(bright music) >> Hello, and welcome to this CUBE conversation. I'm John Furrier, your host of theCUBE, here in Palo Alto, California. It's a hybrid world, we're still doing remote in news. Of course, events are coming back in person, but more importantly conversations continue. We've got two great guests here, John Siegal, SVP ISG Marketing at Dell Technologies, and Dave McGraw, office of the CTO at VMware. Gentlemen, great to see you moving forward. Dell Technologies and VMware great partnership. Thanks for coming on. >> Great to be back. >> Yeah, hi, John, thanks for having us. >> You know, the world's coming back to kind of real life, Omnicon virus is out there, but people say it's not going to be as bad as we think, but it looks like events are happening. But more importantly, the cloud native, cloud operations is definitely forcing lots of great new things happening, new innovations on-premises and at the Edge. A lot of new things happening in Dell and VMware, both have been working together for a long time now. VMware a separate company, we'll get to that in a second, but let's get to the partnership. What's new, what's changed with the relationship? >> Yeah, so I mean, just to kick that off and certainly Dave can chime in, but I think in a word, you know, John, nothing changes in terms of my customer's perspective. I mean, in many ways our joint relationship has never been stronger. We've put a ton of investment in both joint engineering innovation, Joint Go To Market over the last several years. And we're really been making what was our vision a couple of years ago a reality, and we only expect that to continue. And I think much of the reason we expect that to continue is because we have a shared vision of this distributed multi-cloud, you know, cloud native, modern app environment that customers want to drive. >> Yeah, and John, I would add that we've been building platforms together for the last five years, a great example is VxRail. You know, it's a market-leading technology that we've co-engineered together. And now it's a platform that we're actually building out use cases on top of whether it's multi-cloud solutions, whether it's private and hybrid cloud or including Tansu for developer environments. You know, we're using the investments we made and then we're layering in and building more value into those investments together. And we put agreements in place by the way that, you know, multi-year agreements around commercial arrangements and partnering together as well as our technology collaboration together. So we feel really confident about the future and that's what we're communicating to our customer base. >> Yeah, indeed just go ahead sorry, John. >> No, good. >> I was going to say just to build on that, as he said, I really, when I say not much changes, I mean, VMware has always been an open ecosystem partner, right? With its OEM vendors out there. And I think the difference here is Dell has made a strategic choice and a decision to make a significant investment in joint innovation, joint engineering, joint testing for VMware environments. And so I think a lot of this comes down to the commitment and focus that we've already made. You mentioned VxRail, which is a fantastic example where we at Dell, we've invested our own IP. You know, HCI systems software, that's sort of the secret ingredient that the secret sauce that delivers that single click, you know, automated lifecycle management experience. And we're investing lots of dollars in test labs just to ensure that customers always have that, you know, that seamless experience. >> You know, one of the benefits of doing theCUBE for 11 years now, it's just been that long, both EMC World and Dell World back in the day was our first events we went to. We've watched you guys together over the years. One of the things that strikes to be consistently the same is this focus of end to end, but also modularity, but also interoperability and kind of componentizing kind of the solution, not to oversimplify it, but this is kind of the big discussion right now as cloud scale, horizontal scale is with cloud resources are being put into the development stream where modern applications now are clear using only cloud native operations. That doesn't mean it's just cloud. I mean, it's cloud everywhere, but it's distributed computing. So this is kind of the original vision if you go back even five years or more. You guys have been working on this. This is kind of an important inflection point because now it's well known that the modern application is going to have to be programmable under the hood. Meaning everything's going to be scaling and rise of superclouds or new Edge technologies, which is coming fast. This is the new normal. This is not something that we were talking about mainstream five years ago, but you guys have been working on this kind of simplicity solutions-based approach. What's your reaction? >> That's right, John, I'll tell you, you might remember at VMworld a couple of years ago we announced Project Monterey. And now this was really a redefining architecture for not only data center, core data centers, but also for cloud and Edge environments. And so it's leveraging technology, you know, data processing units also known as smart NICs. You know, we're essentially redefining what that infrastructure looks like, making it more efficient, more performance, depending on the use case. So we've been partnering very closely with Dell to develop that technology and it's going to really transform what you see at the Edge and what you also see in core data centers going forward. >> Yeah, and there's so many of those. I mean, I think it seems Monterey is a great example of one that we continue to invest in. I think there's also NBME over TCP is another, if you will key ingredient to how customer is going to essentially get the performance they need out of the infrastructure going forward. And so we were proud to be a partner there, at most recent VMware where we announced, you know, the ability to essentially automate the integration of MBME over TCP with Dell EMC system integrated with vSphere. And that's a great example as well, right? I think there's countless. >> John: Yeah. >> And I'll tell you, we are so excited to see what Dell has done in the storage business with PowerStore X, where they've integrated vSphere ESXi into a storage array. And, you know, that creates all kinds of opportunities going forward for better integration and really for plug and play of, you know, the storage technology into cloud infrastructure. >> What's interesting about what you guys talking about is remember the old DevOps moving infrastructure as code. Okay, that became DevSecOps. That's big part of Tansu and security. Now it's all about devs, right? So now devs have all that built in and now the operations are the big conversation because one of the things we pointed out in the theCUBE recently is that, you know, VMware has owned the IT operations world, in our opinion for a long, long time. Dell has owned the enterprise for a very long time in terms of infrastructure in front solutions. The operational efficiency of cloud hybrid is really kind of what's the gateway to multi-cloud. This has been a big part of IT transformation. Can you guys share how you guys were working together to make that flexibility to transform from the old IT to the new IT? And what are some of the things that you're seeing with your customers that can give them a map of how to do this? >> Yeah, so I would say, you know, one area in particular that we're really coming together is around APEX, right? From an as a service perspective. I think what APEX is really doing is really unifying much of what you just described. It's taking as a service, it's taking multi-cloud, it's taking cloud native development if you will, and modern app development. And we together partner to ensure that's a consistent experience for customers. And we have a number of new APEX cloud services that keep that in mind and that are built on joint innovations, like frankly, VxRail at the bottom of that as they've said earlier. So for customers are looking to get, you know, item managing infrastructure altogether, which we, you know, we're seeing more and more now, we recently announced the APEX Cloud Services With VMware Cloud you know, which is again, a joint solution that'll be available soon. And it's one that is managed by Dell, but, you know, it gives customers that simplicity and scale of the public cloud, but certainly that control and security and performance, if you will, that they prefer to have in the private club. >> Yeah, and I think because, you know, the APEX Cloud Service is designed with the VMware Cloud, you have a capability that drives consistency and portability of workloads for customers. So they don't have to re-skill and retrain to be able to manage the environment. They also are not locked in to any particular solution. They have this ability to move workloads depending on what their needs are; economically, performance, you know, logistics requirements, and they can react accordingly as they digitize their business going forward. >> It's interesting, you guys are talking about this demand in a way, addressing this demand for as a service, which is, you know, it can be one cloud or multiple clouds, but it's really more of an abstraction layer of what you deploy to essentially create that connective tissue between what's existing, what's new and how to make it all work together to again, satisfy the developer 'cause the new apps are coming, right? They want more data is coming into them. So this has been, is this the as a service focus, is that what's happening? >> Yes, absolutely, yeah. The, as a service focus is, you know, at the end of the day is how are we going to really simplify this. We've been on this journey now for at least a year and much more to go. And VMware has been a key partner here, you know, on that journey. So a number of cloud services. We've had APEX Hybrid Cloud, APEX Private Cloud, you know, out there for some time. In fact, that's where we're getting a lot of the traction right now, and this new offering that's going to come out soon that we just mentioned with VMware cloud is just going to build on that. >> And VMware is a super cloud, isn't it Dave? Because you guys would be considered by our new definition of Supercloud because you can sit on Amazon. You also have other clouds too, so your customers can operate on any cloud. >> Our view is that, you know, from a multi-cloud future for customers to be able to be on-premises with a, you know, APEX service, to be able to be operating in a Colo, to be able to operate in one of many different hyperscalers, you know, providing that consistency and flexibility is going to be key. And I think also you mentioned Tansu earlier, John. You know, being able to have the customer have choice around whether they're operating with VMs and containers is really key as well. So, you know, what Dell has done with APEX is they set up again, another platform that we can just provide our SASE offerings to very simply and easily and deliver that value to customers in a consistent fashion going forward here. >> You know, I just love the term Supercloud. Actually, I called it subclass, but Dave Vellante called them Superclouds. But the idea is that you can have all the super power in the cloud capabilities, but it's also distributed clouds, right? Where you have Edge, you've got the Core and the notion of a cloud isn't like one place in which there's distributed computing. This is what the world now realizes. Again, we've talked about in theCUBE many times. So let's discuss this whole Core to Edge dynamic because if everything's cloudified, if you will, or cloud operations, you've got devs and ops kind of working together with security, all that good stuff. Now you have almost a seamless environment where code can run anywhere, data should traverse anywhere, but the idea of an Edge changes dramatically and certainly with 5G. So can you guys tie that Edge computing story together how Dell and VMware are addressing this massive growth at the Edge? >> Yeah, I would say, you know, first and foremost, we are seeing a major shift. As you mentioned today, the data being generated at the Edge it's, I think Michael Dell has actually gone on record talking about the next frontier, right? So it's especially happening because we're seeing all these smart monitoring capabilities, IOT, right? At almost any end point now from retail, traffic lights, manufacturing floors, you name it. I think anywhere where data is being acted upon to generate critical insights, right? That's considered an Edge now and we're expecting to see, as ITC has already gone out there on record as saying 50% of the new infrastructure out there will be deployed at the Edge in the next couple of years, so. And it's a different world, right? I mean, I think in terms of what's needed and what the challenges are, there's certainly a lack of specialized technical resources, typically at the Edge, there's typically a scaling issue. How do you manage all those distributed endpoints and do so successfully? And how do you ensure you lay any concerns around security as well? So, you know, once again, we've had a very collaborative approach when it comes to working on challenges like Edge, and, you know, we, again, common theme here, but the VxRail, which is a leading, you know, joint ACI off in the market is the foundation of many of our Edge offerings out there in the market today. The new satellite nodes that we just announced just a few months ago, extends VxRail's, you know, value proposition to the Edge, using a single node deployment. And it's really perfect for customers that don't have that local technical resource expertise or specialized resources. And it still has cyber resilience built right in. >> And John, just to follow up on that real quick, before Dave chimes in. On the Edge, compute has been a huge issue. And I've talked with you guys about this too. You guys have the compute, you have the integrated systems now, any update there on what VxRail is doing different or other Edge power (John laughs) PowerEdge sounds familiar? We need some more power at the Edge. So what's new there? >> Well, you know, first of all, we had new PowerEdge platforms of course, come out in this past year, and, you know, there's, we're building on that. I mean, the latest VxRail is of course, leveraged that power of PowerEdge. Yeah, lots of a good naming arrogance, right? PowerEdge. >> John: I love that. And, but, you know, it's, you know, it's at the heart of much of what we're doing. We're taking a lot of our capabilities that have been IP, like streaming data platform, which enables streaming, video and real-time analytics and running that on a VxRail or PowerEdge platform. You know, we're doing the same thing, you know, with, in the manufacturing side. We're working with partners that have IOT Edge platforms, you know, and running those on VxRail and PowerEdge. So we are taking very much the idea here that, yes, you're right with our rich resources of infrastructure, both with PowerEdge and VxRail, you know, building on that. But working with partners like VMware and others to collapse an integrated solution for the Edge. And so we're seeing really good uptake so far. >> Dave, what's your take on the Dell Edge with VMware, because automation is big theme, not moving data across an internet that's obviously huge. And you got to have that operational stability there. >> Absolutely, and, you know, to your point, being able to do the processing at the Edge and move results around versus moving massive amounts of data around is really key to the future going forward. And, you know, we've taken an approach with Dell where we're working with customers, we're having detailed conversations, really using a "Tiger Team Approach" around the use cases; manufacturing and retail being two of the real key focuses, healthcare another one where we're understanding customer requirements, it's both today and where they want to go. And, you know, so it's about distributed computing, certainly at the Edge. Dell is coming out with some great new platforms that we're integrating our software with. At the same time, we have technology in STWIN and SASE that become part of that solution as well, with VeloCloud. And we're developing a global network of points of presence that really will help support distributed application environments and Edge-native Application environments working with Dell going forward. >> That's great stuff. The next ending question is what's next. I want to just tee that up by bringing up what you kind of made me think of there, Dave, and this is key supply chain on both hardware and software talking about security. So when you say those things you're talking about in terms of functionality, the question is security, right? Both hardware and software supply chain with open source, with automation. I mean, this is a big discussion. What do you guys react to that about what's next.. >> Yeah, I can tell you from a central engineering perspective, you know, we're looking at security compliance and privacy every day, we're working closely with Dell. In fact, we're in the middle of meetings today in this area. And, you know, I look at a few key areas of investment that we're making collectively together. One is in the area of end to end encryption of data. For virtualized environments or containerized environments, being able to have end-to-end encryption and manage a very efficient way, the keys and maintain the data compression and deduplication capabilities for customers, you know, efficiency and cost purposes while being very secure. The second area we're working closely on is in Zero Trust. You know, being able to develop Zero Trust infrastructure across Edge, to Core, to Colo, to Cloud and making sure that, you know, we have reference designs available to customers with procedures, policies, best practices, to be able to drive Zero Trust environments. >> John what you're (indistinct) is huge and you guys have, literally could be the keys to the kingdom pun intended. You guys are doing a lot of great security at the Edge too, whether the traffic stays with the Edge or goes across the network. >> That's all right, I'm as curious, like you said, it's been a joint focus and initiative across much of our portfolio for quite a while now. And I think, you know, you asked what's next and I think, you know, sky's the limit right now. I mean, we've got the shared vision, right? I think at the end of the day, you know, we've shared a number of joint initiatives that are ongoing right now with Project Monterrey. Obviously our integration with Tansu and a number of solutions we have there, work around APEX, et cetera. I think we have complimentary capabilities. You mentioned, you know, areas like supply chain, areas like security, you know, and I think these are all things that we both do well together. And the thing I will say that I think is probably the most key to us sustaining this great execution together is our collaborative cultures. I think, you know, there's something to be said for what we built, you know, all these last several years, you know, around these collaborative cultures, working together on joint roadmaps and focusing on really end of the day solving our customer's biggest challenges, whatever those may be, you know? And so at the end of the day behind us, we have the greatest supply chains, you know, services, support, and innovation engines. But I think, you know, I think that the passion, our groups working together I think is going to be key to us going forward. >> Well, great stuff moving forward together with Dell Technologies and VMware. David, thanks for coming on. John, great to see you. Thanks for sharing insight. Great CUBE conversation talking encryption, we've spoken about Edge and supply chain as well. Great stuff, great conversation. Thanks for coming on. >> Thank you >> Thank you so much, John. >> Okay, this is theCUBE conversation. I'm John Furrier, with theCUBE. You're watching CUBE coverage. Thank you so much for watching. (bright music)

(upbeat music) >> From our studios in the heart of Silicon Valley, Palo Alto, California, this is a CUBE Conversation. >> Hello, everyone. Welcome to this special Cube conversation here in theCUBE studios here in Palo Alto, California. I'm John Furrier, host of theCUBE. We have a special series we're starting called Demystifying Cloud-Native. And I'm joined with my cohost for this series, Dominik Tornow, Principal Engineer with Cisco Office of the CTO. Dominik, thanks for joining me, and thanks for agreeing to participate in this awesome series around demystifying cloud-native. >> Hey, thanks for having me. >> So, cloud-native is hot, but it's changing. It's super important. Some people have a definition here or there. What is your definition of cloud-native. >> Well for, to define cloud-native, let's use a mechanical approach, alright. So, we are talking about cloud-native applications. So, the first question there would be "what is cloud?" Alright. And I personally define the cloud as a service provider that allows a service consumer to dynamically acquire and release resources. Now, from that point, with that definition in mind, we can define three related concepts. That would be public cloud, private cloud, and hybrid cloud. So, the public cloud is a service provider outside of your organization, the private cloud is a service provider inside your organization, and the hybrid cloud is a union of both. So, with this definition, we can define a cloud application. And a cloud application then is any application that runs on a cloud provider, alright. But now, what is a cloud-native application, alright? If I take a classical application and put it on the cloud it it becomes a cloud application by definition, but it doesn't become a cloud-native application. If we want to grasp cloud-native applications, alright, we've got to grasp a concept that is responsiveness. Responsiveness is very close to availability, but the term availability is highly overloaded. So, I personally like to talk about responsiveness. And responsiveness is a ability of an application to hit its service level agreements. Typically it's response time, right. A typical service level agreement may be 90% of my requests need to be served within 250 milliseconds. So, that is the responsiveness of an application. And now, we can define scalability and reliability. Scalability is responsiveness under load, and reliability is responsiveness under failure. And now to close the loop, we can define cloud-native. And my definition of a cloud-native application is a cloud application that is scalable and reliable by construction. >> Dominik, what is your view on hybrid versus multi-cloud? Cause that's something that we a lot of in the industry around hybrid being public private, a union of that. And you mentioned that. But the talk of multi-cloud is being kicked around a lot. What's the reality of multi-cloud? Is that just I have multiple clouds? What's the impact to development teams and companies as they think about hybrid and multi-cloud? >> So, the hybrid cloud, right, is an instance of a multi-cloud. Because by definition you have multiple cloud providers that make up the multi-cloud, and in the hybrid cloud, you have at least one public and at least one private cloud. And, of course, the implications whether it's public to public or public to private cloud are huge. It does effect your application all the way from the architecture down to the way how you operate your application, alright. And when it comes to, when it comes to multi-cloud, we are looking at significant challenges when it comes to the operation, automation, and the federation between the clouds. >> What do you think about the role Kubernetes is going to play in the enterprise? Cause right now, it's really, I think, one of the most popular, if not the most defacto things I've seen in many, many years. I think it's--to me I think-- The only thing I can think of as impactible as Kubernetes is going way back to TCPIP and what that meant for internet working, which spawned massive change, massive wealth creation, massive computing capabilities. It essentially created networking subnets and, as we know, networking as we know it. Kubernetes has that same feel to it in a whole another kind of modern way. It seems to be something that people are getting behind in a defacto--it's not officially a standard, I guess. Well, it could be. How important--what's the big deal around Kubernetes? What's your thoughts on this? >> Oh, Kubernetes are so--Kubernetes is definitely something that is exciting in the ecosystem because it puts cloud-native in all of our reach, right. With Kubernetes, cloud-native is up for grabs, alright. A cloud--any application, when you just put it on Kubernetes, it won't become a cloud-native application just by containerization, alright. But Kubernetes provides so many primitives that actually allow you to address the challenge of scalability and allow you to address the challenge of reliability. And top of that, it has, as you mentioned, the energy in the ecosystem, alright. And with Kubernetes, if you architect your application right, you do have a chance to efficiently, cost efficiently and also effort efficiently have a cloud-native application that is scalable and reliable by construction. And if you think about it, scalable and reliable by construction, that requires your application to be able to A, detect load and failure and B, mitigate load and failure. And now, if you take Kubernetes and you take it apart and you look under the hood, you see that the Kubernetes primitives are actually designed for that, alright. They allow you to-- They allow the application to scale itself. They allow the application to actually recover from failure. You do have to up and architect your application that way. If your application cannot handle partial failure, your container comes down and with your container you are actually losing vital state in your application. Kubernetes cannot help you with that. But if you architect it correctly, Kubernetes will never stop trying to actually meet your demands. >> That's a great point. How has Kubernetes changed the relationship between the application and the application developers' requirements. Because I think a lot of people see Kubernetes as this silver bullet. Oh my god, Kubernetes's going to solve all my problems. But that's not really what it is there for. You're kind of getting at that. Detecting failure, understanding the events... These are things that are super important. but the application folks have to do the work. Can you just unpack that relationship between the I'm the app builder. What's my relationship to Kubernetes? >> (laughs) A love hate relationship. Because Kubernetes is going to help you a lot, but Kubernetes also demands a lot, alright. So-- >> Explain that. Demands a lot. What did you mean by that? >> The architectures that we are used to. Sorry. >> It demands a lot. >> It demands a lot. The architectures that we are used to need to change, and if you come from, let's say 10 years ago, 15 years ago, right, and we are building a reactive application which at that point would just be called a web application, you have a request coming in, and a web server taking that request and basically spawning the request context. In that request context, your application is still sequential, alright. And if everything fails, the database is here to save the day, the transactions. It's here to save the day and will prevent you from running into any inconsistencies. Now, if you're in a microservice architecture world right, multiple different microservices, no transactions there to save the day. You have to architect with that reality in mind. Kubernetes cannot provide an abstraction that make the reality of distributed applications disappear and look like one local application. It cannot. However, it can support you if you've got the application architecture right. It can support you to actually bring the application to life. And in that case, I do like to differentiate between system, application, and platform. The application is all the bits that you build, right. The platform is all the bits that run your application. And it is the system, basically the combination once the application and the platform are composed, right, that is now scalable and reliable by construction. And you can rely on a lot of pieces when it comes to Kubernetes to actually make this a reality. >> So as people are out there thinking about cloud-native, this modern era's upon us. We've seen observability become a very important topic. And that, you know, that's basically network management in my mind. But we've seen observability have its own category and its big successes out there, PagerDuty, SignalFx, they all got li-- Well all these ventures got successes. Automation's another area. How do you see the interplay between automation and observability? Because Kubernetes has a lot of things going on. Application's going to have a lot more services happening and with microservices and other things. Observability and automation are two important concepts besides orchestration Kubernetes, though observability and automation. How do you see those fitting into that cloud-native architecture? >> So, observability. When we hear observability, right, we should ask ourself the question where "Who is the observed, and who is the observer? And classically, if you think of the observer, we think about ourselves, right? We have either the developers and we have an or we have an operation's team, and it is the operations team that is fed the data from the observability tool set, alright. However, now if we bring operations into the mixture, and especially operation automation, we can close the loop between observability, automation operation, and again, observability. That is the observability tool set, alright, monitoring the application, feeds into the operation of the application in order to actually, again, orchestrate parts of the application. And here with Kubernetes is actually the perfect example and a very simple example is autoscaling. So, autoscaling on Kubernetes, we are basically just monitoring either metrics like for example, CPU load or memory pressure, or CPU load and memory load, or we are looking into application metrics like the messages queued up in a message queue. And this is now the indicator for Kubernetes to actually scale up more pods on demand or scale down more pods on demand. And yes, this is not rocket science. We had this for a while, yet with Kubernetes and it's extensibility, right, we can take that further and further down up from a very generic level where we have autoscaling on a very generic level to an absolutely application specific or use case specific level. If you dig into Knative, for example, you will actually quickly discover that Knative is or, especially Knative Serving, one of the subsets on K Native, is a operations automation platform for microservice applications on Kubernetes. And again, it feeds the observability into the operations and the operations into the observability. >> They work hand in hand? >> They work hand in hand. >> Dominik, I want to ask you, put you on the spot here with a question, so take your time to think about this. What is the most important story or thread or topic or interest that people should pay attention to in this cloud-native wave? And the second part is what's the most important thing that people need to be paying attention to that they might not be paying attention to? >> Well, unfortunately, I think I have to disappoint you. The one most important one is actually very hard to find. It will influence everything. It will influence your organization. It will influence the architecture of your applications. It will influence how you operate these applications and how you move forward with new versions. So, which one is the most important one or the most significant one very much depends on your role. But there is absolutely no question that the cloud-native journey effects all of these roles. >> So, then, you could argue that the top story is that cloud-native is a completely new operating model different from the old way of doing it? >> Yes. >> Would you agree with that? >> I very much agree with that. >> Because some people think like "Cloud-native, I don't even know what that is. "I'm in the 1990s with my IT department, "and my application developer's still running "single threaded mainframes." >> You know, based on the definition-- Doesn't the definition actually sound pretty innocent? Alright. Scalable and reliable by construction. That actually doesn't sound like it's magic dust and that also doesn't sound too hard. But once you actually start uncovering and dive into what that actually means, right, then you see that the implications of that, right, are far reaching. It starts from UX engineering to software engineering to the operations, and it will effect the entire organization and organizational setup. >> Let's just say you and I are having a beer. It's Oktoberfest, you know, we're having a beer, and I say, "Hey, I have, you know, "I've got to get modern with my IT. "My boss is, you know, banging down my doors saying "We need to go cloud-native. "we've got to get modern applications." But we're running old school IT. Dominik, what do I do? Give me some advice. What's the playbook? What's your--what would you tell me? >> A playbook is again actually fairly hard because on the one side, we are actually not very far into this journey. So, it is not necessarily that there is a lot of chapters in this playbook to choose from. And the other one is, you have to give your IT department the possibility to actually re-architect the entire system. Of course, this is a step by step journey, and you cannot do this overnight. But if you wanted to arrive at a truly cloud-native destination, you actually have to walk the entire cloud-native journey. >> Talk about the intersection between design and development. Cause this, again if everything is flipped upside down where applications are in charge, UX and UI are important. UX, meaning thinking about the user experience engineering is super critical to get that done upfront, just like security. If security is being done on the front end baked into everything, doesn't UX have to be baked into everything? If that's the case, that's again a dynamic. So what's your take on that development and design intersection. >> Remember 15 years ago? It was like when do we bring in a UX designer? >> At the end of the project. (laughs) >> At the absolute end of the project, exactly. So we have it ready, and then we have only one demand, make it pretty, alright. So, obviously, that didn't work great. >> Well, I mean that made sense in with in the web, the web was very limited at the time, HTML and you had some interactive base interactive features, so it was a limited tool set then. >> At that time, it did work, but it was still not ideal. >> Yes, and I agree. >> Right? But now we actually--we need to flip. We need to flip the playbook there on its head. And I would argue that as an application developer my boss, so to say, the one who is giving me the requirements, are the UX engineers right now. So, the UX engineers are the ones, alright, that determine the functional requirements of my application. Now, as a application engineer, I still determine A, security and B, also the non-functional requirements of my application. And once again, we come to reliability or we come to scalability and reliability by construction. So, we also need to start working hand in hand together. So, UX and UX design, or design and development, looking at design and development, you see there is somewhat of a misalignment to begin with. UX design is responsible for building the right thing, and development is responsible for building the thing right. Okay. So in that case we are almost orthogonal on our way, right. And in the cloud-native world, actually forces us together. And as a simple example, if you look at one web page now, that may actually be served by multiple microservices. So, given the possibility of partial failure, alright, will the page come up, or will the page not come up? It's actually not a binary condition or a binary decision anymore, right. Parts of the page may be up. Parts of the page may be down. Is that critical? Is the page still viable, or is it not? That is for the UX designer to decide, and I am here to help them. >> So how's the balance get aligned? How do you realign that you're saying bring in UX to lead the application development then to the application developer then to the development team? >> It actually has to be very short feedback cycle. So, I personally argue for designers and developers going along that journey together so there shall not be a hand off. Once there is an actual hand off, you already lost. >> So cloud-native. We're bringing everything together. UX, the front end. Applications taking control. Infrastructure is code. This paradigm's significant. This is here to stay for the next generation or two at least. >> Yes, this paradigm actually does change how we approach software engineering at large. >> Alright, we're going to dig into more of it. There's plenty more to talk about. We've got CUBEcon coming up in San Diego, STO, service meshes, state flow applications, a lot more stuff to talk about. Dominik, thanks for having this conversation demystifying cloud-native, here with Dominik Tornow, Principal Engineer at Cisco, Office of the CTO. I'm John Furrier, theCUBE. Thanks for watching. (energetic music)

