 Live from Las Vegas, it's theCUBE. Covering Discover 2016 Las Vegas. Brought to you by Hewlett Packard Enterprise. Now, here are your hosts, John Furrier and Dave Vellante. Hey, welcome back everyone. We are here live in Las Vegas on theCUBE. Our wrap up of day one here at HPE Discover, HPE Enterprise Discover 2016. This is the show for the new HPE Enterprise. This is of course theCUBE, our flagship program for SiliconANGLE media. We go out to the events and extract the signal from the noise. I'm John Furrier, my co-host Dave Vellante. Dave, wrapping up here day one. Really, it's comes down to, we would love doing the wrap ups because kind of get to say what we want to say, but more importantly, what we learned. And it's interesting. I think it's the new HPE. HPE standing tall above this whole, you know, CSC news is huge, dominating the conversation. Enterprise servers is going to CSC. But the keynote really is continuation of Meg Whitman's vision of, you know, being there for their customers. But data and DevOps and cloud and speed is at the core of the value proposition. What's your take on today's first day? What's your big walk away? What's your sense of kind of what's happening here in day one? What's your thoughts? Well, John, so far this notion of focus of what I've always said, they've got a shrink to grow, it seems to be working. And the CSC spinco, spinout, spinmerge, whatever you want to call it has given a tailwind to the company. As they said earlier, the stock's at a 52 week high. It's up, whatever, 24% of the year was up earlier today. Maybe on some momentum around this conference, but it seems to be working. HPE is an arms dealer. It's got a massive distribution channel and it had such a lack of focus from the upper management. You heard that from people over the years. It's just, it's tough to really get HPE focused. You know, Scott McNeely's all the wood behind one arrow. And by consolidating the company, it's still huge. It's going to be 32 billion after the CSC spinout. The focus, however, on the enterprise, on the data center, on that hybrid cloud is clearly there. And so I think they're in a much, much better position than they were two years ago, certainly much better position than five years ago. When Meg Whitman said it's going to take five years to transform this company, I was disappointed. I said, wow, it's going to take five years. Well, it did take five years. This is a big beast that they're having to unwind. Now, it's early days of that fifth year. It seems to be working. I don't think she's where she wants to be, Dave. If you look at, you know, if you look at Meg Whitman, I'm sure if you talk to her privately, I'm sure she would admit that she's not where she wants to be. I'll tell you why. The HP split was a huge distraction. If you remember going into the announcement of when she announced the split, the numbers weren't looking good. I mean, the cuts that she was making, the leadership, they had a couple of big executive shifts at the top. What's his name? Left, he was the COO. We saw some people moving around. Vecti. Yeah, Vecti was moving around. He actually ended up leaving. But you saw almost Meg trying to find her groove A team. Groove swing with a good A team. So I think the HP split didn't see the numbers coming in. So the split was inevitable. I was originally against it. Well, you remember they were going to spin off the PC group. They were going to merge with the EMC. I don't know, by EMC. I was totally against it at the beginning and obviously for the obvious reasons, it just was untenable. They had to do it. It was just dragging everyone down. It was such a distraction. It was too hard to manage. So the split was almost like a last resort, but it was maybe the right thing to do for the beginning. She had to hit the Jettison button on that one. Mainly because... Eject. Eject. No, we'll separate. I mean, just come on. Pure play both. The shareholders get the stock. That's a good, the financial transition. But that slog took a year and a half of a lot of, you know, drudging through that. So if you take that off the table, she's really in her three and a half years. So I think give her another year for her, quote, true prediction, in my opinion. If you normalize it, I would say three years. But yeah, I mean, I think they're in a good position. I mean, focus is there. And I think people still want to see product leadership, outcomes for more wins, revenue growth. So fast forward. I mean, Meg's 59 years old, 2016, fast forward four years. I mean, if this really takes off, Meg could be CEO of the decade. If she pulls this off, she could, she will have the last laugh. He who last, last, last best. Yeah, because a lot of people were betting against HP emerging and re-ascending, getting back to what's been done. It's kind of like the Golden State Warriors when they played OKC. They were down after the second game. You kind of wrote them off and then they had surged. They found their groups when they came home. They got settled in and then ran the table. They're unstoppable. Steph Curry, the whole team, Clay