits. And so one of the core design principles has been around being API first. You want to show that a little bit? >> Absolutely, Sunil, this whole product is built on API fist architecture. Pretty much what we have seen today and all the functionality that we've been able to show today, everything is built on Rest APIs, and you can pretty much integrate with service now architecture and give you your devops experience for your customers. We do have a plan for full fledged self-service portal eventually, and then make it as a proper service. >> Got it, great job, Bala. >> Thank you. >> Thanks, John. Good stuff, man. >> Thanks. >> All right. (audience clapping) So with Nutanix Era being this one-click provisioning, lifecycle management powered by APIs, I think what we're going to see is the fact that a lot of the products that we've talked about so far while you know I've talked about things like Calm, Flow, AHV functionality that have all been released in 5.5, 5.6, a bunch of the other stuff are also coming shortly. So I would strongly encourage you guys to kind of space 'em, you know most of these products that we've talked about, in fact, all of the products that we've talked about are going to be in the breakout sessions. We're going to go deep into them in the demos as well as in the pods. So spend some quality time not just on the stuff that's been shipping but also stuff that's coming out. And so one thing to keep in mind to sort of takeaway is that we're doing this all obviously with freedom as the goal. But from the products side, it has to be driven by choice whether the choice is based on platforms, it's based on hypervisors, whether it's based on consumption models and eventually even though we're starting with the management plane, eventually we'll go with the data plane of how do I actually provide a multi-cloud choice as well. And so when we wrap things up, and we look at the five freedoms that Ben talked about. Don't forget the sixth freedom especially after six to seven p.m. where the whole goal as a Nutanix family and extended family make sure we mix it up. Okay, thank you so much, and we'll see you around. (audience clapping) >> PA Announcer: Ladies and gentlemen, this concludes our morning keynote session. Breakouts will begin in 15 minutes. ♪ To do what I want ♪

>> Announcer: Live from Nice, France it's theCUBE, covering .NEXT Conference 2017, Europe, brought to you by Nutanix. >> Welcome back to theCUBE, I'm Stu Miniman, happy to be joined by Wael Shawarab, who's with Warba Bank, a customer from Kuwait. Thank you so much for joining us. >> No problem, anytime. I mean, thank you very much for the asking. >> Okay, first set us up a little bit, tell us about Warba Bank, you know, how old's the company, how large? >> Well, Warba Bank basically a bank which is seven years old now. The bank has been coming up into a very challenging market, small market, full of banks. So the bank has set the strategy three years back is to go for digitization of the retail banking journeys, focusing on the core of the investment and commercial banking. >> Okay, seven years, I've interviewed some banks that are a hundred or hundreds of years old. >> Exactly, yeah. >> You know, very different when you talk about kind of the digital disruption that's going on. Before we get into it a little more, just tell us a little bit about your background, how long you've been with the bank. >> Well I've been working in the IT industry especially in information security for the past maybe 17 years, handling the infrastructure role for the past seven years, and I've been working into financial sector, information security consultation, doing penetration testing, ethical hacking, secure checks, configuration networking, this is the background for me. >> Okay, and you have infrastructure and information security management, so security of course from a bank is pretty critical. So in IT is what it is? How do you fit in the organization? >> Right now the information security is the number one top priority for the whole financial sector wherever they are, not in the Middle East only, it's everywhere. The attacking landscape and the implementation and how complex the infrastructure has gone makes the information security now very challenging. So basically, it's one of our key roles to secure the financial sector infrastructure, especially in Warba Bank. >> Can you bring us inside a little bit. I mean, you know, ransomware of course is on everybody's lips this year, >> Oh, this is a lot. >> Dheeray in the keynote this morning was talking about hackers and the like, so what percentage of budget gets spent on security, and what are some of the main concerns that you have? >> Well if you go with the international trends and the surveys, information security is taking most of the budgets for the IT right now because, as I told you, the landscape of the attacking has been rising very much, the people have been very much aware about information security in news, they're coming up every day. So basically, enterprises now are allocating a lot of budget for information security. But it's a bit challenging when it comes to banks in the size of Warba Bank, the priority for the information security, the priority for the cost-effective solution, this is where you have to do the most effective choices when you are doing the implementation for technology. >> Okay. Bring us into, tell us a little bit about your IT environment. I understand you're looking at, you were the first customer of Nutanix in Kuwait, had been looking at them before. So what did it look like before, and you know, how come... >> I mean before it's not us only, it's everybody. It's everybody was implementing the traditional way of implementing infrastructure. Servers, storage, different technologies, complex networks, and that was the way till we joined Warba Bank, things have been changing, we're looking to different strategy digitization and hit the market as soon as possible. That demands make the information infrastructure, information security something that need to be evolved, actually, in the implementation of the technology inside financial sector. So that's why we moved to a cloud-like platform, where we have all of the flexibility of moving, implementing workloads as much as we can, expanding it, east to west, south to north, I mean it depends on whether you really want to put your workloads. So with that direction, Nutanix have been looked for as a vendor. From a strategical perspective, they were going into the same direction where everybody's looking at, and whenever we started to look at the expanding of the infrastructure on the cloud level, they were there. So that's why the Nutanix have changed the infrastructure part when it comes to the implementation of infrastructure inside Warba Bank. >> And tell us about Nutanix expansion into your country. When did they get there, what kind of resources do they have? >> Well we were the first customer in Kuwait. I think we are also the first customer in the Middle East. The implementation was very much scoped because the technology was not really tested at that specific time, so we scope it in a very minor scope, tested, successful, then we started expanding that to go all the way to cover the infrastructure. Little bits and pieces still there, but I mean we're going into production properly. >> Yeah, so how many nodes, what's kind of the scope of your environment? >> We're speaking of almost 30 nodes, so the distribution... >> Stu: How many clusters, how do you break that up? >> It's current three clusters mainly. So the implementation was being segmented properly, security adapted, because I mean when it comes to information security and we combine all your infrastructure in our boxes, security get more complex. So basically, this is where you have to structure, even when you are implementing upper conversion infrastructure, you need to be very careful and you do segmentation for that. >> Okay, so you've been pretty aggressive rolling this out. I understand you're a beta customer for testing, you've been... >> Yes. >> Talked to other you know, potential customers out there. A lot of announcements came out of kind of 5.5. You know, were there certain pieces that you were super-excited about, that you were kind of ready to roll out production, maybe talk a little bit about that. >> Well I think the keynote today was talking about the 5.5 version and the rolling out of new software basically integrated inside the Nutanix platform. For us, we are a beta tester for most of it. So basically, there was nothing much new about it for me, especially, or for Warba Bank, because we've been testing that right now into our environment. We've been collaborating with Nutanix about the bugs, what need to be fixed, and stuff like that. So I mean, I think pretty much the strategy of the 5.5, and today we had a one-to-one meeting about the coming strategy again. It's very much aligned with, if you're going for digitization, the strategy is aligned. >> Were there any special features in 5.5 that jumped out at you or just is it the whole platform? >> Well, the calm is very bit interesting, the microsegmentation implementation for the security of the infrastructure is very much interesting. The expansion for the insights inside the infrastructure, because I mean that specific thing, if you look for other vendors who can provide the same services, basically it can be third party integration, and you'll see some other people are looking at infrastructure. I mean Nutanix, when they look at it, they said, "Okay, we provide everything, so why don't we give that?" So they give the insights where you can do the prediction for the machine learning for the server performance. This is pretty impressive. >> All right. Well, you talked about going forward, what are you looking for for Nutanix, either new functionality, or kind of expansion? >> Well, I mean now because we are beta testing the calm, and this is the first stage for the DevOps implementation, getting people in the automation era, basically this is where they need, I'm looking for, for Nutanix, to start implementing, to start getting stacking the DevOps cycle, the application lifecycle management, right from the provisioning till the application production, pushing deployments, rolling it back, I mean I'm expecting that this is to happen maybe like in two years. That's supposed to be it. I mean, with the vision I can see, that has to be it. >> Yeah, so you mentioned microsegmentation. Is there anything else you know with your security hat on, how does Nutanix make things easier for you >> Well, basically >> within the ecosystem? >> Well they start working on data trust encryption, that makes a lot of leverage for the information security, because basically, in a standard implementation, once that has been arrested on the disk, now we need to secure it, you have to apply your encryption, and you have to see the compatibility with the hardware, with the software. I mean these people have been integrating the data trust encryption along with their frameworks, so basically you don't have to get into all of this struggle when you're looking for data trust encryption. Even during the data transfer, encrypting that has been there, so I think the 5.5 is going to make a big change. >> Okay, well, you told me that this is the second time that you attended. You attended the other European show in Vienna last year. What brings you back to the show? What do you get out of it? If you tell your peers that haven't come, why should they come to an event like this? >> I mean the change, the things we've been seeing in last year, the implementation and the vision, and when you look at, this is the past 365 days, and when you look at that 365 days, you'll see a lot of people planning, and they can see the strategy, and they are moving towards it, they are achieving. So that makes the... I mean last year I've seen people, they are almost like 750 people they were planning for, they were doubled in the last conference. This year I was amazed with the number of people who are attending, the keynote size, the kind of customers, the customer base who came from the Middle East, with me because I'm part of them. So I've seen the people are coming to see the strategy and the implementation of that company. So that was really impressive, and that makes me looking forward, actually to see what's next. >> All right, well, it is .NEXT, so Wael Shawareb, thank you so much for joining us. Have a great time at the rest of the show. >> Thank you very much. >> We'll be back with lots more coverage here at Nutanix .NEXT in Nice, France. I'm Stu Miniman, and you're watching theCUBE. (jet engine roaring) (phone vibrating) ♫ I had a drink so big and loud ♫ I jumped so high I touched the clouds ♫ Whoa oh oh oh oh

>> Announcer: Live from Las Vegas, it's the Cube, covering VMworld 2017. Brought to you by VMware and its ecosystem partners. (bright music) >> Welcome back to the Cube's continuing coverage of VMworld 2017. I'm Lisa Martin with my cohost Dave Vellante. Dave, it's been an exciting almost two full days, and we're very excited to be joined by Joel Reich, the EVP of products and operations at NetApp. And none of us can believe you haven't been on the Cube before! >> I haven't been. I'm sure I've sure I've watched a lot of the episodes, but I've never been a guest. >> I apologize for that. I'm shocked, given our past history and relationship, but welcome. >> Thank you. >> And we like to hear that- >> We'll see how I do before you invite me back again. (laughing) >> As a former NetApp-ian, I have high hopes. So Joel, NetApp is positioning itself as a storage software company for multi-cloud world. What does that really mean? >> So what it means is that, you know, when I think about it, when I talk to customers, the problem space about how do I manage my data has gotten so wide and so broad in the last three years because, you know, it used to include to walls, just the space between the four walls of the data centers that you owned. And now the problem space is that plus other data sources you might need to take to grow your business. It might be infrastructure as a service that you built in the cloud. It might be a software as a service application that you're running that's still your data, but it's in some other person's data center. So what it means is that we've really focused on the fact that the world is going to be hybrid cloud and that it's going to be multi-cloud. And the problems that, a high-class problem to solve is how to allow people to manage their data in that world. >> And we've been talking all week on the Cube, and you see it now at VMware's results, there's a lot of tailwinds, but part of that is the customer reality that they can't bring their business into the cloud and reformulate it to force fit it into the cloud. Rather, they have to bring the cloud to the data. >> Joel: Yep, exactly. >> That's sort of your wheelhouse. When you think about multi-cloud, are you talking about being the data store that multiple clouds can access? And do you see it going beyond that, where people are, you know, cross-clouding, if you will, inter-clouding? >> Sure, yeah, I mean, and the mechanisms vary by which people will do that. You know, we see people wanting to still own their data, in other words still have it behind their firewall. So one of the ways they can cross connect to multiple clouds is they can put a storage system, you know, NetApp storage system, in a cold location facility, let's say an Equinix facility, and there they have access to all of the fastest, broadest pipes that you could find anywhere on the network. And you can do a direct connect to Azure. You can do an express connect, or direct connect to Amazon or express connect to Azure, and make a decision about, you know, who has the best pricing plan or who has the best contractual terms or legal terms for you to go to the cloud. So you know, there's that way to do it when you're trying to manage, really just physically own your data when you're concerned about the privacy or sovereignty of it. There's other ways of doing it also, where our storage management software can sit in the cloud. We have a product called Cloud ONTAP, and you can buy it as a service in Amazon, or you can buy it as a service in Azure. And you could store your data in their infrastructure, and because it has a built-in capability of moving from one, you know, from one vendor to another, you don't have to worry about format differences between the cloud vendors. So you can migrate, you know, across, you could SnapMirror, which is a replication capability that we've had for 20 years, and you could be multi-cloud in that sense also. >> You know what's interesting about that, Joel, is when I first started looking at NetApp, and there was no such thing as cloud, but it struck me that you guys were early on with the concept of storage as a service. You had many, many services within your solutions, whether it was copy services or even data reduction services, well ahead of its time, that were bundled in to the platform. And you would invoke those as necessary. Very sort of cloud-like or, you know, we all talk about serverless today, and that's sort of the model, is invoking services as I need them. >> Yes. >> Kind of composable, if you will. So very compatible, in concept anyway, with cloud. So take us through kind of where you are today, with the architecture, you know, used to be so simple. EMC block, NetApp file, right? And that's changed dramatically. And of course I'm oversimplifying. Where are we today with the portfolio and the company strategy? Maybe you could talk to things like all-flash arrays, hyper-converged, bring us up to date. >> So I mean, I think there's, we look at, you're right, we do take a services perspective of what we're building. And what I do, we look at that there's a consumption continuum that people actually want to buy those services in different shapes or forms. So when we think about it, it's not, we don't have a separate clustered data ONTAP roadmap for, you know, our next high-end FAS system that has different features than the roadmap for the version of ONTAP that's going to run in the cloud. It's actually one product, right, that we build to be able to be consumed in different ways. And that, you know, when you think about it, that's kind of like a microcosm of our strategy, which is that what we're trying to do is make those data services available no matter where the data happens to be. And so to give you an example of a new service that we've implemented as part of cluster data ONTAP, it was in a new release that we did this past spring called 9.2. So it has a feature in it called Fabric Pools. And what Fabric Pools allow you to do is, you know, we have this idea that over time, storage becomes a service-level based thing and you have a capacity tier and you have a performance tier. And over time whatever that performance tier is going to be built of is going to be, you know, as flash progresses to Optane and things like that, that capacity tier is going to get faster and faster and faster, and it's always going to be a little bit more expensive than the, I mean, the performance tier is going to get, you know, it's going to get bigger, it's going to get faster, it's always going to be more expensive than the capacity tier. So Fabric Pools is essentially designed, if you forward think a bunch of years, when what you've got in the data center is all flash, you know, where's your capacity tier going to be? Well so in essence what we're doing is we're doing tiering between all flash and any S3 target. So that S3 target could be Glacier. The S3 target could be S3, I mean the S3 target could be, you know, it could be any S3 target. It could anybody's object store. And essentially what happens is, the system will manage secondary data and snapshot data into that capacity tier, but it'll manage it all together so that you're getting the most efficient use you can of flash. So you look at that and say, okay, that's the consumption model. That's a traditional consumption model, where you're buying controller-based functionality. Well it turns out that cloud ONTAP can use Fabric Pools also. So what that means is I can deploy, I could go to Amazon's Marketplace, I can buy Cloud ONTAP for I think it's $1.45 an hour, and I can run an instance, I can set up a cluster in the cloud, and I could use EC2 storage. And I could use Amazon storage and I could run ONTAP on it, and then if I want to I could implement Fabric Pools and I could tier to S3 or Glacier, right, within the cloud. >> The point is, the value of that is single point of control. >> Joel: Yeah. >> And customers will pay for that value. >> My point is actually, the point is was trying to make is that it's a consumption model choice. I'm not going to force someone, I view the cloud as our friend, right, what we're trying to do is find ways for people to leverage either the infrastructure of the public cloud or their on prem infrastructure to be able to manage their data in ways that they can't. >> And discretely selling that software as a service. >> Joel: Yes. >> Yeah. >> Exactly, or as a feature of our standard appliance product. >> But a much different model than taking a Seagate disk drive, packaging it into a controller, and selling it for 10X what you paid for it. >> Right, exactly. So you know, that's really the exciting thing is trying to find ways of making what we have portable into the different ways that people want to consume data management services these days. >> A couple questions for you, Joel. You mentioned the word "friends." You've been, NetApp, long-time friends with VMware. >> Yes. >> Since we're one year post combination of Dell EMC, how has the NetApp VMware relationship evolved? One of the things we heard Michael Dell say this morning was it's very important to maintain the independence of the VMware ecosystem. Talk to us about how in the last year that relationship has progressed and how that's helping NetApp continue its history of being very innovative. >> Yah, so there's always been coopetition, there's always been places where, you know, our products overlapped and where you could do similar things with VMware at the server level that we could do at the storage level. But from the beginning, you know, the integrations that we did with them I think were, you know, really helped move the market and really helped move both of our businesses. I think there's like three things that we're doing right now that are new, you know, in the last year with them. One of them is we built