 Okay, we're here. This is John Furrier, SiliconANGLE.com, and I'm here with Dave Vellante, wikibon.org. This is theCUBE, SiliconANGLE.tv's coverage of all the tech events and conversations in tech, and we're going to bring that to you live all day today. Here in San Francisco, we're here with EMC's VSpec Longs. Dave Vellante, my co-host. Dave, how you doing? You got in last night? Yeah, John, doing great. We were down at the IBM announcement yesterday, a big week for converged infrastructure, right? We saw some other announcements from HP. We saw some stuff coming out from NetApp. We saw some stuff from IBM yesterday, and now we're here for the big announcement of the week, EMC VSpec. Well, we're here in San Francisco to really document the changing services landscape, SiliconANGLE.com, has a new vertical site now, almost a year up and running called Services Angle, and we cover all the changing disruption in the services business from delivering services, customer service, to web services, to app services, to infrastructure services, and today we are going to be covering EMC's launch of their VSpec, which is an interesting new product, Dave, we're going to drill down to it, but first, we're going to talk about kind of what's going on in tech prior to getting into the livestream. We have all the EMC execs on here. SiliconANGLE.com is the site to go to for a reference point for all tech innovation, Silicon Valley, Boston, all around the world, and Dave, what a busy week it's been, so some news that's happened in tech has been interesting. It's a lot of things to talk about. First is obviously today, and yesterday, Apple was attacked by the DOJ for anti-trust behavior around their e-books. Obviously, I'm against this, because I was to look what the DOJ did to Microsoft. We've talked on theCUBE many, many times about the DOJ's behavior. Apple's stock hasn't all-time high. People think they're going to have a trillion-dollar market cap, and we've predicted that they would go rise, rise, and rise, and now they're being clamped by the government. At the same time, the government under Obama's leadership was trying to create startups for jobs, so I just don't get this kind of hamstringing Apple when they're actually creating innovation. In fact, it was Apple, computer, that enabled Instagram, a startup less than two years old, to sell for a billion dollars. The co-founder, Kevin Systrom, made 400 million dollars by selling an app that takes photos and shares them on the mobile social network, Dave, so. Eight guys starting a billion dollars, getting a billion dollars off the ground. I mean, that's amazing. I mean, he did. Has that ever been done before? Right? Well, Mark Cuban, sub-ten people? We've seen some acquisition, but not that high. Not that, they only had 13 people technically, but really it was like eight about a couple weeks ago. Again, no real presence in sales, no real business, other than the fact they had 30 million people using their product and Mark Zuckerberg saw a little bit of himself in Instagram. And I think the reason why Microsoft bought them was because they had, they were a direct threat. I mean, Facebook bought them because of direct threat and they, although they didn't have a lot of revenue, they had a lot of value to Facebook. So Facebook takes a competitor out of the market for a billion dollars, which if you think about it, if it was less cash, more stock, Dave, then that's going to be a good pop for their IPO. They take a competitor off the table, they get presence in mobile and. Now, John, Facebook's known for buying these services and shutting them down. You think that's what they'll do with Instagram? No, I think they're going to bring them in as small team. Again, it's only 13 people as of the acquisition. So Facebook will bring them in, let them run independent for a while, but ultimately give them a different hedge into the mobile space. Obviously, mobile is the only thing that really could unseat Facebook for being what dominant platform that they are. They own the web, they have a lot of mobile usage, but their mobile app really isn't that great. And obviously, pictures is the number one app on Facebook and it was a direct threat. A billion dollars when they're already kind of quote, overvalued, depending upon how you look at it. I mean, Microsoft's, I mean, Facebook's valuation is so massive. A billion dollars in paper stock, not that much money. I agree with you. I mean, how many users does Facebook have? 800 million, 850 million, and about only half use the Facebook app. I mean, all the users are on mobile. So, big upside there, right? And the other thing about this story, Dave, that was obviously obvious in our internal SiliconANGLE conversations was disagreement around if this is a good deal or not. Mark Riz and Hopkins and I debated this and he wrote a blog post on his own blog so he doesn't go in a rogue with his opinion, but he's got a good angle on