Thompson, amazing. Now, we haven't said all that. HP could be in that mode. They could have had their bad games, but we're going to have to see some performance again. There's no way to hide. But having said that, it's still a business model with relatively low profit margins. And it doesn't have the Dell technology, soon to be Dell technology's supply chain leveraged. So it has to, in my opinion, it has to drive more higher margin business. And that's the big question mark to me is still software. We got Robert Young-Johns coming on. He gave a very strong keynote. You were somebody who was grabbing you. You weren't able to hear it, but you should listen to that very, very strong keynote talking about the transformation and how data is going to transform and machine learning is going to transform. Look, at the end of the day, the rubber's going to hit the road. They've got to perform. But my point is, can HP actually deliver on that vision? And that's where they can, I'm talking software specifically, that's where HP can drive some margin. Here's some of my notes from today that I want to get your thoughts on because I think this is, I was looking for red flags. I mean, part of me looks for the smoke before the fire, but at the same time we're putting puzzle pieces together on HPE and trying to figure all this out. And here's, I don't really see a lot of red flags. I see a couple of good things lining up for them. So let's connect the dots. We just had Rick Lewis on. The composable, that's a winning formula. I think that notion of flexing resource and having it completely programmable, if they can pull that off at scale and you point out the numbers, that's a homerun. The enterprise developer is a my walk away so far in day one. There is, this is not just from this show. It's from all the shows we just gained from and also from coming out of last year. There is a new class of developer out there, I would call the enterprise developer. It's a mix of a traditional web app developer, mobile developer, consumer developer in the cloud with the enterprise. With all the nuances of compliance, databases, systems of record, you are now going to see that convergence between those two developer sets. At SAP Sapphire, we heard the same message. That game is on, no clear winner. And Apple's even getting in the fray with the enterprise with IBM and now SAP. We heard Meg Whitman say that the TS, the technology services is the crown jewel. HP's got to put the reference implementations on the table, reuse them, program them. We heard this from the big SIs. They go out to a customer deployment, they lock it in, they program it. They automate the reference implementation. That's going to be the new game, Dave. These are the kinds of T's. And then finally, you point out operating models are changing. Customers want to consume differently. Therefore, the vendors and the channel of delivery has to match the expectation of the customer. So to me, the crown jewel has to evolve and it's got to become software. I think Vertica could be, and the ecosystem around Vertica could be the crown jewel, but HP has a lot of work to do there. I think they've got to bring in, tuck in acquisitions, do some invention. The good news to me is, I think HP could do very, very well even without the machine. I was nervous about the machine, because it's a Hail Mary. I can think about it as Pink Floyd when I hear the machine. So what I think, from what I'm seeing here, HP could just execute and do very well. But to dominate again, the way it had back in the 90s, to me, it's got to transform and really drive its software business. And I've been saying that for a long, long time. It's carried off some of the assets. It's sold tipping point to Trend Micro. It's got to really focus, in my opinion, young John's has talked about this, that machine learning, that new model of artificial intelligence or machine intelligence or whatever you want to call it, that's something where others have an advantage that HP doesn't get. Look at the past keynotes. I mean, the discussion is, look at Google I.O., all these big events, AI, you know, it's just fantasy. I mean, Facebook, Oculus Rift, that's the kind of fantasy. Now they have Star Trek kind of thing that they're playing up here, which I love by the way. Love that Star Trek alignment. HP has to put a vision. That's going to have extensibility and headroom for the customers to see. I totally agree with you on that one. But at the end of the day, they got to get back to their knitting and win their current business on the table. You're right. And so that's what I'm saying. I mean, I'm encouraged because they can be the best hardware company on the planet and duke it out with Dell and EMC. Great, go do that. But to me, there's got to be a bigger story here for Meg to get CEO of the decade. And that has to be, she said we are a digital transformation factory. You cannot be a digital transformation factory without a stronger software business. Now the other piece of good news that I saw today is she talked about the idea economy and cloud and okay, you figure that messaging would