>> Announcer: Live, from San Francisco celebrating 10 years of high-tech coverage it's theCUBE. Covering VMworld 2019. Brought to you by VMware and its ecosystem partners. >> Welcome back, this is theCUBE two stages, three days of coverage, our tenth year here at the VMworld show. I'm Stu Miniman and my co-host for this segment is Bobby Allan. And welcome back, two of our CUBE alumni. >> How are you? >> As I said back in 2010 we didn't even know what a CUBE alumni was. People were trying to figure out what we're doing but now we have thousands of them and both of these gentlemen have been on the program, a few times. >> Thanks for having us back. >> You're welcome. So, first, over we have Ajay Patel, who I believe was doing another filming evening with our crew-- >> Absolutely >> Earlier today. >> The Accenture Innovation Center. >> Ah, excellent. Beautiful building Accenture has here in San Francisco. >> Ajay: Beautiful (mumbles) >> One of the other benefits of being back in San Francisco is we brought in people and it's really easy to get in and out and do other things in the Valley. But Ajay is the senior vice president and general manager of the cloud provider software business unit inside VMware. And one of his partners is Rackspace. We have Peter FitzGibbon who is the vice president of Product Alliances, with for mentioned Rackspace. >> Yeah, super to be back in San Francisco. It's a great change from Vegas. >> Yeah, you know, there is some debate in the community of course it's a little more expensive here in San Francisco and there are other logistic challenges. We're excited to be back here and yeah, really excited to be talking with both of you. Peter, let's start, you know Rackspace has had a long, long partnership with VMware. When I remember back to like VMware Environments Hosted it's like, Rackspace was the one with the lion's share in that market. And, you know, Rackspace has gone through a lot of changes in the last 10 years that we've been doing this coverage. When I think about multi cloud, all of these environments you've got a nice perspective on this and lots of customers you've worked with. So, give us the update on what you're hearing from customers and your relationship with VMware. >> Yeah, so, 20-year history with VMware that we're very proud of. I would say it's almost being re-birthed in the last two years though. Two years ago, we were one of the first VMware Cloud Verified partners. We launched our VMware Cloud VMware Cloud Foundation Private Cloud. We added that about six months later in customer data centers. We're now one of the major partners of VMware Cloud AWS >> Ajay: VMware Cloud AWS yep. >> And that's one of the areas that we're continuing to expand upon. We announced some new services this week, specifically around VMware Cloud AWS or support of HDX, both for migrations for ongoing support as well as a number of, what we call Rackspace service blocks. Which are additional manage services that we are applying, specifically for VMware Cloud and AWS. So, exciting times at Rackspace and VMware continues to be a look, a major part of our portfolio. >> Ajay: And thank you for all the support, Peter. >> Yeah, so Ajay, bring us up to speed of what's happening in your space you know, a lot of attention gets paid, you know Every time, you know, I saw Sanjay Poon, up on stage at the Goolge clould event, and of course the AWS partnership has been one of the biggest stories in all of tech, for the last couple of years. And that's been extending to, you know first it was like, wait, you know Rackspace has data centers and many of your other partners have data centers, but how did these all, play together and how does the VMware software pull them all together. >> So Stu, I think, you and I have been talking about this world of hybrid multi and we've been arguing, whether it's just a transitionary stage, or here to stay. Hopefully that debate's over, right? Hybrid's a new reality, multi cloud's a new reality and we talk about these hyper scales but you know, Rackspace and many of my VCP partners they've been longstanding in this journey with us. I don't know if you caught Pat's keynote? We demonstrated, that we have over 10 000 data centers through our VCPP network and Rackspace being one of our top 10 partners. So you start, to start seeing this mix of VMware everywhere. Whether it's trough our service provider cloud the customer manage cloud or even a hyper scale VMware cloud. You now have the ubiquitous VMware infrastructure to play with. >> At some point it's just cloud. (chattering) >> That is a great point, when I talk to customers most of them, they have a cloud strategy it's usually not a hybrid or a multi or all these things. Here's the nuance I want to, you know, ask for a second then I definitely want Bobby to jump in with what he's been talking to customers about. You know, hybrid cloud is a reality because customers have their own data centers and they have public cloud. The ideal of multi cloud, customers have multiple clouds, but, you know, one of the definitions I put out there is, multi cloud exists when the multi cloud solution is more valuable than the sum of the pieces. And I'm not sure that we're quite there yet. I think we're starting to move down that path. But what are you both seeing? And does that resonate with what you see today? >> Yeah like, all of our customers have workloads in multiple locations and trying to provide the assessments of where to put the right workloads at the right time is one of the key values that we hold dear. And before we ever talk about where we're going to but a workload we assess whether, what our clients environments is and determine, maybe this is an AWS workload maybe this is a WMS workload maybe this workload really belongs in the data center for, due to laws of the lands laws of gravity and physics. >> And I think, what's happening, really is any application, typically choosing a platform or the cloud service that's driving the decision. Collectively what ends up happening because of that, you are in multiple clouds. So, I think what's it's a result of the reality that applications are driving location and platform choices and the way to drive consistency is trying to pick a few common things whether it's kubernetes as a platform or VMware, right? Those are a way to, kind of, unify these desperate choices that are made individually. That are collectively making each of our customers multi cloud, right? >> Ajay, I want to piggyback on that because you talked about the applications driving a lot of the choices, when applications teams in my experience are, kind of, making the choices they don't care about a centralized strategy and obviously, this very powerful partnership can support multiple places and ways around your workloads. How do you lead the witness, a little bit towards simplification and just because you can do it doesn't mean you should do it. >> Yes, so I think what's happening from our perspective is depending on which side of the IT house you're at if you're part of the core IT that's running and maintaining mission critical systems you're really looking for something that's reliable, performance scalable, secure. And you, maybe, looking at a hardware refresher looking at your data center strategy and you're looking to migrate that workload. You're not really looking to re-change the app just because it's cool. >> Bobby: Right. >> If you're part of digital transformation effort you're looking to say, okay how do I get something out there quickly? >> Bobby: Right. >> How do I integrate on the average my data and application assets while leveraging cloud services? >> Bobby: Right. So, we're seeing this tension in some ways where the, kind of, net new is really pushing the envelope of cloud with self service elasticity, new capability while as the old guard is like I got to keep my running business, running keep it secure. And how do you bridge these two worlds and bring them together? We call it DevOps and, you know, ITA and the traditional, kind of new developer. Reality is, you're trying to bring the two worlds on a common platform. Whether it's VM's or containers and so the exciting part for us is, how do we unify? How do we deliver this experience and give them the choice, where it makes more sense. And blur the lines between public and private. Those are just locations and makes more sense for your customer or your application that you can drive. >> Bobby: Right, excellent. >> We find ourselves in those conversations, all the time trying to bridge two sides of the equation at a customer and trying to get them together on a uniformed strategy and weighing the pros and cons of different locations or different workloads. So, it's not easy, it's not a challenge of course. >> Peter, I'd love you to bring us inside some of those VMware on AWS customers because, you know, some of the first customers I talked to, it was, you know, I'm a VMware shop and there's a part of your group that's like oh my gosh, I can't change and this was a driver saying hey, you don't need to, we can bring you along. But, the value, once again needs to be Oh hey, I need to do some innovative things I want to be able to access some of those cool amazing services that, you know everybody is providing on a daily basis. So, you know, are you seeing that progression are there any interesting use cases that are coming out? >> Progression is the word, we could call it progressive transformation inside Rackspace. Like, you're a VMware customer let's bring you ion the journey towards public cloud. And let's help you leverage those address services. So, we find ourselves in a great position where a very large number of engineers, that support our native AWS workloads, we've brought those two groups together from our VMware expertise and address expertise. So when a customer lands on a VMware address I consider it a failure, if they haven't transformed part of the application in three months. If they're not really consuming those native AWS services. And that's what we really try inject. It's like, get our AWS engineers looking at those workloads let's start consuming those native services and that's what we're finding really exciting about how customers are starting to adopt and starting to plug and play into some of those services. >> Oh I look at it, as you know, you'll see a team Sanjay called it M&MS, migrate and modernize but a part of the migrate is often modernize your infrastructure first by putting on a modern cloud platform. And then modernize your application using cloud services. How it says, it's M-M and M, right, to follow through because it's not just about lifting and shifting keeping the old crap as it is. You got to really start to look at how do you drive innovation drive your Cube to a better place. So that you can operate it more affectively and then modernize for application results. And your service blocks, are really catered to helping that customers. So you can talk a little bit about how they're building the services that compliment our offer. >> Yeah, so our service blocks is... In the past, we offered them one big block manage service to a customer. We realized, let's decompose that and offer the customer what they need at a specific point in time. So we, think about Lego blocks, where at some point you may need, just some support or at some point you might need some architectural services and design and other times you might say cost optimization. That sort of stuff. So over time, we're adding on these Lego blocks if you will, to add a customer, to give them what they need at the point they need it, and not more. So, it's an exciting concept that every month, we're adding more services. We launched a Rackspace manage security service block today specifically for VMware cloud. So, we continue to add these and provide incremental value. >> I want to ask you a little bit of a controversial question. There's a saying, pioneers take the arrows but settlers take the land. >> Right >> So, if I'm a technology leader how do I embrace all this newness without getting shot, partnering with your firms. >> So, you know, we always say lock-ins bad but reality is, we always choose to reject technology platforms. And if you're a VMware customer I hate to say it, you're running on VMware infrastructure you have VMware ecosystem, you have VMware run books you have VMware partners, managing your on-prem assets what if I could you a path forward on any cloud of your choice without having to change any of your day-tot-day operation while leveraging the innovation future. What is the safest path for you, Mr Customer? And so, in this world, you can think of us being laggard in some sense. Because we're not pushing them to a single destination. We're giving them that choice, leveraging the strength. I think the innovative part that we've done today has really brought containers and VM'S in a single solution. We talked about containers killing VM'S two years ago, right? You know, VMware was getting trouble with docker VMware was going to be trouble with Openstack. Where are those two companies today and where is VMware? It's about simplifying for the customer a common solution. And we're taking those choices away and making this easy. Giving partners who can help them on their journey. So, I would say we're the safer choice. >> Okay >> That will be my response. >> Peter, we're not going to ask you about Openstack. (Giggles) >> I'm really back to VMware, it's working progress. (Giggles) >> Interesting point, the settlers right? At this point VMSware and AWS is two years old I think that first year, what was definitely some pioneers our there. But now I think we're really in there where the settlers are coming on and we're seeing large-scale adoption in the platform and now that VMware is offering more and more services, natively we can add more those managed services and help those customers really transform and not worry about the underlying IS that's rock-solid at this point. >> Peter, I would like you to get into it a little bit, kind of, the containerization and the kubernetes, you know, Docker, obviously a lot of hype, but containerization that's hugely important, you know a lot of the keynote this morning was talking about cloud native. I talked to lots of customers, you know there's some that, yes, they will want the VMware journey but many of them say, well, If I'm going to cloud I can just use containers. Why would I have the overhead of VM's? when cloud founders was originally created it was not for that type of environment. So where does that fit into, you know your world containers? >> Yeah, we actually launched some more services on that today as well, some more professional services and manage services, so safely around advanced kubernetes support, across all our platforms so this isn't just a VMware announcement this is on AWS, Microsoft, Badger and Google. So, another exciting progression, or hybrid could story and making investments in those resources to deliver kubernetes. We also launched a cloud native service block today, as well, that is really giving customers access to deep engineering skills and giving them cloud reliability engineers that can help them transform their workloads and get them ready for the cloud. >> I think, for us, if you... Project (mumbles) sorry tan zoo as a solution, and project pacific. Our two marquee announcements we made this week and if you look at the way we're focusing on the bull run manage aspects of the full life cycle and our active participation in the kubernetes community we're starting the beginnings of what I felt, like Java in 2000 when I was at BA, right? Where Weblogic and Java was the runtime for rolling and building new apps. Kubernetes and containers are the new runtime for building distributed apps across Cal platforms. And we're in this early journey and we are uniquely in opposition with the combination of pivotal for build. With project Pacific we're bringing containers into V&V-sphere, so VM's and containers become first class. Trough your point, we demonstrated eight percent performance improvement over bare metal on a V-sphere container based solution. Starting to engineer, based on a key scheduling work that we do in the kernel and in the hypervisor we're driving that deep into the kubernetes platform into the core platform itself. And then manage is going to be the new interesting bit. What is that control panel that everyone is going to fight over? And the manage services partner can help them choose. So, I think the battleground is more and more going to manage I think we secured our base with the runtime. And the bill will be about choice. (Mumbles) >> And Tan zoo is music to our ears we can now, again, focus on what's the additional manage services and service-- >> How do you help customers build apps? And change the engineering culture is what you provide. We just give you the runtime across any of these clouds. >> We want to help everyone, transform applications also transform the culture and how they do their business all that rapport-- >> Engineering transformation is a big one. Sajay transformation we talked about, internally for us VMware, same with our customers. You got to change the mindset of how you build the applications. In this container service based architecture >> Agree, agree >> What else is keeping folks up at night? That you talk to? Love to know that, just hot tail. >> Nothing keeps me up at night it's an exciting world we live in so loaded question, what excites me? What excites me is the progression, that VMware is making and the announcement Lydon video and GPU access link I think, early next year. I think that can be another wave of VMC adoptions. So, not keep me up at night but keep me interesting and excited. >> I think to that point I can build on what Pat said about tech for good, I mean we have a joined customer feeding America, right? We're now taking technology and making it available so that, you know, the 60 000 plus distribution centers they have, are up all the time. They're not even worried about infrastructure. They can focus on feeding the cause which is, I think 47 million people being fed. It's scary, right? >> Well, we want to bring it back to the organization of the discussion, you said you're helping customers with because we are worried you know, about how racking, stacking, configuring how doing all of those things, you know how do you help them? I talked to a number of customers at this show and they said look, my roles in my organization is still hardware to find And it's tough to move into a software role but if I want to get into the6 tech for good I need to be able to uplift my skills uplift my organizations, yeah. >> It's difficult, right? Organizational changes differ for every company but as part of the digital transformation there is also organizational transformation so we're having customers think about what is the progression form a VMware administrator to a DevOps-- >> Or cloud, I bet. (Giggles) >> It's not easy, it's your short answer on that. >> I think for us, is really starting to drive the cultural chance providing the tools and bring the self service in where they can be a coach, right? Be the trailblazer, who can come in and help change your organization. Teach them how to do it right. Not everyone will get there, hopefully bulk of the organization can shift right. >> Peter, I want to give you the final word you know, your partners and customers to understand. Take aways from VMware 2019. >> Yeah, it's great to be here, as usual thanks for having us. I think, Tan Zoo is really exciting. The progression that we're making with adding service blocks on top of VMware and AWS and or other hybrid cloud announcements. So, great to be here, but the Tan Zoo is kind of the story of the show. >> For me, it's a VMware is here to stay. We want to be, be have been, your strategic partner for the last decade. We're here to stay for the next decade. We're going to help you solve these hard complex problems and give you the choice you need. Across a broader ecosystem of partners and solutions. so, very excited to be here and to deliver that value. >> And Peter, thank you so much for joining us again, Bobby Allen, thank you for co-hosting. I'm Stu Miniman and as always thank you for watching theCUBE.

[Narrator] Live from Las Vegas, it's theCUBE. Covering Vmworld 2018. Brought to you by VMware, and its ecosystem Partners. >> Welcome back to theCUBE. We are live at Vmworld 2018, Mandalay Bay in Las Vegas. I'm Lisa Martin with Dave Vellante, hey Dave. >> Hey Lisa, how's it going? >> Great, this morning started off with tremendous amount of momentum from Pat Gelsinger, including a new tattoo that he debuted. 20th anniversary of VMware, 20th anniversary of the Rackspace, DellEMC partnership, please welcome to theCUBE a veteran and alumni, Peter Fitzgibbon, the VP and GM of the VMware practice at Rackspace. Peter it's great to have you back. >> It's great to be back here at Vmworld. >> And we're excited to welcome David Trigg to theCUBE, the Global Vice President of Market Development and Service Providers from DellEMC, welcome. >> Thank you, glad to but be here. So happy 20th anniversary to Rackspace and DellEMC. >> Thank you. >> Longstanding partnership, what's going on? A lot of momentum at Dell Tech World just, what, four months ago? What's some of the momentum that you guys have seen in your joint customer space this summer? >> Yeah, so at Dell Technologies World we launched our Rackspace private cloud, R by VMware, our Everywhere edition, as we're referring to it, which is extending Rackspace private clouds into customer data centers and colos. And since that announcement back at Dell Technologies World, we've seen fantastic adoption from both our existing installed base that's interested, and knows the Rackspace brand, and our fanatical experience, as well as new customers that know now we can service them in new locations. >> And then David, for you, Dell Technologies World was all about IT transformation, digital transformation, security transformation, and making it real. How is DellEMC working with Rackspace to help customers make these transformations a successful reality? >> Yeah, well one of the fist things, in my opinion, to highlight is the length of time that we have worked together, and through that length of time, Rackspace has made incredible investments in their skill set, their ability to manage infrastructure, you know, there's a lot of a deep knowledge there, so customers can feel very confident about the ability to provide the services. And as customers go through transformation, customers have more choices now, and more things, as we talk about the edge, and the core, and the cloud, they have to manage infrastructure in more places than they've ever had to manage before. So we're very proud of the relationship that we've had, the investments that they've made, because our customers are needing help in managing through, not only the transformations, but all of the choices that they have to make on where's the best place to put an application? Where's the best place to put a workload, and how do they manage the migrations and the modernization? So yeah, it plays very, very close into our transformation message, and quite frankly, we couldn't do it without partners like Rackspace. >> Let's talk a little bit more about that, because you're talking about more than just a storage partnership, right? Is that, >> Oh, yeah. >> A lot more to its, it's much more comprehensive, >> Absolutely. >> Sets of integration, practices, and areas of expertise, so let's double click on that a little bit. >> Yeah, there's a lot of skill sets that are required to even just do assessments, where I'm really understanding where do the applications go. Really then making sure that they understand, how do you support the infrastructure? How do you monitor the infrastructure and how do you make sure that it's running a lot? And again, Rackspace has made a lot of investments, is one of the best in the world in being able to do a lot of this. >> Let's talk a little bit more about that. Why Rackspace? >> Well, we are offering customers strategic flexibility, really. Whether they want to deploy in a Rackspace data center, a customer data center, get access to our deep expertise, not just a DellEMC, but our 150 plus VMware certified experts that our customers can now tap into, because this world gets more and more complex. And you saw the evening announcements this morning. It was like, how do our customers get the best value from those technologies, and not simply have shelf ware? Tap into Rackspace, with our partnerships with DellEMC and VMware to get the real value out of that expensive technology. >> So from a customer's standpoint, help us understand what's really going on. We asked the question a lot this week, is things like the AWS VMware partnership, is it a one-way trip to the cloud, or is it boom for the data center? And a lot of people are saying the latter. What are customers saying? What do they really want to do? >> Listen, customers are going to be living their data center for a long time yet to come. We've got legacy applications, they've got mainframes, we got client server applications, and then we have direct cloud-native applications, but there's a slew of applications in the middle where customers are kind of unsure about where to go, and they lean on a trusted partner like Rackspace, who really is cloud agnostic to help them figure out should they go public cloud? Should they be private cloud? Or are they in a hybrid cloud journey like everybody is on? So we want to be the Switzerland, where we can help people determine where they should go, and really offer unbiased expertise. >> So you guys announced, kind of along the lines of being Switzerland, at Dell Technologies World, Rackspace Private Cloud Everywhere, powered by VMware, Everywhere. I know you've got, what, five data centers in five continents. Talk about that Everywhere. How does it help customers to embrace the reality of multi-cloud, and to actually do so in a way that allows them to understand, working with you guys, where different applications should be placed at different times in the year? >> Yeah so, Everywhere is a natural evolution of what we've offered in our own data centers over time. So now deploying out in customer data centers and colos, well later this year, we hope to launch a formal VMware on AWS software as well. So Everywhere constitutes three parts, really, Rackspace data centers, customer data centers, to get as close to their data as needs be, and VMware on AWS as our product matures, as you saw from a number of announcements this morning. >> And to add on to John's question about the promise of the cloud, I think the original promise, and maybe the threat of the cloud was everything was going at the cloud. Well as we're learning through IoT and other new, emerging trends, that's not realistic. Customers really have to think about the edge, their own data center, because their own data centers are not going away. They have to think about the SLAs that they're providing to their end users, to their employees, and that's where you have to place the application, the workload in the right place to enable the best customer experience for their customers and their employees. And that's were a company like Rackspace, that can really get to the edge, the core, the cloud, by managing that infrastructure regardless. Obviously, the investments that VMware's making to help enable that as well, and being supported by a lot of the DellEMC stuff. It's an exciting time, I think. >> I Want to follow up on that, because Peter, off camera said cloud migration doesn't mean leaving your data center. >> Absolutely. >> This Gartner analyst came out, not that recently, but I think it was last year, and said that 80% of data centers will shut down by 2025, so that caused a lot of, right? Both eye rolling and no way, and et cetera. The Wikibon crew, which is affiliated with theCUBE, a sister company, sister division, just came out with a report that said true private cloud is going to be a $32 billion market this year. So that means on-prem cloud. >> Yep. >> So you have all these countervailing messages going on. Then you see, of course, the epitome of Andy Jassy up on stage today with Pat Gelsinger talking about hybrid cloud. What do you guys make of all of this? What's really happening and going to happen? >> I think customer data centers are going to live for some time to come, as people figure out where should the workload actually go? What can they do with that specific workload? Can they refactor it and rebuild it and go cloud-native? Great. Can they move to a hosted private cloud model with Rackspace rolling racks into a customer data center? Or is it a legacy application that really needs to be kept and maintained over time until the next disruption happens, where they really have to refactor it? >> Yeah, really, in that case there may be no business case. Why lift in and shift it, for what? Just to say, >> Exactly, they get it. >> Hey I'm in the cloud. >> Exactly, I think with cloud migrations, does not mean leaving your data center. I think that's going to continue for some time, where people can get the benefits from Rackspace, moving from a CapEX to an OpEx model with managed services, with industry leading SLAs, but still in their own data center, because they have applications running that cannot be moved. >> Well it's interesting, David to see this equilibrium that's kind of being reached, you know? A few short years ago, there was sort of antagonism between VMware and the AWS. You know, the whole book seller comment. Andy Jassy was like, pfft, on-prem cloud, there's no such thing, and now you see those worlds coming together, underscoring the reality that you can't just shove your business into the public cloud. You can't just move all your data there, and there may not be a business case, or an advantage of doing that. >> Right, right. >> What do you think? >> Well a lot of times the answer to the question in the, one, I'm not an analyst, so it's not my job to really predict where it's going to go. I mean, obviously we watch trends and look where it's going. You know, my job and our job is to help customers deal with the realities that they're dealing with right now, right? And they have data centers. They are thinking about the cloud. They are having to take care of the edge, right? And in time, we've seen some of those shifts, right? There was a lot of the, where are we going with the cloud? Where's it going to go? Are they going to shut down all their data centers? Regardless of that, we will adjust to the market and make sure that we're adjusting the market. But more importantly, we're going to do what's right for our customers, to help enable them to those journeys, and it's still yet to be proven. There's a lot of Predictions out there. Will they shut down all data centers? I'm sure there'll be some consolidation of it, but yeah, it's getting more complex. >> Okay, so VMware, Rackspace, DellEMC, you're not screwed, check. (David laughs) what about the edge? Help us unpack that a little bit, you know, whether VMware at the edge, Rackspace, DellEMC, what do you guys see evolving there? >> I think there's many definitions of the edge, and when you talk about it, everything's IoT initially, but even just deploying smaller data centers in customer locations in partnerships with these guys, to kind of meet customers where they are, and get smaller, roll in racks into different locations is continuing to be something that customers are looking for. >> So there's the hinterland edge, which is a bunch of devices, you know IP cameras, they're going to be instrument, most of the data's going to stay there anyway, but then I think you guys call it, I don't know, the core. There's a aggregation point, >> Well the core, >> if you will. >> which is typically what we refer to as kind of the customer data center, and then there's the cloud, right? So kind of the two different, customer data center versus the cloud, and then, truly, the edge, capturing, And it started, and we referred to everything from laptops, phones, as well as, really a lot of the sensors that are going to be out there, and your ability to have to process and analyze and react real time at the edge. And so a lot of use cases, public safety use cases, where, you know, when an event happens, that connection back to a place where you would analyze it. Obviously the autonomous cars, right? They can't have to connect to a data center every time it wants to make a left turn. So a lot of that ability has to be pushed out to the edge, but yet, then also being able to bring that data back, be able to manage that, and be able to update those computers, or those data centers. I mean, an autonomous car is basically a mini data center. Someone's got to manage that, patch that, make sure it's running, and manage that. So yeah, to your point, the edge is beginning to mean a lot of different things. There are the hinterlands, I think was the word you used, and some of those things, but then there are the more traditional work cases, and even just running a phone app is now considered an app, versus, you know, and that's were people start to really look at, is how do you deliver that experience on a phone, and that's an application. >> A lot of data. Well, I like to follow the data, you know? A lot of data at the edge. There's a lot of data, like I say, at the aggregation point, and then if you want to do some hardcore modeling, go to the cloud, and that cloud can be your own, on-prem data center. >> Yeah. >> Right. >> Yeah, there's just so much data being generated, and data is power, I think was one of the key taglines of DellEMC Worlds. And I was like, it truly is. Where the data is, is where the power is. So some has to be transferred back to the core. Some may be pushed up to the cloud for deep processing with AI and ML type processing, but there'll be data at all these different points. >> Well that's the other point, is it's just like the innovation engine no longer is Moore's Law in this industry. it's the data, applying machine intelligence, and then cloud scale. And then, you got to, as suppliers in this business, you better be playing in some way, shape, or form, in all three of those, right? >> Absolutely. >> So how, and speaking of that, I think Pat Gelsinger talked about it this morning in the context of superpowers. He talked about autonomous vehicles, AI machine learning, advanced analytics, IoT. How is DellEMC and their technology, Peter, helping to enable Rackspace to optimize your offerings to be able to take advantage of machine learning AI? To be able to deliver on customer expectations? >> Yeah, we're deeply partnered with these guys from those announcements you head earlier this year, that we're already investigating the different capabilities they're having from an AIML perspective, and really seeing what sort of technologies are they launching that we can then put into our private cloud practice, and offer to our customers. So it's our deep partnership allows us to kind of get a front seat at that and working closely to investigate and to do a lot of R&D with the new capabilities they're coming out with so. >> What superpower does that give Rackspace? In terms of differentiation? >> Uh, you've stumped me on that one. (laughs) >> Well customers have, we talked about, everybody wants flexibility. They also have choice. >> Yeah. >> What are some things that this 20 year partnership infuses into Rackspace to give you those differentiation points? >> Yeah, it's the deep partnership, and knowing, working so long together that we know who to pick up the phone to solve some of these complex problems. >> Yeah, and of us, from my perspective, we always start with out joint customers in mind first. So it's our job to bring the advance technologies, the advanced capabilities that we're making big investments in, and make sure that Rackspace is able to support and leverage those within their business so that we'd provide a better experience for the end customer, but then also making sure that we show Rackspace how they make money on that, and how they can run a business on that, that's really, is differentiated to your point. Because a lot of, you know, you painted a very pretty vision of what the world might look like. Most customers aren't there yet. Most customers aren't taking advantage of AI and deep learning. They're still dealing with some very traditional legacy issues, and it's that gap that becomes very, we love talking about the cool, new, exciting stuff, but for a lot of customers, they're stuck somewhere in the middle, and that's were partnerships like this, because you can not only help them with the legacy, old stuff. How do you migrate, and then how do you take advantage of the really new stuff? Or how do start at least thinking about that and exploring that and looking. A lot of the original IoT use cases, the ROI wasn't known. They're setting up projects, then they hoped they'd get a benefit out of it, right? And that's continuing to emerge and evolve as time goes on. >> Well it's hard, too. I mean, everybody's afraid of getting Uberized and disrupted, et cetera, et cetera, but they, at the same time, if you over rotate, to a new, you can spend bunch of money and not get any return. >> Yeah. >> Everybody's trying to get digital right, it seems, but it's unclear what that means. So they look to partners like you to help them figure that out. >> Well, it's a scary journey to your point, because they obviously have existing revenue streams. It's the inventor's dilemma, right? It's they have existing revenue streams, but how do they digitize their business? How do they reach customers in a different way? And so they don't become Uberized or Airbnbed, or whatever, what term you want to use. Every CIO, every executive is thinking about that. IT for a long time was about taking cost out of the business which, after a while, that's no fun, because that usually means head count reductions, that usually, I mean, that's not a fun conversation to have every single day. Now with the digital transformations mode, how do you generate new revenue streams? How do you, in a way, a lot of companies never, one of the most older industries, being taxis, a little bit not that exciting. It's gotten reinvigorated through some of these things. So it's kind of cool. >> Yeah, and you said digital transformation, right? What does that really mean? Cloud transformation, security transformation, app transformation, so there's many different factors. And companies like Rackspace can offer expertise in all those different areas, where some of our competitors may only hit on one of those. They're only a security company, or only a VMware shop, or only an AWS shop. >> Helping customers really glean the power from that data, because if they can't, it's not powerful. Gentlemen, thank you so much for stopping by theCUBE and talking with Dave and me. We appreciate hearing what's going on with Rackspace and DellEMC. >> Thanks guys. >> Thank you so much, I appreciate it. >> Thanks very much. I appreciate the time. >> Thank you. >> We want to thank you for watching theCUBE. For Dave Vellante, I am Lisa Martin. We're at VMworld day one. Stick around, we'll be back after break. (upbeat electronic music)