another version of ONTAP, which we call vNAS, which can run on top of VSAN. And you know, in an ESX environment and provide, you know, NFS and CIFS file services on top of VSAN, right? So that's a really interesting combination of both of our software-defined products that solve a customer problem. Another thing we've done is, you know, we've announced our HCI product, NetApp HCI, and we have a really close partnership with VMware. We decided that that was the way to go, that we didn't want to build our own hypervisor, and that they did a really good job on the management side, and you know, that our integration of those three things would build something, you know, with our strength being at the storage management layer and their strength being at the hypervisor and management layer, that that would help us build a really effective, competitive product. So you know, I think those are two really good examples of that the partnership is moving forward. Lots of interesting integrations, we're working on figuring out how to bring value to what VMware is now doing with AWS. Cause we have a very large install base. I came to the show and I asked, well how many combined customers do we have with VMware? And it's 50,000 combined customers over the years we've been doing this. So you know, our customers want to know how to get access to that capability, how to move into AWS in a way that provides them an interim step. So there's some really good cooperative work going on between our developers in that area. >> And a couple of strong GTM routes, right, through, you mentioned a new version of ONTAP for VSAN. Yesterday Pat Gellsinger mentioned there's now 10,000 customers on VSAN, talked about obviously with AWS as another GTM opportunity for you. >> Yeah, I mean, our teams work together great. There's no question about it. >> Yeah, I mean you guys have always been right there, in the inner circle of integration with VMware. I mean, in the days where, you know, EMC was trying to control the chessboard, NetApp was always able to have products like, same day, you know, as integrated as anybody. And that was important for VMware to show its independence. >> Well you know, Mountain View is much closer to Sunnyvale than Hopkinton. (laughing) >> It's true. >> So you talked about, you chose not to develop your own hypervisor. Others have. So maybe talk about that a little more, how you differentiate from some of the other hyper converged players. >> I mean, I don't, you know, there are other ways of dealing with, you know, when people don't want to spend money on a license, there are other ways of dealing with that problem than building your own hypervisor. You know, for example, so in our HCI product, we can scale server and, we can scale compute and storage independently. So you don't actually get locked into buying, you don't have to buy another VMware license if all you're doing is selling combined storage, you know, combined HCI nodes. By breaking them apart and having separate HCI nodes, we don't drive people into consuming VMware licenses that they might not need, right, in order to meet the demands of, you know, what they're trying to build. So I think we've taken a much different approach to HCI. We talk about it as second generation. The core, there's a lot of value to it. The core value in differentiation is really ease of setup and use that people have grown to expect from HCI combined with an amazing amount of quality of service and workload guarantee, you know, guaranteed workload per workload performance and scaling to, you know, 100 nodes, which, you know, we think really makes HCI a data center class technology. You know, not an edge technology, not a single application technology, but by adding data management features and having that real ability to scale to very large systems, we think we really, you know, come into the market at a time when HCI is ready to move to that next step of not just being single workload, single application. So we think we're there at a good time, with the right product. >> How about all-flash arrays? Bring us up to speed on that. You guys made an acquisition of SolidFire, great acquisition, picked it up at a good time in the marketplace, got it for I think a relatively good price, really good company, true software defined, built for sort of cloud-oriented applications. So how have you integrated that asset, where do it fit in your portfolio? And maybe you can share some proof points. >> Yeah, so we've seen a lot of success with that. You know, what we were doing, when we bought SolidFire, there were a whole bunch of motivations for it. One of the motivations was we knew we needed access to the new buyers. We knew we needed access to people who were making decisions about deploying applications independent of the infrastructure that they happened to have in their data center. Right, they were trying to find new ways of doing things. So when we bought SolidFire, you know, a lot of it was, we loved the technology. A lot of it was getting access to the new buyers and bringing them to the table. And it's funny cause I was noticing today in a bunch of customer meetings that I had here, that you know, in the past I'd have meetings and it would be like sort of the same IT stack, here's the system admin, here's the server admin, here's the network admin, here's the storage person sitting around the table. And when I talk about, you know, we talk about the data fabric, which is the way we tie together, you know, our hybrid clouds. When I talk about that, you know, either people would start to yawn or they'd start to feel threatened because you know, we're talking about something that was a new world for them that they didn't quite know how they would fit in. One of the things I'm seeing now, especially this year, is that customers are coming to the table with both with a cloud architect, and you know, the person who's trying to figure out how they get to the next place, plus the person who owns the existing infrastructure, and they're trying to figure out how to modernize it. So it's something, you know, when we bought SolidFire, we had this theory, okay, we got to go, we have this new technology, it's aimed at a new buyer. And one of the things I'm seeing now is that the portfolio sale of the things that we're offering is starting to be relevant to actually, we don't have to go find the different people. We're actually starting to see them come to the table and talk to us together. So you know, all-flash for us, that's been what's driving the company. We went, we made a big investment about two and a half years ago. It started to pay off last year. We're still growing much faster than the market, much faster than companies who are a lot smaller than us, and the last, you know, market research data that I saw had us as number two in the world, after really not even, you know, being in the top single digits about three years ago. So that's been a really good thing for us, both for our install base but also winning new footprint and winning new business that we didn't have before. We're displacing legacy competitors, one a day. I think George talked about it in our last earnings call. We're replacing EMC once a day, right, at least, and accelerating past that. And it's replacing the old stuff. And a lot of it is because of what we've done with flash. A lot of it is also because it's a future proof. Okay, well, how am I going to, so let's say I decide I want to move this part of this workload that's on here, one workload that's on here to the cloud next year. Alright, NetApp, how could you help me do that? And we'll go through and talk about, this is what we do with Azure, this is what we do with Amazon, right, this is what we do with IBM Cloud. None of our competitors can do that. >> Excellent, and so, sorry to cut you off, we've got to wrap. But you've got a NetApp Insight 2017 Change the World with Data coming up in, you're going to have to come back to Vegas in October and Berlin, and I'm sure, >> Right here, I might even be sitting in the same place. (laughing) >> I hope you get some fresh air. >> Let's make that happen. Let's get the Cube to Insight. >> There we go! Thank you so much for joining. You're now a Cube alumni, which is fantastic. >> Thank you, do I get a t-shirt? >> Congratulations, a pin I think. >> Yeah, a pin. Alright, well for my cohost Dave Vellante, I'm Lisa Martin, we want to thank you for watching. Come right back. We've got more exciting coverage from day two of VMworld 2017 right now. (bright music)

(upbeat techno music) >> Announcer: Good morning ladies and gentlemen. This is Lenovo Transform. Please welcome to the stage Lenovo's Rod Lappin. (upbeat instrumental) >> Alright, ladies and gentlemen. Here we go. I was out the back having a chat. A bit faster than I expected. How are you all doing this morning? (crowd cheers) >> Good? How fantastic is it to be in New York City? (crowd applauds) Excellent. So my name's Rod Lappin. I'm with the Data Center Group, obviously. I do basically anything that touches customers from our sales people, our pre-sales engineers, our architects, et cetera, all the way through to our channel partner sales engagement globally. So that's my job, but enough of that, okay? So the weather this morning, absolutely fantastic. Not a cloud in the sky, perfect. A little bit different to how it was yesterday, right? I want to thank all of you because I know a lot of you had a lot of commuting issues getting into New York yesterday with all the storms. We have a lot of people from international and domestic travel caught up in obviously the network, which blows my mind, actually, but we have a lot of people here from Europe, obviously, a lot of analysts and media people here as well as customers who were caught up in circling around the airport apparently for hours. So a big round of applause for our team from Europe. (audience applauds) Thank you for coming. We have some people who commuted a very short distance. For example, our own server general manager, Cameron (mumbles), he's out the back there. Cameron, how long did it take you to get from Raleigh to New York? An hour-and-a-half flight? >> Cameron: 17 hours. >> 17 hours, ladies and gentleman. That's a fantastic distance. I think that's amazing. But I know a lot of us, obviously, in the United States have come a long way with the storms, obviously very tough, but I'm going to call out one individual. Shaneil from Spotless. Where are you Shaneil, you're here somewhere? There he is from Australia. Shaneil how long did it take you to come in from Australia? 25 hour, ladies and gentleman. A big round of applause. That's a pretty big effort. Shaneil actually I want you to stand up, if you don't mind. I've got a seat here right next to my CEO. You've gone the longest distance. How about a big round of applause for Shaneil. We'll put him in my seat, next to YY. Honestly, Shaneil, you're doing me a favor. Okay ladies and gentlemen, we've got a big day today. Obviously, my seat now taken there, fantastic. Obviously New York City, the absolute pinnacle of globalization. I first came to New York in 1996, which was before a lot of people in the room were born, unfortunately for me these days. Was completely in awe. I obviously went to a Yankees game, had no clue what was going on, didn't understand anything to do with baseball. Then I went and saw Patrick Ewing. Some of you would remember Patrick Ewing. Saw the Knicks play basketball. Had no idea what was going on. Obviously, from Australia, and somewhat slightly height challenged, basketball was not my thing but loved it. I really left that game... That was the first game of basketball I'd ever seen. Left that game realizing that effectively the guy throws the ball up at the beginning, someone taps it, that team gets it, they run it, they put it in the basket, then the other team gets it, they put it in the basket, the other team gets it, and that's basically the entire game. So I haven't really progressed from that sort of learning or understanding of basketball since then, but for me, personally, being here in New York, and obviously presenting with all of you guys today, it's really humbling from obviously some of you would have picked my accent, I'm also from Australia. From the north shore of Sydney. To be here is just a fantastic, fantastic event. So welcome ladies and gentlemen to Transform, part of our tech world series globally in our event series and our event season here at Lenovo. So once again, big round of applause. Thank you for coming (audience applauds). Today, basically, is the culmination of what I would classify as a very large journey. Many of you have been with us on that. Customers, partners, media, analysts obviously. We've got quite a lot of our industry analysts in the room. I know Matt Eastwood yesterday was on a train because he sent a Tweet out saying there's 170 people on the WIFI network. He was obviously a bit concerned he was going to get-- Pat Moorhead, he got in at 3:30 this morning, obviously from traveling here as well with some of the challenges with the transportation, so we've got a lot of people in the room that have been giving us advice over the last two years. I think all of our employees are joining us live. All of our partners and customers through the stream. As well as everybody in this packed-out room. We're very very excited about what we're going to be talking to you all today. I want to have a special thanks obviously to our R&D team in Raleigh and around the world. They've also been very very focused on what they've delivered for us today, and it's really important for them to also see the culmination of this great event. And like I mentioned, this is really the feedback. It's not just a Lenovo launch. This is a launch based on the feedback from our partners, our customers, our employees, the analysts. We've been talking to all of you about what we want to be when we grow up from a Data Center Group, and I think you're going to hear some really exciting stuff from some of the speakers today and in the demo and breakout sessions that we have after the event. These last two years, we've really transformed the organization, and that's one of the reasons why that theme is part of our Tech World Series today. We're very very confident in our future, obviously, and where the company's going. It's really important for all of you to understand today and take every single snippet that YY, Kirk, and Christian talk about today in the main session, and then our presenters in the demo sections on what Lenovo's actually doing for its future and how we're positioning the company, obviously, for that future and how the transformation, the digital transformation, is going ahead globally. So, all right, we are now going to step into our Transform event. And I've got a quick agenda statement for you. The very first thing is we're going to hear from YY, our chairman and CEO. He's going to discuss artificial intelligence, the evolution of our society and how Lenovo is clearly positioning itself in the industry. Then, obviously, you're going to hear from Kirk Skaugen, our president of the Data Center Group, our new boss. He's going to talk about how long he's been with the company and the transformation, once again, we're making, very specifically to the Data Center Group and how much of a difference we're making to society and some of our investments. Christian Teismann, our SVP and general manager of our client business is going to talk about the 25 years of ThinkPad. This year is the 25-year anniversary of our ThinkPad product. Easily the most successful brand in our client branch or client branch globally of any vendor. Most successful brand we've had launched, and this afternoon breakout sessions, obviously, with our keynotes, fantastic sessions. Make sure you actually attend all of those after this main arena here. Now, once again, listen, ask questions, and make sure you're giving us feedback. One of the things about Lenovo that we say all the time... There is no room for arrogance in our company. Every single person in this room is a customer, partner, analyst, or an employee. We love your feedback. It's only through your feedback that we continue to improve. And it's really important that through all of the sessions where the Q&As happen, breakouts afterwards, you're giving us feedback on what you want to see from us as an organization as we go forward. All right, so what were you doing 25 years ago? I spoke about ThinkPad being 25 years old, but let me ask you this. I bet you any money that no one here knew that our x86 business is also 25 years old. So, this year, we have both our ThinkPad and our x86 anniversaries for 25 years. Let me tell you. What were you guys doing 25 years ago? There's me, 25 years ago. It's a bit scary, isn't it? It's very svelte and athletic and a lot lighter than I am today. It makes me feel a little bit conscious. And you can see the black and white shot. It shows you that even if you're really really short and you come from the wrong side of the tracks to make some extra cash, you can still do some modeling as long as no one else is in the photo to give anyone any perspective, so very important. I think I might have got one photo shoot out of that, I don't know. I had to do it, I needed the money. Let me show you another couple of photos. Very interesting, how's this guy? How cool does he look? Very svelte and athletic. I think there's no doubt. He looks much much cooler than I do. Okay, so ladies and gentlemen, without further ado, it gives me great honor to obviously introduce our very very first guest to the stage. Ladies and gentlemen, our chairman and CEO, Yuanqing Yang. or as we like to call him, YY. A big round of applause, thank you. (upbeat techno instrumental) >> Good morning everyone. Thank you, Rod, for your introduction. Actually, I didn't think I was younger than you (mumbles). I can't think of another city more fitting to host the Transform event than New York. A city that has transformed from a humble trading post 400 years ago to one of the most vibrant cities in the world today. It is a perfect symbol of transformation of our world. The rapid and the deep transformations that have propelled us from the steam engine to the Internet era in just 200 years. Looking back at 200 years ago, there was only a few companies that operated on a global scale. The total value of the world's economy was around $188 billion U.S. dollars. Today, it is only $180 for each person on earth. Today, there are thousands of independent global companies that compete to sell everything, from corn and crude oil to servers and software. They drive a robust global economy was over $75 trillion or $1,000 per person. Think about it. The global economy has multiplied almost 450 times in just two centuries. What is even more remarkable is that the economy has almost doubled every 15 years since 1950. These are significant transformation for businesses and for the world and our tiny slice of pie. This transformation is the result of the greatest advancement in technology in human history. Not one but three industrial revolutions have happened over the last 200 years. Even though those revolutions created remarkable change, they were just the beginning. Today, we are standing at the beginning of the fourth revolution. This revolution will transform how we work (mumbles) in ways that no one could imagine in the 18th century or even just 18 months ago. You are the people who will lead this revolution. Along with Lenovo, we will redefine IT. IT is no longer just information technology. It's intelligent technology, intelligent transformation. A transformation that is driven by big data called computing and artificial intelligence. Even the transition from PC Internet to mobile Internet is a big leap. Today, we are facing yet another big leap from the mobile Internet to the Smart Internet or intelligent Internet. In this Smart Internet era, Cloud enables devices, such as PCs, Smart phones, Smart speakers, Smart TVs. (mumbles) to provide the content and the services. But the evolution does not stop them. Ultimately, almost everything around us will become Smart, with building computing, storage, and networking capabilities. That's what we call the device plus Cloud transformation. These Smart devices, incorporated with various sensors, will continuously sense our environment and send data about our world to the Cloud. (mumbles) the process of this ever-increasing big data and to support the delivery of Cloud content and services, the data center infrastructure is also transforming to be more agile, flexible, and intelligent. That's what we call the infrastructure plus Cloud transformation. But most importantly, it is the human wisdom, the people learning algorithm vigorously improved by engineers that enables artificial intelligence to learn from big data and make everything around us smarter. With big data collected from Smart devices, computing power of the new infrastructure under the trend artificial intelligence, we can understand the world around us more accurately and make smarter decisions. We can make life better, work easier, and society safer and healthy. Think about what is already possible as we start this transformation. Smart Assistants can help you place orders online with a voice command. Driverless cars can run on the same road as traditional cars. (mumbles) can help troubleshoot customers problems, and the virtual doctors already diagnose basic symptoms. This list goes on and on. Like every revolution before it, intelligent transformation, will fundamentally change the nature of business. Understanding and preparing for that will be the key for the growth and the success of your business. The first industrial revolution made it possible to maximize production. Water and steam power let us go from making things by hand to making them by machine. This transformed how fast things could be produced. It drove the quantity of merchandise made and led to massive increase in trade. With this revolution, business scale expanded, and the number of customers exploded. Fifty years later, the second industrial revolution made it necessary to organize a business like the modern enterprise, electric power, and the telegraph communication made business faster and more complex, challenging businesses to become more efficient and meeting entirely new customer demands. In our own lifetimes, we have witnessed the third industrial revolution, which made it possible to digitize the enterprise. The development of computers and the Internet accelerated business beyond human speed. Now, global businesses have to deal