 Live from Las Vegas, it's theCUBE, covering VMworld 2017, brought to you by VMware and its ecosystem partners. Hi, I'm Stu Miniman here with my co-host Keith Townsend and you're watching theCUBE's broadcast, VMworld 2017 here in Las Vegas, Nevada. Happy to welcome to the program a first time guest to theCUBE, but someone I've actually known for many years and super excited to dig in with it, Bob Mendeo, Vice President of Infrastructure Solutions Marketing at Hitachi, Bob, thanks for joining us. Stu, glad to be here, it's taken a little while, but... Yeah, you know, it's funny, we get together at VMworld sometimes and it's like, Bob lives a town over for me, back home, he goes to a Thai restaurant that I used to go to all the time when I lived even closer to him, but we come out to Las Vegas, we get together. Finally get together. So for those that haven't known you for more than a decade, why don't you tell us a little bit about your role at Hitachi? Sure, yeah, so at Hitachi, my team drives infrastructure solutions marketing. So fundamentally the core IT infrastructure products. So here at VMworld, the big focus, things of converge infrastructure, how our storage supports the VMware environments and V-Vol and all that. And just in general, we're really focusing in on data as part of Hitachi, how do we help the customer's data strategy, whether it's going virtualized, cloud. So that's what my team does, core product marketing in those products, work very closely with teams focused on our IoT initiatives and other solution initiatives within Hitachi. So Bob, for a lot of your career, you've worked on partnerships. And we always say it was interesting. What was the Michael Dell thing in the keynote? Some partnerships are, we're just talking and some things are real. So a lot of partners here, everybody is the best partner with VMware, but talk about the Hitachi VMware relationship. Sure, and of course, and as you know, we spent some time at a prior vendor who's obviously very close to VMware at EMC, and I was there with you for many years, but it's a very different partnership as obviously that is. If we look at very tactically, just this hyper-converged space in vSAN, which is a lot of what we've been focusing on at the show anyway, fundamentally that is our offering in that space. So we have our unified compute platform products. Our platform is, for at least the virtualized environments, based on vSAN. And so from that regard, we are a very clean partner from VMware in general terms. Now, I know a lot of my vSAN buddies have been on and we still see a lot of value and centralized, well-protected, modernizing those core environments and we're going to continue to find that blend. But really, we're pretty all in with VMware. In fact, shameless plug, we were the last year's global OEM innovation partner for VMware, so there's been a lot of good work going on. Yeah, just one piece. In addition to vSAN, my understanding, the Cloud Foundation suite, you're also a partner for that. Exactly right. And the last week, getting ready for the event, we announced two solutions. One was an update to the hyper-converged solution, what we call our unified compute platform, or UCP-HC, and we introduced a brand new solution that we call Unified Compute Platform RS for rack scale and that it takes our building blocks of the hyper-converged and brings to you exactly right all the VMware Cloud Foundation tools and the SDC wrapped up, ready to go for a customer. So Bob, let's blow out this infrastructure a little bit. Absolutely. Patachi, very well known for data, data protection, incredible Fortune 500 reference customers, mission-critical data. The compute side of it, a little bit not as familiar with it. Help us understand the chops. Where we are there. Where you're at and the story behind it. I think there's a couple of ways to go and frankly, right now, Hitachi, we think of compute in terms of converged or hyper-converged infrastructure. We're not really in the compute-to-sell server business. We did have a history of building, well, if we go even well further back than my Hitachi tenure, well known for mainframes computing, they've been doing those and actually manufacturing those in Japan until now. We've just had a new deal with IBM to do some work with them, but that culture has always been there. And we also had and still have in the market Hitachi manufactured blade servers. But what our strategy really is looking like going forward is we see more than two-thirds of revenue in the server market is going rack-mount servers, people looking to do more scale-out, more flexible, and that's really what our new solutions are focused on, especially the ones we're highlighting here. We will still do some larger scale-up servers focused on things like SAP HANA, large Oracle databases to your point. From the vendors you speak with, we're not unique here, but we are going to skew to those higher-end customers, but we want to make sure even those higher-end customers are looking for more flexible compute infrastructure. The way we're going to go to market with that is either in context of a solution. So think of a data-blending solution of Oracle, a Pentaho as a Hitachi company, how can we blend that with other data? We're going to sell that solution that'll include servers or we'll sell it as a converged infrastructure solution. We're not really going to go and I don't want to take on some of our Chinese friends and others to say, I'm going to beat you in one-you server costs. Like that's not a value-add solution for me. So extending that brand of rock-solid data services, that core, you know, I've been in plenty of environments where they've run SAP on Hitachi systems and they'll buy two of them because, you know, why not? But let's talk about that strategy when talking to those customers and expanding beyond that core theme. Do you lead with services? What's the idea of, what's the wrapper around it? Yeah, no, that's a great question and it's changing and I'll leave it at that. It's more advanced in certain geographies and others and what we found is, you know, our American counterparts that were so well known for storage and with such large farms, they've taken a different path. They begin to introduce converged as sort of an upgrade path and a solution. If you look at what we're doing in Europe, we actually are very advanced in as a service. So we've even brought companies on like OXIA who was out of the French region. They run SAP as a service. A lot more of our conversations are actually buy by the drink, buy as a service and it depends on where the customer is. Oftentimes it'll just be, how can we help you run SAP in that example? Others, yeah, you