 Live from New York, it's theCube. Covering Riverbed Disrupt, brought to you by Riverbed. Here are your hosts, Dave Vellante and Stu Miniman. Welcome back to the Big Apple, everybody. This is Riverbed Disrupt. We've got a special guest, Steve DiPlessie is with us. The man behind, many men and women at Enterprise Strategy Group, founder. Head Chief Analyst, Senior Analyst, Steve. It's great to see you. Thanks for coming on. Thank you for having me. I appreciate it. How are you doing, fellas? It was good. We were photobombing, video-bombing us today, and here you are. That was not intentional. I didn't know the exact configuration of the cameras. We're almost always live. It's all right, and that ended up, now you're in front of the camera. That's all right, this is not a bomb. So what's doing these days? What's happening? That's a ridiculous question. What's exciting you? Ah, that's a somewhat less ridiculous and still very open to interpretation. I, give me a path, the head down, and we can talk about it. Well, let's start with Dell EMC. You wrote a great blog on that. You know, the history was good. Really enjoyed that. EMC's success is because you left, right? So I'm not exactly sure. It's a 50-50 between mic-ruckers coming in and making everything that we sold actually work, because not much of it worked. I got to say, a lot of people are really positive. People who know both Dell and EMC are actually really positive about the marriage here. Are we nuts? I don't think so. I think from day one, I saw, I'll give you a quick anecdote, hopefully quick. Tell me to shut up, if not. Here's the parallel. In 2000, Joe Tucci comes in. And at that particular, to run EMC. And at that particular time, EMC was really good about bringing in some outsider and spitting them out. The DNA and the antibodies were just awful in that culture, that for an outsider to come in and be able to survive in there. And they went through a bunch of senior managers, senior executive, vice presidents, yada, yada, yada, that nobody lasted. And Tucci came in, and I'd never met the man before. And he had no business to have any idea who I was, for example. And for whatever reason, I was able to get an audience with him very early on. And I sat down with him, and the first question I asked him, only question I asked him, and I wasn't looking nice like you. I was disrespectful, and he could conceive of me as disrespectful, and I said, what are you going to do about Moshe? Because at the time, as many of us that are old enough to know, Moshe was king of the hill over there. He owned Symmetrics, and he was untouchable. Harry Dixon and Moshe were the two untouchable human beings within that EMC culture. And Joe looked me right in the eye and didn't skip a beat at all and said, he's either going to play nice in the sandbox, or he's gone. And it wasn't six weeks later, that ostensibly he was gone. And so I knew right then and there, I knew without knowing the man that this guy was a little bit different. And everybody within the EMC antibody sort of climate said, nope, he's not going to last six months, he's not going to last. But you know, you look somebody in the eye and you see that. And so I saw a lot of the similarities in this deal. So you guys have been around forever. I've been around forever. You know Michael, Michael's a straight shooting guy. Michael doesn't have an ego or a vanity pretense or he doesn't do things for the wrong reasons. He said something very, very interesting to me about a year before the EMC deal, which was, or a couple of years before when he was talking about, I think it was three power at the time when he was in the bidding war with Dave Donatelli at HP over three power. And I don't remember the exact context of the comment, but he talked about Dell spending money. And he said, you know, I treat it like it's my own money. Because it is. Because it is, whereas what he was alluding to is others are spending stockholders money and it's not really that. So that was just a sort of an interesting look into the guy there. So when this deal happened, these are not two strangers, right? They've been together. They've been married and divorced, if you will, and had a relationship for a long time. They know each other. And so when it sort of happened, he was like, oh boy, you know, on paper you can see the synergies and a lot of people I think, I'm certainly not unique. Everybody saw the synergies. There's not a lot of overlap. Really what you worry about in a deal like that is cultural. Are the chiefs, are the generals going to be able to get along or are they going to beat the hell out of each other and backstab and do what happens in every one of these deals it seems like, and they didn't, right? So they really didn't. Interesting that now EMC's a private company, kind of a bummer for those that live in Massachusetts. But there's a good thing going on as well. Why is that a bummer? Well, because EMC, the brand EMC is going to be gone, right? Just like they were going to go away. Oh, okay. Not with their private. Digestive. Yeah, yeah. Oh, no, no, let's hope that doesn't happen. Well, we'll see. We'll see. It's Dell Technologies. Yeah, there's already Dell EMC logos up on the buildings. So from that standpoint, it's sad. Correct. You're sad about it too. It's hard not to be after. Sure, of course. Okay, but this backdrop of companies going private, obviously Riverbed, now Click, BMC, many, many, many others. Practice space. This new private equity game plan. Veritas. Right? It's really, it used to be private equity. Put in some financial guys, suck