with customers at the end of a cable, not always a handshake. While we are still dealing with the effects of a digitizing business, the fourth revolution is already here. In just the past two or three years, the growth of data and advancement in visual intelligence has been astonishing. The computing power can now process the massive amount of data about your customers, suppliers, partners, competitors, and give you insights you simply could not imagine before. Artificial intelligence can not only tell you what your customers want today but also anticipate what they will need tomorrow. This is not just about making better business decisions or creating better customer relationships. It's about making the world a better place. Ultimately, can we build a new world without diseases, war, and poverty? The power of big data and artificial intelligence may be the revolutionary technology to make that possible. Revolutions don't happen on their own. Every industrial revolution has its leaders, its visionaries, and its heroes. The master transformers of their age. The first industrial revolution was led by mechanics who designed and built power systems, machines, and factories. The heroes of the second industrial revolution were the business managers who designed and built modern organizations. The heroes of the third revolution were the engineers who designed and built the circuits and the source code that digitized our world. The master transformers of the next revolution are actually you. You are the designers and the builders of the networks and the systems. You will bring the benefits of intelligence to every corner of your enterprise and make intelligence the central asset of your business. At Lenovo, data intelligence is embedded into everything we do. How we understand our customer's true needs and develop more desirable products. How we profile our customers and market to them precisely. How we use internal and external data to balance our supply and the demand. And how we train virtual agents to provide more effective sales services. So the decisions you make today about your IT investment will determine the quality of the decisions your enterprise will make tomorrow. So I challenge each of you to seize this opportunity to become a master transformer, to join Lenovo as we work together at the forefront of the fourth industrial revolution, as leaders of the intelligent transformation. (triumphant instrumental) Today, we are launching the largest portfolio in our data center history at Lenovo. We are fully committed to the (mumbles) transformation. Thank you. (audience applauds) >> Thanks YY. All right, ladies and gentlemen. Fantastic, so how about a big round of applause for YY. (audience applauds) Obviously a great speech on the transformation that we at Lenovo are taking as well as obviously wanting to journey with our partners and customers obviously on that same journey. What I heard from him was obviously artificial intelligence, how we're leveraging that integrally as well as externally and for our customers, and the investments we're making in the transformation around IoT machine learning, obviously big data, et cetera, and obviously the Data Center Group, which is one of the key things we've got to be talking about today. So we're on the cusp of that fourth revolution, as YY just mentioned, and Lenovo is definitely leading the way and investing in those parts of the industry and our portfolio to ensure we're complimenting all of our customers and partners on what they want to be, obviously, as part of this new transformation we're seeing globally. Obviously now, ladies and gentlemen, without further ado once again, to tell us more about what's going on today, our announcements, obviously, that all of you will be reading about and seeing in the breakout and the demo sessions with our segment general managers this afternoon is our president of the data center, Mr. Kirk Skaugen. (upbeat instrumental) >> Good morning, and let me add my welcome to Transform. I just crossed my six months here at Lenovo after over 24 years at Intel Corporation, and I can tell you, we've been really busy over the last six months, and I'm more excited and enthusiastic than ever and hope to share some of that with you today. Today's event is called "Transform", and today we're announcing major new transformations in Lenovo, in the data center, but more importantly, we're celebrating the business results that these platforms are going to have on society and with international supercomputing going on in parallel in Frankfurt, some of the amazing scientific discoveries that are going to happen on some of these platforms. Lenovo has gone through some significant transformations in the last two years, since we acquired the IBM x86 business, and that's really positioning us for this next phase of growth, and we'll talk more about that later. Today, we're announcing the largest end-to-end data center portfolio in Lenovo's history, as you heard from YY, and we're really taking the best of the x86 heritage from our IBM acquisition of the x86 server business and combining that with the cost economics that we've delivered from kind of our China heritage. As we've talked to some of the analysts in the room, it's really that best of the east and best of the west is combining together in this announcement today. We're going to be announcing two new brands, building on our position as the number one x86 server vendor in both customer satisfaction and in reliability, and we're also celebrating, next month in July, a very significant milestone, which will we'll be shipping our 20 millionth x86 server into the industry. For us, it's an amazing time, and it's an inflection point to kind of look back, pause, but also share the next phase of Lenovo and the exciting vision for the future. We're also making some declarations on our vision for the future today. Again, international supercomputing's going on, and, as it turns out, we're the fastest growing supercomputer company on earth. We'll talk about that. Our goal today that we're announcing is that we plan in the next several years to become number one in supercomputing, and we're going to put the investments behind that. We're also committing to our customers that we're going to disrupt the status quo and accelerate the pace of innovation, not just in our legacy server solutions, but also in Software-Defined because what we've heard from you is that that lack of legacy, we don't have a huge router business or a huge sand business to protect. It's that lack of legacy that's enabling us to invest and get ahead of the curb on this next transition to Software-Defined. So you're going to see us doing that through building our internal IP, through some significant joint ventures, and also through some merges and acquisitions over the next several quarters. Altogether, we're driving to be the most trusted data center provider in the industry between us and our customers and our suppliers. So a quick summary of what we're going to dive into today, both in my keynote as well as in the breakout sessions. We're in this transformation to the next phase of Lenovo's data center growth. We're closing out our previous transformation. We actually, believe it or not, in the last six months or so, have renegotiated 18,000 contracts in 160 countries. We built out an entire end-to-end organization from development and architecture all the way through sales and support. This next transformation, I think, is really going to excite Lenovo shareholders. We're building the largest data center portfolio in our history. I think when IBM would be up here a couple years ago, we might have two or three servers to announce in time to market with the next Intel platform. Today, we're announcing 14 new servers, seven new storage systems, an expanded set of networking portfolios based on our legacy with Blade Network Technologies and other companies we've acquired. Two new brands that we'll talk about for both data center infrastructure and Software-Defined, a new set of premium premiere services as well as a set of engineered solutions that are going to help our customers get to market faster. We're going to be celebrating our 20 millionth x86 server, and as Rod said, 25 years in x86 server compute, and Christian will be up here talking about 25 years of ThinkPad as well. And then a new end-to-end segmentation model because all of these strategies without execution are kind of meaningless. I hope to give you some confidence in the transformation that Lenovo has gone through as well. So, having observed Lenovo from one of its largest partners, Intel, for more than a couple decades, I thought I'd just start with why we have confidence on the foundation that we're building off of as we move from a PC company into a data center provider in a much more significant way. So Lenovo today is a company of $43 billion in sales. Absolutely astonishing, it puts us at about Fortune 202 as a company, with 52,000 employees around the world. We're supporting and have service personnel, almost a little over 10,000 service personnel that service our servers and data center technologies in over 160 countries that provide onsite service and support. We have seven data center research centers. One of the reasons I came from Intel to Lenovo was that I saw that Lenovo became number one in PCs, not through cost cutting but through innovation. It was Lenovo that was partnering on the next-generation Ultrabooks and two-in-ones and tablets in the modem mods that you saw, but fundamentally, our path to number one in data center is going to be built on innovation. Lastly, we're one of the last companies that's actually building not only our own motherboards at our own motherboard factories, but also with five global data center manufacturing facilities. Today, we build about four devices a second, but we also build over 100 servers per hour, and the cost economics we get, and I just visited our Shenzhen factory, of having everything from screws to microprocessors come up through the elevator on the first floor, go left to build PCs and ThinkPads and go right to build server technology, means we have some of the world's most cost effective solutions so we can compete in things like hyperscale computing. So it's with that that I think we're excited about the foundation that we can build off of on the Data Center Group. Today, as we stated, this event is about transformation, and today, I want to talk about three things we're going to transform. Number one is the customer experience. Number two is the data center and our customer base with Software-Defined infrastructure, and then the third is talk about how we plan to execute flawlessly with a new transformation that we've had internally at Lenovo. So let's dive into it. On customer experience, really, what does it mean to transform customer experience? Industry pundits say that if you're not constantly innovating, you can fall behind. Certainly the technology industry that we're in is transforming at record speed. 42% of business leaders or CIOs say that digital first is their top priority, but less than 50% actually admit that they have a strategy to get there. So people are looking for a partner to keep pace with that innovation and change, and that's really what we're driving to at Lenovo. So today we're announcing a set of plans to take another step function in customer experience, and building off of our number one position. Just recently, Gartner shows Lenovo as the number 24 supply chains of companies over $12 billion. We're up there with Amazon, Coca-Cola, and we've now completely re-architected our supply chain in the Data Center Group from end to end. Today, we can deliver 90% of our SKUs, order to ship in less than seven days. The artificial intelligence that YY mentioned is optimizing our performance even further. In services, as we talked about, we're now in 160 countries, supporting on-site support, 50 different call centers around the world for local language support, and we're today announcing a whole set of new premiere support services that I'll get into in a second. But we're building on what's already better than 90% customer satisfaction in this space. And then in development, for all the engineers out there, we started foundationally for this new set of products, talking about being number one in reliability and the lowest downtime of any x86 server vendor on the planet, and these systems today are architected to basically extend that leadership position. So let me tell you the realities of reliability. This is ITIC, it's a reliability report. 750 CIOs and IT managers from more than 20 countries, so North America, Europe, Asia, Australia, South America, Africa. This isn't anything that's paid for with sponsorship dollars. Lenovo has been number one for four years running on x86 reliability. This is the amount of downtime, four hours or more, in mission-critical environments from the leading x86 providers. You can see relative to our top two competitors that are ahead of us, HP and Dell, you can see from ITIC why we are building foundationally off of this, and why it's foundational to how we're developing these new platforms. In customer satisfaction, we are also rated number one in x86 server customer satisfaction. This year, we're now incentivizing every single Lenovo employee on customer satisfaction and customer experience. It's been a huge mandate from myself and most importantly YY as our CEO. So you may say well what is the basis of this number one in customer satisfaction, and it's not just being number one in one category, it's actually being number one in 21 of the 22 categories that TBR talks about. So whether it's performance, support systems, online product information, parts and availability replacement, Lenovo is number one in 21 of the 22 categories and number one for six consecutive studies going back to Q1 of 2015. So this, again, as we talk about the new product introductions, it's something that we absolutely want to build on, and we're humbled by it, and we want to continue to do better. So let's start now on the new products and talk about how we're going to transform the data center. So today, we are announcing two new product offerings. Think Agile and ThinkSystem. If you think about the 25 years of ThinkPad that Christian's going to talk about, Lenovo has a continuous learning culture. We're fearless innovators, we're risk takers, we continuously learn, but, most importantly, I think we're humble and we have some humility. That when we fail, we can fail fast, we learn, and we improve. That's really what drove ThinkPad to number one. It took about eight years from the acquisition of IBM's x86 PC business before Lenovo became number one, but it was that innovation, that listening and learning, and then improving. As you look at the 25 years of ThinkPad, there were some amazing successes, but there were also some amazing failures along the way, but each and every time we learned and made things better. So this year, as Rod said, we're not just celebrating 25 years of ThinkPad, but we're celebrating 25 years of x86 server development since the original IBM PC servers in 1992. It's a significant day for Lenovo. Today, we're excited to announce two new brands. ThinkSystem and ThinkAgile. It's an important new announcement that we started almost three years ago when we acquired the x86 server business. Why don't we run a video, and we'll show you a little bit about ThinkSystem and ThinkAgile. >> Narrator: The status quo is comfortable. It gets you by, but if you think that's good enough for your data center, think again. If adoption is becoming more complicated when it should be simpler, think again. If others are selling you technology that's best for them, not for you, think again. It's time for answers that win today and tomorrow. Agile, innovative, different. Because different is better. Different embraces change and makes adoption simple. Different designs itself around you. Using 25 years of innovation and design and R&D. Different transforms, it gives you ThinkSystem. World-record performance, most reliable, easy to integrate, scales faster. Different empowers you with ThinkAgile. It redefines the experience, giving you the speed of Cloud and the control of on-premise IT. Responding faster to what your business really needs. Different defines the future. Introducing Lenovo ThinkSystem and ThinkAgile. (exciting and slightly aggressive digital instrumental) >> All right, good stuff, huh? (audience applauds) So it's built off of this 25-year history of us being in the x86 server business, the commitment we established three years ago after acquiring the x86 server business to be and have the most reliable, the most agile, and the most highest-performing data center solutions on the planet. So today we're announcing two brands. ThinkSystem is for the traditional data center infrastructure, and ThinkAgile is our brand for Software-Defined infrastructure. Again, the teams challenge themselves from the start, how do we build off this rich heritage, expanding our position as number one in customer satisfaction, reliability, and one of the world's best supply chains. So let's start and look at the next set of solutions. We have always prided ourself that little things don't mean a lot. Little things mean everything. So today, as we said on the legacy solutions, we have over 30 world-record performance benchmarks on Intel architecture, and more than actually 150 since we started tracking this back in 2001. So it's the little pieces of innovation. It's the fine tuning that we do with our partners like an Intel or a Microsoft, an SAP, VMware, and Nutanix that's enabling us to get these world-record performance benchmarks, and with this next generation of solutions we think we'll continue to certainly do that. So today we're announcing the most comprehensive portfolio ever in our data center history. There's 14 servers, seven storage devices, and five network switches. We're also announcing, which is super important to our customer base, a set of new premiere service options. That's giving you fast access directly to a level two support person. No automated response system involved. You get to pick up the phone and directly talk to a level two support person that's going to have end-to-end ownership of the customer experience for ThinkSystem. With ThinkAgile, that's going to be completely bundled with every ThinkAgile you purchase. In addition, we're having white glove service on site that will actually unbox the product for you and get it up and running. It's an entirely new set of solutions for hybrid Cloud, for big data analytics and database applications around these engineered solutions. These are like 40- to 50-page guides where we fine-tuned the most important applications around virtual desktop infrastructure and those kinds of applications, working side by side with all of our ISP partners. So significantly expanding, not just the hardware but the software solutions that, obviously, you, as our customers, are running. So if you look at ThinkSystem innovation, again, it was designed for the ultimate in flexibility, performance, and reliability. It's a single now-unified brand that combines what used to be the Lenovo Think server and the IBM System x products now into a single brand that spans server, storage, and networking. We're basically future-proofing it for the next-generation data center. It's a significantly simplified portfolio. One of the big pieces that we've heard is that the complexity of our competitors has really been overwhelming to customers. We're building a more flexible, more agile solution set that requires less work, less qualification, and more future proofing. There's a bunch of things in this that you'll see in the demos. Faster time-to-service in terms of the modularity of the systems. 