>> Live from Orlando, Florida, it's theCUBE covering Cisco Live 2018. Brought to you by Cisco, NetApp, and theCUBE's ecosystem partners. >> Hey, welcome back, everyone. We're here live at theCUBE in Orlando, Florida for Cisco Live 2018. I'm John Furrier, the co-host of theCUBE with Stu Miniman. It's our third day of three days of wall-to-wall coverage. Our next two guests are from NetApp. Russell Fishman, Director of Product Management, and Keith Barto, Director of Product Management, both directors of product management. One was the former CEO of Immersive, now with NetApp for a few years. Guys, great to see you, thanks for coming on theCUBE. >> Thanks for having us. >> Thanks for having us, John. Thank you. >> We saw you guys in Barcelona, obviously. The NetApp story just keeps on getting better. Also, you have core customer base. Cisco's going under transformation. You guys have been transforming ever since I started seeing NetApp arrive on the scene in the 90s. Every year there's always a new innovation. But now, more than ever, you're hearing even Cisco Bellwether in the routing networking business putting up old way network, hey there's a firewall. There's some devices in there. To a completely new, obviously, cloud made in the modern era really things are changing. So what's your reaction to that? Obviously, you guys are a part of that story. You have a relationship with Cisco. What's your reaction to that? And talk about your relationship with Cisco. >> So we obviously have a huge relationship with Cisco. And most folks will know about our FlexPods, I think that's probably the most famous way that we collaborate with these guys. We just came off the back of an amazing year, five straight quarters of double-digit, year-on-year growth, killing in the market. Obviously, we have to brag a little bit, right, come on. >> It's theCUBE, come on! >> It's theCUBE, we gotta be a little bit excited about it. So we're really excited about that, it just really talks to the strength of the relationship, right? So there's a very strong relationship there, and it's been there with FlexPod for eight years, and there's been a lot of transformation, exactly to your point John, a lot of transformation during that time, a lot of focus on the clouds. So one of the questions I always get asked, is why is converged infrastructure still relevant in a cloud-first world? And it is not obvious answer, now clearly our customers think that it is, and so do our partners. But it is not obvious why that is. NetApp has gone through, you talked about transformation, NetApp has gone through this massive transformation, huge focus on clouds, I mean, we have these cloud-first, cloud-native, focus around our data management platforms. We talk about a concept called the data fabric, I don't know if you've heard of the data fabric before. >> Yeah. >> And the data fabric really talks to how, our vision for how enterprises want to manage that new digital currency that is data across all the silos that they want to leverage, right? We've been able to bring some of that goodness into FlexPod, and that's why we're still relevant now. >> Yeah, so Keith, I think back to when converging infrastructure was built as about simplification, we were gonna take all these boxes and put it down to a box and that was the new unit of measurement. Well, Russell was just talking about we've got multi-cloud, when I think of NetApp now, it's always been a software company, but now software in that multi-cloud world, help connect the dots for us, as to management of converged infrastructure into that whole multi-cloud story. >> Yeah, we were very privileged to be acquired by NetApp last March, and my company Immersive, a lot of us came actually out of Cisco. So I was one of the original FlexPod architects from Cisco and had the privilege of helping to build the network, the storage that we brought into FlexPod, and a lot of our customers and our retailers kept on saying, "How do we know we put it together properly? "How are we following the best practices from the CVDs, "from the NVAs, from the TRs?" And so we took those rules and those analytics and we put them into platform, into a SaaS-based platform, and we were able to analyze that, coming from our customers' FlexPods, from within their deployments, from within their multi-data centers, and bring that into our service, run those analytics, prove those best practices, show the deficiencies, get our resellers out there to help our customers, 'cause FlexPod is a meet in the channel play, and we relied heavily on our resellers to make it a success. >> What was the driver for that product? When you started that company and that happened, what was the main motivation behind that? Was it analytics, was it insight, what was some of the things that you guys were building in, was it operational data? >> The real reason was people kept on asking, "How do I know?" Because it's a reference architecture, not a product, "How do I know I did it right?" Because it's really important, we're gonna run our key business applications on this platform, right? My SAP, my Oracle, my Sequel, my SharePoint, my Outlook. I gotta make sure this stuff is really gonna work properly, and it's going to grow in scale with the business. So I need to make sure that those redundant links are there. I need to make sure that when I do VMWare upgrade, or a Microsoft upgrade, that the firmware is alignment with the best practices in the interoperability matrix, so we wanted to make that as easy as possible, so that from a single dashboard, you can see all of those things, you can diagnose it quickly, you can get those email alerts and notifications, and because you end up with disparate operation teams, the server team, the network team, the storage team, the hypervisor team, sometimes they don't always talk effectively with each other, and from one single dashboard, we're now able to show everybody where things are today, and then, one of my favorites, when there is a problem, you call either Services or Support, and you say, "Hey it's not working," and they say, "What did you change?" And you say, "I didn't change anything." We have that historical-- >> Finger pointing kicks in, it was his fault! >> Yeah we have the historical snapshot and trending, so we can go back and look at where things were and do a comparison to where they are today, and it allows us to have a much faster mean time to resolution. >> And what do you guys call that product now within Cisco? What's it... >> It's now called Converged Systems Advisor in NetApp. >> Awesome, so what's next for convergers. Obviously, people, both cloud growth, we're seeing the on-premise, Wikibon has reported, the true private cloud numbers, which basically say there's a lot of on-premise activity going on, that's gonna look like cloud, it's gonna operate like cloud, so they need to have that. There's migration going on, but it's not a lift and shift, to cloud, there's gonna be, obviously, the hybrid cloud and multi-cloud. So, cloud folks still buy hardware, too. You gotta still run stuff, networks aren't going away, storage isn't going away, so what's next for the converged infrastructure play with FlexPod? How do you guys manage that roadmap? >> So, we just announced some things coming into, jointly with Cisco, coming into Cisco Live. One of those things we announced was something called Managed Private Cloud on FlexPods, or actually no, FlexPod Managed Private Cloud, sorry, I switch it around. And FlexPod Managed Private Cloud, it really talks to exactly what you're talking about, John, which is... What we find, cloud has fundamentally changed customers' expectations of what they want on-prem. They recognize the need on-prem, we live in a hybrid world. Those of us that've been in the industry long enough, and have a couple of gray hairs, know that there are very few transitions that are really absolute in the business. A lot of people pronounce that it's gonna be this way or that way, and the reality is, it's something in between. And that's fine because cloud is just another tool in the toolbox, and you don't want to hit every nail with the same hammer, you want to find the right tool for the right job. So what we've done is we've taken some of that cloud goodness, which really means not having to worry about the underlying infrastructure, all right. Worrying about the applications, being more application-focused, more business-value-focused, more line-of-business-focused. And being able to deliver that in a way that people can consume it on-premise. So it really feels like a FlexPod delivered like a cloud, but from a management day-to-day perspective, you don't have to do it-- >> So, it's flexible. >> It's flexible-- >> FlexPod. >> But it's done for you, so it's your little piece of cloud, sitting on-prem, and you don't have to manage it or run it day-to-day. >> Let's talk about what you just said about the whole transformation, people say a certain way, basically you're kind of saying, a lot of press, and a lot of analysts say, "Oh, you've got to do this digital transformation." Customers will take a pragmatic approach, but you guys at NetApp have been talking for a long time, I've been following it, non-disruptive operations. >> Yes. >> So what you see in the cloud if people wanna take those first three steps, but they don't want to have to overhaul anything, containers have proved to be great resource there, Kubernetes is showing a great way to have life cycle management on the app side of infrastructure. How does your customers, and Cisco customers, maintain that non-disruptive operational playbook, because Cisco guys are gonna start changing, moving up the stack too-- >> Absolutely. >> Doesn't mean storage is gonna go away, but they don't want to disrupt anything, your thoughts? >> And it doesn't mean any of it goes away, that's the funny thing, we talk about where we want to focus, but it's as much about not having to worry about the things that we had to worry about that are just there in the future, right? So it's kind of like if you went back 200 years, going to get fresh water was a big hassle, now it isn't, it's delivered to you, right? I know it sounds like a crazy analogy, but the reality is is that we shouldn't have to worry about the basics of on-premise, private cloud, it should just be automatic, it should be simple to execute, simple to manage, simple to order, simple to deploy, and then you focus on the value, so that's what we've been really focused on. >> Keith, when I listen to my friends in the networking space management's still a challenge. The punchline is usually, they hear single pane of glass, and they said that's spelled P-A-I-N. >> I've heard that one too. >> Talk a little bit about how your solutions tie into some of the broader tools out there. >> Well, we first looked at the compute layer and said, because of the extensibility of USC Manager and the API integration, we're able to take advantage of that, and be able to pull that data out, and XOS, right? We're able to do that exact same thing, and the background that we had at Cisco, and knowing those products really well, we were able to gather all the specific data we need to look at those best practices. And it's a complex architecture, but it's a very elegant architecture, because of the high availability, it can provide the performance, the non-disruptive operations that you were bringing up, John. We want to make sure that we're able to keep those things in line, so as we bring our next release of CSA out, we're going to be adding Enterprise Fibre Channel, so the new MDS switches, we're gonna be bringing our relationship with VMWare in our engine to be able to ingest the configuration of VMWare in. We're also bringing back our partner-centric reseller portal so when customer is running Converged Systems Advisor, they can share it to their reseller, and the reseller's going to be able to provide managed services, support services, and professional services to expand, to repair, to augment those existing FlexPods in their customers' environments. So we're really excited to be able to bring that solution back to our resellers-- >> What's that going to do, what's the impact of that, because I almost imagine that's going to enable them to want to be tightly integrated but also get data from their customers. What do you guys see as the value for the partners to take advantage of that? >> Well, I just met with a partner at our booth, just a few moments ago, and walked them through the solution they had never seen it before. It takes a reseller a week, or even multiple weeks, depending on the size of the FlexPod, to actually go through the configuration of the servers, the network, the storage, the hypervisors, and correlate that into a deliverable to their customer. We can do that in sub-10 minutes, sub-15 minutes. >> So faster time to the customer value. >> Faster time to customer value, faster time to resolution if there is a problem, and then again, they're running in their key business applications on this platform, we've been doing it for eight years, we want to continue to expand upon the value the FlexPod can offer. >> But I wanted to add just a couple of things to what you were saying. We talked about FlexPod really being a channel play. That's important to us in product management, not so important to our customers. What it really means to our customers is they tend to have a very close relationship with their partners. Their partners are the ones that are really enabling FlexPod for them. What we're doing with Converged Systems Advisor, is we are creating such a close relationship at a technical level, technology level, between the customer and the partner, that the partner's there to help them on a daily basis. Where there is a problem, it's almost like the telematics in your car, right? All the cars now, they're phoning back home, they're telling where there's something wrong, you get this letter or an email, you need a service, you need... This is exactly what we're achieving with the Converged System Advisor-- >> When you call support, what don't you want to hear? What's your model number, what's your serial number, what's your contract ID? Wouldn't it be great if everybody's singing off the same sheet of music? >> Well, you bring a great point there. There was so much discussion, well, converged infrastructure a public lot, those are gonna be really simple, and they're gonna be homogenous, and they're all gonna be great, but yeah, you're smiling and laughing because the reality is you're never gonna find two customers that have the same environment, no matter what you're talking about. >> No. >> So I need the tooling, I need the data and the analytics, to help get through that. I shouldn't have to spend half an hour on level one support. >> And that's all-- >> I shouldn't have to go through multiple forms the same time. >> Yes, and you're right Stu, that's always been, that's always been the mantra for FlexPod since the word dot. We don't get to an 11 billion dollar install base unless you're doing something right, and the word, the reason the word flex is in there, it's a dichotomy, whenever you go into these sorts of discussions, do you make it really fixed, right? Which is almost like, I call it like straight jacket, right. But you know what you get, right? Or do you make it flexible, right? And the flexibility really addresses the business need as opposed to the technology need. So the product guys love it when it's fixed, the customers love it when it's flexible. >> Yeah, you're talking about basically, changes... You want changes to be rolling with the... Technology rolling with the changes. >> Yes. >> Not be stuck in the straight jacket, or we'll also say tailor-made suit, but things change, you wanna... Fashion changes, so this is a real big issue, and talk about support, I think the ideal outcome is not to even call support, with analytics and push notifications and AI, you can almost see what DevNet's doing here, around how developer are getting involved with DevOps and network DevOps. Coders can come in and use the analytics, if tightly integrated in, so that you get the notifications, or they know exactly your environment. Is that, how far along are you guys on that path, because analytics play a big role, you've got the command center there, the Converged Systems Advisor, implies advising, resolution, prescription, what's the vision? >> So Immersive was a Cisco solution partner at the very beginning, so we were a part of this group right behind us, and it was exciting to be a part of that, to attend Cisco Live and be a part of DevNet, and we expanded upon, as you mentioned, the API, integrations of all these platforms, and when cluster data ONTAP came out for NetApp, we did the exact same thing, right? So we get integrated with NetApp, and very easily able to bring all that data in. Now, massaging that data is the hard part, right? Understanding what is noise and what is the real goodness, so you have to find those best practices, look at the hard work that our teams have done around validated designs between Cisco and NetApp, and look at the best practices that come from those particular pieces of hardware. And then once that intelligence is built, correlating that in the cloud service is really where the magic happens. So our teams are back there talking with the network experts the storage experts, the compute networks, the virtualization experts, and so when we have that data, and now you can decision-eer, right? You can start advising your resellers. So we bring up the rules dashboard, and then we do have alerting that we can send to ticketing systems to the remedies, the ServiceNows-- >> It's interesting, I'd love to get the product perspective on this, and across the bigger picture, because the trend we're seeing, certainly on theCUBE, over the past few years, and most recently this year, is the move from device, hardware, to system. So the systems approach really becomes more of a holistic view where, you're looking at the holistic view of multiple things happening. >> Yes. >> It's not just, this is the box, here's where the rack is, command line interface, you guys taking that same approach, can you just add some color on NetApp's vision on looking at holistically, 'cause that's really where software shines. >> No, no, and that's absolutely, so we have a way of seeing FlexPod as a, we call it a converged system, and for that exact reason. So what CSA is able to do is look at anything that happens within that converged system and the context of the overall system, and that really is the key, right? When you understand things in context it means so much more. Just think about when you listen to someone talk, a word taken out of context means nothing, right? So when we listen to that infrastructure, what it tells us is understood in context. And what it will ultimately do, and I think you were kind of hinting at this, John, the vision here is that there will be self-healing infrastructures, self-healing converged systems, just like the cloud, right? So we are continuously monitoring the configuration, the availability, and other aspects of your converged system and we are able to take action to make sure it stays on the rails. >> We saw you guys at the RSA event, you guys had a small little party we went to, and we were riffing, having fun with some of the NetApp folks, and the big trend in cloud is server-less. So the joke was, is this storage-less solution coming? To your point about this, if you think about it, it's just storage somewhere. This is kind of a joke, but it's also kind of nuanced. This is elastic-- >> No, no! It's absolutely true, if you look at NetApp's strategy, if you look at our cloud strategy, we're the first third-party branded services part of the AGI core services, we're not in the marketplace, we're actually part of AGI core. It's NetApp cloud volumes for AGI, and a customer doesn't know what's going on behind the scenes but let's be clear, we're talking about software-defined storage here, right? >> And cloud-ified, too, as well, talk about cloud operations. >> Yeah, still at the end of the day, for us, our intellectual property is not really tied to hardware, we obviously use that as a way to get our intellectual property in the hands of our customers. But we're not tied to a-- >> You guys made a good bet on cloud, I remember talking before Kurian took over, you guys were kicking the tires on Amazon years ago. >> Yes, yes, yes, that's right. >> So it's not like a Johnny-come-lately to the cloud, you guys have been deep in the core. >> Absolutely. >> To end this segment, I wanted to get your thoughts, because you guys are here at Cisco Live, what should the audience understand that couldn't make it out here as the top story at Cisco Live, and what is your role with Cisco here, what's the big story, top line, high-order bit, NetApp, Cisco story. >> So I'll go first, and I'll let my friend here go second. We were really excited coming into Cisco Live, right. We had this pretty big announcement last week, there were a few different aspects to it, but I'll talk about two of them. A new focus between Cisco and NetApp on verticals around FlexPod, and what that really means is that we're focused on very specific verticals, including healthcare, but there'll be others that come down the line. We announced a new solution base on Epic PHR. We announced some lead customers, including the Mercy Technology Services, which is part of the Mercy Hospital group. So that was super exciting, I think what it does is it just demonstrates that our focus is on the outcomes, as opposed to the actual infrastructure, the infrastructure is the way to deliver that. So we're very excited about that at Cisco. The second thing that we announced was, I said, mentioned this Managed Private Cloud, we actually announced it with four of our major joint partners, Dimension Data, ProAct, Microland, and oh my Lord, ePlus, yes of course. That was super exciting as well, and what it does is it captures the imagination, and it's always very fun when you're standing at a booth, and people say, "Oh, I've known FlexPod, "I've seen you guys around." But there's always something new to talk about. >> The relevance is more than ever. >> Absolutely. >> Keith, what wave is NetApp riding right now, if you look at the Cisco action going on, what they're going through, what should people know about the big wave that you guys are taking advantage of right now? >> I think the big wave is absolutely gotta be what we're doing with the hyperscalers. We by far have taken the industry by storm, when you think about what we've done with Microsoft, what we're doing with Google, you know, sorry? >> And Amazon. >> And Amazon, thank you. >> Small companies. >> Yeah, just small hyperscalers, right? It's amazing what we can do with cloud ONTAP, across those vendors, and when we look at what our customers have done with FlexPod, and their relationship with Cisco and NetApp, and our ability to work together to help customers get their data from their core data centers to cloud, back, to their customers, and for us to be able to use analytics the way we do on FlexPod, I think there's a real opportunity-- >> And riding the scale wave too, scaling is huge. Everyone's talking about large-scale, talking about hyperscale as that is the largest scale you can see. >> Well, and our ability to control where the data lives, right? Because you want to be able to hold control of your data, and being able to use familiar tools like what you're already using in your own data center and in your own converged infrastructures, being able to use that ONTAP operating system to be able to control that experience is gonna be very important. >> Guys, thanks for coming in for the NetApp update, great news, great alignment with Cisco. It's a large-scale world, and certainly, the world is changing, storage is gonna be a critical part of it, server, storage, infrastructure, cloud operations on-premise, and in the cloud. TheCUBE, bringing you live coverage. I'm John Furrier, Stu Miniman, stay with us for more day three of three days of coverage here in Orlando, Florida, for Cisco Live, we'll be right back. (electronic music)

>> Live from San Francisco, it's theCUBE! Covering, Red Hat Summit 2018. Brought to you by Red Hat. >> Hey, welcome back everyone. We're here live in San Francisco for Red Hat Summit 2018, I'm John Furrier, my co-host John Troyer. Next guest is CUBE alumni, been on so many times. I can't remember. I think you're a VIP CUBE alumni, Doug Balog, general manager, IBM Storage Client Success and IBM's partners executive leading the Red Hat relationship. Welcome back to theCUBE, great to see you. >> It's always great to be on it again. I think that's a new category you just invented, a VIP alumni, as to something. >> On theCUBE.net site we actually have badges for CUBE VIPs that says VIP. Great to see you. Again, we have a little history. Your role at IBM, you've been there for a lot of time. You've seen their history. Power's been your wheelhouse, you built that from scratch. An open community with the Power Systems at IBM, but you launched OpenPOWER, an open consortium, very much open source model. And you know that's very successful, congratulations on that. >> Thank you. >> Now your role with Red Hat, you're the lead executive. You're the guy to call with any problems, or anything, opportunities. What's going on? Give us the update. >> Yeah, so I think it was mentioned by Matt on stage today where we're actually celebrating 20 years of partnering together with Red Hat. I think a lot of folks take pause at that not realizing how far back this relationship goes. Hate to say I was there in 1998 when we struck this agreement. I think at that time a lot of folks inside IBM were scratching their heads saying, who's Red Hat, and what is Linux, and why are we doing this? At the end of the day, we have had a longstanding belief in open collaboration, drives innovation, drives value to clients. That was the fundamental reason we jumped in when it was just an operating system discussion back in the early 2000s. We brought that across at that time. Our Intel server base, then our mainframe, and then in 2013 our Power platform. We brought our software along as well back then too. Running on that operating system. Then it became a virtualization discussion and brought Rev onto the platforms, our software supported that. Now here with some exciting announcements today around the partnership around cloud with a common container strategy. Which I think for enterprise clients will help build a larger ecosystem, give clients choice of how they want to bring that value to clients. So it's been a long, deep relationship and one that I think the two companies are more aligned than not in many ways. >> And you guys are humble, I'll say. And you guys were a catalyst moment. Linux, the Linux coming together at that time became an industry standard literally overnight, because the industry rallied around it. You guys supported it with a big contribution and since then. But that was back in the day, that was when it was tier two citizen in the world. Now open source is tier one, it's powering everything you see and open source software and storage and networking, software-defined data center, now CloudScale, this is a big deal. >> It's a big deal. >> For the world. Now, the cloud story's interesting to me. So you got the Red Hat powering a lot of the enterprise. Hybrid cloud's number one thing on the agenda, multi-cloud's kind of being discussed, but that's with the end in mind. Hybrid cloud is a number one work area, which essentially cloudifying, creating cloud operations for the enterprise. How is this partnership with Red Hat impact IBM's customers and what's in it for the Red Hat customers? >> I think as, and I know you just had Arvin on here a moment ago. It was literally just about six months ago, that Arvin and I and Paul Cormier and Jim Whitehurst sat down and said, you know what, I think the next big thing for us to partner around is containers. There is so much advantage for speed of software deployment, this hybrid cloud structure you talked about and the fact that, listen, I think we're much more mature in the industry talking about cloud. There were moments a year or two ago where the answer was everything's going to the public cloud, on-prem's dead. I think it's a much more mature conversation now in terms of the role of hybrid. Which means clients are still going to have plenty of their data. Especially if they're a regulated industry. That data's going to stay on-prem, but that still doesn't mean there are parts of their infrastructure, parts of their applications that they're going to want to run on a public cloud, like the IBM cloud. So that ability to have a common container approach, a common container management structure, like IBM cloud private, with OpenShift as the partner, I think it brings tremendous freedom of choice to clients, so where they run what with a common development platform. >> It's interesting, the definition's changed, and we're always squinting through the noise, but the bottom line is if everything's cloudified if you will, using that word, on-prem and public cloud doesn't really make a difference where you locate it because it's cloud operations and Wikibon had the True Private Cloud rapport which basically stated that True Private Cloud is essentially on-premise activity, just operating in a cloud framework meaning same code bases, more operational dashboard. Especially cloud operations not traditional IT. So I think there is the distinction, so it's still on-prem. >> Still on-prem. >> But now you've got the edge of the network as well. Software Base2, so you've got IoT Edge, public cloud, hybrid, all coming together. >> You know we used to, when the world was just on-prem for the most part, we used to talk about different architectures being fit for purpose. What's the right workload to run what kind of applications. I was just up with a large financial institution in your neck of the woods on Friday and we were having this fit for purpose conversation around the cloud based on what kind of workload it is, how sensitive is the data, is it redacted of your and my names and social security numbers, right? All that stuff that's important. Where should that cloud workload run? What cloud should it run in? Or should it run on-prem or across both? So listen, a lot of what's old is always new, but of course it keeps evolving here now to this world of multi-cloud and hybrid cloud as you said. >> What's going on with customers at IBM? Tell us what's happening in your world. Obviously the industry's replatforming as the entire business. It's not just companies. It's an entire infrastructure's changing. You call it cloud infrastructure, data insfrastructure, AI, you're doing the Power stuff being successful. It's a global rearchitecture. >> That's right. >> This is not a one company. >> No. >> This is a complete standard. >> Everybody's transforming and I don't think there's ever an end to transformation. I think transformation is a train ride you decide to get on and you better get on, and you're going to stay on it once you get on. There's milestones along the way that demonstrate progress. But there's no resting anymore in terms of being comfortable in today's world. So transformation is going on forever. In the systems business we're constantly transforming. We brought out a new mainframe last year, we call it the z14. And now recently kind of a sum of our little skinny Zs, the ZR1s. Which are really designed for the modern data center because they fit in a standard, an industry standard rack. So we're bringing that robust security to not only our traditional Z clients, but to brand new Z clients, running Linux by the way. >> Arvin nailed it in his description and then I think this is true. You've got TCP/IP, HTTP, these are seminal moments and now you've got this glue layer with containers and say Kubernetes. This is going to change how software's being built and software being run, and how businesses will be running. So that's an industry wide dynamic shift over. At the infrastructure level. Instrumentation, and all the software behind it. Okay, that's happening. We're agreeing with that and totally agree with that. Now the impact to the customer. What do they have to do? Because they have to now adapt to this new world. Which means they got to put the legacy in. Plugging into the legacy they have to have microservices. So what does that software-defined infrastructure look like for the customer? You've seen the systems side through storage. What does software-defined mean in this new architecture? >> It certainly, part of the objective of ICP, IBM Cloud Private, was to create that on-prem cloud experience. Because again, so many clients were looking for not just having their traditional IT, which they're going to continue to have, but continue to modernize. But also move to a new environment that was much more self-service, all the things and the benefits of the public cloud, but still being careful around their data in many ways, and their core applications. So they're transforming and modernizing from legacy IT to on-prem IT, and then branching out with the fit for purpose discussion to the multi-cloud, to the hybrid cloud world. >> I love that that in the fit for purpose you can it that in so many parts of the stack. We, I think open source, one of its characteristics is it develops in public. And 20 years ago the question was, not is it fit for purpose, but when is Linux going to be ready? When's it going to be ready? Is it going to be ready? I think that answer is pretty clear now, and I think the same thing has been going through with containers and with Kubernetes. On theCUBE you're tracking Kubernetes, the growth of Kubernetes. Is this a real moment where IBM says, okay now, Kubernetes and OpenShift is now ready for the enterprise? >> Absolutely. Absolutely. If I think about kind of big moments in IT that provide a ubiquitous access to developers, you had, we talked about Linux as an operating environment, once all the platforms, the different architectures ran Linux, the ability for application portability while still bringing out the value of the platform, became very much true. Java, from an application programming model was another one. If you wrote in Java, you had the ability then to move that Java workload around without recompilation in many cases, to different architectures getting the value out of where you chose. Containers are the next one. So now we're containerizing workload. And again you have sort of freedom of choice of where you run it. And if you run it in this cloud or that cloud. Or this system or that system. You get different values out of it. >> And we're not just containerizing microservices. Now we're talking about containerizing WebSphere. >> WebSphere and databases and message queuing, and kind of that robust runtime that somebody in the audience joked, gosh I haven't seen those queues in a long time. Not that they haven't been there, they've always been there. But again, this is back to how do you take what you have from a legacy IT and modernize it for this cloud era? Much more than cloud washing. This is really transforming the IT. >> It preserves the adjustment. The bottom line, if I'm a CIO or I'm an executive looking at this market, I say okay, I've got a purchase decision I've made in the past, and I have a stall base of stuff and my choice used to be I've got to replace that, hire new people, move everything over, to now your approach is a little bit different. Great, just containerize it. And then when you're ready, you deal with it on its lifecycle. So you don't really have, so it's an ROI thing and it's also preservation of preexisting conditions. >> Now the other big, of course, client transformation going on is there's not a single client on the planet who's not trying to figure out artificial intelligence and what it means to their business to bring more insights around their clients into their workflows. So that's why in addition to Watson and all the work we do around Watson, of course in our cloud, we've gone down to the system level with our Power platform and really optimized Power9 with flash storage attached to it as the best combination of a platform for this AI era. In fact, I was sharing just before we went live here, is actually a big announce day for our systems business too. We're announcing new models of our AI platform, what we call the AC922 now with six GPUs with our partnership with NVIDIA. We've got new Linux systems, kind of the fall on with Power9, that I started back, they're much better by the way, that I started back in 2013. So here we are at the Linux Summit, we've got a common cloud partnership being announced at the same time we're announcing all the way down to the metal, systems and chips that are optimized to run the Linux and open source platforms. >> The thing that I like about those environments, the level of granularity is getting down to the point where you can have your applications or down to the level, to a service level, and manage it on that based on PowerAI would be a great example of what people can tap into. >> It actually it connects it all together, right? I mean PowerAI, which again, new content there. We've just announced PowerAI on Power9 and on Red Hat for the first time. Back to new news here at the Summit. It'll be containerized later this year. So now you've got PowerAI in a container on IBM Cloud Private, running on OpenShift optimized for Power9. Starts to make your brain hurt a little bit. But that's closer to the level of the thoughtfulness of our strategy and how all the pieces work together from the software and the applications down to the systems and the chip. >> You guys do a good job keeping in the open, too. I really like how that went with Power, certainly great stuff. PowerAI for the folks watching, check it out it's from IBM. Interesting product. I think it's got a lot of capability. Your perspective as an industry participant. You've seen many waves. What's this wave like in your opinion? There's so much going on with this new infrastructure. How do you talk about it when someone says hey Doug, what's going on? All this stuff. You've got blockchain over here. You've got this going on over there. >> I think that, at least from a systems perspective, the way think about it, myself and my peers think about it is, we've gone through so many generations where it was more manufacturing process driven innovation. How do you pack more on a chip? How do you pack more on a chip? How do you pack more on a chip? And it was kind of all about that. We're now in an era where homogeneity is no longer going to cut it. You're going to really need a number of GPUs, a number of processors, different kind of architectures, to fit the kind of workload that's coming so fast at us these days. You really don't have time to step back and say, let me replumb my old data center with that next one chip. It's going to be a diversity of infrastructure. >> Its hard to provision. You need it available immediately. >> So this wave we're in really is about bringing that diversity, that heterogeneity back into the data center, and bringing that value though, back in a simplified deployment way, 'cause heterogeneity means complexity in some ways. And that's where the layering of software packages like PowerAI, like software-defined storage, like ICP and OpenShift with our partnership with Red Hat kind of help bring that diversity and bring it back to a common level of application development. That's kind of the end goal. Common application development, the platform brings out the value. The app doesn't have to worry about it, but you've got that diversity of choice underneath. >> Great, Doug, great stuff. Great to have you on theCUBE. Just to end the segment, briefly summarize for people watching, what's this relationship with Red Hat all about? Obviously you have history, but what's the value? Talk about it right now. What's the impact to the customer watching? The relationship that's announced today with the private cloud initiative with Red Hat. >> I think if we summarize the relationship without getting into the technology, it really is about bringing innovation to enterprise clients. At the end of the day that's what Red Hat's focused on, that's what we're focused on, and that's what we're focused on together. They have great minds in the industry, we have great minds in the industry. The power of those minds coming together to create some of the innovation that we just talked about here in this segment, I mean it's mind blowing for what it means to enterprise clients to help them propel themselves forward and transform. That's what it means. >> These are the kind of partnerships we're going to see now that people are rallying behind Kubernetes and containers and this new software-defined infrastructure that's going on. We expect more of it. Right? We'll see more? >> Absolutely, software-defined is the name of the game these days. Not that there isn't value in the systems by the way. It's got to run someplace. >> They're under the hood. >> They're under the hood. >> Programmable. >> And they're differentiated for sure. >> Yeah infrastructure as code, you still need servers to run this stuff on. >> It does matter. It does matter a lot. >> Doug, great to see you. >> Good to see you as always, John. John, good to see you. >> Absolutely. >> theCUBE bringing all the action here, here in San Francisco. Live coverage, I'm John Furrier, John Troyer, day one, we'll be right back with more after this short break. (electronic music)