all the money out and leave the carcass for whatever's left. And now they're saying, why should the VCs have all the fun? I mean, Riverbed got taken off a, what, 3.6 billion? They're going to, at some point, do an IPO. They're going to be 10 billion plus. A year from now. Right? I mean, 8, 10 billion, maybe? I don't know. Probably. That's a nice return. That's a nice return. Michael Dell returns. So I think that you bring up a very, a fascinating point that I think is going to happen more often than less. And the, at the, I'm not that smart, but fundamentally having that microscope and that spotlight on you in 90 day increments, dealing with no disrespect, 26 year old MBAs that have never had a real job that their only interest is squeezing that penny per share regardless of what the human impact or what the, a long-term impact to a company is is the wrong way to do business. It's our way, it's our system, but it's the wrong fundamental way to do business. Your dads probably told you just like I did. No, no, no, you spend less than you make. It's right, we're not the government. We can't print our own money. You spend less than you make and you honor your dads and all these other things. I think the privatization aspect in all of this stuff is just going to keep going because these companies are good companies and they, you take the handcuffs on them, they don't care what Wall Street thinks for a certain period of time, years, certain period of time and when they're ready to come back exactly right, they go from $3 billion to $10 billion because they were able to do the right things, not because they only cared about squeezing the coffee budget to make another, you know, 0.10 cents a share. Steve, so, you know, market shares and competition and enterprise tech, you know, seemed for a long time, you know, nothing changed. Storage industry was very entrenched. You know, we've seen market shares shifting a lot. You know, bring it back to, you know, we're at a show called Disrupt Here. You know, there's been a leader in the networking world for most of my career here. Why are, you know, enterprises, you know, open to, you know, more change? They're doing cloud, they're, you know, looking at some of the things like riverbeds talking about. It's a great question. So at first I would say they're not. They're not open to it. Nobody, and there are two fundamental reasons. One is, I hate to say it, but human beings are lazy. I'm one of them. The devil I know is easier than the devil I don't. Yeah, most people don't like change. No, do not like change whatsoever. So the only reason that anybody changes any of this stuff is because, one, they have to. It just doesn't work anymore. Nobody buys something that's better because it's better. They buy it because they have to buy it. Yeah, why'd you buy that Tesla? Yeah, well, that's a terrible example. I'm an idiot. And I just bought it because it was way better. All right, sorry. Now, but we are at some inflection points right now. So it doesn't matter why the change occurred, right? So I could still, I think maybe a different answer is I could buy a horse, right? It's still a valid mode of transportation. It just makes me a complete ass if I do, right? But it's technically a valid mode of transportation. So I could still go on and do that path. People get into a habit of over a course of years and sometimes decades, this is just the way we did it. This is the way we do it. It's the way I was trained. This is the way I will train the next guy. I'm going to walk in in the morning and smash myself with a hammer in the head every day. Why? I don't know, it doesn't feel good. Why do you keep doing it? Because that's the way we do it. So change tends to be some, you need some macro external function to force a change. VMware had ESX for 10 years before they became VMware as we know them. 10 years, why did that happen? Because it was a nice to have. It was the smarter thing to do. It only happened when the data center ran out of power and cooling. When I couldn't physically fit any more stuff in there and I still had to do a job, that's when people went, well, those guys in the corner are running this cool stuff that emulates pretty much any environment you want to. And you do it and people went, oh, oh, that's interesting. And now you're an idiot if you don't run VMware. Just as an example, right? And so I think that it's the same sort of thing. We get hub and spoke, spine and leaf, yadda yadda yadda, whatever the networking terminology is that we had to do, that had a place in time. But you would never probably architect something like that today if you started from a clean piece of paper. And I'm not picking on just Cisco. I'd take the, as long as you're going to keep giving me a buck, I'm going to take your buck, right? It's, because they do answer to shareholders. So they're sort of at a catch, they could, they could and they will eventually react to the market that says, stop doing it that way because it's the wrong way to do it. How about HPE? HPE. Ooh, how about HPE? Go in the opposite direction of Dell. Super interesting. Will Dell's ability to sell through EMC change the dynamic in the server market? Will they surpass HPE? So my personal bet, if I had to bet right now, I would say yes. The answer is yes. And here's the reason why. You got, you had three sort of mega companies, right? In, well, really two, HPE and IBM. And then you had Dell as the, it sounds stupid to say, but the wannabe to those guys. And Dell's grown up and now they're on equal playing fields. But, so H, IBM took one