12% faster service equating to almost $50 thousand per hour of reduced downtime. Some new high-density options where we have four nodes and a 2U, twice the density to improve and reduce outbacks and mission-critical workloads. And then in high-performance computing and supercomputing, we're going to spend some time on that here shortly. We're announcing new water-cooled solutions. We have some of the most premiere water-cooled solutions in the world, with more than 25 patents pending now, just in the water-cooled solutions for supercomputing. The performance that we think we're going to see out of these systems is significant. We're building off of that legacy that we have today on the existing Intel solutions. Today, we believe we have more than 50% of SAP HANA installations in the world. In fact, SAP just went public that they're running their internal SAP HANA on Lenovo hardware now. We're seeing a 59% increase in performance on SAP HANA generation on generation. We're seeing 31% lower total cost to ownership. We believe this will continue our position of having the highest level of five-nines in the x86 server industry. And all of these servers will start being available later this summer when the Intel announcements come out. We're also announcing the largest storage portfolio in our history, significantly larger than anything we've done in the past. These are all available today, including some new value class storage offerings. Our network portfolio is expanding now significantly. It was a big surprise when I came to Lenovo, seeing the hundreds of engineers we had from the acquisition of Blade Network Technologies and others with our teams in Romania, Santa Clara, really building out both the embedded portfolio but also the top racks, which is around 10 gig, 25 gig, and 100 gig. Significantly better economics, but all the performance you'd expect from the largest networking companies in the world. Those are also available today. ThinkAgile and Software-Defined, I think the one thing that has kind of overwhelmed me since coming in to Lenovo is we are being embraced by our customers because of our lack of legacy. We're not trying to sell you one more legacy SAN at 65% margins. ThinkAgile really was founded, kind of born free from the shackles of legacy thinking and legacy infrastructure. This is just the beginning of what's going to be an amazing new brand in the transformation to Software-Defined. So, for Lenovo, we're going to invest in our own internal organic IP. I'll foreshadow: There's some significant joint ventures and some mergers and acquisitions that are going to be coming in this space. And so this will be the foundation for our Software-Defined networking and storage, for IoT, and ultimately for the 5G build-out as well. This is all built for data centers of tomorrow that require fluid resources, tightly integrated software and hardware in kind of an appliance, selling at the rack level, and so we'll show you how that is going to take place here in a second. ThinkAgile, we have a few different offerings. One is around hyperconverged storage, Hybrid Cloud, and also Software-Defined storage. So we're really trying to redefine the customer experience. There's two different solutions we're having today. It's a Microsoft Azure solution and a Nutanix solution. These are going to be available both in the appliance space as well as in a full rack solution. We're really simplifying and trying to transform the entire customer experience from how you order it. We've got new capacity planning tools that used to take literally days for us to get the capacity planning done. It's now going down to literally minutes. We've got new order, delivery, deployment, administration service, something we're calling ThinkAgile Advantage, which is the white glove unboxing of the actual solutions on prem. So the whole thing when you hear about it in the breakout sessions about transforming the entire customer experience with both an HX solution and an SX solution. So again, available at the rack level for both Nutanix and for Microsoft Solutions available in just a few months. Many of you in the audience since the Microsoft Airlift event in Seattle have started using these things, and the feedback to date has been fantastic. We appreciate the early customer adoption that we've seen from people in the audience here. So next I want to bring up one of our most important partners, and certainly if you look at all of these solutions, they're based on the next-generation Intel Xeon scalable processor that's going to be announcing very very soon. I want to bring on stage Rupal Shah, who's the corporate vice president and general manager of Global Data Center Sales with Intel, so Rupal, please join me. (upbeat instrumental) So certainly I have long roots at Intel, but why don't you talk about, from Intel's perspective, why Lenovo is an important partner for Lenovo. >> Great, well first of all, thank you very much. I've had the distinct pleasure of not only working with Kirk for many many years, but also working with Lenovo for many years, so it's great to be here. Lenovo is not only a fantastic supplier and leader in the industry for Intel-based servers but also a very active partner in the Intel ecosystem. In the Intel ecosystem, specifically, in our partner programs and in our builder programs around Cloud, around the network, and around storage, I personally have had a long history in working with Lenovo, and I've seen personally that PC transformation that you talked about, Kirk, and I believe, and I know that Intel believes in Lenovo's ability to not only succeed in the data center but to actually lead in the data center. And so today, the ThinkSystem and ThinkAgile announcement is just so incredibly important. It's such a great testament to our two companies working together, and the innovation that we're able to bring to the market, and all of it based on the Intel Xeon scalable processor. >> Excellent, so tell me a little bit about why we've been collaborating, tell me a little bit about why you're excited about ThinkSystem and ThinkAgile, specifically. >> Well, there are a lot of reasons that I'm excited about the innovation, but let me talk about a few. First, both of our companies really stand behind the fact that it's increasingly a hybrid world. Our two companies offer a range of solutions now to customers to be able to address their different workload needs. ThinkSystem really brings the best, right? It brings incredible performance, flexibility in data center deployment, and industry-leading reliability that you've talked about. And, as always, Xeon has a history of being built for the data center specifically. The Intel Xeon scalable processor is really re-architected from the ground up in order to enhance compute, network, and storage data flows so that we can deliver workload optimized performance for both a wide range of traditional workloads and traditional needs but also some emerging new needs in areas like artificial intelligence. Second is when it comes to the next generation of Cloud infrastructure, the new Lenovo ThinkAgile line offers a truly integrated offering to address data center pain points, and so not only are you able to get these pretested solutions, but these pretested solutions are going to get deployed in your infrastructure faster, and they're going to be deployed in a way that's going to meet your specific needs. This is something that is new for both of us, and it's an incredible innovation in the marketplace. I think that it's a great addition to what is already a fantastic portfolio for Lenovo. >> Excellent. >> Finally, there's high-performance computing. In high-performance computing. First of all, congratulations. It's a big week, I think, for both of us. Fantastic work that we've been doing together in high-performance computing and actually bringing the best of the best to our customers, and you're going to hear a whole lot more about that. We obviously have a number of joint innovation centers together between Intel and Lenovo. Tell us about some of the key innovations that you guys are excited about. >> Well, Intel and Lenovo, we do have joint innovation labs around the world, and we have a long and strong history of very tight collaboration. This has brought a big wave of innovation to the marketplace in areas like software-defined infrastructure. Yet another area is working closely on a joint vision that I think our two companies have in artificial intelligence. Intel is very committed to the world of AI, and we're committed in making the investments required in technology development, in training, and also in R&D to be able to deliver end-to-end solutions. So with Intel's comprehensive technology portfolio and Lenovo's development and innovation expertise, it's a great combination in this space. I've already talked a little bit about HPC and so has Kirk, and we're going to hear a little bit more to come, but we're really building the fastest compute solutions for customers that are solving big problems. Finally, we often talk about processors from Intel, but it's not just about the processors. It's way beyond that. It's about engaging at the solution level for our customers, and I'm so excited about the work that we've done together with Lenovo to bring to market products like Intel Omni-Path Architecture, which is really the fabric for high-performance data centers. We've got a great showing this week with Intel Omni-Path Architecture, and I'm so grateful for all the work that we've done to be able to bring true solutions to the marketplace. I am really looking forward to our future collaboration with Lenovo as we have in the past. I want to thank you again for inviting me here today, and congratulations on a fantastic launch. >> Thank you, Rupal, very much, for the long partnership. >> Thank you. (audience applauds) >> Okay, well now let's transition and talk a little bit about how Lenovo is transforming. The first thing we've done when I came on board about six months ago is we've transformed to a truly end-to-end organization. We're looking at the market segments I think as our customers define them, and we've organized into having vice presidents and senior vice presidents in charge of each of these major groups, thinking really end to end, from architecture all the way to end of life and customer support. So the first is hyperscale infrastructure. It's about 20% on the market by 2020. We've hired a new vice president there to run that business. Given we can make money in high-volume desktop PCs, it's really the manufacturing prowess, deep engineering collaboration that's enabling us to sell into Baidu, and to Alibaba, Tencent, as well as the largest Cloud vendors on the West Coast here in the United States. We believe we can make money here by having basically a deep deep engineering engagement with our key customers and building on the PC volume economics that we have within Lenovo. On software-defined infrastructure, again, it's that lack of legacy that I think is propelling us into this space. We're not encumbered by trying to sell one more legacy SAN or router, and that's really what's exciting us here, as we transform from a hardware to a software-based company. On HPC and AI, as we said, we'll talk about this in a second. We're the fastest-growing supercomputing company on earth. We have aspirations to be the largest supercomputing company on earth, with China and the U.S. vying for number one in that position, it puts us in a good position there. We're going to bridge that into artificial intelligence in our upcoming Shanghai Tech World. The entire day is around AI. In fact, YY has committed $1.2 billion to artificial intelligence over the next few years of R&D to help us bridge that. And then on data center infrastructure, is really about moving to a solutions based infrastructure like our position with SAP HANA, where we've gone deep with engineers on site at SAP, SAP running their own infrastructure on Lenovo and building that out beyond just SAP to other solutions in the marketplace. Overall, significantly expanding our services portfolio to maintain our number one customer satisfaction rating. So given ISC, or International Supercomputing, this week in Frankfurt, and a lot of my team are actually over there, I wanted to just show you the transformation we've had at Lenovo for delivering some of the technology to solve some of the most challenging humanitarian problems on earth. Today, we are the fastest-growing supercomputer company on the planet in terms of number of systems on the Top 500 list. We've gone from zero to 92 positions in just a few short years, but IDC also positions Lenovo as the fast-growing supercomputer and HPC company overall at about 17% year on year growth overall, including all of the broad channel, the regional universities and this kind of thing, so this is an exciting place for us. I'm excited today that Sergi has come all the way from Spain to be with us today. It's an exciting time because this week we announce the fastest next-generation Intel supercomputer on the planet at Barcelona Supercomputer. Before I bring Sergi on stage, let's run a video and I'll show you why we're excited about the capabilities of these next-generation supercomputers. Run the video please. >> Narrator: Different creates one of the most powerful supercomputers for the Barcelona Supercomputer Center. A high-performance, high-capacity design to help shape tomorrow's world. Different designs what's best for you, with 25 years of end-to-end expertise delivering large-scale solutions. It integrates easily with technology from industry partners, through deep collaboration with the client to manufacture, test, configure, and install at global scale. Different achieves the impossible. The first of a new series. A more energy-efficient supercomputer yet 10 times more powerful than its predecessor. With over 3,400 Lenovo ThinkSystem servers, each performing over two trillion calculations per second, giving us 11.1 petaflop capacity. Different powers MareNostrum, a supercomputer that will help us better understand cancer, help discover disease-fighting therapies, predict the impact of climate change. MareNostrom 4.0 promises to uncover answers that will help solve humanities greatest challenges. (audience applauds) >> So please help me in welcoming operations director of the Barcelona Supercomputer Center, Sergi Girona. So welcome, and again, congratulations. It's been a big week for both of us. But I think for a long time, if you haven't been to Barcelona, this has been called the world's most beautiful computer because it's in one of the most gorgeous chapels in the world as you can see here. Congratulations, we now are number 13 on the Top500 list and the fastest next-generation Intel computer. >> Thank you very much, and congratulations to you as well. >> So maybe we can just talk a little bit about what you've done over the last few months with us. >> Sure, thank you very much. It is a pleasure for me being invited here to present to you what we've been doing with Lenovo so far and what we are planning to do in the next future. I'm representing here Barcelona Supercomputing Center. I am presenting high-performance computing services to science and industry. How we see these science services has changed the paradigm of science. We are coming from observation. We are coming from observation on the telescopes and the microscopes and the building of infrastructures, but this is not affordable anymore. This is very expensive, so it's not possible, so we need to move to simulations. So we need to understand what's happening in our environment. We need to predict behaviors only going through simulation. So, at BSC, we are devoted to provide services to industry, to science, but also we are doing our own research because we want to understand. At the same time, we are helping and developing the new engineers of the future on the IT, on HPC. So we are having four departments based on different topics. The main and big one is wiling to understand how we are doing the next supercomputers from the programming level to the performance to the EIA, so all these things, but we are having also interest on what about the climate change, what's the air quality that we are having in our cities. What is the precision medicine we need to have. How we can see that the different drugs are better for different individuals, for different humans, and of course we have an energy department, taking care of understanding what's the better optimization for a cold, how we can save energy running simulations on different topics. But, of course, the topic of today is not my research, but it's the systems we are building in Barcelona. So this is what we have been building in Barcelona so far. From left to right, you have the preparation of the facility because this is 160 square meters with 1.4 megabytes, so that means we need new piping, we need new electricity, at the same time in the center we have to install the core services of the system, so the management practices, and then on the right-hand side you have installation of the networking, the Omni-Path by Intel. Because all of the new racks have to be fully integrated and they need to come into operation rapidly. So we start deployment of the system May 15, and we've now been ending and coming in production July first. All the systems, all the (mumbles) systems from Lenovo are coming before being open and available. What we've been installing here in Barcelona is general purpose systems for our general workload of the system with 3,456 nodes. Everyone of those having 48 cores, 96 gigabytes main memory for a total capacity of about 400 terabytes memory. The objective of this is that we want to, all the system, all the processors, to work together for a single execution for running altogether, so this is an example of the platinum processors from Intel having 24 cores each. Of course, for doing this together with all the cores in the same application, we need a high-speed network, so this is Omni-Path, and of course all these cables are connecting all the nodes. Noncontention, working together, cooperating. Of course, this is a bunch of cables. They need to be properly aligned in switches. So here you have the complete presentation. Of course, this is general purpose, but we wanted to invest with our partners. We want to understand what the supercomputers we wanted to install in 2020, (mumbles) Exascale. We want to find out, we are installing as well systems with different capacities with KNH, with power, with ARM processors. We want to leverage our obligations for the future. We want to make sure that in 2020 we are ready to move our users rapidly to the new technologies. Of course, this is in total, giving us a total capacity of 13.7 petaflops that it's 12 times the capacity of the former MareNostrum four years ago. We need to provide the services to our scientists because they are helping to solve problems for humanity. That's the place we are going to go. Last is inviting you to come to Barcelona to see our place and our chapel. Thank you very much (audience applauds). >> Thank you. So now you can all go home to your spouses and significant others and say you have a formal invitation to Barcelona, Spain. So last, I want to talk about what we've done to transform Lenovo. I think we all know the history is nice but without execution, none of this is going to be possible going forward, so we have been very very busy over the last six months to a year of transforming Lenovo's data center organization. First, we moved to a dedicated end-to-end sales and marketing organization. In the past, we had people that were shared between PC and data center, now thousands of sales people around the world are 100% dedicated end to end to our data center clients. We've moved to a fully integrated and dedicated supply chain and procurement organization. A fully dedicated quality organization, 100% dedicated to expanding our data center success. We've moved to a customer-centric segment, again, bringing in significant new leaders from outside the company to look end to end at each of these segments, supercomputing being very very different than small business, being very very different than taking care of, for example, a large retailer or bank. So around hyperscale, software-defined infrastructure, HPC, AI, and supercomputing and data center solutions-led infrastructure. We've built out a whole new set of global channel programs. Last year, or a year passed, we have five different channel programs around the world. We've now got one simplified channel program for dealer registration. I think our channel is very very energized to go out to market with Lenovo technology across the board, and a whole new set of system integrator relationships. You're going to hear from one of them in Christian's discussion, but a whole new set of partnerships to build solutions together with our system integrative partners. And, again, as I mentioned, a brand new leadership team. So look forward to talking about the details of this. There's been a significant amount of transformation internal to Lenovo that's led to the success of this new product introduction today. So in conclusion, I want to talk about the news of the day. We are transforming Lenovo to the next phase of our data center growth. Again, in over 160 countries, closing on that first phase of transformation and moving forward with some unique declarations. We're launching the largest portfolio in our history, not just in servers but in storage and networking, as everything becomes kind of a software personality on top of x86 Compute. We think we're very well positioned with our scale on PCs as well as data center. Two new brands for both data center infrastructure and Software-Defined, without the legacy shackles of our competitors, enabling us to move very very quickly into Software-Defined, and, again, foreshadowing some joint ventures in M&A that are going to be coming up that will further accelerate ourselves there. New premiere support offerings, enabling you to get direct access to level two engineers and white glove unboxing services, which are going to be bundled along with ThinkAgile. And then celebrating the milestone of 25 years in x86 server compute, not just ThinkPads that you'll hear about shortly, but also our 20 million server shipping next month. So we're celebrating that legacy and looking forward to the next phase. And then making sure we have the execution engine to maintain our position and grow it, being number one in customer satisfaction and number one in quality. So, with that, thank you very much. I look forward to seeing you in the breakouts today and talking with many of you, and I'll bring Rod back up to transition us to the next section. Thank you. (audience applauds) >> All right, Kirk, thank you, sir. All right, ladies and gentlemen, what did you think of that? How about a big round of applause for ThinkAgile, ThinkSystems new brands? (audience applauds) And, obviously, with that comes a big round of applause, for Kirk Skaugen, my boss, so we've got to give him a big round of applause, please. I need to stay employed, it's very important. All right, now you just heard from Kirk about some of the new systems, the brands. How about we have a quick look at the video, which shows us the brand new DCG images. >> Narrator: Legacy thinking is dead, stuck in the past, selling the same old stuff, over and over. So then why does it seem like a data center, you know, that thing powering all our little devices and more or less everything interaction today is still stuck in legacy thinking because it's rigid, inflexible, slow, but that's not us. We don't do legacy. We do different. Because different is fearless. Different reduces Cloud deployment from days to hours. Different creates agile technology that others follow. Different is fluid. It uses water-cooling technology to save energy. It co-innovates with some of the best minds in the industry today. Different is better, smarter. Maybe that's why different already holds so many world-record benchmarks in everything. From virtualization to database and application performance or why it's number one in reliability and customer satisfaction. Legacy sells you what they want. Different builds the data center you need without locking you in. Introducing the Data Center Group at Lenovo. Different... Is better. >> All right, ladies and gentlemen, a big round of applause, once again (mumbles) DCG, fantastic. And I'm sure all of you would agree, and Kirk mentioned it a couple of times there. No legacy means a real consultative approach to our customers, and that's something that we really feel is differentiated for ourselves. We are effectively now one of the largest startups in the DCG space, and we are very much ready to disrupt. Now, here in New York City, obviously, the heart of the fashion industry, and much like fashion, as I mentioned earlier, we're different, we're disruptive, we're agile, smarter, and faster. I'd like to say that about myself, but, unfortunately, I can't. But those of you who have observed, you may have noticed that I, too, have transformed. I don't know if anyone saw that. I've transformed from the pinstripe blue, white shirt, red tie look of the, shall we say, our predecessors who owned the x86 business to now a very Lenovo look. No tie and consequently a little bit more chic New York