>> Live from Barcelona, Spain, it's theCUBE covering Cisco Live 2018. Brought to you by Cisco, Veeam and theCUBE's Ecosystem Partner. >> Welcome back to theCUBE coverage here in Barcelona, Spain. We are live at Cisco Live 2018 Europe. I'm John Furrier, the co-founder SiliconANGLE. My co-host Stu Miniman, analyst at WikiBon.com. Our next two guests is Siva Sivakumar, who's the Senior Director Data Center Solutions at Cisco and Lee Howard, Chief Technologist, Global Industry Solutions and Alliances at NetApp. Great partnership here to talk about the tech involved in the partnership. Obviously, in the industry, it's pretty well known that NetApp's doing really well with Cisco. Congratulations. You guys have been enabling great partner dynamics lately, but all the action's been on the intersection between a raise, better, faster, cheaper storage, but also enabling software defined stuff, value. What's the check involved in the partnership? Why is it going so well? Lee, can you start? >> I think offering choice out there is the best thing that we can do. You've got data fabric from a NetApp perspective is that super interconnected highway and as many on ramps as we can build for folks to get on that highway. The more successful you're going to be able to see. I mean, the IDC numbers speak for themselves, prolific, double digit growth. I think we were at 56% last quarter, listed together on there. That's how tight this partnership's been. Leveraging that combined portfolio has given us a very competitive offering out there in the industry. >> Siva, I want to get your thoughts because actually Cisco, we've been... Stu and I love talking about networking, in Cisco in particular because the old days, provision the network and good stuff happens. Apps get built. Things get done. But with the Cloud, you see the shift where you've got DevOps culture, you got cloud-native happening. The real enabling technologies have to be beyond the network, so you guys have been successful with a variety of other things. What's the key things that's making you guys key partners in the ecosystem? What are you guys truly enabling? Is it network programmability? What's the secret sauce from Cisco's standpoint? >> If you look at the way Data Center has evolved in the last decade or so, the way customers are consuming technology is much more at a platform level. They want things simplified. They want to, as you just said, the innovation that's happening in the above layer, in terms of the software's tech and use cases, is just tremendous. They really want the platform to become simple and that's what Cloud did to you anyways. That level of simplification, that level of optimization, but still a best of breed, it is what got us together. We have continued to build world class platforms that started one way, started mainly looking at virtualization in those place over time. In the last four or five years or so, the amount of innovations we have brought on top of a FlexPod, which is a joined solution together, has been right at the cutting edge of where technology is going and where applications are landing. That, in a very large way, has become the key for the success between the two of us. >> We had talked Brandon on here earlier and he validated our thesis and WikiBon actually had a report that came out last year, in the middle of the year, called "True Private Cloud." It was the only research analyst firm that actually got this one right, in my opinion, which validated by you guys is that... Certainly any (mumbles) would argue that everything is moving to the Cloud, tomorrow. Certainly there's some cloud migration and some stuff in the Public Cloud, no problem. But what WikiBon did is they looked at the true Private Cloud numbers, meaning that the action where the spend is and where the buyers are doing the most work both refreshing and retooling is on premises. Because they're actually changing the operating model on premises now as a way, as a way, as a sequence, to hybrid and then maybe full Multi-Cloud or full Public Cloud, whatever they want to do. So that being said, Lee, what does that mean? Because certainly, I understand what a Cloud operating model is, but I'm talking about storage and networking. >> Yeah. >> What does that look like? Is that a full transformation? How long is that going to take? Your thoughts? Comment on that. >> We're seeing, you saw on the key note this morning them referencing brand new titles and new personnel, new human capital that's coming in. I think that is, both you're enabling and your barring the factor to changing how you're consuming resources on site. Cloud architects as they're coming in to prominence enterprise architects. I think we're getting to a point where there's enough of a intuition to the software that's enabling those consumption trends to shift, that it's now a way for not just those that have the inside information, but it's something that's consumable for the masses. I think 2018, you guys hit on DevOps, highly versatile model going forward and I think Multi-Cloud is going to be the right answer. >> John: The roles are changing. >> Roles are changing and we have been seeking to be that technology provider that regardless of where you're at in that journey, you're able to leverage our portfolio to be able to do it. >> John: Does the product change? >> The product, the tenets behind the product, not so much but I think the way that it's being leveraged does end up changing. >> Siva, your thoughts on this. >> You know, if you start to think about the earlier generation of Cloud, it was mainly seen as a capacity argumentation, mainly on the IS. It really started people to think that everything is moving to Cloud, but if you look at the innovation that happens in the Cloud, the Cloud in itself is a massive ecosystem and people want to go do that. So there is a huge reason why the cloud is successful, but that's not necessarily just taking everything on. That's not the trend. What you really see is customers now starting to reach that level of maturity to say hey, there is a tremendous value in what I can do and on-prim, the data gravity and the latency and those things. >> So you agree with the "True Private Cloud" report, the on-prim action is where? >> We continue to see that from our customers, you see it as option and things like that. We absolutely see that is real as well. >> Let's go back to the data center for a second because some people look at it, and it's like oh, well CI's been happening now for gosh, almost a decade now. HCI has a lot of buzz out there. We want to hear what you're hearing from customers because first of all, what we see is there's still the majority of people, still building their own. They're taking the pieces. FlexPod is a little bit different than say hyper-converged from a single skew, but you've still got to build your own CI. Big partnership >> Absolutely. >> There's a huge revenue. HCI has both Cisco and NetApp have pieces there. Where are the customers today? Why is CI still a meaningful part of the discussion today? >> I think it all comes down to scale and how you want to be able to interface. What do you want your data center to be like today? How are you staffed and proficient at implementing a solution and where do you want that data center to go tomorrow? I think CI and HCI absolutely have a place together in the data center, but as we see RFPs fundamentally shift to reflect the new way that infrastructure's being consumed, a cookie cutter approach that you get with a lot of HCIs isn't always going to be the answer. You want to have that full modularity, that full flexibility. It's in the title, it's FlexPod. You want to be able to have that versatility to address not just the initial scoping project but with Flash and able data centers, assets are staying on the books longer and longer. Those depreciation schedules are getting stretched out. Having the versatility, not just to live in today's operating environment, but the operating environment of tomorrow, I think is what's really driving that main stay of CI. >> Siva, we heard in the key notes this morning a lot of discussion about Multi-Cloud and management. Talk about Cisco and NetApp. How do you view those together? Where do you go to market together, co-engineer, things like that? >> Absolutely. If you guys look at what we did in the FlexPod, we created what we would fundamentally call or say code platform for data center. That was the biggest success. We had a lot of work loads and news cases. But in the last two to three years, what we have both done, because individually we have portfolio products that allow a Cloud journey. Cisco is a big proponent of Multi-Cloud and the journey to Cloud and proving customer the right platform so they can pick and choose when to go to Cloud and how to go to Cloud. There are similar assets from NetApp. What we have done is we have built FlexPod solutions that builds on top of on that leverage, is the Cloud Center products, NetApp's data fabric, some of their technology that's call location within the equinox and so on and so forth. What that has allowed is FlexPod as a platform has blossomed as the Cloud has grown because we now offer the choice. That also brought more customers to realize while these guys really provide me the journey to Cloud model. That is more new solution that we are building that continues to drive that mindset from both companies. >> Stu: Lee, you want to build on that? >> Yeah, providing that operational excellence to where you're able to come in and leverage these assets, not just day zero but through the entire lifespan of that asset and that's the... Quality of life improvements is a big thing from NetApp and Cisco's perspective as we're coming together and we're planning what the future state is going to look like. It's not just hey, this is the specific drive capacity you're putting in, that's yesterday's infrastructure. Tomorrow is all about what quality of life, how much time can we give back to those end users out there? >> So I have a question for you guys both. Lee, we'll start with you. You got the storage compute and switching cause you're leaders in those areas, what's next? What's driving the partnership? You talk about how you present the partnership with Cisco to customers. What's in it for me? What's new? What's fresh? What's the deal? >> The conversation we have out there a lot of times there's perception issues that we are the old guard of technology. FlexPod's been around seven going on eight years and they say what's fresh out there? Well, we're so much more than just the infrastructure piece. It's a combined portfolio. Cisco recently announced their partnership with Google Cloud. We have our NFS Native on Azure going forward. Leveraging those better together stories and each other's Rolodex to be able to come in and truly engineer next generation solutions, that's what's getting people excited. How are you going to set me up for success tomorrow, not just how are we going to be successful today on today's technology? >> Siva, how are you guys successful with that? How do you talk about the relationship because they have a unique capabilities, been around the block for awhile in the storage business? Look at the history of NetApp. Very interesting, very engineering oriented, very customer focused. >> Lee: 25 years. >> What's your position in this? >> I think you have two companies who have a tremendous technology focus in building, but what keeps this partnership going together is easily our customers. We are not young anymore in the partnership. We have over $10 billion of install based customers. We have over 8,000 customers. Just keeping up with those customers and providing them the journey however they want to go, it absolutely becomes our, it's our prerogative to make these customers successful in wherever they want to go next. That's a big driver for how we look at innovation. We continue to provide the capabilities that allows our customers to continue their journey and at the same time, we bring our innovation to make this platform successful. >> So I'm going to put you on the spot here, both of you guys. I know Stu's got a question. I got a couple minutes left. Kubernetes has put a line in the sand and separates the two worlds of developers. App developers, really just looking as a fabric of resource, they're creative, doing cool things. Then you've got the network storage software engineering going on under the hood, it's like a car. You're now an engine. You got to work together. What are you guys doing specifically to make that work, make the engine really powerful? >> In the context of Kubernetes, we are-- >> Under the hood. What's under the hood? Kubernetes is the line there, but you got to sit with that app. You got to make the engine powerful. You guys are working together. What's the sound like for the customers? Why NetApp and Cisco together? >> If you look back at our containerization, micro services that journey, we certainly again, same logic, same model. We are building an ecosystem there. We are developing joint solution that optimizes how Kubernetes and Cisco and Google have made several announcements on how we are bringing innovation and infrastructure automation level, network scale level, that allows a massively scalable container environment of Kubernetes environment to be deployed on top of a Cisco infrastructure. NetApp's innovation around Kubernetes, around building the plug-ins for how the plug-ins interact with the storage subsystem that allows us to say if you are deploying a Kubernetes environment, if you are deploying the best of breed, you certainly need the platform that understands and scales with that. >> All right, Lee. Your differentiation for that power engine under the hood with Cisco. >> It's infrastructure is code. That's what we are together and I don't think that across the competitive landscape that they are, everybody else is really embracing it in such a fashion. It's speaking the language that these developers are wanting to do and we're marrying that up with the core tenets that made us an IT powerhouse together. >> It was the developer angle John- >> All right. (laughs) >> We've been doing so many of these together. Absolutely where we wanted to go. >> Stu and I get the-- Infrastructure is code. The great shows. We do the cloud-native, got Kubernetes, we do under the hood. This is a big journey for customers. There's a lot of fud out there and they want to know one thing. Who's going to be around in the future? Having the partnerships is really key. You guys have been very successful. I'll give you guys the final word. Each of you share what customers should expect from the relationship. Siva, we'll start with you. >> I think continued greatness, continued commitment to making customers successful with the innovation that keeps them worry much more about the above the layer, the application, the business critical elements and make the infrastructure as simple and as versatile as possible is absolutely our commitment. >> I'd boil it down to the human capital out there, the human element and that is bringing conviction to your decisions. We've both been here multiple decades together in our partnership. FlexPod's coming up on a decade. It's conviction and knowing that you can rely on the lifeblood of your business being secure with us together. >> Well, congratulations. Certainly, the developers are going to be testing the hardware under the hood and we got a DevOps culture developing all on-prim and in the Cloud hybrid. It's going to be an interesting couple years. Interesting times we live in. Lee Howard, Chief Technologist with NetApp and Siva Sivakumar, Senior Director Data Center Solutions. Here on theCUBE, I'm John Furrier. Stu Miniman. Live from Barcelona. Cisco Live 2018 in Europe. More live coverage from theCUBE after this short break. (techno music)

>> Narrator: Live from Las Vegas. It's the Cube! Covering VMWorld 2017. Brought to you by VMware and it's ecosystem partners. >> Welcome back everyone. Live in Las Vegas we are here in the VMware Village, VM Village. We're kicking off day two or ending day two wrap up here. It's the Cube, I'm John Furrier with Dave Vellante with our wrap up guests Peter Burris, head of research at Wikibon.com and Stu Miniman co-host of the Cube and analyst of Wikibon. Guys, great day two in the books. Another day tomorrow, another wall-to-wall coverage. Events tonight tonight stacked up, last night great hallway conversation. We covered that on our intro this morning. Day two was about Michael Dell, Pat Gelsinger conversation. A lot of announcements with Google crashing the party, and a one-on-one exclusive with Sam Ramjay who's VP at Product Management, head of Developer Platforms. Not just Google Cloud, they're brinhing all the developers to bear. Peter this telegraphs your point about Google not to be taken lightly. >> Oh yeah well look. We talked about this earlier, and there are some very real thing that have yet to happen. Just contrast this. Three years or two years ago, if you talked to the Google enterprise group and you said to them, well you have some really great opportunities. What are you going to do with them? They'd say, whatever the consumer guys give us, we'll repackage. And now if you see what Google is doing, they're actually going out and creating new partnerships, creating new technology. They're actually acting like a real enterprise company. It's a transformation that's happening very fast. My guess is there's an enormous amount of stuff that's going underneath the covers at the new Google campus. But it's interesting to see that company become a really enterprise player before our eyes, and it's going to be a consequential player. >> Stu and Dave I want to get your reaction to something, because we saw an observation this morning Peter, I think you started out by saying the whole world's upside down, a whole new way to engage the enterprise. You mentioned VMware transforming as a company, similar to what IBM did many years ago. But we saw Michael Dell here, we heard Sanjay Poonen the COO come on, talking about how they're collaborating. He even made reference to Vmware almost merging with-- Kind of hinting to that where there would be showing up at their show working together closely. A new kind of relationship is building on how to be competitive, yet Google and Microsoft have to kind of catch up. And the question on the table is is there dis-economies of scale in that? Can Google get the enterprise IQ to truly understand the digital transformation and bring that developer communication and that operational scale of Google, and can Microsoft bring that enterprise knowledge of Office, Windows, et cetera to the cloud, at the speed of the disruption, at the same time change how they engage? Stu. >> Yeah, so John it's pretty typical we talk about how when some of these technologies started, it's like oh wait no, they're not ready, don't look at them. Public cloud you know was a dirty word at VMware a couple of years ago. Now we're embracing it. I'm sure you talked about Michael Dell. He's a big partner of Microsoft's. They're going to be doing Azure Stack. The Amazon dynamic is amazing. John last year we said to Pat Kelsner, hey Pat you want to come on the Cube at Reinvent? He's like, oh, you're inviting me? Well we had Sanjen Poonen on at that show. I've mentioned it, I was at the AWS Summit in New York City. VMware was a partner presenting there. People are interested to look at it. How this bakes out. There was you know an interesting thing. A tweet went out from Kelsey Hightower. A lot of people in the open source community was like, you know one technology killing the other, and we always said, you know, VM's going to kill Bare Metal and containers will kill that, and server-less will kill that. And it's a joke of course, because nothing ever dies in IT, it's all additive. >> Man: The Hotel California. >> It's you know, we'll talk to IBM and talk about their Z customers that are running mainframe. Oh and you can run Linux and containers on that too. So IT is a complex world. We're all going to have to kind of live in this space. Heck, so many of our guests that we have on this program, we're interviewing them at the second or third or more company that they've been at. So it's the ebbs and flows of the people and the technology, and it's fun to document. >> Well the question is, is it a zero sum game? I've talked to a number of service providers, some of the 4,400. I haven't talked to the 4,400, but a handful. And they're frankly not happy about the AWS deal. Because they're all trying to compete against AWS, and they're just saying, their narrative is, oh, it's a big straw that's just going to suck everything out. But the question is, is it a zero sum game, or-- I mean datacenters booming, enterprise is booming. Is this one of those boom years that everybody benefits? >> Just note on that. VMware got out of VCloud Air. That actually made those 4,400 happier, because now VMware is no longer a threat as well as a partner-- >> However! >> The Amazon stuff and the Google stuff is bringing back-- >> Yeah they never liked VCloud Air, and yes getting out is a good thing. And then next day, boom. >> To me, the other part of the answer is, does a knowledge of the enterprise and how the legacy and traditional applications matter? And the reality is to Stu's point, since you can check in but you can never leave, that at the end of the day, it's going to matter. Your knowledge of how transaction processing works is going to matter. Your knowledge of how Z series handles storage or handles data is going to matter, in the enterprise. And so the reality is, it's not a zero sum game, there's going to be a lot of, because of the complexity, there's going to be an enormous premium place in experience. How you package that experience, how you present it, there's going to be a lot of niches in this marketplace. A lot of ways of getting to that scale. But there's no question that's what most important is getting there fast and early. >> And the big three, obviously Amazon Microsoft Google, all bring something different to the table. And the question is, what view of the cloud do they bring? VMware taps out of the cloud game with VCloud Air, has an arms dealer-like approach Dave. We talk a lot about being an arms dealer. You know Sanjay was teasing out like, you can have these native clouds, not cloud native. Native cloud players, one two and three, sucking the straw at the top of the power law. But then VMware could service an entire set of new clouds. I call maybe second tier or secondary native clouds, where hey someone's got-- Jeff Rick and I were talking about a drone farming cloud. With drones that have applications for farms. >> There's going to be specialization. >> That speaks to a new set of service providers. And the question is, is the cloud service provider market about to explode? What do you think? >> Explode? >> Meaning great, grow, big. Does that long tail fatten out the neck and the torso? >> Yeah. Because at the end of the day, at the end of the day, where you are located matters. Your ability to bring together classes of services is going to matter, and being able to enfranchise and federate all those things is going to matter. And if it is truly cloud, if it's a common cloud experience, the cost to customer of getting into that is going to be relatively low. And so what you're really testing is, is the cost of getting into a specialized cloud going to be more or less than the cost of going with a general cloud and start adding things? And there's going to be a lot of opportunity to serve particular classes of companies by different characteristics. Let me draw an analogy for you. That we talk about-- I'm going to get political for a second. But we talk about partisanship in the US, right? And many years ago people said, oh, the internet is going to democratize everything, and it's going to be this wonderful-- Well that really happened is the internet made it possible for media companies to enfranchise audiences independent of geography. And now we've got highly specialized media sources that are all retaining to a particular audience. Why wouldn't we expect, since software is effectively media, why wouldn't we expect to see the same exact economics and dynamic happen for some of these specialized audiences? >> John: Make software great again! That's my motto. (laughing) >> To that point, service has always been a highly fragmented and highly specialized market. Cloud is services, and I would expect yes, to answer your question, that you're going to see a lot more service providers explode. But they better have a differentiation strategy relative to AWS. >> So the Tam conversation around that is cool, but what's really happening here that was getting a lot of traction, and we talked about this earlier about the two private cloud report. I asked Sanjay Poonen and then I talked to Sam Ramjay at Google who heads up the development platform in Project Management. You know to your quote this morning, a lot of IT's been driving costs out of business, now we're putting revenue on their agenda. He goes, really? And I asked him, what's your metric for success at Google? And he started to think about it and went back to the business value of technology. So I know this is a research area for you. I want to give you a chance to describe, what's the cutting edge metric around the business value of technology? Because in the cloud, magic quadrants don't matter, okay? The scoreboards are changing. At the end of the day it's what value does technology contribute to business that drives top line revenue? Yeah cost containment I get that, but revenue. >> Well so the traditional way of thinking about ROI or business returns or business value is you say I'm going to say for a given application, for ERP, which is the numerator, which is the benefit, so that's why I classify it. Now I'm going to look at the denominator. Which of the different configurations of technologies make that given set of systems have the highest return? And it all becomes a cost question. So really where this goes is that increasingly what businesses are looking at are saying, my customers are demanding digital engagement. My partners are demanding digital engagement. I'm going to use my data differently. I'm going to turn products into services, I'm going to do all these different things with data. That's where the revenue side comes into play. Now can you argue that it all comes back to costs and automation? Yeah, there's things you can do. But at the end of the day the question is, what does your customer see? Does your customer see a better service or a better capability? A different approach of doing things? That is the non-standard numerator in the equation, and that's where IT is, with the business, is increasingly focusing it's attention. And so increasingly what's happening is we're looking at a common denominator, you know Amazon's pricing and Google's pricing and all these other guys' pricing is going to moderate to a set of common metrics, and that means now we can start talking about the numerator, and how doing the numerator differently is going to be the differential. >> Okay so let's take that and take it to Stu and Dave. I did a comment on, we heard this race to the bottom, race to zero, that's not happening. Your True Private Cloud report shows that the SaaS business and True Private Cloud just by itself is bigger than-- >> And we never believed that. We've never bought into that. >> And you know, it's funny, in some of the analyst sessions you get to talk to some of the customers and talking to some of my peers here, something we hear from a lot of companies, not all of them, but cost isn't number one on the list. Usually it's a agility, it's entering the business, it's being able to move faster. Cost and price of course does matter eventually, but you know it's that being able to react faster, that agility that needs to go there. And I mean there's all of these new technologies that are going to line up. Heck, we're spending all of this time talking about public and private cloud, and edge computing is just going to completely change that landscape even more, as we go forward. >> Look, and the other thing is, Amazon sets a pretty high price umbrella. I've never bought into the race to the bottom, I've always said Amazon's going to be more profitable than everybody. They're an infrastructure company with 30% operating margins which is like a software company! I mean that's basically VMware's operating margin. Maybe VMware's a little higher. And of course Amazon has a much higher capital cost. But there's a big price umbrella that Amazon has created. That's an awesome opportunity. I'm interested in what you guys think about the recent momentum behind VMware. The last two years we've seen a total change, right? Two years ago it was kind of negative, negative growth. And now it's tailwinds, positive momentum. Is this a product cycle, is it you know expanded ELAs? Kind of a one time thing? Or do we think this is a sustainable trend? I mean I've said I think the stock is undervalue. Am I right, is this sustainable? >> I think you're right. To me my observation is, I'll let you guys comment on it, but my observation is VMware was stuck in the middle of an identity crisis between the virtualization op side and trying to do cloud. And you nailed it on the earlier intro segment where you said that there's no cap X there, they've got better margins because of it. And by making a decision on not doing cloud and becoming much more of an arms dealer, you can move the ops into the dev, right? And that's been a big stuck in the mud point from VMware. They've got great ops, great enterprise, but they just weren't nailing the developer side. And that became a problem. Now you have clarity on the wave. Cloud IOT just pointed out, now it's very clear what's going on, and everyone knows where the game is. Then the shift is going to come to, and it's whether Kubernetes announcement with Google today didn't get them a lot of applause in my opinion, Stu I'd love to get your reaction. I don't think this audience can connect the dots yet on that long play of the orchestration. So they're still stuck in I got my house to clean up, I don't want to get the fluff and the head room and the future vision. I got problems to deal with on my upside. Yeah I want to do dev and I want to do dev ops, but shit I got to take care of business! >> Yeah so to Dave's question, VMware had reached a certain point, they'd kind of saturated the market for server virtualization. They made a number of number of bets. Some of them panned out. Airwatch, great acquisition. NICERA, phenomenal acquisition. NSX, we've talked extensively about that. Push towards the developer community? Well, I think they've understood now. Pivotal's going to handle that. We'll shove that over here. There's not a developer track at this show anymore. The cloud piece, they fumbled it, a few times, and now they've kind of understood it. Kind of a natural progression. They've made some moves. The ELA is something I think they've sorted out. Their license agreement, how have the partnerships with customers. We've talked extensively about some of the pricing. >> Some of the deck chairs, the mulligan on Virtustream. Carry on, please. >> So right, it's where they fit, where they partner. The relationship with the ecosystem. And a thing, what drove VMware to where they are, is those partnerships and the technology partnerships as well as the channel partnerships. Some of those things I hear, Kubernetes AWS, VMware on AWS, their partners are like, it's scary. I don't know if I make any money. Is this now VMware and Amazon just go to the bank and they cut me out of the whole thing? Some of these are interesting, right. Most people aren't ready for the container, they're definitely not ready. Kubernetes, they hear about it, but it's pretty early. >> Peter your reaction, 'cause this really points to what Stu's saying. I believe what's saying to be true, because I agree. They did their homework, they were listening. They weren't sticking their heads in the sand at your transformation point. >> So if you're a CIO and you're looking at a whole bunch of change, my business' stance towards digital and technology is changing, my relationships with the business are changing. I now foresee that I'm going to have to reorganize my IT organization to take advantage of things like hyper converge and whatnot. So I'm looking at an enormous transformation. In comes VMware and the first thing out of their mouth is, we really don't know what we're doing. We're throwing a bunch of spaghetti against a wall. Would help you sustain these assets until we figure this all out? The CIO's going to say thank you very much, where's Microsoft? So what's happened is VMware decided to get serious and stable. They decided to make some bets, and a lot of the best that we're making right now we're seeing at the show are probably not going to pan out. But that's okay, because it starts-- >> John: But the big ones are, maybe. >> We think so, we think so. We think anesthetics as well. Stu listed them, we don't have to go over them again. But what we are seeing is-- And Michael Dell and Pat and all the executives over and over. >> They're paying attention. >> Open with an opinion. It's very clear that businesses like the VMware opinion. I think Stu and I and all of us probably agree that they could probably go further with that opinion, they could probably lay out an even better vision of what the cloud experience is going to be as they foresee it and as they're going to engineer to it. But it's very very clear that customers today are saying, I've got all this installed, I'm willing to continue to invest in caretaking all this VMware stuff because they have done a better job of laying out what my options are, whereas a few years ago the options were all over the map, which means they had no options. >> They were groping for something. Okay we've got to wrap it up. I wanted to go around the horn on the final piece. We're going to go out tonight, we're going to party. We're going to socialize, stay up all night long, talking to people getting the data. Not all night, we'll be in bed by 11. (laughs) I'll be in bed by 11, I hope, I hope. Great conversations last night, lot of hallway conversations. Lot of good chatter. So around the horn, most compelling thing that you heard, not in a session, in the hallway, through conversations and interactions. Peter we'll start with you. >> Most compelling thing that I heard is, is there's some new stuff coming in the Google universe. That is going to potentially have a pretty significant impact ultimately on how enterprises look at Google. I found out some interesting stuff there. The most compelling thing just very simply on the VMware side of things was the probably coming out of some of the conversations we had with Chad this morning Dave. And the idea that increasingly you're going to look at these platforms. Platform wars are on the horizon. Where it's going to go back to what we were looking at many years ago in certain respects. But you know written much larger. But the increasingly the way people are going to evaluate the quality of a platform is not intrinsic to the platform, but how well it binds to other platforms. That's probably the most important statement that I heard on the floor today over what's happening. >> John: Stu. >> Continue on kind of Peter's theme. We're starting to see really you know, it's gelling. Some of this multi-cloud messaging, been really teasing out with a lot of people. Once again when I get to talk to the practitioners, as to what applications are they building, where do things go, how are they moving around, and you know VMware is a trusted partner, one they've really turned to for a lot of this. And the customers at least are optimistic about what they're hearing. I've heard a bunch of them are really excited for the VMware and AWS more than I expected to hear, and you know it'll be interesting to see. It's been interesting, we've kind of been saying Microsoft maybe there. When we go to Dell EMC World they're talking a lot about Microsoft. Microsoft Ignite's coming up, there will be a huge push. We've said for years, who has the best hybrid strategy? It's got to be Microsoft, hands down. >> Although we haven't mentioned Oracle. Oracle is still not out of this. >> Yeah, absolutely. I always say follow the applications, follow the data. Oracle, Microsoft, huge application portfolio. >> You know I haven't heard one person talk about Microsoft or Oracle here, not one. Dave? >> I want to chime in. >> I've spent the last 24 hours, I've talked to a number of customers. And I will tell you, they're strugglin' to move fast. And that's I think good news for VMware and Dell EMC, because you know all the vision that's put forth, and all this cloud native stuff, and they're really having a hard time digesting a lot of this stuff. You've been saying it for a while, hybrid cloud is BS, nobody's doing hybrid cloud, as it's sort of been defined in early days. Like federated apps, nobody's even thinking about it, not even close. Yeah multi-cloud because I'm getting inundated with all these clouds. So they're really having a hard time moving. So I think that's a good trend. >> Dave, I heard a great line in this. VMware is moving at the speed of the CIO. >> Yeah, it's true. >> That's a great line. >> That's a kind of double-edged comment, but you know absolutely. You want to stay at least up with most of your customers. >> I will say, I said hybrid cloud is BS. I did say it mainly because it's not ready for prime time in my opinion, but. >> Stu: Is it a way station, John? >> Yeah it's a halfway house or it's a way station, whatever you want to call it. >> It's a cul-de-sac! (laughing) >> Sanjay used that line today. Okay my final observation is more of kind of an epiphany from me that kind of wasn't really blind spot but it was an awakening. The customers I've been talking to are really struggling with the merging of multiple stacks. Hardware and software. In new use cases that have been untested and undocumented, and that's causing to the speed of the CIO conversation of, wait a minute we can't just deploy some of this stuff at scale until we do our homework. We've got to get the hardware stacks and the software stacks working together. We've heard it a lot, that's been the number one hallway conversation. That means there's a lot more work to do on that front. Well guys-- >> But it's a working together part. It's that how they bind together. >> It's these new use cases of working together. This is not a software vendor and a hardware vendor, it's all going to be a data vendor at the end of the day! And we'll see who can bring the stacks together. Okay Pat Gelsigner, we had Michael Del, Sanjay Poonen. Great day guys, great stuff. Let's go hit the hallway, go hit some of these parties and get more data for you guys. Thanks for watching the Cube, live in Las Vegas. Wrap of day two here. I'm John Furrier, Dave Vellante, Peter Burris and Stu Miniman. This is the Cube, thanks for watching.