know, we still do the occasional, all right, you need an upgrade and hey, did you think of moving to converge? So it kind of depends but we're definitely moving to some large customers. Why don't we just run it all for you and then you just pay by the drink. So it's a whole mix but it's definitely moving more toward an outcome-based conversation. We're really trying to have the conversation of, it's great, we can sell you whatever system we want. We have hyper-converged, converged storage. What are you trying to do with your data and can we help you with that? So that's where we're getting closer to anyway. It's a growth path, certainly. Bob, I want to get your view on what you're hearing from customers. So traditionally I think Atachi's a large enterprise, very reliable, trusted brand. You brought up service providers, very different, how they think of it. If you could save them pennies that makes their services easier to do. The impact of cloud, the VMware and Amazon is something that's been discussed here. What are the key challenges you're hearing from customers? What's changed over the last couple of years? You know, it's clearly confidence in their data. We're seeing big impacts from GDPR and other type concerns and just speed of IT services. I mean, those are the two biggest things. It's interesting, you mentioned the Amazon, VMware relationship and everything and we're seeing this sort of weird dichotomy. We're seeing lots of interest in that and we're seeing some cloud services migrate back to the data center. So we're seeing this funny thing where customers I think have trialed a lot and they're now beginning to get a better sense of what data types and what applications really can be in the cloud. And certainly a lot of them are going there. Far be it for me to argue that. But we are seeing some of them, they go, you know what, this doesn't belong there, we're bringing it back in and then we're seeing new applications that we want to get to that hybrid model. That's one of the reasons we think this rack scale solution is going to be so interesting for customers. Yeah, you bring up an interesting fight. When you look at data, you mentioned GDPR, customers, how do I leverage my data, how I manage the government interest compliance and now, you know, new regulations which are a little bit fuzzy. They are very, yeah. Even today, how are you helping customers through that all, you know, data is the new oil, how do I tap it? Yeah, absolutely, and I think one of the things is customers want to leverage multiple types of infrastructure be it in their data center or elsewhere, that's going to only continue and probably we'll see multi-cloud, like we saw multi-vendor storage vendors 10 years ago. But if we can help and one of the things we do with what we call our content platform is have that object storage where, regardless of where that data is sitting, the policy can be maintained in your site, that metadata that really runs where everything is and how you get to that data, we can help them keep control of, regardless of if some of it's sitting in whatever S3 compatible or in Azure, we can give them that centralized control of disparate cloud sources. So I love to say conferences like VMworld moves at the speed of the CIO. The speed of the CIO is not necessarily the speed of the business. Fair. So there's a opportunity for Hitachi to not only talk to the CIO, but talk to the business, talk to me about the nuance of that, balancing that relationship of needing to, you know what, we need to service our traditional customer, but there's this other customer that's really needing our capability. I think you've hit a little bit on our corporate strategy to some degree in the sense that we kind of have a bifurcated focus in a way. We need to be a value-added IT solutions vendor and it has to be solutions, right? I think the world of saying I'm going to win because my VSP is better, which of course it is, but that's beside the point. I'll come back to that with all my EMC friends, but that day's passing us by. We all know that. So we need to be relevant in, like I said, a data blending and SAP, how are we going to integrate that? That's our IT side, but this whole other side of the business and we are reasonably unique. So my part of Hitachi, this IT business that we're in is a relatively small piece of a, you know, nearly $100 billion, you know, global conglomerate technology company. And one of the things this global technology company does is very deep vertical market industrial solutions. I don't know if you've noticed, but VMware mentioned IoT a lot more than we've heard them mention in the past. And I think there is a play where the business is looking for how to use technology to modernize. I don't know if I want to use the phrase digital transformation. I think someone comes out and slaps someone now if you use it too much. Yeah, there's someone right behind you. Yeah, I'm a little nervous, but if you think about that, how can we leverage technology if I have maintenance on trucks and I have 16,000 trucks as one of our customer does, how do I do predictive maintenance to save me a couple of million dollars a year? Just as a starting point, we can bring expertise to that that maybe some other can't. One of the things that we're trying to do is have the business conversation of how technology can help operations be them out within a factory, within some sort of vertical market and then develop that core general purpose IT solution. That is, you know, we can put different applications on it, but understand the data flow within the enterprise. We're trying to do both of those. What I am seeing though is more and more CIOs are being linked with the business because they know there's no other way. And increasingly some of the customers I see, the CIO came out of the business and that's a really interesting trend. All right, Bob, we've got to dig into this IoT stuff. IoT is a big, big, big discussion. Last interview we were talking about from a security standpoint, it's the biggest challenge we have there. Just orders of magnitude, more service area. Absolutely. Hitachi as a global company, I think about the devices and sensors. You live there where many of the legacy infrastructure companies there and then architecturally, if I put my storage and infrastructure hat on, it's like, well, I want containers or server lists or something like that. So, you know, do you play everywhere? Or, you know, where are the pieces that Hitachi has is set up to win and has strengths. No, good question. I think there's two key things that we're focused on. One is, first, Hitachi builds lots of machines. I mean, I still, I've been there