sort of fashion look, shall I say. Nothing more than that. So anyway, a bit of a transformation. It takes a lot to get to this look, by the way. It's a lot of effort. Our next speaker, Christian Teismann, is going to talk a lot about the core business of Lenovo, which really has been, as we've mentioned today, our ThinkPad, 25-year anniversary this year. It's going to be a great celebration inside Lenovo, and as we get through the year and we get closer and closer to the day, you'll see a lot more social and digital work that engages our customers, partners, analysts, et cetera, when we get close to that birthday. Customers just generally are a lot tougher on computers. We know they are. Whether you hang onto it between meetings from the corner of the Notebook, and that's why we have magnesium chassis inside the box or whether you're just dropping it or hypothetically doing anything else like that. We do a lot of robust testing on these products, and that's why it's the number one branded Notebook in the world. So Christian talks a lot about this, but I thought instead of having him talk, I might just do a little impromptu jump back stage and I'll show you exactly what I'm talking about. So follow me for a second. I'm going to jaunt this way. I know a lot of you would have seen, obviously, the front of house here, what we call the front of house. Lots of videos, et cetera, but I don't think many of you would have seen the back of house here, so I'm going to jump through the back here. Hang on one second. You'll see us when we get here. Okay, let's see what's going on back stage right now. You can see one of the team here in the back stage is obviously working on their keyboard. Fantastic, let me tell you, this is one of the key value props of this product, obviously still working, lots of coffee all over it, spill-proof keyboard, one of the key value propositions and why this is the number one laptop brand in the world. Congratulations there, well done for that. Obviously, we test these things. Height, distances, Mil-SPEC approved, once again, fantastic product, pick that up, lovely. Absolutely resistant to any height or drops, once again, in line with our Mil-SPEC. This is Charles, our producer and director back stage for the absolute event. You can see, once again, sand, coincidentally, in Manhattan, who would have thought a snow storm was occurring here, but you can throw sand. We test these things for all of the elements. I've obviously been pretty keen on our development solutions, having lived in Japan for 12 years. We had this originally designed in 1992 by (mumbles), he's still our chief development officer still today, fantastic, congratulations, a sand-enhanced notebook, he'd love that. All right, let's get back out front and on with the show. Watch the coffee. All right, how was that? Not too bad (laughs). It wasn't very impromptu at all, was it? Not at all a set up (giggles). How many people have events and have a bag of sand sitting on the floor right next to a Notebook? I don't know. All right, now it's time, obviously, to introduce our next speaker, ladies and gentlemen, and I hope I didn't steal his thunder, obviously, in my conversations just now that you saw back stage. He's one of my best friends in Lenovo and easily is a great representative of our legendary PC products and solutions that we're putting together for all of our customers right now, and having been an ex-Pat with Lenovo in New York really calls this his second home and is continually fighting with me over the fact that he believes New York has better sushi than Tokyo, let's welcome please, Christian Teismann, our SVP, Commercial Business Segment, and PC Smart Office. Christian Teismann, come on up mate. (audience applauds) >> So Rod thank you very much for this wonderful introduction. I'm not sure how much there is to add to what you have seen already back stage, but I think there is a 25-year of history I will touch a little bit on, but also a very big transformation. But first of all, welcome to New York. As Rod said, it's my second home, but it's also a very important place for the ThinkPad, and I will come back to this later. The ThinkPad is thee industry standard of business computing. It's an industry icon. We are celebrating 25 years this year like no other PC brand has done before. But this story today is not looking back only. It's a story looking forward about the future of PC, and we see a transformation from PCs to personalized computing. I am privileged to lead the commercial PC and Smart device business for Lenovo, but much more important beyond product, I also am responsible for customer experience. And this is what really matters on an ongoing basis. But allow me to stay a little bit longer with our iconic ThinkPad and history of the last 25 years. ThinkPad has always stand for two things, and it always will be. Highest quality in the industry and technology innovation leadership that matters. That matters for you and that matters for your end users. So, now let me step back a little bit in time. As Rod was showing you, as only Rod can do, reliability is a very important part of ThinkPad story. ThinkPads have been used everywhere and done everything. They have survived fires and extreme weather, and they keep surviving your end users. For 25 years, they have been built for real business. ThinkPad also has a legacy of first innovation. There are so many firsts over the last 25 years, we could spend an hour talking about them. But I just want to cover a couple of the most important milestones. First of all, the ThinkPad 1992 has been developed and invented in Japan on the base design of a Bento box. It was designed by the famous industrial designer, Richard Sapper. Did you also know that the ThinkPad was the first commercial Notebook flying into space? In '93, we traveled with the space shuttle the first time. For two decades, ThinkPads were on every single mission. Did you know that the ThinkPad Butterfly, the iconic ThinkPad that opens the keyboard to its size, is the first and only computer showcased in the permanent collection of the Museum of Modern Art, right here in New York City? Ten years later, in 2005, IBM passed the torch to Lenovo, and the story got even better. Over the last 12 years, we sold over 100 million ThinkPads, four times the amount IBM sold in the same time. Many customers were concerned at that time, but since then, the ThinkPad has remained the best business Notebook in the industry, with even better quality, but most important, we kept innovating. In 2012, we unveiled the X1 Carbon. It was the thinnest, lightest, and still most robust business PC in the world. Using advanced composited materials like a Formula One car, for super strengths, X1 Carbon has become our ThinkPad flagship since then. We've added an X1 Carbon Yoga, a 360-degree convertible. An X1 Carbon tablet, a detachable, and many new products to come in the future. Over the last few years, many new firsts have been focused on providing the best end-user experience. The first dual-screen mobile workstation. The first Windows business tablet, and the first business PC with OLED screen technology. History is important, but a massive transformation is on the way. Future success requires us to think beyond the box. Think beyond hardware, think beyond notebooks and desktops, and to think about the future of personalized computing. Now, why is this happening? Well, because the business world is rapidly changing. Looking back on history that YY gave, and the acceleration of innovation and how it changes our everyday life in business and in personal is driving a massive change also to our industry. Most important because you are changing faster than ever before. Human capital is your most important asset. In today's generation, they want to have freedom of choice. They want to have a product that is tailored to their specific needs, every single day, every single minute, when they use it. But also IT is changing. The Cloud, constant connectivity, 5G will change everything. Artificial intelligence is adding things to the capability of an infrastructure that we just are starting to imagine. Let me talk about the workforce first because it's the most important part of what drives this. The millennials will comprise more than half of the world's workforce in 2020, three years from now. Already, one out of three millennials is prioritizing mobile work environment over salary, and for nearly 60% of all new hires in the United States, technology is a very important factor for their job search in terms of the way they work and the way they are empowered. This new generation of new employees has grown up with PCs, with Smart phones, with tablets, with touch, for their personal use and for their occupation use. They want freedom. Second, the workplace is transforming. The video you see here in the background. This is our North America headquarters in Raleigh, where we have a brand new Smart workspace. We have transformed this to attract the new generation of workers. It has fewer traditional workspaces, much more meaning and collaborative spaces, and Lenovo, like many companies, is seeing workspaces getting smaller. An average workspace per employee has decreased by 30% over the last five years. Employees are increasingly mobile, but, if they come to the office, they want to collaborate with their colleagues. The way we collaborate and communicate is changing. Investment in new collaboration technology is exploding. The market of collaboration technology is exceeding the market of personal computing today. It will grow in the future. Conference rooms are being re-imagined from a ratio of 50 employees to one large conference room. Today, we are moving into scenarios of four employees to one conference room, and these are huddle rooms, pioneer spaces. Technology is everywhere. Video, mega-screens, audio, electronic whiteboards. Adaptive technologies are popping up and change the way we work. As YY said earlier, the pace of the revolution is astonishing. So personalized computing will transform the PC we all know. There's a couple of key factors that we are integrating in our next generations of PC as we go forward. The most important trends that we see. First of all, choose your own device. We talked about this new generation of workforce. Employees who are used to choosing their own device. We have to respond and offer devices that are tailored to each end user's needs without adding complexity to how we operate them. PC is a service. Corporations increasingly are looking for on-demand computing in data center as well as in personal computing. Customers want flexibility. A tailored management solution and a services portfolio that completes the lifecycle of the device. Agile IT, even more important, corporations want to run an infrastructure that is agile, instant respond to their end-customer needs, that is self provisioning, self diagnostic, and remote software repair. Artificial intelligence. Think about artificial intelligence for you personally as your personal assistant. A personal assistant which does understand you, your schedule, your travel, your next task, an extension of yourself. We believe the PC will be the center of this mobile device universe. Mobile device synergy. Each of you have two devices or more with you. They need to work together across different operating systems, across different platforms. We believe Lenovo is uniquely positioned as the only company who has a Smart phone business, a PC business, and an infrastructure business to really seamlessly integrate all of these devices for simplicity and for efficiency. Augmented reality. We believe augmented reality will drive significantly productivity improvements in commercial business. The core will be to understand industry-specific solutions. New processes, new business challenges, to improve things like customer service and sales. Security will remain the foundation for personalized computing. Without security, without trust in the device integrity, this will not happen. One of the most important trends, I believe, is that the PC will transform, is always connected, and always on, like a Smart phone. Regardless if it's open, if it's closed, if you carry it, or if you work with it, it always is capable to respond to you and to work with you. 5G is becoming a reality, and the data capacity that will be out there is by far exceeding today's traffic imagination. Finally, Smart Office, delivering flexible and collaborative work environments regardless on where the worker sits, fully integrated and leverages all the technologies we just talked before. These are the main challenges you and all of your CIO and CTO colleagues have to face today. A changing workforce and a new set of technologies that are transforming PC into personalized computing. Let me give you a real example of a challenge. DXC was just formed by merging CSE company and HP's Enterprise services for the largest independent services company in the world. DXC is now a 25 billion IT services leader with more than 170,000 employees. The most important capital. 6,000 clients and eight million managed devices. I'd like to welcome their CIO, who has one of the most challenging workforce transformation in front of him. Erich Windmuller, please give him a round of applause. (audience applauds). >> Thank you Christian. >> Thank you. >> It's my pleasure to be here, thank you. >> So first of all, let me congratulation you to this very special time. By forming a new multi-billion-dollar enterprise, this new venture. I think it has been so far fantastically received by analysts, by the press, by customers, and we are delighted to be one of your strategic partners, and clearly we are collaborating around workforce transformation between our two companies. But let me ask you a couple of more personal questions. So by bringing these two companies together with nearly 200,00 employees, what are the first actions you are taking to make this a success, and what are your biggest challenges? >> Well, first, again, let me thank you for inviting me and for DXC Technology to be a part of this very very special event with Lenovo, so thank you. As many of you might expect, it's been a bit of a challenge over the past several months. My goal was really very simple. It was to make sure that we brought two companies together, and they could operate as one. We need to make sure that could continue to support our clients. We certainly need to make sure we could continue to sell, our sellers could sell. That we could pay our employees, that we could hire people, we could do all the basic foundational things that you might expect a company would want to do, but we really focused on three simple areas. I called it the three Cs. Connectivity, communicate, and collaborate. So we wanted to make sure that we connected our legacy data centers so we could transfer information and communicate back and forth. We certainly wanted to be sure that our employees could communicate via WIFI, whatever locations they may or may not go to. We certainly wanted to, when we talk about communicate, we need to be sure that everyone of our employees could send and receive email as a DXC employee. And that we had a single-enterprise directory and people could communicate, gain access to calendars across each of the two legacy companies, and then collaborate was also key. And so we wanted to be sure, again, that people could communicate across each other, that our legacy employees on either side could get access to many of their legacy systems, and, again, we could collaborate together as a single corporation, so it was challenging, but very very, great opportunity for all of us. And, certainly, you might expect cyber and security was a very very important topic. My chairman challenged me that we had to be at least as good as we were before from a cyber perspective, and when you bring two large companies together like that there's clearly an opportunity in this disruptive world so we wanted to be sure that we had a very very strong cyber security posture, of which Lenovo has been very very helpful in our achieving that. >> Thank you, Erich. So what does DXC consider as their critical solutions and technology for workplace transformation, both internally as well as out on the market? >> So workplace transformation, and, again, I've heard a lot of the same kinds of words that I would espouse... It's all about making our employees productive. It's giving the right tools to do their jobs. I, personally, have been focused, and you know this because Lenovo has been a very very big part of this, in working with our, we call it our My Style Workplace, it's an offering team in developing a solution and driving as much functionality as possible down to the workstation. We want to be able, for me, to avoid and eliminate other ancillary costs, audio video costs, telecommunication cost. The platform that we have, the digitized workstation that Lenovo has provided us, has just got a tremendous amount of capability. We want to streamline those solutions, as well, on top of the modern server. The modern platform, as we call it, internally. I'd like to congratulate Kirk and your team that you guys have successfully... Your hardware has been certified on our modern platform, which is a significant accomplishment between our two companies and our partnership. It was really really foundational. Lenovo is a big part of our digital workstation transformation, and you'll continue to be, so it's very very important, and I want you to know that your tools and your products have done a significant job in helping us bring two large corporations together as one. >> Thank you, Erich. Last question, what is your view on device as a service and hardware utility model? >> This is the easy question, right? So who in the room doesn't like PC or device as a service? This is a tremendous opportunity, I think, for all of us. Our corporation, like many of you in the room, we're all driven by the concept of buying devices in an Opex versus a Capex type of a world and be able to pay as you go. I think this is something that all of us would like to procure, product services and products, if you will, personal products, in this type of a mode, so I am very very eager to work with Lenovo to be sure that we bring forth a very dynamic and constructive device as a service approach. So very eager to do that with Lenovo and bring that forward for DXC Technology. >> Erich, thank you very much. It's a great pleasure to work with you, today and going forward on all sides. I think with your new company and our lineup, I think we have great things to come. Thank you very much. >> My pleasure, great pleasure, thank you very much. >> So, what's next for Lenovo PC? We already have the most comprehensive commercial portfolio in the industry. We have put the end user in the core of our portfolio to finish and going forward. Ultra mobile users, like consultants, analysts, sales and service. Heavy compute users like engineers and designers. Industry users, increasingly more understanding. Industry-specific use cases like education, healthcare, or banking. So, there are a few exciting things we have to announce today. Obviously, we don't have that broad of an announcement like our colleagues from the data center side, but there is one thing that I have that actually... Thank you Rod... Looks like a Bento box, but it's not a ThinkPad. It's a first of it's kind. It's the world's smallest professional workstation. It has the power of a tower in the Bento box. It has the newest Intel core architecture, and it's designed for a wide range of heavy duty workload. Innovation continues, not only in the ThinkPad but also in the desktops and workstations. Second, you hear much about Smart Office and workspace transformation today. I'm excited to announce that we have made a strategic decision to expand our Think portfolio into Smart Office, and we will soon have solutions on the table in conference rooms, working with strategic partners like Intel and like Microsoft. We are focused on a set of devices and a software architecture that, as an IoT architecture, unifies the management of Smart Office. We want to move fast, so our target is that we will have our first product already later this year. More to come. And finally, what gets me most excited is the upcoming 25 anniversary in October. Actually, if you go to Japan, there are many ThinkPad lovers. Actually beyond lovers, enthusiasts, who are collectors. We've been consistently asked in blogs and forums about a special anniversary edition, so let me offer you a first glimpse what we will announce in October, of something we are bring to market later this year. For the anniversary, we will introduce a limited edition product. This will include throwback features from ThinkPad's history as well as the best and most powerful features of the ThinkPad today. But we are not just making incremental adjustments to the Think product line. We are rethinking ThinkPad of the future. Well, here is what I would call a concept card. Maybe a ThinkPad without a hinge. Maybe one you can fold. What do you think? (audience applauds) but this is more than just design or look and feel. It's a new set of advanced materials and new screen technologies. It's how you can speak to it or write on it or how it speaks to you. Always connected, always on, and can communicate on multiple inputs and outputs. It will anticipate your next meeting, your next travel, your next task. And when you put it all together, it's just another part of the story, which we call personalized computing. Thank you very much. (audience applauds) Thank you, sir. >> Good on ya, mate. All right, ladies and gentlemen. We are now at the conclusion of the day, for this session anyway. I'm going to talk a little bit more about our breakouts and our demo rooms next door. But how about the power with no tower, from Christian, huh? Big round of applause. (audience applauds) And what about the concept card, the ThinkPad? Pretty good, huh? I love that as well. I tell you, it was almost like Leonardo DiCaprio was up on stage at one stage. He put that big ThinkPad concept up, and everyone's phones went straight up and took a photo, the whole audience, so let's be very selective on how we distribute that. I'm sure it's already on Twitter. I'll check it out in a second. So once again, ThinkPad brand is a core part of the organization, and together both DCG and PCSD, what we call PCSD, which is our client side of the business and Smart device side of the business, are obviously very very linked in transforming Lenovo for the future. We want to also transform the industry, obviously, and transform the way that all of us do business. Lenovo, if you look at basically a summary of the day, we are highly committed to being a top three data center provider. That is really important for us. We are the largest and fastest growing supercomputing company in the world, and Kirk actually mentioned earlier on, committed to being number one by 2020. So Madhu who is in Frankfurt at the International Supercomputing Convention, if you're watching, congratulations, your targets have gone up. There's no doubt he's going to have a lot of work to do. We're obviously very very committed to disrupting the data center. That's obviously really important for us. As we mentioned, with both the brands, the ThinkSystem, and our ThinkAgile brands now, highly focused on disrupting and ensuring that we do things differently because different is better. Thank you to our customers, our partners, media, analysts, and of course, once again, all of our employees who have been on this journey with us over the last two years that's really culminating today in the launch of all of our new products and our profile and our portfolio. It's really thanks to all of you that once again on your feedback we've been able to get to this day. And now really our journey truly begins in ensuring we are disrupting and enduring that we are bringing more value to our customers without that legacy that Kirk mentioned earlier on is really an advantage for us as we really are that large startup from a company perspective. It's an exciting time to be part of Lenovo. It's an exciting time to be associated with Lenovo, and I hope very much all of you feel that way. So a big round of applause for today, thank you very much. (audience applauds) I need to remind all of you. I don't think I'm going to have too much trouble getting you out there, because I was just looking at Christian on the streaming solutions out in the room out the back there, and there's quite a nice bit of lunch out there as well for those of you who are hungry, so at least there's some good food out there, but I think in reality all of you should be getting up into the demo sessions with our segment general managers because that's really where the rubber hits the road. You've heard from YY, you've heard from Kirk, and you've heard from Christian. All of our general managers and our specialists in our product sets are going to be out there to obviously demonstrate our technology. As we said at the very beginning of this session, this is Transform, obviously the fashion change, hopefully you remember that. Transform, we've all gone through the transformation. It's part of our season of events globally, and our next event obviously is going to be in Tech World in Shanghai on the 20th of July. I hope very much for those of you who are going to attend have a great safe travel over there. We look forward to seeing you. Hope you've had a good morning, and get into the sessions next door so you get to understand the technology. Thank you very much, ladies and gentlemen. (upbeat innovative instrumental)