>> Announcer: Live from Las Vegas, it's theCUBE. Covering VMworld 2017. Brought to by VMware and its ecosystem partners. (upbeat techno music) >> Okay, we're live here at VMworld 2017's theCUBE's coverage of VMworld 2017. I'm John Furrier. My hosts, Dave Vellante and Stu Miniman. We've got two sets kicking off live here in Las Vegas for our eighth year of coverage. Boomy, we're in the broadcast booth at the Mandalay Bay. Guys, we're here to kick off the show. Three days of wall-to-wall coverage. Three days of great keynotes. Today, big surprise, Andy Jassy, the CEO of Amazon Web Services joined Pat Gelsinger on stage in a surprise announcement together, hugging each other before they talked and even after they talked. This partnership is going to be big. We're going to have coverage, in-depth analysis of that. Dave, VMWorld is now the cloud show with re:Invent. If you look at what's going on, Stu, you've been to many, many shows. This is our eighth year. This was the show. Great community. Now re:Invent has been called the new VMWorld. You put 'em both together, it's really the only cloud show that matters. Google does not have yet a presence. Microsoft has all these shows that are kind of spread all over the place. All the top people are here in IT and cloud at VMWorld and at re:Invent coming up in December. >> Well, John, eight years ago we talked about is this the last stop for IT before cloud just decimates it? And if you go back two years ago, VMware was not in favor. The stock was half of what it is today. Licensed revenue was down 1%. Fast forward to today, it's growing at 10 to 12% a year. Licenses up 13%. It's throwing off operating cash flow at $3 Billion a year. The market's booming. Wall Street's talking VMware now being and undervalued stock. The big question is, is this a fundamental shift in customer mindsets? In other words, are they saying, "Hey, we want to bring the cloud operating model to the business and not try to force our business into the cloud." Or, is this the last gap of onprem. >> Stu, I want to get your thoughts cause I want, squinting through the announcements and all the hype and all the posturing from the vendors is I was looking for, where's hybrid in all this? Where's the growth? And, my validation point on the keynote was when we heard very few words hybrid. Private, on premise was the focus. You guys put out at Wikibon a report called True Private Cloud, Market Sizing. Kind of lay out, that's where the growth is. But, I tweeted private cloud is the gateway drug to hybrid. We're seeing customers now wanting to do hybrid, but they got to do their homework first. They got to do the building blocks on premise, and that is what your calling True Private Cloud. Do you agree? And your thoughts. >> Yeah, so, really good points, John. And the nuance here, 'cause if I'm VMware, I've got a great position in the data center. 500,000 customers. Absolutely, the growth is the move from legacy to True Private Cloud. The challenge for VMware is they already have 500,000 customers there. Those are the customers that are making that shift. So it does not increase vSphere. One of the key things for me, is Pat said, "What vSphere had done for the last 20 years, is what NSX is going to do for the next 10 years, or more." Because they're betting on networking, security, some of these multi-cloud services that they announced. How do those expand VMware so that as True Private Cloud grows and they also do public cloud, VMware has a bigger seat at the table, not just saying "Wait, my customers are shifting. Where are they going?" >> Dave, I want to get your thoughts. You and I talk about all the time on camera, and also privately, about waves. We've been through many waves in the industry. We've seen a lot of waves. Pat Gelsinger has seen many waves, too. Let's talk about Pat Gelsinger because, interesting little tidbits inside the stage area. One, he said "I want to thank you for being the CEO of this company." Stu, you made a comment that this is the first VMWorld where there's not a rumor that Pat's not going to be the CEO. He's kind of kickin' ass and takin' names right now. Stock's up and he put the wave slide out there. And wave slides to me, you can tell the senior management's kind of mojo by how well laid out the wave slide is. He put up a slide on one side. Mainframe mini computer cloud. And the other side client server, internet, IoT Edge. He nailed it, I think. Pat Gelsinger is going to go down as being one of the most brilliant stroke of genius by looking at either laying down what looked like a data center position, and some say capitulate, to Jassy, who's smiling up there saying, "Bring those customers to Amazon." But this is a real partnership. So, Pat Gelsinger, go big or go home. You can't be any bigger, bold bet that Pat Gelsinger right now with VMware, and it looks like it's paying out. What's your thoughts on Pat Gelsinger, the wave and his bold bet? >> Well, I think that businesses are configuring the cloud, John, to the realities of the data. And the data, most of the data, is on prem. So the big question I have it, how is Amazon going to respond to this? And Stu, you and Furrier have had debates over the years. Furrier has said flat out, Amazon is going to do a True Private Cloud, just like Azure Stack. You have said, no. But if Amazon doesn't do that, I think that Pat Gelsinger's going to look like a genius. If they do do that, it's going to become an increasingly more competitive relationship than it is right now. >> Yeah, just a little bit of the inside baseball. Kudos to VMware for getting this VMware on AW out. I hear it was a sprint to the finish because taking cloud foundation, which is kind of a big piece. It's got the VSAN, the NSX, all that stuff, and putting it in a virtual private data center. Amazon owns the data center. They give them servers. This was a heavy lift. NSX, some of the pieces are still kind of early, but getting this out the door, limited availability. It's one data center. They're going to roll out services, but to Dave's point, right, where does this go down the road? Is this Amazon sticking a straw into 500,000 data centers and saying, "Come on in. You know that we've got great services, and this is awesome." 'Cause, I don't see Amazon re-writing their linux stuff to be all native VMware, So, where will this partnership mature? Andy said, "We're going to listen to our customers." "We're going to do what you're asking us." And absolutely today VMware and Amazon, two of these strongest players in the ecosystem today, they're going to listen to their customers. Google, Oracle, IBM, Microsoft, all in the wings fighting for these customers, so it's battle royale. >> You know the straw is in there, John, what's your take, and where do the developers fit in this? >> Well Stu wrote a good point, inside baseball, the key is that success with Amazon was critical. Jassy said basically, this is not a Barney deal, which he kind of modernized by saying most deals are optical really hitting at Microsoft on this one and Google. I mean, they're groping for relevance. It's clear that they're way behind. Everyone's trying to follow these guys. But, on the heels of Vcloud Air, it was critical that they get stake in the ground with Amazon. They took a lot of heat for the Vcloud Air, Stu. This had to get done. Now, my take on this is that, I think it's a genius move. I think Pat Gelsinger, by betting the ranch on Amazon, will go down in history as being a great move. You heard that here, 2017. He's so smart, he wants to be a component of the Amazon takeover, which will happen. It'll be a two-cloud game, maybe three, maybe four, we'll see, but mainly two. But the ecosystem partners on this phase one is key. DXT, Deloitte, Accenture, Capgemini, and then you start to see the logos coming in. They have so many logos, you have to break them down. But more importantly the white space. devops, migration cost, network security and data protection are all filled in with plenty more room for more players. I think this is where the ecosystem was lagging just a few years ago. You saw the shift in the tide. Now you're seeing the ecosystem going, "Wow, I get what VMware's doing. I'm doubling down." It's an Amazon Web Services, VMWare world. All the other cloud players, in my opinion, are really fumbling the ball. >> So, I can infer from that, you see this as a balanced partnerhip i.e. that's not like one needs more than the other. I mean, clearly, Amazon needs VMWARE to reach those 500,000 customers, and clearly, VMware needs a cloud strategy because Vcloud Air and many other attempts have failed. Yes, we said that. It's failed, we asked Pat about that. So, you see it as a more balanced partnership. Do you see that balance of power shifting over time a that straw gets bigger and bigger and bigger. >> Well the Walking Dead or as the Game of Thrones reference going on is kind of the Gray War is happening in cloud. And it really is going to become Amazon versus whoever they can partner with, and the rest of the legacy world. I think the wave slide was impressive to me because this is such a shift from just distributed computing now decentralized with blockchain and AI looming as massive disrupts, I think this is only going to get more decentralized. So whoever has tech that's legacy, will ultimately be toast. And I think Gelsinger's smart to see that wave, and I'm starting to see the movement. It's super early, so, no big bets. It's just be directionally correct and ride that wave. >> Yeah, so, one of the things that got me is last year, it kind of went under the radar that VMware is starting to launch some cloud services, and were very direct, today, that they said there are seven, basically SaaS offerings. It's security, it's cost management. Now, VMWare on AWS, little expensive. We're starting to get the data on how much it is per month or per year or for three-year. But going to have the SaaS offerings. We know Vcloud Air failed, also Paul Moritz had played the Microsoft game. We're going to get this suite of applications. We're going to give you email. We're going to give you, you know, social. We're going to give you all these things. They're all gone. Kind of cleared the table of all those. Now they've got these SaaS applications, so how will that play. I kind of like Pat, very up front on security, and said, "As an industry, we have failed you." Dave, you've been looking at this for a long time. It's a board-level discussion. It's a do-over for security. Does VMware have the chops to play in this space, Dave? Do you buy them as a, you know, valid SaaS provider? >> Well, two questions there. One is in the security front that great tech is always going to get beat by bad user behavior. So this is a board-level issue. As far as SaaS, to me, it's a business model issue that VMware is migrating its business to a routable business model, which is smart. I don't see it as SaaS as an applications, but I see it as a monthly fee. Better to get ahead of it now, while you're hot, than get crushed by Wall Street as you're trying to make that transition like many other companies have failed to do. >> Guys, one thing I want to note is that VMware also laid out their strategy. You kind of heard it there even though that Jassy came on stage. A look it, Jassy's not an idiot, he's smart. He knows what's going on. He knows that he has to win VMware over because VMware ... he's got to balance it. Got 'em in the back pocket on one hand, got a great relationship, Stu, 500,000 customers. Remember, VMware is also an arms dealer. They got the ops, IT operations locked down with their customers. So they have other clouds they can go to. SO, the big trend that we didn't hear, that's out there kind of hiding in plain site is multi-cloud. Multi-cloud is ultimately VMware's strategy. He laid out, one, make private cloud easy. You guys reported on that. Two, deep partnerships with major cloud providers. And three, expand the ecosystem. >> John, so I mean a little bit of kind of rumors I heard. They were actually looking to make the partnership not with AWS at first, it was going to be Google. And Michael Dell said, "If we're going to start with a cloud deal, it's going to be Amazon." The right move, absolutely, that's where it's going to be. But you remember last year, we were here. John, you and I, the announcement was with IBM. Now, no offense to SoftLayer, great acquisition. It's doing well, but IBM does not play at the level of an Amazon. They might have the revenue of a Google in cloud, but, you know, very different positioning. They were up on stage talking about security today. Great position there with analytics. But, we'll see, there's two more days of keynotes. I expect we'll see another cloud provider making some announcements with VMware. And VMware absolutely an arms dealer. They put out on the slide all of their service providers. We've got people like CenturyLink and OVH and Rackspace on theCUBE this week, as well as how their going to play with the Microsoft Google. You've got Michael Dell on tomorrow. I know you're going to talk to him about how Dell fits with Azure Stack, and how the Dell whole family is going to play across all of these because at the end of the day, Michael Dell, and Pat working for him, they want to keep getting revenue no matter who's the winner out there. >> Okay final question as we wrap up the segment. Customers are that watching here, it's clear to me that, we even heard from one on stage, saying, "Well, we're taking baby steps." That wasn't her exact words, but, their going slow to hybrid cloud. All the actions on private as you guys pointed out in our True Private Cloud report on Wikibon.com If you haven't seen it, go check it out, it's going viral. But, this is classic slowness of most enterprise customers. When there's doubt, they slow down. And, one of the things that concerns me, Stu, about the cloud guys right now, whether it's AWS, Google, and Microsoft, is the market's moving so fast, that if these clouds aren't dead simple easy to use, the customers aren't going to go to hybrid. They're going to go back to their comfort zone, which is the true private cloud, going to build that base. It's just got to get easier to manage. It's got to get easier to multi-cloud. And the bottom line is that Amazon's clearly in the lead. So, Jassy has a window right now to run the table on enterprise. He's got about 18-24 months, but Google's putting the pedal to the metal. I mean they're pedaling as fast as they can. Microsoft's cobbling together their legacy, okay, running as fast as they can. But there's this economies of scale, Stu, for them. Your thoughts and reactions. >> Yeah, so, I always thought enterprise simplicity is actually an oxymoron, does not exist. This VMware community, one of the things people loved about it, they were builders. They were all like get in there, and I tweak that. Harvard Business School calls it the Ikea effect. If I help build it just enough, I actually love it a little bit more. VMware's not simple. NSX, hitting about a billion dollars when you get into it is not easy. Security and networking are never going to be you know dirt simple. Amazon, we thought it was real simple, now thousands of services. Absolutely, we've been at that ecosystem for many years. It gets tougher and tougher the more you get into it. And, John, some of the builders there, the developers there, they get in. There's lot of room for this ecosystem to build around that. Because one of the things we talk about as VMware goes to some of these clouds. Where do they get that ecosystem? You mentioned some of the systems integrators, but the rest of the channel, where can they make money? And trying to help, because it's not simple, how do they help get opinionated, make those choices, build it all together. There's professional services dollars there. There's ways to help consult with companies there. >> Ecosystem is the key point. Watch the ecosystem and how that's forming around cloud, hybrid cloud, true private cloud, whatever you want to call it. And then, again, the technology's maturing. It's all about the people and the process to actually affect so called cloud, hybrid cloud, bringing the cloud model to the data, not forcing your business into cloud. >> We got to wrap up here. We've also got Lisa Martin and Keith Townsend and John Troyer, and we got some community guests as well, joining like we did last year. So this will be great. But I want to put something out there, guys, so we can hit up tomorrow and tease it out. I worry about when you have these fast waves that are coming through and the velocity is phenomenal right now. Is that, what tends to crumble, Dave, to your ecosystem point, are these foundations. When you have these industry consortiums, it's kind of like it's political. They've got boards and multiple fingers in it. That could be the suffering point, in my opinion. And that points directly at Cloud Foundry. Cloud Foundry, OpenStack, some of these consortium groups are at risk, in my opinion, if it goes too fast. Stu, to your point. Kubernetes has got great traction. You've got Containers. Dockers got a new CEO. Uber's got a new CEO. I mean the world is moving so fast. So, rhetorical question, industry consortiums. Do they suffer, or do they win in this environment? >> Depends on what they're doing, right? If they're low-level technical standards that advance the industry, I think they do win. I think if it's posturing, and co-opetition, and trying to cut off the one vendor at the knees, it loses. >> Stu, real quick, consortiums. Win or lose in this environment? >> Yeah, we've seen some that have done quite well, and some that have been horrific. So, absolutely, if it gets way too political. Open source has done some really good things, but the foundations, once they get in there, it's challenging and, I'd say, more times than not, they don't help. >> Well, we're in theCUBE. We're breaking it down. We're going to be squinting through all the announcements looking at where the meat on the bone is, where the action is and the relevance and the impact to enterprises and emerging tech. This is theCUBE. I'm John Furrier with Stu Miniman and Dave Vellante. We're back with more live coverage. Day one, after this short break. (techy music)

>> Narrator: From Palo Alto, California, it's CUBEConversations with John Furrier. >> Hello, welcome to our special CUBEConversation here in Palo Alto, California. I'm John Furrier, co-founder of SiliconAngle Media and co-host for the CUBE. I'm here with Phu Hoang who's the co-founder and chief strategy officer of DataTorrent. Great to see you again. Welcome back >> Thank you so much, John. >> This CUBEConversation. So, you're now the chief strategy officer, which is code words for you are the CEO and co-founder of the company. You bring in a pro guy, Churchwood we know very well, former EMC-er, real pro. Gives you a chance to kind of get down and dirty into the organization and get back to your roots and kind of look at the big picture. Great management team. Talk about what your background is, because I think I want to start there, because you have an interesting background. Former Yahoo executive, we've talked before. Take a minute to talk about your background. >> Yeah, sure. You know I think I'm just one of those super lucky engineer. I got involved with Yahoo way early in 1996. I think I was the fifth engineer, or so. I stayed there for 12 years, ended up running about close to 3,000 engineers, and had the chance to really experience the whole growth of the internet. We build out hundreds of sites worldwide, so all of engineering team develop all of those websites throughout the world. >> You must have a tear in your eye at how Yahoo ended up. We don't want to go there. Folks that don't remember Yahoo during the web1.0 days, it was the beginning of a revolution. I kind of see the same thing happening, like blockchain and what's going on now. A whole new wild west is happening, but back then you couldn't buy off the shelves. You had to certainly buy servers, but the software, you guys were handling kind of a first generation use case. >> That's right. >> Folks may or may not know, but Yahoo really was the inventor of Hadoop. Doing Hadoop at large scale, honestly ... MapReduce written by Google, but the rest is, you guys were deploying a lot of that stuff. You had to deal with scale and write your own software for big data, before it was called big data. >> That's exactly right. It's interesting, because originally we thought that our job was really customer-facing website, and all of the data crunching and massaging that we would actually be able to use enterprise software to do that. Very quickly we learned at the pace of scale data that we were generating that we really couldn't use that software. We were kind of on our own, so we had to invent approaches to do that. The thing we knew a lot was commodity servers on racks. So, we ended up saying, "How do I solve this big data processing problem using that hardware?" It didn't happen overnight. It took many years of doing it right, doing it wrong, and fixing it. You start to iterate around how to do distributed processing across many hundreds of servers. >> It's interesting, Yahoo had the same situation. And ultimately Amazon ended up having, cause they were a pioneer. People dismissed Amazon web services. Like, "It's just hosting and bare metal on the cloud." Really what's interesting is that you guys were hardening and operationalizing big data. >> That's right. >> So, I got to ask you the question, cause this is more of a geeky computer science concept, but batch processing has been around since the mainframe, and that's become normal. Databases, et cetera, software. But now, over the past 8 years in particular, as big data and unstructured data has proliferated in massive scale, certainly now with internet of things you see it booming. This notion of real time data in motion. You have two paradigms out there, batch processing, which is well known and data in motion, which is essentially real time. Self-driving cars ... Evidence is everywhere, where this is going. Real time is not near real time. >> That's right. >> In nanoseconds, people want results. This is a fundamental data challenge. What's your thoughts on this and how does this relate to how big data will evolve for customers? >> I think you're exactly right. I think as big data came, and people were able to process data, and understand it better, and derive insights from it, very quickly for competitive reason, they find out that they want those insights sooner and sooner. They couldn't get it soon enough. So, you have those opposing trends of more and more data, yet at the same time, faster and faster insight. Where does that go? When you really come down to it, people don't really want to do batch processing. They do batch processing, cause that was the technology that they have. If they have their way, they don't want to just ... Information is coming into their business. Customers are interacting with their products constantly, 24 by 7. Those events, if you will, that are giving them insights are happening all the time. Except, for a long time, they store it into a file. They wait til midnight, and then they process it overnight. More and more there are now capabilities in memory distributed to do that processing as it comes in. That's one of the big motivations for forming DataTorrent. >> I want to get to DataTorrent in a minute, but I want to get some of these trends, cause I think they're important to kind of put together the two big pieces of the puzzle, if you will. One is, you mentioned batch processing in real time. The companies, historically, have built their infrastructure and their operations IT, and whatever, around that, how storage was procured and deployed. Now with IOT and the edge of the network becoming huge, it's a big deal. So, data in motion, it's pretty much well agreed upon amongst most of the smart people, this is a big issue. Let me throw a little wrench in the equation. Cloud computing kind of changes the security paradigm. There's no perimeter anymore, so there's no door you can secure, no firewall model. Once you get in, you're in. That's where we've seen a lot of attacks on ransomware and a lot of cyber attacks. The penetration is everywhere. Now there's APIs and everything. When you bring cloud into it, and you bring in the fact that you've got data in motion, what is the challenge for the customer? How do top architects get their arms around this? What's the solution? What's your vision on that? >> Well, I will start by saying it's a hard problem. I think you're absolutely right. I think we're still in the phase where the problems are very visible about how do you solve this. I think we're still, as an industry, figuring out how to solve it, cause you're right, the security issue ... Security is not this one point tool. It's an entire ecosystem process for doing that. The cloud opens up all of those opportunities for fraud and so on. It's still an ongoing challenge. I think the trend of memory becoming cheaper and cheaper, so that things are done more in memory and less in storage could actually help a bit on that. But overall, security internal, external processes are ... >> It's a moving train. >> Yeah, it's moving. Exactly. >> Let me ask you about the big other trend to throw on top of this. This is really kind of where you see a lot of the activity, although some will claim that the app store is not seeing as many apps now as they used to be. Certainly the enterprises, massive growth and application development. So, ready-made apps with DevOps and Cloud have built a whole culture of infrastructure as code, which is essentially saying that I'm going to build apps and make the infrastructure kind of invisible. You're seeing a lot of apps like that, called ready-made apps, however you want to call it. Those are the things. How are you guys at DataTorrent handling and supporting that trend? >> We are right smack in the middle of exactly that trend. One of theses that we had was that big data's hard. Hadoop is hard. Hadoop is now 12 years old. Lots of people are using Hadoop, trying Hadoop, but yet it's still not something that is fully operationalized and easy for everybody. I think that part of that is big data's hard, distributed processing is hard, how to get all that working. There were two things we were focusing on. One was the real time thing. The other one was, how do we make this stuff a lot easier to use? So, we focus a lot on building tools on top of the open source engine, if you will, to kind of make it easy to use. The other one is exactly that, ready-made apps. As we continue to learn in working with our customers, and starting to see the patterns, putting kind of, bigger functional block together, so that it's easier to kind of build these big data application at this next layer. Machine learning, rule engines, whatever not. How do you piece that together in a way that is 80 percent done, so that the customer only has a little bit, the last mile. >> So, you guys want to be the tooling for that? >> Yeah, I think so. I think you have to. This stuff, you have to kind of go through the whole six layer of what it takes to get the final business value out. You're not going to have the skillset to do it. The more we can abstract and get it to the top, the better. >> Every company's got their own DNA. Intel has Moore's Law. You're the co-founder of DataTorrent. What's the DNA of your company, as the founder? Talk about what's the, what do employees you try to instill into your culture that is the DNA that you want to be known for? >> Interesting. So, I start out sort of on the technical or product side. Actually, our DNA is all about ops. We think that, especially in big data, there's lots of ways to do prototypes and get some proof of concept going.. Getting that to production, to run it 24 by 7, never lose data, that really has been hard. Our entire existence is around how to truly build 24 by 7, no data, fast application. All of our engineers live and breathe how to do that well. >> Ops is consistent with stability. It's interesting, Silicon Valley's going through its own transformation around programmers and the role of entrepreneurship. It's interesting, in the enterprise, they always kind of were like, "Oh, no big deal." Because at the end of the day they need stuff to run at five 9. These are networks. The old saying that Mark Zuckerberg used to have is, "Move fast and break stuff." They've changed their tune to, "Move fast and be a hundred percent reliable." This is the trend that the enterprises will always put out there. How do companies stay and maintain that ops integrity and still be innovative without a lot of command and control, and compliance restrictions? How do they experiment with this data tsunami that's happening and maintain that integrity? >> My answer to that is, I think, as an industry, we have to build products and tools to allow for that. Some of that is processes inside a company, but I think a lot of that can be productize. The advances in that big data processing layer, and how to recover, get new containers, and do all the right things, allow for the application developer not to have to worry about many of those segments. I think technology exists out there for tools to be developed to deal with a lot of that. >> I love talking with entrepreneurs and you're the co-founder of DataTorrent. Talk about the journey you've been on from the beginning. You have a new CEO, which as the CEO, you want to lighten the load up a little bit. It gets bigger, you got to have HR issues, things are happening. You're putting culture in place and trying to scale out and get a groove swing. Certainly Uber could've taken a few tips from your playbook, as bringing in senior management. You did it at the right time. Talk about your journey, the company, and what people should know about DataTorrent. >> We're just a bunch of guys that are just still trying to make a contribution to the industry. I think we saw an opportunity to really help people move towards big data, move towards real time analytics, and really help them solve some really hairy problems that they have coming up with data. From a skillset and personally, I think kind of my particular strength was really about that initial vision. Be able to build out a set of capabilities, and maybe get a first set of half a dozen wins, and really prove point. To sort of make it into a machine that has all the right marketing tools, and business development tools, and so on. It will be great to bring in someone like Guy, who has done that many, many times over, and has been super successful at that, to take us to the next level. >> Takes a lot of self awareness, too. You probably had your moments where, should you stay on, be the CEO ... But, what are you doing now, cause you get down and you can get into the products. Are you doing a lot more product tinkering? Are you involved the road map? What's your involvement day-to-day now? >> I love it, cause it's exactly what I enjoy most, which is really interacting with customers and users and really continue to hone in on the product market fit. And continue to understand, what are the pain points? What are the issues? And, how can we solve it? All coming from, not so much a services mentality, but a product mentality. >> At the cloud ops, too. That's a big area. So, what's the big problem that you solve for the customers? What's the big, hairy problem? >> Really easy, how to productize, how to operationalize this data pipeline that they have, so that they can truly be accepting real live business data that they are getting in, and giving them the insight. >> Been a lot of talk about automation and AI, lately. Obviously, it's a buzzword. Wikibon just put out a report called True Private Cloud that shows all the automation's actually going at and replacing non-differentiated labor, which actually the racking and stacking gear. Moving to values, actually is going to be more employment on that side. Talk about the role of automation in the data world, because if you just think about the amount of data that companies like Facebook and Yahoo take in, you need machine learning. You need automation. What is the key to automation in a lot of these new emerging areas around large data sets? >> It's so funny, yesterday I was driving. I was listening to a KQED segment, and they were talking about in its next phase, AI and machine learning is going to do sort of the first layer of all the reporting. So, you actually have reporters doing much more sophisticated reporting, cause there's an AI layer that has a template of what are the questions to answer, and they can just spill out all the news for you. >> Paid by cryptocurrency. >> Yeah. I think machine learning and AI will be everywhere. We will continue to learn, and it will continue to get better at doing more and more things for us, so that we get to kind of play at that creative, disruptive layer, while it does all the menial tasks. I think it will touch every part of our civilization. The technology is getting incredible. The algorithms are incredible. The power, the computing power to allow for that is getting exponential. I think it's super interesting that the engineers are super interested in it. Everything we do now revolves around ... When we talk about the analytics layer at real time, it's all about machine learning scoring and how to, rules and all that. >> Great to have you here on the CUBEConversation. Give you the last word. Give a quick plug about DataTorrent. What should your customers know about you guys? Why should they call you? >> We're a company solely focused on bringing big data applications to production. We focus on making sure that as long as you understand what you want to do with data, we can make it super fast, super reliable, super scalable. All that stuff. >> Co-founder of DataTorrent here and the CUBEConversation here in Palo Alto. I'm John Furrier. Thanks for watching. (synth music)