that. And for people who aren't in Silicon Valley, it looks like just this frothy, gratuitous deal. And as Mark was saying, it's an insider VC hand job. So, I think ultimately, I don't believe that because there wasn't a lot of VCs in here. They only raised $7 million in financing. Only a few players. Sequoia kind of came in the last moment on a huge round, but they're going to get two X on their money. Yeah, people made some money, but the big thing is the founder made 400 million. So it was more of a deal for the founder and less of an inside Silicon Valley baseball deal. Risen's other point was that they could have just hired a bunch of engineers and replicated the features and the service. Yeah, and of course they could, but if it fails, they lose in the eyes of Wall Street. They lose on the execution prowess that they have. And look at Google Plus. Google Plus has been trying to duplicate Facebook and they're struggling, as some say. I actually think they're doing well. I think they have a different strategy. And this week in the news, Google Plus redesigned their whole social network. So, I think Google Plus is one of those things where the easy analysis for the low-end bloggers out there is to compare it to Facebook. And most of the tech crunches of the world talk about that. Oh, it's a Google Plus as a Facebook clone. Google's specifically going after sequencing off Gmail and all their current assets. And I think Google Plus will be a completely different product than Facebook and we'll see how they execute that, but clearly not knocking it out of the park. Product's not that bad, it's got traction, but it's not Facebook. Well, I know a lot of Instagram users weren't thrilled with the move, but if Facebook keeps them as a separate service, I'll be happy because I use the mobile app and I think it could be a lot better. And like you said, pictures is the number one use case. So last week, this week, Mark and I were talking about the billion dollar week in tech. Big week in tech, wasn't it? It's been a billion dollar week. There's been three acquisitions this week of a billion dollars. Instagram, Facebook, deal that we talked about. AOL sold their patent portfolio to Microsoft for a billion dollars. And AT&T sold their yellow pages to a financial group, AKA hedge fund or some other new instrument to take that old dying business and turn it around. Probably most likely in a date of this is for a billion dollars. So you got all three of those coming selling for a billion and Kodak is still worth zero. That's a Kodak. So the best line of the week was Instagram sells for a billion, Kodak sold for zero. Well, you know, we were having a conversation about branding earlier. Maybe Kodak should just use the brand to brand anything like the Kodak car, Polaroid too, right? The Polaroid brand still has some cash aid, doesn't it? You remember Polaroid, John? You drive by Polaroid on 128 now. It's just a, it's a, it's a burned out building basically. So maybe they should just go into whatever, pianos, cars, cameras. There's some other sentiment around the Instagram deal that I want to share with you. And that is, is that, you know, and I saw a line out there on the Twitter sphere around the quote was Kodak solves all photography problems worth zero. Instagram wrecks all solves problems, sells for a billion. So it kind of, it makes a question, what's that word? So. So billion dollars. Billion dollar a week. A lot of things going on. Also, I wrote a post on Forbes. It's got a lot of traction about hunger games and that's more of a social angle, but basically hunger games, huge success. Thanks to companies like this moment, which builds deep, the best social platform for YouTube and Facebook. And hunger games became a huge success because they applied social media in the right way. Hunger games proved that you can execute a social media strategy without gimmicks and viral guy viral cats. And they did it well in advance, activated their car audience and huge success. And the other thing Dave is hot outside of the social network in our world is services. So we're seeing IT cloud, huge. HP made an announcement, VMware announced them with Cloud Foundry yesterday. OpenStack has having some changing of the guard with Citrix leaving. And now today solidifier stepping up. Well, and I got to put in a plug for services. We were here talking about converged infrastructure, the whole trend toward bringing together servers and storage and networking. And the whole idea behind this, John, as you know is simplification. Simplification you would think means less services. Well, guess what? At Wikibon, we just size this market and the TAM is enormous. It's a $400 billion market. And guess what the biggest component of that market is? Services. So services are over 40% of that TAM. So despite the trend towards simplification in cloud, services is still the big nut. The other thing that happened this week, Dave, I'll share