>> Announcer: Live from Las Vegas, it's theCUBE. Covering Dell EMC World 2017. Brought to you by Dell EMC. >> Hello everyone, welcome to our live coverage from SiliconANGLE Media's theCUBE. It's our flagship program. We go out to the events and extract the signal from the noise. We are here at Dell EMC World 2017 with Michael Dell, the chairman and CEO of Dell Technologies, which is the company that owns Dell EMC, but this is the first year of the EMC World passing the baton formally to the Dell EMC World. There was an event in Austin, a small event one month after the close in September, eight months ago. Michael, great to see you and thanks for spending the time out of your valuable schedule to come on theCUBE. Appreciate it. >> Always great to be with you, John. >> This is like the SportsCenter of all the techs, so I'm going to go hard-hitting question first. You know I'm a big fan of entrepreneurship, and certainly a big fan of innovation, and the work that you've done. Saw on your Facebook page, 33 years, and you had that video when you were a kid. I forget how long in that was but you were still in your dorm room. 33 years ago last week, and a trillion dollars in sales. Really pretty amazing. I noticed Mark Zuckerberg also commented on your, probably built Facebook on a Dell laptop. Congratulations. >> Thank you, thank you. It's been fun, it's been exciting, interesting, and thrill of a lifetime. But I actually think the next 33 years will be much, much more exciting, so I couldn't be more excited about the future. >> It's really good to see you kind of, we talked about years ago, when rumors of you going private. Certainly there's a spring in your step every year. You seem to get stronger with the private, not being the public company, but I got to ask you from an entrepreneurial standpoint. You're the founder-led CEO entrepreneur. You can't take that entrepreneur out of the kid. What's the management style? 'Cause when I interview Andy Jassy, Jeff Bezos, they have that founder-led entrepreneurial culture, but it's transforming into a management practice now, from folks who are, through experience, and observing what's in front of them, have to take on the next 33 years. What is the key to success based on your experience and how are you executing the Dell technologies? Because you have that entrepreneurial spirit, you are executing, and you have to still grow off this base of a consolidating IT market. Go. >> You know we've been able to be bold, and being private allows us to take on some risks and make some investments, and certainly going private back in 2013, and then the combination with EMC, and Vmware, and Pivotal and the whole Dell Technologies family has created a different kind of company. Much stronger than Dell or EMC were by themselves. And customers reacted very positively to that. So when I step back and look at the future of our industry and what's happening with digital transformation, and then all the assets and capabilities we have now, again, couldn't be more excited about the opportunities ahead. >> Bezos said on his interview, I'll ask you the same question in the context of your world. He said you know Amazon started out driving his car around, and going, dropping stuff off at the post office, and then it became what it is today. And he said he still has the guiding principles that's timeless for his culture, which was lower prices and get stuff to the consumer fast. That's been the ethos of Amazon's culture and a lot of other things wrap around it, but that's been kind of the guiding principles. What is your guiding principles that have been timeless for you as an entrepreneur-led CEO? >> It's been customer focus. It's been big ears and listening. It's been understanding the customer's challenges and opportunities, and designing the company from the customer back. It's been understanding the technology and then finding the intersection between the customer's challenges and the technology to create the solution. And I think that's stood the test of time for us and worked really well, and wow, the opportunities ahead of us, again, are even much, much more exciting. >> Well congratulations. So let me ask you the question that's on everyone's mind here at the show. There's also the EMC, Dell EMC, culture still intact, we gave Howard some props on the combination, the merger of equals, but now you have obviously a strategy, I'm not going to deny it's a pretty good one, mature market, consolidating, win the game there. You see that happening, but the question that I have is the growth strategy. Okay, 'cause you now got to have a growth strategy in a hyper-flywheel market called the Cloud, Cloud computing, cloud-native, Kubernetes, machine learning, Pivotal. What is that growth strategy as you build off that existing market? >> Well certainly with Pivotal we've got kind of the tip of the spear of our Cloud strategy, as the platform to develop cloud-native apps, the operating system for the internet of things, and the digital transformation for many of the largest companies in the world. Then we Virtustream. We've got a mission-critical public Cloud for those super-high-performing intensive workloads, VMware driving the software-defined data center. Everybody wants to have a data center that is software-defined. And what VMware has done in virtualization, obviously, is unparalleled, taking that into the network and into storage, VMware's got incredible momentum. I know you're going to have Pat on tomorrow to talk more about that. When we put all this together with the consolidation that's going on in the existing several-hundred-billion-dollar client and data-center business, the combination together, we're very well-positioned to grow. >> I got a lot of heat for a few years ago when I said to Pat Gelsinger, Hybrid Cloud is a destination that most people go to, but I made a comment, I said the Cloud is not a product, Hybrid Cloud is not a product, and you can't get a skew on a Hybrid Cloud. You can't say "Give me a Hybrid Cloud." It's more of a mindset destination of the customers. You said on stage that Hybrid Cloud and Cloud is a way of doing IT. Explain specifically what you mean by that and how does that translate into growth for you? >> Well let me take you back to the internet, okay? Because if we were having this discussion 20 years ago, we wouldn't be talking about the Cloud, we'd be talking about the internet, and we'd be talking about our internet strategy and our internet prog division, and our Vice President of the internet, and where is all that today? It's everywhere. The internet is part of everything. Internet is a way of doing IT, and Cloud really is the same thing. If you look at these large public Cloud companies, what they've done is extrapolated the workload up to the application layer. And that's what we're doing with Pivotal. That's what we're doing with the software-defined data center. That's what we're doing with Converge and Hyper Converge infrastructure, and that's why all those things are white-hot in terms of growth and customer options. >> The internet was a bubble that burst and everyone had a website. Remember that, those days. But you mentioned the internet. Let's stay on that for a second because that's interesting. Software has changed, right? Shrink-wrap software, and for the internet, you download it. Okay, now you have the Cloud access. So we were just talking in our intro that the role of a software company isn't the business model of selling software, it's how software works within the business model of this new modern era of computing. What's your vision around that, because a lot of people will say, and I even said to you privately, where's the software play? And a lot of people jump to that, right? So what's your vision around software? You don't have to sell any. Facebook doesn't sell software. They have software DNA and they're open-source, but their business is an application. Can you explain your vision on software? >> Sure, well obviously you've got mission-critical apps. You've got some of the traditional Platform 2 kind of apps and you've got the cloud-native apps. And there's a right place and a right way to develop all those. And it's not a monolith. There are many, many different approaches within that. That's why we see it as a multi-cloud world. For cloud-native, Pivotal is clearly our platform, and a winning platform, and has tremendous momentum, and avoids this problem of lock-in that many customers are starting to experience with the public Cloud. You can leverage the public Cloud but also run them on-premise. In fact 80 percent of the Pivotal Cloud Foundry instances end up on-premise. Then for the traditional apps, the Platform 2 apps, VMware is continuing to do great. You'll see that in the growth of their business and all the success that VMware is enjoying as now part of Dell Technologies. And then for those mission-critical apps, like SAP, like Oracle, like Epic, you need a different level of performance and capability, and that's where Virtustream comes into play. >> So I asked you a question last year. What are you most excited about, what are you digging into? What's getting you stoked about the stuff in front of you? You mentioned Pivotal. Obviously you've seen that change and I think a much stronger strategic front row with Cloud Foundry. This year, what is that thing for you, is it NSX? What are you looking, what are you geeking out on right now? In terms of you look at the future, you're making some bets. What are you looking at? What is Michael Dell unpacking the most for you personally? Not so much for the business, for you personally. What are you learning, what are you understanding deeper? >> What's exciting is how all of our customers are engaged in this digital transformation. And we're just in the beginning of this. And we're all trying to figure out, hey, how do I use all this data to make my product and service better? And they're all on this digital transformation journey. So again you put together what we're doing with VMware, with the software-defined data center, with NSX, with Pivotal, with Converge and Hyper Converge, the amount of growth in the data, and then all the new computer science. The machine intelligence that's being reasoned over that data. Super exciting time, and if you're not excited now, you're totally asleep or you're dead. >> That's super. If you're a computer science major right now, best time to be coding and building stuff. Okay, Pat Gelsinger. What's the conversation with Pat like these days? Because VMware's market cap is greater than HPE right now. That's one of your companies. It's not even part of the, not even the holistic view of everything you got. One piece is bigger than HPE. You've competed with HPE over the years. So you got to go to Pat and say, "You've got to watch what you're doing here. "You've got a tiger by the tail with VMware." What are some of the conversations you have with Pat? Share some color around how you guys interact, what is he thinking? Obviously he's got some new things with the Amazon relationship. What's the conversation like? >> Well I've known Pat for almost 30 years. We met a long time ago back when he was at Intel, and VMware's doing great, and the team there continues to innovate in virtualization, now with the whole software-defined data center. I am particularly excited about NSX because what you can do when the network is delivering its code by virtualizing the network, and virtualizing all the functions in the network, all the layer four through seven functions, and then run that on top of our open switching. It's a huge opportunity, and you combine that with everything else we're doing, VMware's incredibly well-positioned, and certainly for us, when we think about how do you modernize and automate the data center, VMware's at the very center of that. >> So you have conversations with Pat. Are they like, hey, let's take that beachhead, let's conquer that hill? What are some of those conversations when you take him to the ranch, or you guys have your meetings. What's the strategy? Take us to the war room. What are some of the conversations strategically? >> We work together quite closely, as well as ensuring that the open ecosystem that VMware has continues to thrive. Because VMware also works with the rest of the industry, and that's been an important part of their strategy and an important part of their growth for a long time. What you're seeing now is a much tighter collaboration across Dell Technologies. So Boomi and Pivotal working together. Pivotal and VMware, NSX working together. Dell EMC and VMware working together, and bringing together combined innovations in the form of new products and new solutions, like the kinds we're introducing here at Dell EMC World. >> So you got 33 years under your belt with Dell, your company, Michael Dell's company, Dell Technologies now, a whole new future ahead of you. What's your reaction to EMC World now converted into Dell EMC World? Again, you had a little event in Austin. It wasn't really the real big EMC World event. This is the Dell EMC. We spoke last year. I think we walked back from the party chatting. What's it like this year, what's different, what's your perspective, what's your reaction? Share some color on what you think is happening here. >> We've been really thrilled with the reaction from customers and partners. I'll tell you I think initially there was a bit of a wait-and-see. Customers were like, oh, how's this going to work? I think we're past that, and now customers are seeing that we really are one company, and they're seeing the new products and innovations. And the theory that we had that customers would want to buy more of everything from one company is absolutely playing itself out in the wins in the business that we're seeing. >> And the internet's a great example. I use that analogy, because internet was over-hyped, it popped, it all delivered the same. It was pet foods online, everything happened that everyone said was going to happen, just didn't happen the way they thought. Do you see the Cloud the same way? Because in a way you're taking a very cautious pragmatic approach by saying we're going to integrate our customers and have this operating environment called multi-cloud, or whatever the customers want. Do you see that internet analogy happening the same now with Cloud? >> Yeah I think, as I said, Cloud is not a place, it's a way of doing IT, and having sold billions of dollars of equipment to the public Cloud providers for years and years, what we see, the big difference there, is that these companies have, again, moved up to the application layer. They've moved to the software-defined data center. Everybody wants that. And as we can bring those efficiencies, and now with our Cloud flex pricing, we see lots of opportunity. >> As an entrepreneur, now CEO, go back to the entrepreneur, final question for you. Is there always the hustle in the entrepreneur, I mean that in a good way, Mark Cuban talked about it like the same way, in a way, you still got to have that agile mindset, never settle for complacency. Bezos' shareholder letter kind of points out the same thing. Common thread amongst entrepreneurs. What is the Michael Dell zeal right now that you have that you're pushing through your organization that really is more of a, not an order, but more of a mindset to be an entrepreneur, because it is moving very fast, this transformation. It's business, it's technical, it's supply chain, it's everything across the board, software. What do you tell your troops to keep their eye on the prize? What is that entrepreneurial ethos? >> We call it pleased but never satisfied. We are relentless about innovating and improving on behalf of customers, and designing our business with the two billion interactions we have a year with customers, and taking that input and feedback, and making our products, our systems, our services, everything we do better on behalf of our customers to enable them. >> What's the coolest thing that you saw last year with customers in the transformation of Dell and EMC coming together? What is the coolest customer example you could point to? >> I saw some customers that used Pivotal to fundamentally change the way they develop applications inside their own businesses. One particular customer showed us that they had 1,500 developers developing a thousand applications with only four operations people. And the way they did that was that they, again, extrapolated up to the platform level using Pivotal Cloud Foundry. That is the nirvana state that many of our customers seek to obtain, and we certainly want to help them get there. >> Dave Vellante wanted me to ask you a question. He says, "Michael, with all that money you spent "to buy EMC, sixty billion, all the piece parts, "do you have any money left for M&A?" And if you do, I saw a little venture announcement, it looks like the Dell EMC venture's kind of coming together, saw that release. So it's good to get the hands in the water, you invest personally through your capital company, but M&A, there's a lot of activity going on. Do you have any dry powder left for M&A? >> We sure do, and we've already made some acquisitions, both in the Dell EMC level and at the VMware level, and of course Dell Technologies' capital, we're now having a bit of a coming-out party explaining what we're doing with the portfolio and the new investments, and lots of new investments in machine learning, deep learning, security, and Cloud, and all the next-generation business models that are imported to us. >> Are you going to be involved in some of those decisions? Are you going to see 'em all, or does that all roll up to you, or are they going to be autonomous? >> I'm involved in 'em, but we got a fantastic team with Scott Darling, and team running the show there, and I'm there to support them. >> Well great keynote, final final question. You mentioned A.I. a little bit, some machine learning, you brought that up. Good to see you not really hyping up the A.I. and not having anything to back it up, not promoting A.I. Everyone's coming out and saying A.I. So I want to ask you, what's your take on A.I. these days, because obviously augmented intelligence is here today, but A.I.'s been around for a while. Neural networks has been around for years. What's your view on A.I., and how do you see that impacting Dell EMC short, medium, long-term? >> I think the potential here is really tremendous. It takes time though. You know, DARPA had this contest to see, could you drive a car through the desert, a vehicle through the desert, 150 miles back in 2004. The first year, I think the farthest they got was eight miles. By 2005, they had lots of cars completing the entire 150 mile journey. Now we still don't have self-driving cars, that was 12 years ago. So it does take time for these things to evolve, but the level of improvement and advancement in the processing power, and the learning that's going on in these systems is tremendous. And, again, when you have hundreds of billions of nodes, and all this data, and an increase in processing power, it is really a Cambrian explosion, we do think of it as the fourth Industrial Revolution. To me that is incredibly exciting. >> Michael Dell here inside theCUBE. Michael Dell, chairman and CEO of Dell Technologies, and this is the Dell EMC World 2017, the first of the Dell EMC World. Congratulations. Great to see you on theCUBE. >> Michael: Thank you John. >> More live coverage here at Dell EMC World 2017 after this short break. Stay with us, be right back.