>> Announcer: Live from Washington D.C., it's theCube, covering .Next conference. Brought to you by Nutanix. >> We're back, this is Dave Vellante with Stu Miniman, and this the wrap of .Next, Nutanix's customer event, #NEXTConf and this is theCube, the leader in the live tech coverage for enterprise technology. Stu, second day. I got to say, Nutanix has always done a good job, innovative venues, they do funky, fun stuff with marketing, we haven't seen the end of it. We have another keynote today, there's a keynote tomorrow morning, big names, Bill McDermott's here, we just saw Peter MacKay, Chad Sakac is here. Who am I missing? >> Stu: Diane Greene >> Diane Gree was up yesterday. >> Y'know, thought leaders, had the CEO of NASDAQ on this morning Dave, y'know really good customers, thought leaders, Nutanix always makes me think a little bit, which I really enjoy. My fourth one of these Dave, usually by the fourth show I've gotten to, it's like I've seen it. Have we made progress, where are we going? >> I thought Sunil Podi's comment was really interesting, he said, "Look, we saw the trends, "we knew that hardware was going down." I mean, they're essentially admitting that they were a hardware oriented company, infrastructure company, we saw what was happening to infrastructure and hyper-converge, and we could just packed it up then, sold the company for a bunch of money, there were rumors floating around, you know they were pre-IPO, they easily could have sold this thing for a billion plus, all could have cashed out and made a buncha dough, and they said, "Y'know what, we're going to do something "different, we're going to go for it." You got to love the ambition, and so many companies today just can't weather that independent storm. I mean, you've seen it over and over and over again. The last billion dollar storage company that remained independent was NetApp, that was 14 years ago, now Nutanix isn't a storage company, but look around here, look at the analysts, a buncha storage guys that have grown up, and it's to me, Stu, it's a representation of what's happening in the marketplace. Storage as we know it is going away, and it always has transformed, y'know it used to be spinning disc drives, then it was subsystems, then it was the SAN, now it's evolving, these guys call it invisible infrastructure, call it whatever you want, but it's moving toward infrastructure as code, which is just a stepping stone to cloud. So your thoughts on the event, the ecosystem, and their position in the marketplace. >> Right, they reach a certain point, they've gone public, can they keep innovating? Look at a number of announcements there, we spent a lot of time talking about the new CloudZi service out there. >> Si? >> Zi. >> Zi, zi, sorry, you got it. (chuckles) >> Pronunciation of some of these, "it's Nutanix, right?" >> Nutonix, Nutanicks, (chuckles) >> They made jokes about the company last year, but this year, that's product, we're talking vision. The ink is still drying on the relationship with Google, doesn't mean they haven't been working for a while, but where this deal goes, interesting to see where it is six months from now, a year from now, because also Google, small player, I mean it wasn't to be honest, I was at the Red Hat Summit and they had a video of Andy Jassy saying, "We've extending AWS with OpenShift." And you're like wow. Red Hat has a position in a lot of clouds, but for Andy Jassy to make an appearance, Amazon, the behemoth in the cloud, that's good. Look, getting Diane Greene here, I said number one, it gives Nutanix credibility, number two it really pokes at VMware a little bit, she's like, "Oh, I did this before." And everybody's like, "Well, she's here now at Nutanix." Nutanix wants to be, that they've compared themselves to both Amazon, I think we hear it was Sunil or Dheeraj in an analyst session said they "want to be like the A Block." Not the V Block that EMC did, but the Amazon Block for the enterprise, or the next VMware, they talked about the new operating system. It's funny, in a lot of my circles, we've been trying to kill the operating system for a while, I need just enough operating system, I want to serverless and containerize all of these things because we need to modernize, and the old general-purpose processor and general-purpose operating system has come and gone, it's seen its day, but Nutanix has a play there. When I look at some of the things going on, we're talking about microsegmentation Dave, we're talking about multi-cloud and some interesting pieces. I like the ecosystem, I like that balance of how do you keep growing and expand where they can go into, leading the customers, but they're delivering today, they've got real products, they've got real growth, sure they have some challenges as to that competitive back and forth, but you asked Chad Sakac if this reminded him of Dell EMC, and kind of that partnership that they had for years, reminded me a little bit of kind of EMC and VMware too, once EMC bought VMware, VMware, the relationship they had, HP, and IBM, and other companies that they needed to treat as good or better than EMC. They're some of those tough relationships, and Dell with Nutanix, their partner, not only do they do Dell XC, but now they're doing like Pivotal on top of it, they can do Hyper-V deployments, Lenovo's another partner, Nutanix is broadening their approach, there's a lot of options out there and a lot of things to dig into, interesting, they keep growing their customers, keep delighting their customers, it reminds me of other shows we go to, Dave, like Amazon re:Invent, customers are super excited, You tell me about the Splunk conference and the ServiceNow conference where those customers are in there, they're excited, and Nutanix is another one of those, that every year you come, there's good solid content, there's a customer base that is growing and exciting and sharing, and that's a fun one to be part of. >> So, I want to ask you about VMware, it's kind of a good reference model. EMC paid out, I don't know, $630 million for VMware, which was the greatest acquisition in enterprise IT history, no question about it in terms of return. A couple questions for you, you were there at the time, you signed the original NDA between EMC and VMware, kind of sniffed em out. Would VMware's ascendancy been as fast and as successful, or even more successful, without EMC? Would VMware have got there on its own? >> I don't think so Dave, because my information that I had, and some of it's piecing together after the fact is VMware was really looking for that company to help them get to the next state. The fundraising was a little bit different back in 2003 than it was later, but rumors were Semantic was going to buy them. Everybody I talked to, you'd know better than me Dave, if Semantic had bought them, they would have integrated into all their pieces, they would have squashed it, the original talent probably would have fled much sooner. EMC didn't really know what they had, I had worked on some of the due diligence for some of the product integration, which took years and years to deliver, and it was mostly we're going to buy them. Diane had a bit of a tense relationship with Joe Tucci kind of from day one, and it was like okay, you're out there in Palo Alto, we're on the other coast, you go and do your thing, and you grow, and by the time EMC had gotten into VMware a little bit more, they were much bigger. So I think as you said, they're one of the great success stories, EMC did best in a lot of its acquisitions where it either let it ran a division and go, or let it kind of sit on its own and just funded it more, so I think that was a-- >> Well, and the story was always that Diane was pissed because she sold out at such a low price, but that's sort of ancient history. The reason I brought that up is I want to try to draw the parallel with Nutanix today, and come back to what you were saying about the A Block. When you look at Amazon, we agree, they have a lead, whether that lead is five years, seven years, four years, probably more like five to seven, but whatever, whatever it is, it's a lead, it's substantive. Beyond the infrastructure, the storage and the compute, they're building out just all kinds of services, I mean just look at their website, whether it's messaging, on and on and on, there's database, there's AI, there's their version of VDI, there's all this big data stuff, with things like Kinesis, and on and on and on, so many services that are much, much larger than the entire Nutanix ecosystem. So the reason for all this background is does Nutanix need a bigger, can Nutanix become it's ambition, which is essentially to be the next VMware, without some kind of white knight? >> So my answer, Dave, is if you look at Nutanix's ambition, one of the challenges for every infrastructure company today, if you think okay, we've talked about True Private Cloud, Dave, what services can I run on that? How can I leverage that? Look at Amazon, y'know a thousand new services coming every year, look at Google, they've got TensorFlow, really cool stuff, they've got those brilliant people coming up with the next stuff, how do I get that in my environment? Well, Nutanix's answer, coming at the show was we're going to partner with Google, we're going to have that partnership, you're going to be able to plug in, and you want to do your analytics and everything, use GCP, they're great at that, we're not, we know that you need to be able to leverage Google services to do that. The Red Hat announcement that I mentioned before, another way how I can take OpenShift and bridge from my data center and my environment and get access to those services. The promise of VMware on Amazon, yeah we're going to have a similar stack that I can go there, but I want to be able to access those VMware servers. Now, could it suck them eventually into all of Amazon and leave VMware behind? Absolutely, it's tough to partner with Amazon. So, the thing I've been looking at at almost every show this year is how are you tying into and working with those public clouds, we talked about it at VMON, Dave, they have Microsoft up on stage, they have partnerships with the public cloud-- >> David: HPE was up there. >> But the public cloud players, if you're not allowing your customers and the infrastructure that you're building to find ways to leverage and access those public cloud services, which not only are they spending $10 billion a year for each one of the big guys on infrastructure to get all around the globe, but it's all of those new services ahead, moving up the stack. To stitch together that in your own environment is going to be really challenging, how many different software pieces, how do I license it? How do I get it on, as opposed to oh, I'm in the public cloud, it's a checkbox, okay I want to access that, and I consume it as I need it, that consumption model needs to change, so I think Nutanix understands that's directionally where they want to go, I look at the Calm software that they launched and say hey, you want to use TensorFlow? Oh, it's just a choice here, absolutely, go. Where is it and how do I use it? Well, some of these details need to be worked out, as Detu said, "it's not like it's one click for every application, any cloud, anywhere." But that's directionally where they're going to make it easy, so all that cool analytic stuff that we cover a lot on theCube, a lot of that is now happening in the cloud, and I should be able to access it whether I'm in my private cloud or public cloud, and it's just going to be consumption model, whether I have certain characteristics that make it that I'm going to want to have that infrastructure for whether that's governance or locality, we talked to Scholastic yesterday, and they said, "Well when you've got manufacturing "in books, I need things close "to where they're coming off the production line, "otherwise there's things that I'm doing "in the public cloud." So that's there we see, when I talk to companies like I do here, at the Vienna show last year, when I talk to Christian Reilly with Citrix, who had been at Bechtel for many years, there's reasons why things need to live close to what's happening, y'know we've talked a lot about Edge, and therefore public cloud doesn't win it all, I know we had one guest on this week that said, "Right, depending on what industry you're is, "is it a 30/70 mix or a 70/30 mix?" There's a lot of nuance to sort this out, and this is long game, Dave, there's this change of the way we do things is a journey, and Nutanix has positioned themselves to continue to grow, continue to expand, some good ambition to expand on, like the five vectors of support that they have, so I've liked what I've heard this week. >> So in thinking about what we're talking about VMware, the imperative for virtualization was so high in the early 2000's because we were coming out of the dot com bust, IT was out of favor, VMware was really the only game in town, there really wasn't a strong alternative, had by far the best product, Microsoft Hyper-V was sort of in-concept, and KVM and others were just really not there, so there really was no choice, it appealed to 100% of the IT shops, I mean essentially. So I wonder though, today, is the imperative for multi-cloud the same? The fundamental is yes, everybody has multiple clouds. But this industry has lived in stovepipes forever, and has figured out how to manage stovepipes, it manages them by fencing things off. So I wonder is the imperative as high, you could maybe make an argument that it's higher, but I'm still not quite getting it yet, as it was in the early 2000's, where the aspirin of virtualization to soothe the pain of do more with less was such an obvious and game changing paradigm shift. I don't see it as much here, I see people still trying to figure out okay, what is our cloud strategy? Number one, number two is the competition seems to be much more wide open, it's unclear at this time that any one company has a fast-track to multi-cloud. >> I think you've got some really good points there, Dave. A thing that I've pointed out a few times is that one of the things that bothered me from the early days with VMware is from an application standpoint, it tended to freeze my application. I didn't have a reason to kind of move forward and modernize my application. Back in 2002 it was like oh, I'm running Windows NT with a really old application, my operating system going to end of life, well maybe it's time to uplift. Oh wait, there's this great virtualization stuff, my hardware's going end of life too. No, shove it in a VM, let's keep it for another five years. Oh my god, that application sucked then, it's going to suck even more in five years, and workforce productivity was way down. So, the vision for Nutanix is they're going to be a platform that are going to be able to help you modernize your environment and how do we get beyond, is it virtualization, is it containerization, is it a lot of the cloud-native pieces, how does that fit in? Starting to hear a little bit more of it, a critique I'd have on HCI about two years ago was it was the same applications that were in my VMware SAN, not VSAN, but my just traditional storage area network was what was running on Nutanix. We're starting to see more interesting applications going on there, and look, Nutanix has a bullseye on them, there are all the HCI direct replacements, there is the threat of the cloud, and I haven't heard as many SAAS applications living on Nutanix as I do when we talk to all flash-array companies, Dave, every single on of them can roll out, here's all these SAAS deployments on our environment, just scalable environments that build that for the future. I haven't heard it as much from Nutanix. >> So VMware was aspirin , Nutanix originally started as aspirin, and now they're pivoting to vitamin. Who are they up against? Who do you like? Who are the horses on the track? Let's analyze the race and then wrap. >> Yeah, so when Nutanix got into this business, it was well, they're helping VMware environments, it was 100% VMware when they first started that relationship with VMware was really tough, they've lowered that too, they've now got what, 28% is running HV, they've got a little bit on Hyper-V, but they've still got about 60% of their customers are VMware. So VMware, y'know, huge challenge, VSAN has more customers than anyone in the hyper-convergent infrastructure space, easy, number of customers, but virtualization admin has taken that. Microsoft, huge potential threat, Azure Stack's coming this year, it's been coming, it's been coming, it's really close there, all the server guys are lining up. Microsoft's a huge player, Microsoft owns applications, they're pulling applications into their SAAS offerings, they're pulling applications into Azure, when they launch Azure Stack, even if the 1.0, if you looked at it on paper and say Nutanix is better, well, Microsoft's a huge threat to both VMware, which uses a lot of Microsoft apps, as well as Nutanix. So those are the two biggest threats, then of course, there's just the general trend of push to SAAS and push to public cloud where Nutanix is starting to play in the multi-cloud, as we talked about, and COM and the DR cloud services are good, but can Nutanix continue to stay ahead of their customers? They're ahead of the vast majority of enterprises, but can they convince them to come on board to them, rather than some of these big guys? Nutanix is a public company now, they're doing great, but yeah, it's a big TAM that they're going after, but that means they're going to have a tax from every side of the market. >> I see HCI as one where you got a leader, and that leader can make some good money. I don't see multi-cloud as a winner-take-all market because I think IBM's going to have its play in multi-cloud, HPE has its play in multi-cloud, Dell EMC is going to have its play in multi-cloud. You got guys coming out of different places like ServiceNow, who's got an IT operations management practice, builds business big, hundreds of millions of dollars of business there, coming at multi-cloud, so a lot of different competitors that are going to be going for it, and some of them with very large service organizations that I think are going to get there fair share, so I would predict, Stu, that this is going to continue to be, multi-cloud is going to be a multi-stovepipe cloud for a long, long time. Now, if Nutanix can come in and solve that control plane problem, and demonstrate substantial business value, and deliver competitive advantage, y'know that might change the game. It's difficult at this point in 2017 to see that Nutanix, over those other guys that I just mentioned, has an advantage, clear advantage, maybe from a product standpoint, maybe. But from a resource standpoint, a distribution channel, services organization, ecosystem, all those other things, they seem to me to be counterbalancing. Alright, I'll give you last thought. >> Yeah, so it's great to see Nutanix, they're aiming high, they're expanding into a couple of areas, and they keep listening, so I hope they keep listening to their customers, expand their partnerships, SAAS customers would be really interesting, service provider is something that they've gotten into little bit, but plenty more opportunity for them to go there. Dave, personally for me, to it have been a company I've watched since the earliest days, it's been a pleasure to watch, y'know I think back, right, VMware you said, I think it was a hundred person company when I first started talking to them and Diane Greene, and I look at where VMware went. I've been tracking VMware for now five years, and reminds me a lot of some of those trends, for a 20 person company, I said to hear almost 3000 boggles the mind, I've been to their headquarters a bunch. So it's been fun to watch the Newton army, and they've been loving watching it from our angles. >> Well and these events are very good events, and so there's a lot of passion here, and that's a great fundamental for this company. So I'm a fan, I think it may be undervalued, I think it very well may be undervalued. >> Wall Street definitely doesn't understand this stuff. >> Alright Stu, great working with you this year, (chuckles) this month, this quarter, this month, certainly this show, so great job. I really appreciate it >> Stu: Thanks, Dave. >> There's a big crew behind what Stu and I, and John Ferrier, and Jeff Frick, and others do here. Here today with us Ava, Patrick, Alex, Jay, you guys have had an awesome spring. Brendan is somewhere, I guess Brendan is doing the keynote right now. So, fantastic job, as always, Kristen Nicole and her team, writing up the articles. Jay Johanson back at the controls, Bert with the crowd shots. Everybody, really appreciate all your support, thanks for watching everybody. We'll see you, we got a little break, I think, in the action, cause it's July Fourth, well it's Canada year, or Canada week-- >> Canada Day and Independence Day next week. >> And Independence Day in the United States, and then we'll be at Infor Inforum, second week of July, I'll be there with Rebecca Knight and the crew, so watch for that, check out SiliconAngle.com for all the news, Wikibon.com for all the research, and theCube.net to find all these videos, Youtube.com/SiliconAngle, it's everywhere, if you can't find it, you're not on Twitter, you're not on social. Thanks for watching, everybody. This is Dave Vellante with Stu Miniman, we're out. (lo-fi synthesizer music)

>> Announcer: LIVE from San Francisco, it's theCUBE, covering Pure Accelerate 2017. Brought to you by Pure Storage. >> Welcome back to San Francisco everybody, this is Dave Vellante with David Floyer, and this is theCUBE, the leader in live tech coverage, we go out to the events, we Extract the Signal from the Noise, this is Pure Accelerate 2017. This is the second year of Pure Accelerate. Last year was a little north of here at, right outside AT&T Park. Pure, it's pretty funny, Pure chose this venue, it's like this old, rusted out, steel warehouse, where they used to make battleships, and they're going to tear this down after the show, so of course the metaphor is spinning rust, old legacy systems that Pure is essentially replacing, this is like a swan song, goodbye to the old days, welcome in the new. So very clever marketing by Pure. I mean they did a great job setting up this rusty old building-- >> It's bad. Nice, it's a nice building. >> Hopefully it doesn't fall down on our heads and, so, but let's get to the event. The messaging was very strong here. I mean, they pull no punches. >> You know, legacy, slow, expensive, not agile, we're fast and simple, come with us. Of course the narrative from the big guys is, "Oh Pure, they're small, they're losing money, "you know, they're in a little niche." But you see this company as I said earlier when Matt Kixmoeller was on. They've hit escape velocity. >> Absolutely. >> They're not going out of business-- >> Nope. Okay, there's a lot of companies you see them-- >> And they're making a profit. >> Yeah, you read their financials and you say ah oh, this company's in deep you know what. No, they're not making a profit yet, Pure. >> They are projecting to make a profit in the next six months. >> But they basically got you know, 500 and what, twenty-five million dollars in the balance sheet, their negative-free cash flow gets them through by my calculation, in the next nine or 10 years, because they have zero debt. They could easily take out debt if they wanted to, growing at 30% a year. They'll do a billion dollars this year, 2.4 billion dollar market cap. They didn't have a big brain drain six months after the IPO, which was really important, it was like, you know business as usual. They've maintained the core management team. I know Jonathan Martin's you know, moving on, but they're bringing in Todd Forsythe to run marketing. A very seasoned marketing executive so, you know, things are really pretty interesting. The fact is, we haven't seen a billion dollar storage company that's independent since NetApp, there's only one left, NetApp. EMC is now Dell EMC. 3PAR never made it even close to a billion outside of HPE. Isilon couldn't make it, Compellent couldn't make it, Data Domain you know, couldn't make it as a billion dollar company. None of those guys could ever reach that level of escape velocity, that it appears that Pure and Nutanix are both on. Your thoughts David Floyer. >> I couldn't agree more. They have made their whole mantra, simplicity. They've really brought in the same sort of simplicity as Nutanix is doing. Those are the companies that seem to have been really making it, because the fundamental value proposition to their customers is, "You don't need to put in lots of people "to manage this, it'll manage itself." And I think that's, they've stuck to that, and they are been very successful with that simple message. Obviously taking a flash product, and replacing old rusts with it is, makes it much simpler, they're starting off from a very good starting point. But they've extended that right the way up to a whole lot of Cloud services with Pure. They've extended it in the whole philosophy of how they put data services together. I'm very impressed with that. It reminds me of Ashley, the early days of-- >> Of NetApp. >> No, of NetApp and also of the 3PAR. >> Oh, yeah, yeah, absolutely, simplicity, great storage services, Tier 1. When I say NetApp, I'm thinking, you know, simplicity in storage services as well. But you know, this is the joke that I been making all week is that you talk to a practitioner you say, "What's your storage strategy?" Oh, I buy EMC for block, I buy NetApp for file. At Pure it's sort of, not only challenging that convention, but they're trying to move the market to the big data, and analytics, and they also have a unique perspective on converge and hyper-converge. They count a deep position hyper-converge that's you know, okay for certain use cases, not really scalable, not really applicable to a lot of the things we're doing. You know, Nutanix could, might even reach a billion dollars before Pure, so it's going to be interesting. >> Well, I think they have a second strategy there, which is to be an OEM supplier. Their work with Cisco for example. They're an OEM supplier there. They are bending to the requirements of being an OEM supplier, and I think that's their way into the hyper-converge market is working with certain vendors, certain areas, providing the storage in the way that that integrator wants, and acting in that way, and I think that's a smart strategy. I think that's the way that they're going to survive in the traditional market. But what's, to me, interesting anyway, is that they are really starting to break out into different markets, into the AI market, into flash for big data, into that type of market, and with a very interesting approach, which is, you can't afford to take all the data from the edge to the center, so you need us, and you need to process that data using us, because it's in real time these days. You need that speed, and then you want to minimize the amount of data that you move up the stack to the center. I think it's a very interesting strategy. >> So their competing against, you know, a lot of massive companies I mean, and they're competing with this notion of simplicity, some speed and innovation in these new areas. I mean look at, compare this with you know, EMC's portfolio, now Dell, EMC's portfolio. It's never been more complicated right? But, they got one of everything. They've got a massive distribution channel. They can solve a lot of problems. HPE, a little bit more focused, then Dell EMC. Really going hard after the edge. So they bring some interesting competition there. >> And they bring their service side, which is-- >> As does Dell. So they got servers right? Which is something that Pure has to partner on. And then IBM it's like you know, they kind of still got their toe in infrastructure, but you know they're, Ginni Rometty's heart is not in it you know? But they, they have it, they can make money at it, and you know, they're making the software to find but... And then you get a lot of little guys kind of bubbling. Well, Nimble got taken out, SimpliVity, which of course was converged, hyper-converged. A lot of sort of new emerging guys, you got, you know guys like Datrium out there, Iguazio. Infinidat is another one, much, much smaller, growing pretty rapidly. You know, what are your thoughts, can any of these guys become a billion-dollar company, I mean we've talked for years David about... Remember we wrote a piece? Can EMC remain independent? Well, the answer was no, right? Can Pure remain independent in your view? >> I don't believe it could do it, it was, as just purely storage, except by taking the OEM route. But I think if they go after it as a data company, as a information company, information processing company, and focus on the software that's required to do that, along with the processes, I think they can, yes. I think there's room for somebody-- >> Well, you heard what Kix said. Matt Kixmoeller said, "We might have to take storage "out of the name." >> Out of the name, that's right. >> Maybe, right? >> Yes, I think they will, yeah. >> So they're playing in a big (mumbles), and the (mumbles) enormous, so let's talk about some of the stuff we've been working on. The True Private Cloud report is hot. I think it's very relevant here. On-Prem customers want to substantially mimic the Public Cloud. Not just virtualization, management, orchestration, simplified provisioning, a business model that provides elasticity, including pricing elasticity. HPE actually had some interesting commentary there, on their On-Demand Pricing. Not just the rental model, so they're doing some interesting things, I think you'll see others follow suit there. I find Pure to be very Cloud-like in that regard, in terms of Evergreen, I mean they essentially have a Sass subscription model for their appliance. >> And they're going after the stacked vendors as well, in this OEM mode. >> Yeah, they call it four to one thousand Cloud vendors, so you're True Private Cloud Report, what was significant about that was, to me anyway, was a hundred and fifty billion dollars approximately, is going to exit the market in terms of IT labor that's doing today, non-differentiated lifting of patching, provisioning, server provisioning, (mumbles) provisioning, storage management, performance management, tuning, all the stuff that adds no value to the business, it just keeps the lights on. That's going to go away, and it's going to shift into Public Cloud, and what we call True Private Cloud. Now True Private Cloud is going, in our view, to be larger than infrastructures that serve us in the Public Cloud, not as large as Sass, and it's the fastest growing part of the market today, from a smaller base. >> And also will deal with the edge. It will go down to the edge. >> So punctuate down, so also down to the edge so, what's driving that True Private Cloud market? >> What's driving it is (mumbles), to a large extent, because you need stuff to be low latency, and you need therefore, Private Clouds on the edge, in the center. Data has a high degree of gravity, it's difficult to move out. So you want to move the application to where that data is. So if data starts in the Cloud, it should keep stay in the Cloud, if it starts in the edge, you want to keep it there and let it die, most of it die there, and if it starts in headquarters again, no point in moving it just for the sake of moving it. So where possible, Private Cloud is going to be the better way of dealing with data at the edge, and data in headquarters, which is a lot of data. >> Okay, so a lot of announcements here today, NVMe, and NVMe Fabric you know, pushing hard, into file and object, which really they're the only ones with all-flash doing that. I think again, I think others will follow suit, once they have, start having some success there. What are some of the things that you are working on with the Wikibon Team these days? >> Well, the next thing we're doing is the update of the, well two things. We're doing a piece on what we call Unigrid, which is this new NVMe of a fabric architecture, which we think is going to be very, very important to all enterprise computing. The ability to merge the traditional state applications, applications of record with the large AI, and other big data applications. >> Relevations, what we've talking about here. >> Very relevant indeed, and that's the architecture that we believe will bring that together. And then after that we're doing our service end, and converged infrastructure report and the how, showing how the two of those are merging. >> Great, that's a report that's always been, been very highly anticipated. I think this is our third or fourth doing that right? >> Fourth year. >> Right, fourth year so great looking forward to that. Well David, thanks very much for co-hosting with me-- >> Your very welcome. >> And it's been a pleasure working with you. Okay that's it, we're one day here at Pure Accelerate. Tomorrow we're at Hortonworks, DataWorks Summit, we were there today actually as well, and Cloud Foundry Summit. Of course we're also at the AWS Public Sector, John Furrier is down there. So yeah, theCUBE is crazy busy. Next week we're in Munich at, IBM has an event, the Data Summit, and then the week after that we're at Nutanix dot next. There's a lot going on theCUBE, check out SiliconANGLE.tv, to find out where we're going to be next. Go to Wiki.com for all the research, and SiliconANGLE.com for all the news, thanks you guys, great job, thanks to Pure, we're out, this is theCUBE. See you next time. (retro music)