come through. The customers that they trotted out on stage, remember for years, it was just Jeffrey Katzenberg, a dream work. So you're like, oh, not again. Okay, so we saw CIO Boeing, partners Ben Golub from DACA was on, Microsoft CISO, Home Depot was on. So you had a much richer set of customers coming on stage. And really this digital transformation as a competitive necessity, I buy, I presume you buy in two or two, it's got to be a greater software component. So for Meg to get CEO of the decade, let's talk about that, because I called Joe Tucci the CEO of the decade. He got in the red zone and turned the ball over on down some of the three yard line. So the CEO of the decade, last decade. Yeah, maybe last decade. No, but I think that was a fair, I mean, greatest acquisition in the history of the enterprise. Federation didn't work out. He's on the three yard line. Dell takes him over. VMware, but I mean, I would agree with that. By the way, McDermott was up there too, you know, but he wasn't sole CEO. He was sharing that with Schnabe. Well, who's got some more work to do? Here's what Meg Whitman has got to be to be CEO of the decade. One, numbers and show real revenue growth. She's got to put the numbers on the scoreboard. That's clearly number one. Two, HPE enterprise has to be a viable company. You know, not, you know, selling off this and that and the other thing and making it a pure numbers game like what Mark Hurd used to do. Really making it a viable whereas employee growth is strong. You have good culture. Cash flow growth. Real, you know, good facilities, everything. Good bones in the company, as I used to say. And management talent. Management talent. People want to come work here. Good structure in the company, good bones, as I say. Happy customers and finally a really robust ecosystem where people are making some cash with some shared vision, shared economic growth. To me, that would make it a home run for her. And finally, as a company, the Docker thing is good. And I'll say this right now. A lot of people are poo-pooing the whole, oh, HPE's late to the game with Docker. I see some of the influencers online saying, oh yeah, I've heard this VMware spiel from 2008. Here's what I say to those folks. It doesn't matter what someone does. It's who finishes first, second or third. And this game to me, that all depends on where they are in the industry. You come in late to the party. On an early ramp, you're not late to the party. You're still catching the wave. So the question for HPE is, what they do beyond containers? What they do with microservices? That's going to be the cloud. What they can they attach to the cloud? Ride the cloud wave with hybrid and what they can attach to it? To me, the Docker beyond containers conversation is all going to be about what they do there. Yeah, and the fact that HPE finally has jettisoned its public cloud aspirations, to me, is a good thing. They don't have to have to deal with it. They don't have to worry about it. Totally focused on this notion of hybrid cloud. No question they can make money at what you call inter-clouding. Again, I've beaten a dead horse on the software side. The other thing I would add to your list is M&A. Meg's got a show in Aruba, great acquisition, three-par, good acquisition, but they paid a lot for it and they were late to the game. So, you know, okay, you and I could have done the three-par acquisition. But Vertica was a really good acquisition even though they kind of really don't think they knew what they were buying at the time, and it took them a couple of years to figure it out. But Aruba was a deliberate acquisition that seems to be working out very well. They need a string of those, Joe Chuchu used to call them a string of pearls, and they've now got the balance sheet to be able to do that. They're getting close. They're not quite there yet. They've got to throw off more cash and be able to reinvest that in organic growth as opposed to just stock buybacks. Well, Dave, great analysis. We're here in theCUBE for three days of wall-to-wall coverage. That's a wrap from day one. We'll be here all day tomorrow. We've got Robert Young-John's on. Big slew of executives, customers, and certainly Thursday the docks will be connected through Thursday. Go to CrowdChat.net slash HPE Discover. Join the conversation. Jump into the threads there. It's still going to be open. It's going to be always on. And then of course the replays are available if you go to Crowdpages.co slash HPE Discover. That's our new social digital engagement. And of course, SiliconANGLE.com, Wikibon.com, SiliconANGLE.tv, and YouTube.com slash SiliconANGLE. 9 a.m. keynotes tomorrow. They usually, you know, HPE has the keynotes in the afternoon. They start 9 a.m. tomorrow. So we're clicking off at 9, pre-keynote, pre-game coverage, and then keynote at 9.15. This is theCUBE, wrapping up from day one. I'm John Furrier, your host with my co-host, Dave Vellante from Wikibon.com, also co-CEO of SiliconANGLE.media with myself. Thanks for watching, and we'll see you tomorrow. You're watching theCUBE. That's a wrap from day one.