>> Announcer: Live from Las Vegas, it's theCUBE. Covering Dell EMC World 2017. Brought to you by Dell EMC. >> Hello everyone, welcome to our live coverage from SiliconANGLE Media's theCUBE. It's our flagship program. We go out to the events and extract the signal from the noise. We are here at Dell EMC World 2017 with Michael Dell, the chairman and CEO of Dell Technologies, which is the company that owns Dell EMC, but this is the first year of the EMC World passing the baton formally to the Dell EMC World. There was an event in Austin, a small event one month after the close in September, eight months ago. Michael, great to see you and thanks for spending the time out of your valuable schedule to come on theCUBE. Appreciate it. >> Always great to be with you, John. >> This is like the SportsCenter of all the techs, so I'm going to go hard-hitting question first. You know I'm a big fan of entrepreneurship, and certainly a big fan of innovation, and the work that you've done. Saw on your Facebook page, 33 years, and you had that video when you were a kid. I forget how long in that was but you were still in your dorm room. 33 years ago last week, and a trillion dollars in sales. Really pretty amazing. I noticed Mark Zuckerberg also commented on your, probably built Facebook on a Dell laptop. Congratulations. >> Thank you, thank you. It's been fun, it's been exciting, interesting, and thrill of a lifetime. But I actually think the next 33 years will be much, much more exciting, so I couldn't be more excited about the future. >> It's really good to see you kind of, we talked about years ago, when rumors of you going private. Certainly there's a spring in your step every year. You seem to get stronger with the private, not being the public company, but I got to ask you from an entrepreneurial standpoint. You're the founder-led CEO entrepreneur. You can't take that entrepreneur out of the kid. What's the management style? 'Cause when I interview Andy Jassy, Jeff Bezos, they have that founder-led entrepreneurial culture, but it's transforming into a management practice now, from folks who are, through experience, and observing what's in front of them, have to take on the next 33 years. What is the key to success based on your experience and how are you executing the Dell technologies? Because you have that entrepreneurial spirit, you are executing, and you have to still grow off this base of a consolidating IT market. Go. >> You know we've been able to be bold, and being private allows us to take on some risks and make some investments, and certainly going private back in 2013, and then the combination with EMC, and Vmware, and Pivotal and the whole Dell Technologies family has created a different kind of company. Much stronger than Dell or EMC were by themselves. And customers reacted very positively to that. So when I step back and look at the future of our industry and what's happening with digital transformation, and then all the assets and capabilities we have now, again, couldn't be more excited about the opportunities ahead. >> Bezos said on his interview, I'll ask you the same question in the context of your world. He said you know Amazon started out driving his car around, and going, dropping stuff off at the post office, and then it became what it is today. And he said he still has the guiding principles that's timeless for his culture, which was lower prices and get stuff to the consumer fast. That's been the ethos of Amazon's culture and a lot of other things wrap around it, but that's been kind of the guiding principles. What is your guiding principles that have been timeless for you as an entrepreneur-led CEO? >> It's been customer focus. It's been big ears and listening. It's been understanding the customer's challenges and opportunities, and designing the company from the customer back. It's been understanding the technology and then finding the intersection between the customer's challenges and the technology to create the solution. And I think that's stood the test of time for us and worked really well, and wow, the opportunities ahead of us, again, are even much, much more exciting. >> Well congratulations. So let me ask you the question that's on everyone's mind here at the show. There's also the EMC, Dell EMC, culture still intact, we gave Howard some props on the combination, the merger of equals, but now you have obviously a strategy, I'm not going to deny it's a pretty good one, mature market, consolidating, win the game there. You see that happening, but the question that I have is the growth strategy. Okay, 'cause you now got to have a growth strategy in a hyper-flywheel market called the Cloud, Cloud computing, cloud-native, Kubernetes, machine learning, Pivotal. What is that growth strategy as you build off that existing market? >> Well certainly with Pivotal we've got kind of the tip of the spear of our Cloud strategy, as the platform to develop cloud-native apps, the operating system for the internet of things, and the digital transformation for many of the largest companies in the world. Then we Virtustream. We've got a mission-critical public Cloud for those super-high-performing intensive workloads, VMware driving the software-defined data center. Everybody wants to have a data center that is software-defined. And what VMware has done in virtualization, obviously, is unparalleled, taking that into the network and into storage, VMware's got incredible momentum. I know you're going to have Pat on tomorrow to talk more about that. When we put all this together with the consolidation that's going on in the existing several-hundred-billion-dollar client and data-center business, the combination together, we're very well-positioned to grow. >> I got a lot of heat for a few years ago when I said to Pat Gelsinger, Hybrid Cloud is a destination that most people go to, but I made a comment, I said the Cloud is not a product, Hybrid Cloud is not a product, and you can't get a skew on a Hybrid Cloud. You can't say "Give me a Hybrid Cloud." It's more of a mindset destination of the customers. You said on stage that Hybrid Cloud and Cloud is a way of doing IT. Explain specifically what you mean by that and how does that translate into growth for you? >> Well let me take you back to the internet, okay? Because if we were having this discussion 20 years ago, we wouldn't be talking about the Cloud, we'd be talking about the internet, and we'd be talking about our internet strategy and our internet prog division, and our Vice President of the internet, and where is all that today? It's everywhere. The internet is part of everything. Internet is a way of doing IT, and Cloud really is the same thing. If you look at these large public Cloud companies, what they've done is extrapolated the workload up to the application layer. And that's what we're doing with Pivotal. That's what we're doing with the software-defined data center. That's what we're doing with Converge and Hyper Converge infrastructure, and that's why all those things are white-hot in terms of growth and customer options. >> The internet was a bubble that burst and everyone had a website. Remember that, those days. But you mentioned the internet. Let's stay on that for a second because that's interesting. Software has changed, right? Shrink-wrap software, and for the internet, you download it. Okay, now you have the Cloud access. So we were just talking in our intro that the role of a software company isn't the business model of selling software, it's how software works within the business model of this new modern era of computing. What's your vision around that, because a lot of people will say, and I even said to you privately, where's the software play? And a lot of people jump to that, right? So what's your vision around software? You don't have to sell any. Facebook doesn't sell software. They have software DNA and they're open-source, but their business is an application. Can you explain your vision on software? >> Sure, well obviously you've got mission-critical apps. You've got some of the traditional Platform 2 kind of apps and you've got the cloud-native apps. And there's a right place and a right way to develop all those. And it's not a monolith. There are many, many different approaches within that. That's why we see it as a multi-cloud world. For cloud-native, Pivotal is clearly our platform, and a winning platform, and has tremendous momentum, and avoids this problem of lock-in that many customers are starting to experience with the public Cloud. You can leverage the public Cloud but also run them on-premise. In fact 80 percent of the Pivotal Cloud Foundry instances end up on-premise. Then for the traditional apps, the Platform 2 apps, VMware is continuing to do great. You'll see that in the growth of their business and all the success that VMware is enjoying as now part of Dell Technologies. And then for those mission-critical apps, like SAP, like Oracle, like Epic, you need a different level of performance and capability, and that's where Virtustream comes into play. >> So I asked you a question last year. What are you most excited about, what are you digging into? What's getting you stoked about the stuff in front of you? You mentioned Pivotal. Obviously you've seen that change and I think a much stronger strategic front row with Cloud Foundry. This year, what is that thing for you, is it NSX? What are you looking, what are you geeking out on right now? In terms of you look at the future, you're making some bets. What are you looking at? What is Michael Dell unpacking the most for you personally? Not so much for the business, for you personally. What are you learning, what are you understanding deeper? >> What's exciting is how all of our customers are engaged in this digital transformation. And we're just in the beginning of this. And we're all trying to figure out, hey, how do I use all this data to make my product and service better? And they're all on this digital transformation journey. So again you put together what we're doing with VMware, with the software-defined data center, with NSX, with Pivotal, with Converge and Hyper Converge, the amount of growth in the data, and then all the new computer science. The machine intelligence that's being reasoned over that data. Super exciting time, and if you're not excited now, you're totally asleep or you're dead. >> That's super. If you're a computer science major right now, best time to be coding and building stuff. Okay, Pat Gelsinger. What's the conversation with Pat like these days? Because VMware's market cap is greater than HPE right now. That's one of your companies. It's not even part of the, not even the holistic view of everything you got. One piece is bigger than HPE. You've competed with HPE over the years. So you got to go to Pat and say, "You've got to watch what you're doing here. "You've got a tiger by the tail with VMware." What are some of the conversations you have with Pat? Share some color around how you guys interact, what is he thinking? Obviously he's got some new things with the Amazon relationship. What's the conversation like? >> Well I've known Pat for almost 30 years. We met a long time ago back when he was at Intel, and VMware's doing great, and the team there continues to innovate in virtualization, now with the whole software-defined data center. I am particularly excited about NSX because what you can do when the network is delivering its code by virtualizing the network, and virtualizing all the functions in the network, all the layer four through seven functions, and then run that on top of our open switching. It's a huge opportunity, and you combine that with everything else we're doing, VMware's incredibly well-positioned, and certainly for us, when we think about how do you modernize and automate the data center, VMware's at the very center of that. >> So you have conversations with Pat. Are they like, hey, let's take that beachhead, let's conquer that hill? What are some of those conversations when you take him to the ranch, or you guys have your meetings. What's the strategy? Take us to the war room. What are some of the conversations strategically? >> We work together quite closely, as well as ensuring that the open ecosystem that VMware has continues to thrive. Because VMware also works with the rest of the industry, and that's been an important part of their strategy and an important part of their growth for a long time. What you're seeing now is a much tighter collaboration across Dell Technologies. So Boomi and Pivotal working together. Pivotal and VMware, NSX working together. Dell EMC and VMware working together, and bringing together combined innovations in the form of new products and new solutions, like the kinds we're introducing here at Dell EMC World. >> So you got 33 years under your belt with Dell, your company, Michael Dell's company, Dell Technologies now, a whole new future ahead of you. What's your reaction to EMC World now converted into Dell EMC World? Again, you had a little event in Austin. It wasn't really the real big EMC World event. This is the Dell EMC. We spoke last year. I think we walked back from the party chatting. What's it like this year, what's different, what's your perspective, what's your reaction? Share some color on what you think is happening here. >> We've been really thrilled with the reaction from customers and partners. I'll tell you I think initially there was a bit of a wait-and-see. Customers were like, oh, how's this going to work? I think we're past that, and now customers are seeing that we really are one company, and they're seeing the new products and innovations. And the theory that we had that customers would want to buy more of everything from one company is absolutely playing itself out in the wins in the business that we're seeing. >> And the internet's a great example. I use that analogy, because internet was over-hyped, it popped, it all delivered the same. It was pet foods online, everything happened that everyone said was going to happen, just didn't happen the way they thought. Do you see the Cloud the same way? Because in a way you're taking a very cautious pragmatic approach by saying we're going to integrate our customers and have this operating environment called multi-cloud, or whatever the customers want. Do you see that internet analogy happening the same now with Cloud? >> Yeah I think, as I said, Cloud is not a place, it's a way of doing IT, and having sold billions of dollars of equipment to the public Cloud providers for years and years, what we see, the big difference there, is that these companies have, again, moved up to the application layer. They've moved to the software-defined data center. Everybody wants that. And as we can bring those efficiencies, and now with our Cloud flex pricing, we see lots of opportunity. >> As an entrepreneur, now CEO, go back to the entrepreneur, final question for you. Is there always the hustle in the entrepreneur, I mean that in a good way, Mark Cuban talked about it like the same way, in a way, you still got to have that agile mindset, never settle for complacency. Bezos' shareholder letter kind of points out the same thing. Common thread amongst entrepreneurs. What is the Michael Dell zeal right now that you have that you're pushing through your organization that really is more of a, not an order, but more of a mindset to be an entrepreneur, because it is moving very fast, this transformation. It's business, it's technical, it's supply chain, it's everything across the board, software. What do you tell your troops to keep their eye on the prize? What is that entrepreneurial ethos? >> We call it pleased but never satisfied. We are relentless about innovating and improving on behalf of customers, and designing our business with the two billion interactions we have a year with customers, and taking that input and feedback, and making our products, our systems, our services, everything we do better on behalf of our customers to enable them. >> What's the coolest thing that you saw last year with customers in the transformation of Dell and EMC coming together? What is the coolest customer example you could point to? >> I saw some customers that used Pivotal to fundamentally change the way they develop applications inside their own businesses. One particular customer showed us that they had 1,500 developers developing a thousand applications with only four operations people. And the way they did that was that they, again, extrapolated up to the platform level using Pivotal Cloud Foundry. That is the nirvana state that many of our customers seek to obtain, and we certainly want to help them get there. >> Dave Vellante wanted me to ask you a question. He says, "Michael, with all that money you spent "to buy EMC, sixty billion, all the piece parts, "do you have any money left for M&A?" And if you do, I saw a little venture announcement, it looks like the Dell EMC venture's kind of coming together, saw that release. So it's good to get the hands in the water, you invest personally through your capital company, but M&A, there's a lot of activity going on. Do you have any dry powder left for M&A? >> We sure do, and we've already made some acquisitions, both in the Dell EMC level and at the VMware level, and of course Dell Technologies' capital, we're now having a bit of a coming-out party explaining what we're doing with the portfolio and the new investments, and lots of new investments in machine learning, deep learning, security, and Cloud, and all the next-generation business models that are imported to us. >> Are you going to be involved in some of those decisions? Are you going to see 'em all, or does that all roll up to you, or are they going to be autonomous? >> I'm involved in 'em, but we got a fantastic team with Scott Darling, and team running the show there, and I'm there to support them. >> Well great keynote, final final question. You mentioned A.I. a little bit, some machine learning, you brought that up. Good to see you not really hyping up the A.I. and not having anything to back it up, not promoting A.I. Everyone's coming out and saying A.I. So I want to ask you, what's your take on A.I. these days, because obviously augmented intelligence is here today, but A.I.'s been around for a while. Neural networks has been around for years. What's your view on A.I., and how do you see that impacting Dell EMC short, medium, long-term? >> I think the potential here is really tremendous. It takes time though. You know, DARPA had this contest to see, could you drive a car through the desert, a vehicle through the desert, 150 miles back in 2004. The first year, I think the farthest they got was eight miles. By 2005, they had lots of cars completing the entire 150 mile journey. Now we still don't have self-driving cars, that was 12 years ago. So it does take time for these things to evolve, but the level of improvement and advancement in the processing power, and the learning that's going on in these systems is tremendous. And, again, when you have hundreds of billions of nodes, and all this data, and an increase in processing power, it is really a Cambrian explosion, we do think of it as the fourth Industrial Revolution. To me that is incredibly exciting. >> Michael Dell here inside theCUBE. Michael Dell, chairman and CEO of Dell Technologies, and this is the Dell EMC World 2017, the first of the Dell EMC World. Congratulations. Great to see you on theCUBE. >> Michael: Thank you John. >> More live coverage here at Dell EMC World 2017 after this short break. Stay with us, be right back.