>> Narrator: Live from Las Vegas, it's theCUBE. Covering HPE Discover 2017. Brought to you by Hewlett-Packard Enterprise. >> Okay, welcome back everyone. We are here live in Las Vegas for SiliconANGLE Media's, theCUBE's exclusive coverage for three days for HPE Discover 2017. We're on day three, down to the wire here. I'm John Furrier with SiliconANGLE with my co-host Dave Vellante, my partner in crime with Wikibon. Our next guest, Ric Lewis. Software Defined Cloud Senior Vice President, President and GM of HPE, welcome back to theCUBE. >> Thank you. >> And Kate Swanborg, Senior Vice-President Tech Communications and Strategic Alliances, DreamWorks Animation. Welcome back as well. >> Thank you. >> John: Great to have you guys back. >> It's good to be here. >> So obviously DreamWorks, you guys are a big customer, Ric you are now leading up the team for Software Defined infrastructure, as we call it programmable infrastructure, a lot of great things. >> Ric: Yeah. >> Synergy we talked heavily about last year. >> Ric: Yeah. >> I kind of was geeking out with you on that in terms of all that programming ability and automation. Meg story this week was simplifying hybrid IT, which is the key part of where Software's coming in. >> That's exactly right. >> And so we got DreamWorks here, what's your vision in how that's going to happen? How do you take that simple message and put it into practice? >> Yeah so, we're completely about making hybrid IT simple, and we have three primary vectors that we're driving in order to make that happen. The first is our hyperconverged appliances that we deliver, and the second is HPE Synergy, our composable, and the third is our hybrid IT management stacked software that we have. And we've got momentum across all of those. In Hyper Converged, you guys know we acquired SimpliVity, it closed in February. Got a lot of customers on that. We had Red Bull on-stage here at Discover talking about their use case of that in their racing. It was a packed house, people completely interested in all the things we're doing in hybrid IT. That's SimpliVity. Synergy, we now have almost 400 customers that have adopted Synergy. We started shipping in volume in December, and DreamWorks Animation is one of those customers, and real excited for you to hear a little bit about how they're using it, but we had, I think we had around 10 customers from Synergy across all kinds of verticals and use cases, including service providers that were on-stage here. And the final thing is our hybrid IT management stack, a program that we introduced here at Discover called Project New Stack. So, that's what's going on in Software Defined & Cloud, it's a lot right now. >> And we had a SimpliVity customer on by the way, they were really glowing. >> Yeah. >> Great to see that happen. >> That was a great story. >> Great story, Kate, so DreamWorks, you guys have a business, you've got to put a product out there and so you got to look at technology, make it work for you, and sometimes you got to get in the weeds, there's pieces and pieces, at the end of the day you got a product to deliver. How are you guys taking some of the things that are coming out at HPE and putting them into action? What are some of the things you're doing? >> Well, I think one of the things that is often surprising to people is just how much technology we consume to make a CG feature animated film. These films take 80 million compute hours to render the images, petabytes of storage and we're typically working on five or six active films in production because they take us four or five years to make. And so we want to be able to have the capability of releasing two or three films a year, we must have simultaneous production. But of course, not all of the productions are exactly the same, and we've also got other media opportunities, whether it's television or theme park. And so, what's critical to us is that we're actually able to provision the right amount of digital resource to the right project quickly and easily so that as those creative inspirations are growing and burgeoning at the studio, we've got the resource behind it in an effortless fashion. >> And how are you making that happen with the Synergy for example, because last year we were looking at thinking well this has got a lot of potential. I mean you can do it through the orchestration, making the management work kind of takes that, abstracts away a lot of the complexity. How are you guys dealing with that, I mean how have you put that into action? >> Well, we've been working within a hybrid environment for years now, so the idea of a hybrid environment isn't new to us. The key however, is that it's labor intensive. It's time-consuming. In order to get all of the right configurations of the networking and the storage, the compute to actually work in a realtime environment for our artists, that has taken us an enormous amount of effort over the years. What we're looking for in the Synergy deployment is to reduce those weeks down to days and those days down to hours. Once we're able to do that, our engineers can go off and focus on the niche technology solutions that actually matter to the artists. And that's where we want to get the business benefit. >> And with Synergy, compute, storage and fabric all managed under the same management domain. >> That's right. >> Single API that you can get access to all those resources, so it makes it super easy. It's the world's easiest way to do infrastructure as a service, it's built into the platform natively. >> That's right, and one of the things that's been so impressive to us is that we've been working with the Pointnext team to come in and actually configure this for our environment. Everybody uses a high-performance compute environment, but nobody's is exactly the same. The configure ability of this and the customability of this to our environment has been critical, and we've seen incredible benefits from that. >> So Ric, we kind of pushed you in theCUBE last year, cause you were saying "there's nothing like this in the marketplace". We said, okay define what's different. (John laughs) One of the things you touched on was the fluid pools of infrastructure. >> Yes. >> And Kate, what you just described is bringing technology to different digital teams. >> The dynamicism if you will. >> Absolutely. >> Being able to dynamically configure the thing, yes. >> So, let's test it. I mean, it sounds like that's exactly what you're doing, and how is this different than the infrastructure that you used to have? >> So, the reason that it's different is that we've got, we've got a simply said, a single infrastructure. We've got a compute farm, we've got storage, and historically what we had to do was actually partition off certain pieces of that for certain productions in order to protect their resources. The problem with that is that any given day, particularly in a creative environment, maybe they're using all of it, maybe they need more, maybe they need less. The challenge is is that historically if they needed less we can't reprovision that to another production in order to take advantage of their inspiration and their business motivations. Now we can. Now we have the opportunity to actually have the infrastructure be as dynamic as our creative environment, and that's saying a lot. >> And you can reconfigure those resources three clicks, five minutes, you literally can deprovision -- >> Kate: That's it. >> So the old way they're like bitchin and moanin, where's the servers? >> Absolutely. >> Right. >> And running around scrambling. >> They're on order. (all laugh) >> Six weeks. No this what we're talking about. >> Yeah. >> This is about speed, right? I mean this is -- >> It absolutely is. >> Alright, so I want to ask you a question about the HPE event. You mentioned you're here. So, a lot of people go to these events and they try and extract all the action. You've heard a lot of firsts, last year was Synergy first, big claim there. We're hearing some security stuff with servers here. >> Ric: Yeah. >> As a practitioner that comes to these shows, what's your strategy when you come to an event like HPE Discover, and obviously the schmooze is going on and getting wined and dined by HP, a big customer, but like when you go in there, what are you looking for, how do you connect the dots, what tea leaves do you read, what's your strategy? >> Well, I'll tell you, one of the things that really interests me about Discover is we've got a deep partnership with Hewlett-Packard Enterprise. We're talking to Hewlett-Packard Enterprise all the time. So we might actually think that we know what's going on. It's not true, there's so much innovation happening that when we bring our team to this show, we learn things that could really help our business. I'll give you a great example, so we learned this week about SimpliVity. Now, we had sort of heard about it, but we had not taken our time out of our schedules to really understand how that could help our VM environment. Our team's sitting in one of the panels this week, and he's texting other engineers on our team going "We have got to look at this next week at DreamWorks Animation". That's the kind of environment this is. I'll tell you something else, New Stack, we're going to lean heavy into New Stack because we believe that the innovation that we're seeing in that space is really, finally going to deliver on this promise of cloud that's been out there. >> What specifically about New Stack do you like? I want to just double down on that. Is it the rule of your own, is it the flexibility, what's the big thing there? >> Well, again this is one of those things where our team today is actually writing code and creating architectures that are sort of New Stack-like, but we're having to do it, we're having to invest our own time. It's trial and error, some of the things work some of the things don't, and that time is not being spent focused on our animation productions. The fact of the matter is, here's Hewlett-Packard actually doubling down and making sure that there is going to be a robust solution that works, that we can bring into our environment. >> We're in enterprises across the world every day. We're having these conversations, and most enterprises are doing kind of a roll-your-own cloud kind've thing. >> That's right. >> They're playing with OpenStack, they're playing with Kubernetes, they're playing with all these tools, they got a bunch of custom code, but we're really what we're trying to do with New Stack is take the best of what they're all trying to do, constrain that down, take our standard Software Defined infrastructure as the base, put a stack on top of that that they can count on to do a private cloud with bridge-to-hybrid capabilities, that's standard, that ships, that delivers and has updates, so that they're not messing around with it. Their developers don't want to spend time doing that, they just want to have a private cloud installation that has hybrid capabilites and have it installed. >> This is super relevant, this is super relevant, and we call you a tech athlete because you want to go out there and deliver value to your group and actually build products, right? >> That's right. >> The film. But Dave's team just put out the True Private Cloud Report which shows on PRAM, cloud-like environment, $260 billion dollar TAM, but the notable thing is that the labor costs were non-differentiated spend is going up by a $150 billion shifting in 10 years. >> Yeah. >> That's exactly the point here that you're talking about, is my guy's aren't working on the product that they need to be building. They're doing the R&D, so the OpenStack and all these things you're talking about, they're doing the R&D. Here, you're doing the R&D, delivering the product to the customer. >> Well and when we deliver that, we're still going to leverage all of those technologies. OpenStack is a key part of New Stack. Kubernetes is a key part of New Stack, but what we're doing is pulling that together so that they don't have to curate their own private cloud. >> Kate: That's right. >> We create that, deliver it in a way that's an appliance-like way, just like we deliver Hyper Converged today, in a controlled plane that manages that hybrid IT estate and gives them visibility into public cloud uses and private cloud, and it's really going to help them a lot, and it's going to help a whole lot of other customers cause we're making it standard and easily deployable. >> Well, we've seen this story unfold over this decade, where the corner office has said I don't want to spend money on that caching and provisioning. Okay, so go to the cloud. And then IT said, well, eh, we can't do that. (laughs) Okay, and so they get in with Hewlett-Packard Enterprise and others say what's the answer? Okay, but what you've described is this horizontal infrastructure capability that you can throw any workload at. >> That's right. >> And so my question is, what does it mean for the business? Does it mean you can do things faster, you have happier animators, you can do more movies, what does it mean? >> I think it means a couple of things. First of all, opportunity cost. In our business, a new opportunity for a creative endeavor, that comes up all the time, and the key is is that you want to be able to explore that as quickly as possible. Creative ideas work out sometimes, sometimes they don't, but they key is is that if takes you time and effort and money to just explore it, you've got an opportunity cost you don't want. >> Yeah, yep. >> Something like Synergy will allow us to provision resources to new ideas and new potentials quickly enough, easily enough, and at a cost-effective measure, so that we can actually determine which creative endeavors are going to work more quickly in our environment. That's a huge deal. >> So you were missing opportunities because of the infrastructure limitations, is that right? >> That's -- >> The mockups and everything have to get done. >> That's right! >> All the CG work. >> Again, when our filmmakers have a new idea for a new sequence, a new character, those types of characters, they take tremendous amounts of resources. I often talk about the dragon in Shrek. Back in 2001 we released Shrek, and it had this beautiful, huge pink dragon in it. And she was fantastic, but frankly she was so complex and so computationally heavy, we actually had to cut her out of parts of the film because we couldn't produce the shots she was in. Fast forward a few years, and we decide to make a movie called How to Train Your Dragon that's nothing but dragons. The key is is that we never want to be in a position again where we're tabling a great creative idea because we can't resource for it. And solutions like SimpliVity and Synergy and particularly where we're going with New Stack and the ability to actually harness the cloud without having to do all the work ourselves, that's going to bring that potential to reality. >> John: And then you know, your application in this opportunity cost is for your business. Other companies have apps, right? So their opportunity costs are very similar. >> That's right. >> John: This is the classic how shadow IT was born. >> Oh, yes! >> And people want to experiment, show proof of concept. Not a PowerPoint, an actual demo of real working product. It may not have the scale there, but you get to that point of where it's workable. >> Look, every business is facing some element of this right now, and I will tell you the other reason of the two reasons that I think that this is going to make a difference. It's future-proofing our environment. >> Ric: Yeah. >> The world is so dynamic right now, things are changing so quickly. Even in our environment with media and entertainment, the world of what people want to consume and how they want to consume it and the nature of how we're looking at innovation in both filmmaking techniques, as well as new media opportunities, the key in all of that is is that we have to be dynamic in order to be future-proofed. These types of solutions give us the confidence that we're actually putting the money in the right place. It's an investment in our future. >> Earlier you mentioned Pointnext services, and the narrative from Hewlett-Packard Enterprise is my inference is it's more cloud-like. Do different types of business models. Are you seeing that? I mean, is it more than just a new name, a new brand, are you starting to see an evolution of the way in which you engage with Hewlett-Packard services? >> We absolutely are, and it's one thing to talk about strategy, but at the end of the day, you don't call up your technology and have a conversation with it, you call up people. And what we're seeing is that Hewlett-Packard Enterprise is investing in a level of expertise within the Pointnext services organization that is unparalleled. That is a massive change over the course of the last five, six, 10 years. These folks are coming into our environment now and we're finding that we are inspired by their strategies. We're not having to teach them about our business, they're actually coming in with all of these other learnings that they've gotten from all of these corporations and they're looking at our ambitions and going hey, we think we've got some ideas here. I'll tell you, our engineers are hard to impress. >> That's the truth. >> They are used to, what was your phrase, rolling it on their own. >> Yeah. >> They are used to being responsible, and they have very little tolerance for actually giving other people time within our organization. Pointnext has blown them away. We could not be doing the work that we're doing on Synergy as quickly and as effectively, installation and strategy around that without the Pointnext team. >> Well, that's the proof, that is the proof in the pudding in my opinion when your people who are, I won't say cocky, but they're kind of, sounds like they're pretty cocky. (laughs) >> Ric: Confident. >> But that you're in a, you're in media entertainment. It is one of the most disruptive, being disrupted markets right now. Smart Cities, IoT, media entertainment it's, you're the leading trend in IT right now, media entertainment. >> And in our team, there's simply no tolerance at DreamWorks Animation for technology getting in the way of the business. The fact of the matter is technology always has to be enabling the storytellers, enabling the filmmakers, enabling the business and ambition. And the key is is that our engineering team, they feel responsible to that. One of the things that we're finding with the new Hewlett-Packard Enterprise, the Pointnext team, Ric's team with the Synergy deployments, is that we actually feel like we've got a partner that can up our own game. >> John: Good. >> And we do deep beta programs with them on everything that we're doing to make sure that we're meeting that next generation of what they need. It's a fantastic partnership. >> Well Ric, congratulations on the success, and Kate thanks for sharing all the great stories and your experience DreamWorks Animation. Great to see that trend, again media entertainment, you guys are doing great stuff. We're doing our share with digital TV here, we're not a, we live on the edge of the network with theCUBE here at HP Discover. With DreamWorks Animation, I'm John Furrier, Dave Vellante, stay with us for more day three coverage here in Las Vegas at HP Discover. We'll be right back. (tech music)

>> Narrator: Live from Las Vegas, it's the CUBE covering HPE Discover 2017. Brought to you by Hewlett Packard Enterprise. >> Okay, welcome back everyone. We are live here in Las Vegas for SiliconANGLE Media's theCUBE's three-day exclusive coverage of Hewlett Packard Enterprise, HPE Discover 2017. I'm John Furrier with my co-host, Dave Vellante. Our seven-years covering HPE, and we have our next guest whose been on the job for seven weeks, Parvesh Sethi, Senior Vice-President of HPE Pointnext Consulting. Industry veteran of cloud. You understand what's going on. Appreciate you coming in and sharing-- >> Thank you for having me. >> Your talking points with seven weeks on the job, but you're new to HPE, welcome to theCUBE. So fresh in to HPE, got a fresh eye. You've been around the industry for a while. What is the hybrid journey for HP? Because you were just in the Q&A with Meg and Antonio with the press and the analysts, and still people are trying to put it together. Like, with no cloud, how do you guys fit in this? So, hybrid cloud, simplifying hybrid IT. They're not saying simplifying hybrid cloud, simplifying hybrid IT, which implies cloud. >> Exactly, I think the approach that I would take is if you look at the role of the IT, it's really changing. I mean, you can consider IT to be the strategic sourcer now. It's no longer we built it, we own it, we run it, because now they're really managing a supply chain. So, you're looking at the private cloud, public cloud, and people having the highly-automated infrastructure, or software-defined infrastructure, and legacy b-spoke systems. The job of the IT is really getting very complex. When you heard Meg talked about making hybrid IT simple, so for Pointnext Consulting standpoint, it's really working with the clients about making that journey much more simpler, and making sure it's not just simple, but the speed is there. Also we'll ask that we are focused on the workloads to really moving the workload securely. Because, at the end of the day, the whole journey is really centered around the workload-side of the house. >> And your role is, am I correct, is tip-of-the-spear consultant? Is that right, and strategy consulting? >> That's correct. It includes the consulting and the professional service portfolio. >> So, help us understand, because when EDS went to CSE with the spin-merge, all of the sudden you're seeing Accenture, Deloitte, and others come out of the woodworks. And this is their wheelhouse, in strategic consulting, so where do you pick up, and how do you relate to those guys? >> Yeah, no, it's a great question. In fact, it's with the spinoffs, it's also given us a great opportunity to really work with number of the SIs, and so we're have a close work relationship with number of them, and the way I look at the strategic consulting, where we add value is really more around the technology consulting piece of it. And because that's where we feel that we can really add differentiation. And partnering with some of our SIs, that's where they can help us from the verticalization piece of it, the business process side of it, because that's not really our core strength. Our core strength is really around the technology consulting, and also being around, and dealing with, and doing 11,0000 plus engagements every year. From Pointnext perspective, that's lot of experience that we bring to the table partnering with the ecosystem, we truly bring some of these outcome-based solutions that we keep referring to. >> Dave's team at Wikibon has put out some pretty seminal research. I think it's very unique. I don't think any other research firm has actually documented this, even captured the numbers. But, they just did a report called The True Private Cloud Report, go to wikibon.com for the folks watching, but really what it illustrates is that IT is not declining, it's only increasing in its capabilities. So, yes, server shipments might be declining, but, at the end of the day, IT is changing and growing with cloud. But one of the points in that survey is the TAM is 260 billion plus in true private cloud. And that doesn't include hybrid. But, the other statistic besides the TAM is the fact that the labor costs are undifferentiated, and being automated away with cloud, which is a good opportunity. And then the shifting of those resources to differentiated apps or services is the focus. That's business transformation. That's what you guys are doing. Share with us your thoughts, and how you guys look at that. Obviously, you're only seven weeks in from an HP perspective but you been in the industry. How are you guys going to attack that trend, and ride that wave of shifting that to differentiated capabilities? >> Yeah, I think so one of the things you always hear about from a technology standpoint, lot of folks focus on just the technology piece of it. What we're finding is when we engage with the clients, it's really taking a look at, even before the technology, it's what is the strategic framework. Why do so many digital transformation projects stall, or fail? Because there's no interned alignment in terms of business, IT, and OT side of the house, so what you're seeing is from the consulting side of the house is kind of making sure that we bring these things together. And we have a methodology called Unified Transformational Framework, UTF, which has seven key domains, and one of the first things we do when we engage with the client, we bring them together, business side of it, the IT side of it, and we assess where they're at today in each one of those domains, and assess the gaps. We actually put together a strategic framework with them in terms of what is the desired state where they want to be, where they're at today, and how do we map out that cloud journey together with them. And, more importantly, what are the key outcomes they are really seeking. And so if they are looking at focusing on achieving certain cost-efficiency, or launching new services faster, or securing information network, or from an IOT perspective, what are the specific use cases, like for oil and gas, you may have heard some of the examples here with Tech Smart on refinery of the future. What are some of the outcomes they're looking for, and then kind of working backwards to make sure that we can take them on that journey roadmap, and accelerate that whole journey. It's the time to value equation. >> So it would seem like the hybrid IT message that you guys provide is the foundational infrastructure for a digital transformation. Okay, sounds good, now, let's peel that back a little bit. Because, if I'm an executive in a board, I'm saying, "Okay, great, how do we get started, "how do we pay for it?" You come in with your maturity model, here's where you guys are at. How much of that conversation is around the data? And data, data value, how to monetize data, how it contributes to whatever objective, raise revenue, cut costs, et cetera. How much of the conversation do you anticipate is going to be around that data? >> No, it actually is quite a bit of floor discussion on the data as well. So, I'll take it in steps of there's two main types that come up. One is really around the workloads as to enterprises have hundreds, thousands of applications running but not every application, not every workload needs to move to a public cloud or private cloud. Some of them may be more suited towards just a dedicated infrastructure that they already have. One of the first things we focusing on through the tool, we do an inventory, as well as through the interviews. Because one path doesn't give you all the information that you seek. Synthesizing the two really gives you the full picture. And, then on top of it, more and more data is getting generated at the edge, and so in terms of what do you do with the data, how can you help them drive a real-time action, and then what can you do to monetize on that data, just like the example with the M1GD team that's been showcased here, that's not just change the fan experience, it's also helping them taking the look at the data, the loyalty, and everything else, and then increasing opportunities to drive top-end growth from the revenues in the concession stand, or promotional material, your absolutely right, the focus is more about not just guarding the data, the data production, data consumption, it's how do you monetize on that piece of it. >> And does HPE focus more on the IT transformation, and your partners like the big SIs on the business transformation, or no, is it not that simple, it's not that clear? >> Yeah, I mean, it's hardly just kind of say, okay, those are in their silos because there's that intersection point that really drives additional transformation. That's one thing that I think we are uniquely positioned, because number of these solutions you see on the demo floor here who are jointly partnered up with our ecosystem, and that really drives that value up from the business outcome standpoint, it's not just what the technology is able to do, it's not just, yeah, if we're able to have a faster server, this then that, it's really more about what will that enable. In turn, what is the business outcome that's enabling. >> But I would imagine your partners are deep experts in some healthcare business process that HPE doesn't possess, then you guys, from a technology standpoint, can go much deeper than they can. My question is how much of the conversation from your partners has been, or do you expect it to be, "Hey, you know what, if you could do this, you know, "with the technology, you know, we can really "help this company, and win a large deal," for example, which is a semi-custom, you know, and it requires a deep technological expertise to marry with that business process. >> No, absolutely, in fact, I was with a partner earlier, and actually what you just called out was very similar discussion with him. From a healthcare perspective, one of the things we can do, and we have done, where the picture in archiving communication system, we can package what one of the other providers does along with computing and for storage, package that up, and where the configuration provisioning time is reduced dramatically when they show up on site, everything is preconfigured. But, then jointly with a partner who has more knowledge about the patient experience. Marrying the two, you can actually see not just how the healthcare provider and the patient are going to interact, but how also the information that's generated there, how can that be analyzed at a remote location through a specialist. So it's that whole value chain that you can do with a partner that you're just not able to do yourself. >> Am I correct that you run a PNL, right, this is not a free-beat. >> That's correct, no. >> Okay. >> Yes, so from that standpoint we do work with the ecosystem where there is some investment made on the solution of it, but then, obviously, you take a look at does the solution make sense, is there a market for it, can you do the repeatability aspect of it, and, if the answer is yes, then certainly both starts get much more happily engaged. >> Parvesh, talk about the dynamic in digital transformation, specifically, around as companies really transform from being analog to digital. That basically makes them cloud service providers. >> Right. >> So if you have a sass-ification, that's kind of a shift, this is the shift in IT we're talking about, yeah, keeping the lights on, running servers in the data center, old way, classic enterprise. Portions of their operations now have to be shifted to this new way of doing IT to be a service provider, yet they're not service providers, but they're becoming one, or the end-user customer might buy from a partner that's becoming a service provider, either building their own cloud. Is that how you guys see it at Pointnext, and how are you nurturing this, or working with this mega-trend that's the cloud is enabling? >> Couple of things happens. I was with a client very recently, and they've been actually doing number of use cases, fifty plus use cases in the labs, and on the whole use cases around digital transformation. Each use case theoretically can generate millions of savings for them. By the same token, they haven't been able to take it out of the lab and mainstream it, so this goes back into the alignment piece of it, and then also the cultural and the organizational aspect always gets overlooked. Because if the focus is just on the solution piece of it, or digitalization of the workflow, and you have not the trends from the workforce in terms of how they should evolve, how the skillsets should evolve, and if certain roles are getting combined, how should they be dealing with that piece of it. We are talk about DevOps or OpsDev. It's really the whole notion around how they should be working differently than before. If that aspect of it hasn't been put a lot of focus on, most of these transformations literally stall or fail. >> You mean on the cultural piece of it. >> On the cultural piece of it, absolutely. This is another area that we put lot of focus on, and, in fact, one of the offers we rolled out, the management of change, is actually getting lot of traction just because of that reason. >> You know, one of the challenges that the companies that I talk to have is actually funding the digital transformation. The incentive to do it is well, if we don't do it, we're going to get uber-ized, okay. So people get that, but, at the same, then the CFO's are, "Okay, that's fine, "but how are we going to make money at this, "how are we going to actually pay for this?" And, really, for organizations that can show that type of path to profitability, if I may, it seems like it gets more traction, and has staying power. I wonder if you could comment on that. >> Well said. In fact, a number of the engagements we start off with, that discussion always comes up that we don't have any extra funds to go do this thing, but we have to do this thing in order to stay relevant. >> John: What do we do. >> Yeah, so one of the things we focus on is safe-to-invest initiatives. For example, you heard the example of ALDO Group, one of the large global retailers. The federate structure, and then moving towards where it can be had they can move towards a centralized as well as a global centers architecture that can help them drive more speed, cut down the provisioning time, cut down on the operating cost. When you have initiatives like that, the enterprises can then take those savings and then show the CFO that this is how we can apply those savings into these key initiatives that can continue to make us more relevant, and also transform the end-user experience, or their end-customer experience. So, I think as you do this on prioritized use cases, that gives you more credibility in the organization to go do lot more and much faster. >> So, final question for you. Observations, new to HPE, now, Pointnext, New to HPE Discover here, as an employee, what's your observation about HPE Discover, their position in the marketplace, vis-a-vis, the industry scope and trends that are out there? >> First of all, I think coming out here, this is my first Discover so I see a lot of excitement here, and I think up to the point that you made earlier, Dave, with the spun-offs, I think that has really opened up a lot of the doors where a lot of the partners say, "Look, this is something we can do more together of." So, every meeting that I've been with a customer since we're partners, they see us kind of where we're the top stack, who are not biased towards that, right, because this is not where we play, but we play more for roll out the solution aggregation, plus also bring lot that experience to really guide them on their journey. One of the things I constantly hear is if you can help us accelerate time to value, and you can help us drive the acceleration, because a lot of these initiatives stalling, help us on that journey, there's tremendous opportunity for both sides. So that's what we see lot of excitement here. Parvesh Sethi, Senior Vice-President, Pointnext, welcome to theCUBE, thanks for your commentary and insight. >> Thank you for having me. >> Appreciate it, good luck with your journey. This theCUBE bringing you all the digital transformation and conversations here at HPE Discover 2017. I'm John Furrier with Dave Vellante. We'll be right back. (upbeat music)