with you is that we were at the SAP event this week where they launched their new HANA database and actually came out and said, we are not a CRM company. We are not an ERP company. SAP is a database company and came out with all their top dogs. Vishal Sikha was the lead executive out there, essentially introducing the massive uptake of HANA, talking about the application business, really talking about two things. Mobile and they're talking about performance as database. So that brings up the key point that I want to chat with you about. I'm looking at our real-time analytics dashboard here, Dave. And the trending items in the verticals that we're covering is analytics, open source, cloud computing, SQL MySQL, VMware, big data, EMC and cloud storage. I mean, this area is smoking hot. What is your take on why SAP, why IBM, why VMware, EMC, Cisco, why all these guys like OpenStack are all retooling. It seems to be like cloud washing is moving into cloud reality. What is your angle on this real quick? Two words, land grab. Right, we're in a major transition. Guys like Joe Tucci have talked about these waves. As you know, well know, John, you and I have been around a long time. These new waves bring trillions of dollars of opportunity. And as a result, people are going after it. They're going after converged infrastructure. They're going after cloud. They're going after new ways of, like for instance with OpenStack, the Hail Mary against Amazon. And it's a land grab. Okay, we're getting ready to go to the live feed. So we're about to begin, Dave, this event, that EMC's kicking off. And by the way, we're going to cover the EMC event here, VSpec, but we're also going to wrap around the editorial angles around how this impacts the services. We're going to go to a live stream in a few minutes of EMC's event here. And they're announcing some pretty amazing things here. Simple, efficient, flexible. This is a channel killer. This product is going to change the services business. Obviously the reseller channel, the integration business around integrations, all about margins, Dave. And I want to get your opinion, once they announce it, have you do a deep dive and dissect the announcement. But to me, I want to hear a couple of things from EMC. I want to hear group points. I want to hear some things that are a success. And I want to hear how people are going to make money. Because the channel cares about margin and profit and making cash and serving their customers. So let's set it up real briefly. So first of all, we're here in San Francisco live at the Terra Gallery in downtown San Francisco for the EMC V-specs announcement. It's a converged infrastructure announcement. Now, VCE, the joint venture between VMware, Cisco, and EMC, which is largely funded by EMC, about two thirds maybe even more funded by EMC, started this off in 2009, John, with the converged infrastructure announcement around Vblock, a single block of infrastructure. We had Mike Capellis on theCUBE talking about this. Single block of infrastructure that brings together Cisco UCS, EMC storage, and Cisco servers. And that really has started to take up the market. Now Exadata also, Oracle Exadata after the acquisition of Sun started to bundle in Sun hardware. They bumped out HP. So Exadata and Vblock were really the two players there selling a single SKU. HP entered the market. Donatelli went to HP, brought that ethos in there and knew how important this was. And now we're seeing everybody, Dell, IBM, HP, NetApp. NetApp was also in there with FlexBot. Now, here's the thing, John. Vblock was any way you wanted it as long as it was black, okay? It was like the Model T of converged infrastructure. The announcement today is all about choice and flexibility, more hypervisors, more choice in terms of servers, more choice in terms of networking beyond just Cisco. So that's what today's announcement is about. And we're seeing it's a big chance. What about lock-in? Say it again? We want to talk about lock-in. Is there a lock-in factor here? Yeah, I think that every single vendor will tell you there is no lock-in. Quote, we won't lock you in. Quote, there's no lock-in here. Guess what? John, I'm on record of saying this is the mother of all lock-ins. And here's why. Customers are worried about who has pricing power. What you're finding with all these suppliers, Vblock, certainly IBM yesterday said this with, I had a lunch with Steve Mills. You're seeing this with Exadata. They're claiming that they're not charging a premium for this integration. They're putting white glove services on this. Why? Because they clearly want to have pricing power down the road. So today, this is caveat emptor. Today, there's no price premium down the road. I would expect there would be for integration. There should be. Okay, we're going to take a commercial 30-second break just to kind of reset and get ready for the live stream from EMC. So stay tuned. We'll be right back.