path. IBM said, I'm kind of going to get out of the infrastructure business and I'm going to get into the third platform. I'm all in the higher value or what I presume to be eventually higher value plays there. But there's no value in commodity hardware, et cetera, et cetera, et cetera. Analytics, baby. Yeah, you got it. Whatever. Cognitive. And okay, that's great. Good for them. The bet. And they made a lot of big bets, right? HPE went exactly the other way. What's just strictly, you know, we might have paid 10 billion for our autonomy but we're going to sell our $30 billion in software assets for less money because it is distractive. And they, so they split the two companies into printers, essentially. Cut your losses and go. Yeah. And don't get me wrong. Those are, Burger King makes money, right? Burger King makes money. They follow McDonald's around and this is not a good analogy, but it's the only one I can kind of think of on the top of my head. Being number two and profitable is not a bad business. And so, as such, they don't have to support, HPE doesn't have to support a full stack of all of this other stuff that's really complicated and hard and really big company thing so they're divesting themselves of it. So Meg's essentially being her own PE firm. She's stripping it before somebody else strips it and taking what she can get in the coffers and in essence. And it's efficient. Yeah. Starting it again. What about riverbed? Give us your bumper sticker and then we get a wrap. Yeah, right. So they, I'm probably the wrong person to ask for the following reasons. Number one, I am not deep enough. But number two is I've loved these guys since literally their inception. And I will tell a quick story in that sense. I was meeting their primary venture capitalist at the time, a guy named Chris Shepi from Lightspeed. And I went to that Greek place in Palo Alto that I can never remember the name of. And I was meeting him and he called me on the way over and he said, hey, I'm running a little late with a guy, do you mind if somebody joins us? I said, no, and it was Jerry. And in, so I walk in and I'm this kid and there's Jerry in his jeans and doesn't care about anything type of thing. I said, oh, great. So what do you do? He said, oh, well, and Chris said, oh, we just seed funded him. I said, oh, that's terrific. What's the company doing? I said, where did it go? He went, not exactly sure yet. I was thinking about a networking thing, you know, some paraphrasing that like they gave him money and he didn't know what they were going to do. And I was like, oh my God, what a great bet. That worked out really, really, really, really well. So I love Riverbed. I've loved him ever since. I love Jerry is not only a character and a human being, but it's a great company that has done, you know, again, taking on Goliath. Really hard to take on Goliath and Cisco is about as Goliath as they come and these guys have just kicked butt. Well, you've taken on Goliath and a pretty entrenched business. So I said the last question, the last question, what's new with ESG? You guys are rocking. You got a bunch of people working for you and just keep growing and love to see a new areas, hit the security or to virtually, you know, every part of IT, your customers love you. What's new with you guys? My current personal passion and where we're driving more, I think interesting stuff than normal is insecurity because it is the wild, wild West. I'm a storage guy, I'm boring box kind of guy. I understood that stuff 25 years ago. Security's fascinating to me because it is the storage business kind of 25 years ago, only an order of magnitude if not bigger. So there are 1500 companies, not 150 trying to want to be and there's zero clear winners in any of these senses. Riverbed brought up Palo Alto today, great company, but there are hundreds of different vectors that are all sort of attempting in one way or another to do the same thing, but it's a horse race where all the horses are running in different directions. Looks like a money python kind of scared the ready go. Everywhere. And so I personally find that intriguing and fascinating also because the bigger they are, the harder they fall. So we'll go from a 1500 to 150 and then we'll go from almost a trillion invested to oh boy a lot of people are going to lose a lot of money but from that certainly some players are going to rise tremendously. And the other thing I'd really find interesting is this is we're no longer in the era of the boring box. We really aren't. And that's good for everybody in IT except people that really love the boring box. And so it is always hard, the school of hard knocks, people are going to lose jobs and it's unfortunate in that respect and they'll come clinging to that Titanic. But at the end of the day what's on the other side is crazy stuff. You know, the iPhone we forget is it's seven years old or something. It's eight years old. We act like it's a, you know, we've had it forever but no, no, no. I had a bag phone when I was with the emcee and I thought it was really cool at $1,000 a minute to be calling my friend who had a bag phone because you couldn't call anybody else because no one else had a bag phone. That wasn't that long ago. So anyway, them. All right, well, it's going to be interesting to see picking winners in the security space but so congratulations on all your success. Oh, thanks. Thank you very much for coming on theCUBE. It was great having you. Any time guys, thank you so much. All right, keep it right there, buddy. We'll be back to wrap, disrupt right after this.