>> Announcer: Live from Las Vegas, it's theCUBE, covering InterConnect 2017. Brought to you by IBM. >> Welcome back everyone. We are here live in Las Vegas at the Mandalay Bay for exclusive Cube coverage for three days for IBM InterConnect 2017. I'm John Furrier. My co-host, Dave Vellante. Our next guest is Ed Walsh, General Manager of Storage and Software-Defined Infrastructure at IBM. Welcome back. >> Ed: That was a mouth full wasn't it? >> Welcome back to The Cube. Welcome back to the fold at IBM. >> Thank you very much, always good. >> You're leading up a big initiative. Take a quick second to talk about what you're the general manager of scope wise, and then we'll jump right in. >> Yeah, so I run basically the storage division, which has all of our storage from mainframe to open systems, tape, software defined storage and software defined compute, but it's all under our storage portfolio. So development, sales, you know, run the PINA. >> Right, and the new innovations that are coming out, what do you have your eye on? What's your goal, you know, you got a spring in your step. What's the objective? >> So we talked probably in October, I was 90 days in. So now I'm a whopping 8 months in. I think we kind of talked about it. I kind of... my hypothesis for coming here was you know, clients are going through this big change and some of your write ups lately about the True Private cloud and how they're trying to go from where they are now to where they're trying to get to. And that confusion eats up leadership so as confusion... IBM has the right vision, but it's like clouding cognitive, as is much on PRIM. So we have the right vision to help them get through that. And we have a history of doing that. And the second one was that we have a portfolio that's pretty broad. So we almost have an embarrassment of riches on what we can do with someone when they're really trying to look to modernize environments or transform, we can help them from anything. From the biggest and baddest. But it really doesn't matter. The broad portfolio allows us to engage and bring it forward and get them to the... Whatever their path forward is we can give that vision. And then, the one thing I was really talking about is he could bring in IBM. If I could bring in IBM, the greater IBM, the True Cognitive, the analytic team, and bring that together to bear for our infrastructure clients, or inside storage itself, that would be where we'd have the trifecta taking off. So we're in the middle of that transformation. Going very well. But along the same lines I have a fantastic product line. We're going to continue, in fact we're putting more investments on that. Not only on the hardware raise, but as much on the software-defined, and going all flash just because a lot of operational benefits. But then really what we're able to do by bringing the large IBM behind us... IBM also did some interesting organizational changes in January. Arvind Krishna is now running Hybrid Cloud and research for IBM so it's bringing the girth of IBM behind what's on PRIM hybrid into the Cloud. So it allows us to play a very strategic role. >> So a couple Wikibomb buzzwords, right? The True Private Cloud, we talked about server sandwiches, really sort of instantiation of software-defined. Really the impetus is that customers on PRIM want to run the Public Cloud. With that kind of agility and automation. So what are you seeing? What is IBM delivering to support that? First of all, are you seeing that? >> So it's kind of funny, so that... I do talk about study a lot because I thought the True Private Cloud, the way you coined it, is the right way to almost just say it's not what you're thinking I'm about to say. But the study, it's everything you get in the Public Cloud and you want to bring it on PRIM. All the flexibility, all the development models, right? How you engage developers. All the financial models as well, but bring that. And then it easily extends the Hybrid Cloud. When you start going through that, every one of our clients we engage, they know we understand the value of Cloud. They're at different maturity levels of how they're using Cloud, but it's all in their vision. We do a lot of work to help people bridge. So where are you know, let's talk about where you need to get to and have some meaningful steps to get there. So the True Private Cloud resonates with them. And then what we're doing is launching. In fact we launched this week with Cisco. So we have a converged offering with Cisco called VersaStack. But what we're operating on is, how do you make a Private Cloud as agile, and has the same use cases specifically for developers or DBA's that you have on the Public Cloud? And we're bringing that to the offering set for a converged offering. So what we do around on API later... So a key use case would be to do would be, why do people go to Public Cloud? Business units like it because the developers. It's easy to use, they have true DevOps capabilities. They're able to swipe a credit card. Single line of code. Spin up an environment. Signal out a code. Spin it down. They don't have to talk to an IT guy. They don't have to wait three weeks or do a ticket system. So how do you do that on PRIM? So what we have now, in market is, imagine a API abstraction layer, that for storage allows all the orchestration and all the DevOps tools to literally do the exact same thing on PRIM. So once you set it up, it allows the IT team, it's called Spectrum Copy Data Management, allow the IT team to set up templates. But through roles based access, allow a developer or a DevOps tool like Chef or Puppet to literally infrastructures code. Single line of code, spin up a whole environment. An environment would be, let's say three or four VM's, last good snapshot, maybe Datamaster or not. Most times it's Datamast. Bring up an offense network, but literally it goes from, on PRIM I just can't get it done. It takes me two or three weeks. So that's why I go the Public Cloud for other reasons. I can not only choose where I put it, where it's the right place to do, but I can give the exact same use case on PRIM by just doing API calls and they use exactly the same tools for development that are used in the Cloud, like Chef, Puppet, Urbancode, Python scripts. >> How's the reaction been to that? Give us some anecdotal... >> So once you have that conversation, that's just one of the things we're doing to make the True Private Cloud come to life. Of course the extension to SoftLayer, in other Clouds to get the... People, all of the sudden they see a path forward. It's not as easy to... You have to explain how it works, but the fact of the matter is they don't have a lot of tools now to make... We can bring down cost, give you a little bit more efficiancy, consolidate it. But that's not really how True Private Cloud is. You need the automation. So they're responding to it well. In fact it's the number one demo on the floor. For us, as far as systems, people trying figure out actually how to do the DevOps on the PRIM. >> John: That's awesome. >> Talk more about he Cisco relationship. There's a lot of interesting things going on in the storage business. There's consolidation, and you know the whole VCE thing and then Cisco looking for partners. You guys selling off BNT, it opens up a whole new partnership potential. So how has that evolved and where do you want to take it? >> So I think, match made in heaven between us, especially in storage, and Cisco. If you look at the overall environment conversion Hipaa converts account for about a third of the storage industry, so we play well. There's no overlap between us and Cisco. It's great. We're after the exact same accounts and actually, from a... You think of the very top level of our organization all the way down, the two companies have a lot of the same cultures and to be honest we're very tight. So it allows us to have a great relationship. We've already had a good relationship. About 25 thousand joint clients, which is amazing. And then what we're doing with VersaStack specifically is we're putting in the next generation, so we have a great converged offering that has all our all flash storage, but also software-defined. But what we added is we brought in what they did with their CliQr acquisition, which is called CloudCenter, and you add that on top make it single click, deploy and application anywhere, both on PRIM in the different Clouds, and it makes it very simple for developers. We talked about the API Layer. You bring that in to DevOps environment. So we feel really strong that as far as, if you're looking to bring in a True Private Cloud probably the best answer that we could do, is what we do with VersaStack. And we just announced it this week. And also we gave a preview. It's Cisco live in Melbourne a week ago. I think it's been a good uptake. But it kind of plays to... When you know what people were trying to do, but you need to bring the automation. You got to make it self-service and that really drives, for the business units, as well as developers. That drove what we brought into VersaStack. So we brought different assets in it from Cisco and IBM to make that kind of a reality. >> John and I were talking earlier on theCUBE this week and somebody brought up, yeah the CIO, they really don't think about storage. They certainly don't want to be thinking about the media. And the conversation shifted way off... Even flash now, it's like, oh yeah, yeah we get it. But you mentioned something earlier and this is very relevent to CIO's. They want to get from point a to point b with this minimal disruption, they don't want to have to buy a boat load of services to get it done. And now you're talking about things like automation and self-service. What are the discussions like with senior IT executives and how are you helping them get from point a to point b with minimum disruption? >> So the good thing about... You think about the IBM brand. It's as much about trust and helping people through it. So people give us just a credit to say I can engage with them, get the innovation. But also we've been through the zeros So a lot of the times they're asking how are we doing it? How are we transforming our company? How are we doing it internally? And then if you jut kind of, common sense, walk them through because of the broadness of the portfolio, we don't just have this point solution and every answer is, well you buy this box, right? We're able to have that conversation and when you get that broader IBM together that's where it kind of differentiates and they love it. Now I've been to a lot of, oh I'll say, IBM friendly accounts which is great. But also, some people that have never dealt with us are eyes wide open because it's a new day. People are struggling with this big transfer, right? How do you get from now to where you want to go in Cloud is a big change. >> Those new customers, what are they getting wide-eyed about? What are they focusing on? What's the big focus? >> So we'll talk about, we'll do True Private Cloud, but really what you can do as far as data, and what we're doing around Cognitive is really telling, right? The ability to really show 'em with symbol API calls they get more... So to have a Cognitive conversation that's an industry specific conversation really gets people lit up. In the end it ends up being, okay I see the possible. Then, how do I get from here to there. And typically it doesn't start, well I'm just going to go directly that direction. It's help me with a multi-year plan to get to there, while I'm taking out costs, adding agility over time. But I would say the kind of conversations are especially with an industry lens, which is what IBM brings to it, is really telling. >> So I got to ask you about the Convergent reStructured markup because the hot trend that's in the Cloud native world is server lists. So is there a storage list version? Cause what you're basically saying with the True Private Cloud is, you're essentially doing server lists, storage lists, philosophy. Is that, I mean how do you guys rationalize this server list trend. Cause servers and storage are basically the same things in my mind these days. But, I mean, you might disagree. >> I think in general people aren't looking to the different components. They're looking for a way to operate in their environment that's more efficient. They're looking for use cases. They're also trying to have IT not be in the way of what they're trying to do in development, but actually give the right tools. So that's why, to be honest, go back to True Private Cloud, I've been using it a lot cause it really resonates with people. Is how do you get that same experience but on PRIM, cause there's different reasons to be on PRIM. >> It's like Cloud native on PRIM. You could get all the benefits of what Serverless promotes, which is here's an unlimited pool of resources. The software will just take of that for you. That's DevOps. >> And doing... >> John: On PRIM. >> And doing true DevOps, Chef, Puppet, no compromises is exactly how you do it. So you change nothing for your developers. But now you're running it on PRIM or in a Hybrid Cloud. Cause there's a lot good use cases for Hybrid Cloud even if it's born in the Cloud application. You're making a web application or iPhone application, the fact of the matter is, you might want to test it against the back end. So being able to do a Hybrid Cloud, bring this system record data there, to be able to do DevOps on what production looked like maybe last night, or a week ago is much different than the current DevOps models. >> Well it's a good strategy too. If you think about the True Private Cloud, the way you're looking at it, which I think is the right way, is a lot of the things that we look at on theCUBE, and talk about, is three areas. Product gaps, organizational gaps, and process gaps. The number one thing is organizational gaps. So when you have that True Private Cloud on PRIM, it's not a big leap to go Cloud Native Public. >> It's seamless in fact. >> John: It's totally seamless. >> And on that case that a lot of the stuff we're talking about is, we help people modernize and transform their environment. And the message is all about optimization on the traditional application environment. It's all about freeing up the resources. So... >> John: That's the ovation strategy. That's the creativity, that's the Dev element. >> And if you don't free up the key resources they can't be on the digital transformation. And without the right skill set, because they're kind of trapped in operation. So a lot of the automation things we're doing are things that, to be honest, the storage team, or the admin team will be doing. It's manual error prone, but take it away. But also you free up the team. So it kind of plays to all those. >> That must really resonate with the CIO. I mean, I would imagine CxO goes, okay I could have Cloud on PRIM and then train my organization to then start thinking Hybrid workloads as they start moving Hybrid pretty quickly. >> And here's the thing, is what do you have to change for developers? Tell me what I have to get by the developer or DBA's? And the answer is nothing. Use the exact same tools. So you know, on stage it'll literally show me how Chef or Puppet... They're not doing trouble tickets or spinning things up, down, but... Same thing with deploying applications. It's like Cloud Center application. Set up the stack and deploy either on PRIM, different architectures, both converged and non-converged or in different Clouds. And they allow you to just, one click and deploy it. And they deal with all those differences. But that's how you want to make it, you use it serverless. They don't have to worry about the infrastructure. But also we're freeing up the team. >> So Ed, I got to ask ya, on a sort of personal note, I mean I've followed your career for a long time. John and I call you the Five Tool Star. You've had the start-up experience, you've got technical chops, you did a stint at IBM, you went to MIT and came back with that big MIT brain, brought it to IBM, so pretty awesome career. By no means even close to over. What have you brought to IBM? I think I've known every GM of storage, since the first GM of storage at IBM. What specific changes have you brought and what's the vision and the direction that you want to take this organization? >> It's a great culture, great history of storage. So I guess that I would be the first outsider coming into storage. But I don't think it's any different. I've been in storage my entire career. I understand it. Some of it is optimizing their current model. The portfolio of what we're doing. Some of it is just making sure we have the right things in sales and working with channels, which one of my companies was an actual channel partner. So I think it's just the perspective of maybe a fresher look, but again we are a great team. Great portfolio. We're quietly number two in storage hardware software. Shhhhhhhh. Don't tell anyone. Cause we don't do a good job of getting the news out... But the fact of the matter is... >> Now we'll tell everyone. You say don't tell anyone, we're telling everybody. You tell us to tell everyone, we don't tell anyone. >> Together: (laughing) >> But we still get people, are you guys still doing storage? We're like, literally we're number two by revenue. And this is IDC and Gartner software hardware. So we are a player in the space. We have a lot of technology and I guess what I'm bringing is just maybe a little spice of vision and... >> Well you guys have a strategy that's unique and different but aligned with the mega trend. That, to me I think, is something that's been in the works for a while. It's been cobbled together. Dave always points it out, how the storage groups change. But the game is still the same, right? Ultimately it's about storage. Now the market conditions are changing on the organizational side. That seems to be the thing. >> Ed: Agreed. >> Well all flash is probably the thing. >> But also what you're going to start seeing is bringing Cognitive capabilities. So we're not going to call in Watson for storage, but imagine bringing Watson to storage, right? Think of all the metadata we have. Not only for support but for insight. You're going to all start doing more Cognitive data management, and not only look at metadata, but taking action on them. Using Watson to look at images, so very interesting use cases that I think only IBM can do. >> I can just envision the day where I just voice activate, Watson spin me up more servers. And provision all flash petabyte. Done. >> (giggling) Believe it or not, we can do a chat, but we have that working. >> John: (laughing) >> We're looking for applicability of that, so. >> And then Watson would tell me, well you can't right now. >> You're not authorized. (laughing) >> You got to grab the Watson for storage url. He's been grabbing url's all day on GoDaddy. (laughing) >> Ed, thanks so much for coming on theCUBE. Congratulations on taking names and kicking butt in storage, in the strategy. True Private Cloud, a good one, love that research, again from Wikibomb. >> Yup. >> Kind of new but different, but relevant. >> Ed: Very relevant. >> Thanks so much. >> Ed: (mumbles) So thank you, thank you very much. I appreciate it. >> Okay, live coverage here at Mandalay Bay here at IBM Interconnect 2017. I'm John Furrier, Dave Vellante. Stay with us. More coverage coming up after this short break. (pulsing tech music)

>> Announcer: Live from New York, it's the CUBE. Covering the IBM Machine Learning Launch Event. Brought to you by IBM. Now here are your hosts Dave Vellante and Stu Miniman. >> Welcome back to New York City everybody the is The CUBE the leader in live tech coverage. We're here at the IBM Machine Learning Launch Event, bringing machine learning to the Z platform. Steve Astorino is here, he's the VP for Development for the IBM Private Cloud Analytics Platform. Steve, good to see you, thanks for coming on. >> Hi how are you? >> Good thanks, how you doing? >> Good, good. >> Down from Toronto. So this is your baby. >> It is >> This product right? >> It is. So you developed this thing in the labs and now you point it at platforms. So talk about, sort of, what's new here today specifically. >> So today we're launching and announcing our machine learning, our IBM machine learning product. It's really a new solution that allows, obviously, machine learning to be automated and for data scientists and line of business, business analysts to work together and create models to be able to apply machine learning, do predictions and build new business models in the end. To provide better services for their customers. >> So how is it different than what we knew as Watson machine learning? Is it the same product pointed at Z or is it different? >> It's a great question. So Watson is our cloud solution, it's our cloud brand, so we're building something on private cloud for the private cloud customers and enterprises. Same product built for private cloud as opposed to public cloud. Think of it more as a branding and Watson is sort of a bigger solution set in the cloud. >> So it's your product, your baby, what's so great about it? How does it compare with what else is in the marketplace? Why should we get excited about this product? >> Actually, a bunch of things. It's great for many angles, what we're trying to do, obviously it's based on open source, it's an open platform just like what we've been talking about with the other products that we've been launching over the last six months to a year. It's based on Spark, you know we're bringing in all the open source technology, to your fingertips. As well as we're integrating with IBM's top-notch research and capabilities that we're driving in-house, integrating them together and being able to provide one experience to be able to do machine learning. That's at a very high level, also if you think about it there's three things that we're calling out, there's freedom, basically being able to choose what tools you want to use, what environments you want to use, what language you want to use, whether it's Python, Scala, R, right there's productivity. So we really enable and make it simple to be productive and build these machine learning models and then an application developer can leverage and use within their application. The other one is trust. IBM is very well known for its enterprise level capabilities, whether it's governance, whether its trust of the data, how to manage the data, but also more importantly, we're creating something called The Feedback Loop which allows the models to stay current and the data scientists, the administrators, know when these models, for example, is degrading. To make sure it's giving you the right outcome. >> OK, so you mention it's built on Spark. When I think about the efforts to build a data pipeline I think I've got to ingest the data, I've got to explore, I've got to process it and clean it up and then I've got to ultimately serve whomever, the business. >> Right, Right. >> What pieces of that does Spark unify and simplify? >> So we leveraged Spark to able to, obviously for the analytics. When you're building a model you one, have your choice of tooling that you want to use, whether it's programmatic or not. That's one of the value propositions we're bringing forward. But then we create these models, we train them, we evaluate them, we leverage Spark for that. Then obviously, we're trying to bring the models where the data is. So one of the key value proposition is we operationalize these models very simply and quickly. Just at a click of a button you can say hey deploy this model now and we deploy it right on where the data is in this case we're launching it on mainframe first. So Spark on the mainframe, we're deploying the model there and you can score the model directly in Spark on the mainframe. That's a huge value add, get better performance. >> Right, okay, just in terms of differentiates from the competition, you're the only company I think, providing machine learning on Z, so. >> Definitely, definitely. >> That's pretty easy, but in terms of the capabilities that you have, how are you different from the competition? When you talk to clients and they say well what about this vendor or that vendor, how do you respond? >> So let me talk about one of the research technologies that we're launching as part of this called CADS, Cognitive Assistant for Data Scientists. This is a feature where essentially, it takes the complexity out of building a model where you tell it, or you give it the algorithms you want to work with and the CADS assistant basically returns which one is the best which one performs the best. Now, all of a sudden you have the best model to use without having to go and spend, potentially weeks, on figuring out which one that is. So that's a huge value proposition. >> So automating the choice of the algorithm, an algorithm to choose the algorithm. what have you found in terms of it's level of accuracy in terms of the best fit? >> Actually it works really well. And in fact we have a live demo that we'll be doing today, where it shows CADS coming back with a 90% accurate model in terms of the data that we're feeding it and outcome it will give you in terms of what model to use. It works really well. >> Choosing an algorithm is not like choosing a programming language right, this bias if I like Scala or R or whatever, Java, Python okay fine, I've got skill sets associated with that. Algorithm choice is one that's more scientific, I guess? >> It is more scientific, it's based on the algorithm, the statistical algorithm and the selection of the algorithm or the model itself is a huge deal because that's where you're going to drive your business. If you're offering a new service that's where you're providing that solution from, so it has to be the right algorithm the right model so that you can build that more efficiently. >> What are you seeing as the big barriers to customer adopting machine learning? >> I think everybody, I mean it's the hottest thing around right now, everybody wants machine learning it's great, it's a huge buzz. The hardest thing is they know they want it, but don't really know how to apply it into their own environment, or they think they don't have the right skills. So, that actually one of the things that we're going after, to be able to enable them to do that. We're for example working on building different industry-based examples to showcase here's how you would use it in your environment. So last year when we did the Watson data platform we did a retail example, now today we're doing a finance example, a churn example with customers potentially churning and leaving a bank. So we're looking at all those different scenarios, and then also we're creating hubs, locations we're launching today also, announcing today, actually Dinesh will be doing that. There is a hub in Silicon Valley where it would allow customers to come in and work with us and we help them figure out how they can leverage machine learning. It is a great way to interact with our customers and be able to do that. >> So Steve nirvana is, and you gave that example, the retail example in September, when you launched Watson Data Platform, the nirvana in this world is you can use data, and maybe put in an offer, or save a patients life or effect an outcome in real time. So the retail example was just that. If I recall, you were making an offer real-time it was very fast, live demo it wasn't just a fakey. The example on churn, is the outcome is to effect that customer's decisions so that they don't leave? Is that? >> Yes, pretty much, Essentially what we are looking at is , we're using live data, we're using social media data bringing in Twitter sentiment about a particular individual for example, and try to predict if this customer, if this user is happy with the service that they are getting or not. So for example, people will go and socialize, oh I went to this bank and I hated this experience, or they really got me upset or whatever. Bringing that data from Twitter, so open data and merging it with the bank's data, banks have a lot of data they can leverage and monetize. And then making an assessment using machine learning to predict is this customer going to leave me or not? What probability do they have that they are going to leave me or not based on the machine learning model. The example or scenario we are using now, if we think they are going to leave us, we're going to make special offers to them. It's a way to enhance your service for those customers. So that they don't leave you. >> So operationalizing that would be a call center has some kind on dashboard that says red, green, yellow, boom heres an offer that you should make, and that's done in near real time. In fact, real time is before you lose the customer. That's as good a definition as anything else. >> But it's actually real-time, and when we call it the scoring of the data, so as the data transaction is coming in, you can actually make that assessment in real time, it's called in-transaction scoring where you can make that right on the fly and be able to determine is this customer at risk or not. And then be able to make smarter decisions to that service you are providing on whether you want to offer something better. >> So is the primary use case for this those streams those areas I'm getting you know, whether it be, you mentioned Twitter data, maybe IoT, you're getting can we point machine learning at just archives of data and things written historically or is it mostly the streams? >> It's both of course and machine learning is based on historical data right and that's hot the models are built. The more accurate or more data you have on historical data, the more accurate that you picked the right model and you'll get the better predictition of what's going to happen next time. So it's exactly, it's both. >> How are you helping customers with that initial fit? My understanding is how big of a data set do you need, Do I have enough to really model where I have, how do you help customers work through that? >> So my opinion is obvious to a certain extent, the more data you have as your sample set, the more accurate your model is going to be. So if we have one that's too small, your prediction is going to be inaccurate. It really depends on the scenario, it depends on how many features or the fields you have you're looking at within your dataset. It depends on many things, and it's variable depending on the scenario, but in general you want to have a good chunk of historical data that you can build expertise on right. >> So you've worked on both the Watson Services in the public cloud and now this private cloud, is there any differentiation or do you see significant use case different between those two or is it just kind of where the data lives and we're going to do similar activities there. >> So it is similar. At the end of the day, we're trying to provide similar products on both public cloud and private cloud. But for this specific case, we're launching it on mainframe that's a different angle at this. But we know that's where the biggest banks, the insurance companies, the biggest retailers in the world are, and that's where the biggest transactions are running and we really want to help them leverage machine learning and get their services to the next level. I think it's going to be a huge differentiator for them. >> Steve, you gave an example before of Twitter sentiment data. How would that fit in to this announcement. So I've got this ML on Z and I what API into the twitter data? How does that sort of all get adjusted and consolidated? >> So we allow hooks to be able to access data from different sources, bring in data. That is part of the ingest process. Then once you have that data there into data frames into the machine learning product, now you're feeding into a statistical algorithm to figure out what the best prediction is going to be, and the best model's going to be. >> I have a slide that you guys are sharing on the data scientist workflow. It starts with ingestion, selection, preparation, generation, transform, model. It's a complex set of tasks, and typically historically, at least in the last fIve or six years, different tools to de each of those. And not just different tools, multiples of different tools. That you had to cobble together. If I understand it correctly the Watson Data Platform was designed to really consolidate that and simplify that, provide collaboration tools for different personas, so my question is this. Because you were involved in that product as well. And I was excited about it when I saw it, I talked to people about it, sometimes I hear the criticism of well IBM just took a bunch of legacy products threw them together, threw and abstraction layer on top and is now going to wrap a bunch of services around it. Is that true? >> Absolutely not. Actually, you may have heard a while back IBM had made a big shift into design first design methodology. So we started with the Watson Data Platform, the Data Science Experience, they started with design first approach. We looked at this, we said what do we want the experience to be, for which persona do we want to target. Then we understood what we wanted the experience to be and then we leverage IBM analytics portfolio to be able to feed in and provide and integrate those services together to fit into that experience. So, its not a dumping ground for, I'll take this product, it's part of Watson Data Platform, not at all the case. It was the design first, and then integrate for that experience. >> OK, but there are some so-called legacy products in there, but you're saying you picked the ones that were relevant and then was there additional design done? >> There was a lot of work involved to take them from a traditional product, to be able to componentize, create a micro service architecture, I mean the whole works to be able to redesign it and fit into this new experience. >> So microservices architecture, runs on cloud, I think it only runs on cloud today right? >> Correct, correct. >> OK, maybe roadmap without getting too specific. What should we be paying attention to in the future? >> Right now we're doing our first release. Definitely we want to target any platform behind the firewall. So we don't have specific dates, but now we started with machine learning on a mainframe and we want to be able to target the other platforms behind the firewall and the private cloud environment. Definitely we should be looking at that. Our goal is to make, I talked about the feedback loop a little bit, so that is essentially once you deploy the model we actually look at that model you could schedule in a valuation, automatically, within the machine learning product. To be able to say, this model is still good enough. And if it's not we automatically flag it, and we look at the retraining process and redeployment process to make sure you always have the most up to date model. So this is truly machine learning where it requires very little to no intervention from a human. We're going to continue down that path and continue that automation in providing those capabilities so there's a bigger roadmap, there's a lot of things we're looking at. >> We've sort of looked at our big data analyst George Gilbert has talked about you had batch and you had interactive, not the sort of emergent workload is this continuous, streaming data. How do you see the adoption. First of all, is it a valid assertion? That there is a new class of workload, and then how do you see that adoption occurring? Is it going to be a dominant force over the next 10 years? >> Yeah, I think so. Like I said there is a huge buzz around machine learning in general and artificial intelligence, deep learning, all of these terms you hear about. I think as users and customers get more comfortable with understanding how they're going to leverage this in their enterprise. This real-time streaming of data and being able to do analytics on the fly and machine learning on the fly. It's a big deal and it will really helps them be more competitive in their own space with the services we're providing. >> OK Steve, thanks very much for coming on The CUBE. We'll give you the last word. The event, very intimate event a lot of customers coming in very shortly here in just a couple of hours. Give us the bumper sticker. >> All of that's very exciting, we're very excited, this is a big deal for us, that's why whenever IBM does a signature moment it's a big deal for us and we got something cool to talk about, we're very excited about that. Lot's of clients coming so there's an entire session this afternoon, which will be live streamed as well. So it's great, I think we have a differentiating product and we're already getting that feedback from our customers. >> Well congratulations, I love the cadence that you're on. We saw some announcements in September, we're here in February, I expect we're going to see more innovation coming out of your labs in Toronto, and cross IBM so thank you very much for coming on The CUBE. >> Thank you. >> You're welcome OK keep it right there everybody, we'll be back with our next guest right after this short break. This is The CUBE we're live from New York City. (energetic music)