(car engines) >> [Voiceover] Live from Silicon Valley, it's theCube, covering Mobile World Congress 2017. Brought to you by Intel. >> Okay welcome back everyone, we are here live in Palo Alto for the Cube's special coverage of two days of wall to wall coverage of Mobile World Congress 2017, we're doing it here in Palo Alto, covering what's happening in Barcelona, with folks over there, we've got analysts, we've got reporters, and we have friends there phoning in and sharing their commentary, certainly on Twitter as well. And we're doing it from inside our new studio in Palo Alto, and we're going to break it down. As their day ends, we're going to be analyzing and discussing the future implications of what it all means, teasing out the top news, giving our opinion and our commentary in reaction to all the breaking news. I'm John Furrier with Silicon Angle and theCube. I think the next guest is Willie Lu, who is a Facebook friend who I've been having conversations with, it's great to meet in person. He's a wireless guru, going back to his ph.D in the 90s, now chairman of the Palo Alto Research Group. Extensive experience in dealing with fixed wireless, mobile wireless, but more importantly, creating the technologies with industry to understand what's it going to take to invent the future. Willie, great to have you inside the studio. >> Thank you very much, John. >> One of the great things about having the Palo Alto studio is while everyone's out in Barcelona right now having dinner, probably going out for the evening, we get to sit inside the studio and talk about what they did today. So the big story inside Mobile World Congress in Barcelona was obviously, the devices. You're seeing Blackberry making a comeback, Nokia, you know, pumping their new muscles, bringing back the old Nokia Phone, and rolling out their new ones. Huawei, you got bringing in their Apple killer, they want to go up and down the stack. So certainly the device centric jewelry, if you will, the phone, the eye candy, the VR, the AR, the virtual reality. But also 5G. Intel, Qualcomm, Ericsson, Nokia, all the major telcos are rolling out essentially what they are calling 5G and beyond, which is essentially not just wireless, but an end to end network to be the new fabric of wireless. Not only for the devices in the phones, but the devices being the people in the cars. And the factories, and the cities, and the entertainment, this is an area that you have a lot of work in at a technical level. So I went to spend this segment talking about the picture of the future. Right? You know, obviously we need that next step up function of architecture, we need that next network. We need those next devices, that's something that you're thinking a lot about. What's your picture, what's the future look like for you? >> Yeah, thanks John. I'm the wireless mobile system architect for almost 25 to 30 years. So from my point of view, because I'm the technical eyes, from a technical point of view, when you're talking about mobile communications, normally we have three factors we have to trade off, compromise each other, okay? The first is high speed transmission, the second one is mobility, fluid mobility, the third one is capacity. Make sure capacity, right? Make sure the operator make money, right? So, before, previously in the last 20 or 30 years, our phones from the step-by-step, from 2G which is GSM or CDMA, the basic CDMA which is IS-95 to 3G which is WCDMA to the 4G which is OFGMA, including LTE. And these phones basically is still focused on one issues, even mobility issue, even high speed issue, but in the future in the 4G, 5G, 6G whatever, you know we need a very high speed. Very high speed, one giga beyond, over there. We also need a mobility, frame mobility, right? We also make sure able to make money, the operator make money, right? >> That's the number one. >> So how to, we want three, we want mobility, high speed, capacity. We, everything we need. And then single one standard is not going to work, because if you want pick LTE, a very high speed, you lose the mobility. If you pick free mobility, you lose the bandwidth. So the issue, that's the issue. We, 20 years ago, when I do the ph.D and when I was Stanford professor， I was a consulting professor at Stanford, we started the open wireless access, it's means converge a multiple standard together, converge the wifi, LTE, and the broadband wide access together in a same device. So when you have a wifi, you can go to wifi, which is very high speed, can be very very high speed in the future right? And then you go to the highway, where very fast there, you cannot get a wifi, but you can get LTE, or 3G or 2G, that's fine. So that's the research we are working on the open wireless access or open wireless architecture or OWA. And there's, it's the (inaudible) map is from TGMA, CGMA, OFDMA, to OWA. Okay, that's the technical point side. And for the device design side, my picture is for the next five years, ten years, fifteen years, twenty years, which very clear, okay? Before that, in the last 20 years, everybody their mobile phones, is still a carrier-centric mobile phone. Is means when I have a mobile phone, it's AT&T, it's AT&T, it's locked to AT&T or it's AT&T phone, right? And right now, from last year to this year, we are on a very important transition from the carrier-centric phone to a user-centric phone. Yeah probably, couple of company, Google, other company, they are working on the, on the virtualization, mobile virtualization right? Means what? Means a user can pick up different operators on the way, right? So this phone, if I don't have signal, I don't have T-mobile signal, I can using AT&T to get a LTE. And if I don't have AT&T, I can use Verizon. So we are on the way from the carrier-centric to a user-centric at the moment. >> [John] So let's stop right there, 'cus I really think you're onto something really important and I think this is, there's some history to look at. I mean if you look at wireless, I agree, this is a very carrier-centric. And for the consumers out there, you can think of just the basic concepts of most people's experience: I want to unlock my phone, right? These are kind of known terms of consumers, whether they're, it's my kids or adults. "I don't want to be stuck to the carrier" "on their plan." "I want to move my phone around." But that's just on the service. Now you want to decouple it further to the person. So, take a car. I might want to have a relationship with my car, as if I'm, going to be never buying a car, I might use autonomous cars or Uber or other services. And I get into the car and I need personalization. So this is the user-centric thing is that super important point. But now we are stuck, still stuck, in my opinion, in siloed telco stacks, meaning I'm stuck to the carrier, I have limited services, and now I want to shift that to better performance. I mean you can't look any further than hyper convergence or converged infrastructure on the data centers. So where it's networking combining. So are you taking that same approach to say that you think wireless will converge in? Is that the idea? >> Yes, when you wireless converging. Take examples: wifi, LTE, and converge together. So your phone basically is running on wifi. Actually in the priority order, wifi first. Wifi first, and then second is LTE, and then probably 3G is the second one there. So, and then if you have wifi you go wifi, and if car, the car also can be a micro base station, okay, to connect to the wifi, LTE together, and then distribute to the passengers in the car, so this is also we can, for the future, work in mobile office project. I can stay in the car, and the car itself is a sub base station, and then connect each other. There also, okay let's talking about the future picture, okay. In the next five years, okay, there's a couple companies working, already working on the mobile wifi network. So it's means if I am living in Palo Alto there, I'm moving around in my neighborhood in Palo Alto, I don't have, I don't even add AT&T, Verizon operator, I can have a mobile service because I can share all neighbor's wifi networks together as a mobile protocol. Then I can moving, I can hike, I jogging, your house, my house to there. We can share the wifi together, we call. We divide the wifi into the home wifi, and the visitor wifi we can rent the service to outside. So this called community mobile network based on wifi. That's the next five years picture. >> [John] How does that happen? I mean I just found, first of all I believe, and that's a great philosophy. And you're starting to see Xfinity do that with their current wifi, creating a little metro neighborhood network. That's really hard to pull off 'cus of the security concerns. Is it viable in the next five years, do you think that is even doable? What has to happen to make that happen? >> I think this going to be not a major issue because wifi still have a lot of bandwidth, right? And you can exchange bandwidth with security issue there. So wifi is more easy to the security than LTE, because LTE for the similar network, the spectrum is very expensive right? So that's why we cannot using a lot of overheads for security. So I always say, the most secure is wifi, then LTE. 'Cus LTE, the data, right? When you open it, there's not much overhead available for secure encryption, whatever there. So wifi you can, >> [John] So they're maximizing their signal for performance, not security. >> Yeah, not security. And wifi you can take like 40%, 30% the overhead load for the security and it's very secure. So that's not issue, that's why. That's the five, next five moment. Okay and then beyond that, when the mobile wifi neighborhood is built, right? Then we back to the traditional settled operator networks there. We'll converge together, then user for the next ten years, after ten years, user can pick up his preferred operators as he like. For example, if I'm in Palo Alto and then AT&T give me a good package, right? They give an offer, and I click my AT&T, it's go to AT&T. And I back to the Cupertino and Cupertino, >> [John] It's like network hopping. >> Yeah. >> It's like not radio hop, frequency hopping, it's network hopping. >> That's an idea, right right right. But still you need a converging network info together. >> So let's take it back to Mobile World Congress. So right now the current present is, that they're painting the picture of a 5G world where autonomous vehicles, entertainment, smart cities, and smart home are all being powered by an end-to-end, from the network to the edge, software and capabilities, from silicon software to device. >> Yes. >> So that's cool, makes a lot of sense. Now is 5G truly the enabler, that 5, 6 G is the wireless enabler for this in your view? In your picture of the future, what role does wireless play in creating this new fabric? >> Yeah, I think it's very much possible because when I say when we converge the different wireless solutions together then you have more space to focus on one direction, you focus on very high speed. We can one giga, two giga, even ten giga is enough right? And the other side, we increase the mobility issue, right? And then the other side we converge on the operator side. In the future, I mean AT&T, Verizon, it's not, they're not going to just provide the cellular mobile access only, they want to provide more service around its 5G, 6G, be new business model right? For traditional business model, you just provide the radio, the hand phone access. But in future, this operator is going to help provide more service, service-oriented platform. >> Is that consistent, that service business model, is that viable in your vision of the future. What is, or let me ask differently. What is the business model for the operator, in your vision of this multi-network world? What do they do, what kind of services are they delivering? >> I think in the future, very important service, around the ten years, around the time frame, is very important service is called mobile virtualization service. So in the future, Google can run mobile service, but they're working with AT&T and Verizon. >> [John] It's like MVL on steroids, basically, it's all doing pipe management. >> Yeah and then let's say for example, Google did a contract with AT&T for how much bandwidth every year, probably one P, or a large bandwidth. And then AT&T provides its bandwidth to Google, right? And then AT&T can do other service also, so AT&T save a lot of cost in the individual marketing. You know, right now the operator spend a lot of money for the marketing, right? But later they can cut off this cost, because Google can do marketing, right? >> [John] So it's, this is economic reconfiguration. >> [Willie] Yes. >> Okay, so here's the next question. In today's landscape of the marketplace, what would be bad behavior from your standpoint, that would screw up that future? What would be the signs that it's not going the right way in the ecosystem, because part of the things that I'm seeing with things like Intel and the big players is there's an ecosystem that needs to get agreement; That to accelerate the future, there has to be a new model, a new network. What are some signs that are warning signs for you? You know, people holding onto a certain thing, certain technology. What would be a red flag for you, if you look at the marketplace, what kind of activities would say "woah, that's not good." >> Okay, I think it depends on, for the operator, I think it's not good, in the future it's not good, you just focus on making money from the access size. Because in the future, access will be cheaper, cheaper, cheaper, cheaper. So if AT&T just focus on access revenue, it's going to red flag, okay? So you have to provide total solution, right? And from the vendor side, you cannot support one single standards. You only support LTE, it's going to dangerous. So you have to be open. So in the future, I think in the future, from my personal point of view, Comcast, AT&T, all these company, they are going to merge together. Because they want provide a converged solution, right? So in the future access will be cheaper, cheaper, cheaper, cheaper. And then you have to, they have another revenues from the other sides. >> [John] I wrote a paper in 2001 called "Broadband Starvation". And it was the beginning before wifi really hit, and then wifi hit and New York Times picked it up, was one of those stories. But we talked about the starvation from America for more bandwidth. Obviously even outside the US, you saw accelerated bandwidth, broadband penetration. I called it the "Broadband Starvation" because broadband starvation was in rural areas, so it always was limited by the actual physical connection. You know, the cable, the last mile. We all know the history of the policy side of the Arbox and the days of you know, the telephone companies. But now Comcast and now AT&T (laugh), they're the fiber to the home, there's some, or the coaxial to the home. They bring in, off the street and terminate it into the house. Wireless changes that. Is that a scenario where you see 5G going where ultimately, this notion of fiber to the home could be you know, ancient history? Or, 'cus that always, there's still construction. You got to still trench, you still got provisions, and the circuits to the homes. You know, is wireless an opportunity there? And will that free up more competition? >> Yeah, I think that's a big question, and a big picture, okay. I think from my personal experience, when we design technology for next 10 years, 15 years, the very big picture you think about is very important is: we're on the way to transition, to transition from the mobile communication to a personal communication. So previously, the mobile communication >> Personal communication, you mean people-centric? >> Yeah, people-centric. So mobile communication, previously we call mobile communication is a telecom term. Is means just for connection, just for envisioning connection, right? But in future >> [John] Endpoint, that's it. >> Yeah that's right. So we're on the way. Even at some universities, they change the course from mobile communication to personal communication. Personal communication means is: everything is personal. Personal-centric, right? So in a personal-centric, so in the future, the operator, the vendor, the provider think about, in the future, you're not only provider, information connection only, you provide anything a person needed for his life, including health, security, right? Everything there. >> [John] Transportation. >> Transportation, yeah. >> [John] Could be all digital services. >> The transportation, security. >> healthcare. >> And everything there and then each application will need a different requirements of the bandwidth, right? Especially for the health, we need lots of lots of video transmission, right? And this is going to, that's why we need a WLAN, a wireless network, is converging together. And then wireless is still a lots, lots of way we have to invent. >> The word "convergence" is back again, it's happening everywhere. Willie, thanks so much for the commentary. Love this, this is consistent with, Wikibonds had a research, siliconANGLE had a research, Peter Burris who was on our opening segment talking about not IOT, only IOT, internet of things, but IOT and P, people. Internet of People. >> [Willie] Yes, and think about IOT, okay? What's the major technologies inside the IOT? One is sensing technology, okay? The other one is wireless connection, right? You want to connect to that billion billion nodes together, so we need a multidimensional, different wireless technology. How to connect this billion billion nodes together? That's also we need wireless technology. >> I worry about that not happening because I think the telcos have been slow, and I think I'm seeing movement now with the telcos, that now is the time to make their move. NFV's viable, and now their business model is somewhat emerging. The question is, will they be fast enough to move? That's the question. >> Yeah, I think. >> Are they? >> That's also my question, because the moving, the virtualization like from Google, they're moving very fast than a traditional telco, right? So telco have to change their way of thinking in the business, right? >> I think Google should be the telco, take over the telco. >> That's why in the the next five, ten years, people just go to Google, using Google account to get access to the phone, to the mobile phone. You get a phone number from Google, right? >> They're going to call it Apple World Congress, or Google World Congress. Uber World Congress, if we don't. >> But anyway, we still need everybody work together. It's like different wireless standards converge together. And different company they also want to converge together. And then eventually, the target is very simple. It's the personal, it's the personal centric, user centric, the wireless world. That's the future. >> [John] Willie Lu here from Palo Alto Research. In here Palo Alto, a good Facebook friend guru in the wireless area all the way down from back in his ph.D days, as a practitioner and inventing the future. Great vision, I agree with it 100%. I think Intel and all the big players would agree. The ecosystem of smart movement right now is critical, and I think there's a huge opportunity to, to tie it all together there in IOT and people, a people-centric world. Congratulations on your work at the Wireless Mobile Congress that you started, and also the open, this open alliance, open wireless alliance. Congratulations. Willie Lu here inside theCube, I'm John Furrier, for more exclusive coverage of Mobile World Congress here in Palo Alto after the short break. (electronic music) (cheerful electronic music)