almost five years in a week or so and I still learn, you know, claring on car stereo. So that's actually OEM and lots of vehicles out there. Is that a play for us? The medical field, all the devices and scanners, obviously the big earth moving equipment, all of those things. So we have a pretty good understanding of, because I think one of your thoughts here is going to lead us to, a lot of that data is going to be dealt with locally and we have a pretty good sense of what data might we get value out of. Because one of the biggest problems, I, you know, as someone who still cares very deeply about storage, I'd like to save every bit that ever came out of a machine, but that's not going to make sense for anyone. So if we can deal with figuring out what data to keep local to that edge, we are developing a core platform. We can send the relevant data back. If you haven't heard of it, it's called Lumata and you know, I'm under, I think I have a shock collar on. We'll have some big announcements coming out and then your future around that. So I'll pick, but it's out in market and it is something that's been done. Nobody listening, you can tell us. No, no, we're not live on the internet or anything. So, but point being, you know, we have the central platform that's really going to scale and ingest all that machine data, but we know we need to deal with it at the edge and you're right. That's a different type device than we're known for historically. Now, but we build so many devices in the other parts of the business. How do we leverage and combine? But we're not going to only focus on Hitachi because that's a very difficult path. You need to understand in every IoT solution there's some lots of partners. And one of the things that we've learned from our Japanese counterparts and our global counterparts is the idea of co-creation. And so what we really want to do is learn from some of our lighthouse. Like I mentioned that transportation company, that's going to be a unique solution to them, but there has to be a core that's reusable. I think the challenge that IoT has had to a certain degree really getting traction in the market is if every IoT deployment is a snowflake, it's really hard to make a business for anyone and really get customers on quicker. So we're also going to look at that core data center level. Can we use the components? Think of a converged infrastructure stack. If you're going to run core ingestion components of IoT, could we do some pre-packaging to help customers? Can we make it easier for IT to make happen what the business wants on the IoT side? That's what places I think we can add real value. So talking about, you know, frictionless business and frictionless IT, the real challenges are when you have a Hattachi's huge manufacturing organization, manufacturing operations is very different from IT operations. And a lot of times IT or IT providers find themselves that kind of a marriage counselor. What are some of the lessons learned from looking at Hattachi's business from an organizational perspective and then looking at traditional IT that you can give insights into the audience? Well, I'll answer in kind of two ways. So the first is we need to change as much as our customers need to change to take advantage of this opportunity and we're doing a lot of that change. Give one example that I know our CEOs talked about in a bunch of public forums is within all the, what we would call front-facing businesses, those vertical businesses, we've put what we call chief Lumaada officers or IoT technology experts in each of those businesses to be part of the conversation of the overall manufacturing or whatever that vertical business may be. So we can insert thoughts of, hey, what have you done to make it easier for us to pull information out of those systems? How can we leverage that? What are you thinking maybe as an as-a-service offering that you're not just selling a system or a bulldozer or whatever, I'm not going to get the right closer to converge and storage. What can I tell you? But you know, we don't just want to sell that big piece of machinery. How are you going to sell a solution for the customer that either improves the maintenance, makes it easier? So that's what we're doing internally. I will say what I've seen with customers and we can explain to them and I think really that's having the CIO at the seat of the business more frequently or embedding a technologist in the business. I was actually down, had the luck of going down to Sydney and some of our other cities that were doing really wonderful stuff in Australia a few weeks back. And I was in a room and it was tremendous. We thought the meeting was going to go one way and it went completely down an IoT path, which was a surprise, but the person was talking, and I didn't realize fully who was in the room, they were talking so much about business relevant data they're trying to do to change their operations. It wasn't until after the meeting I realized when we were really talking about our roles better, she was a technology architect. And so that distinction, that wall between business and technology for the companies were actually going to pull it off and this was a power generation company, they're dissolving those walls. And I think the only way to really implement a solution that uses data to improve the business is to dissolve the walls as quickly as possible. Last thing I wanted to ask you, Bob, if we come into VMworld this year, so some people have commented, you used to think VMware, they're the server virtualization company, now it's a lot of conversations, right? Is it cloud? Is it, you know, they're stewing sass, where we're going through this? Hitachi's a conglomerate. There's a lot of different things. You're on the infrastructure side there. What do we think of when we think of Hitachi in the next? Yeah, well it's good that you mentioned next. We'll have an event we're calling next in this very building in a few weeks and you'll hear a lot more about what we're thinking of ourselves. I would say this, I think what we're hoping, especially on the technology, that digital side of Hitachi, if you will, you think of us as a data solutions company a certain way. I think one of the big learnings for us is we're one of the top software companies on a revenue basis in the world. No one thinks of us that way, but all of those machines that we talk about, all of those things, guess what's running them? And if you aggregate, I think it's top 15, I don't want to be, I might be slightly off, apologies, but we're up in that. So I think one of the things we want to help people understand is we can be an outcome-based partner for you, whether that's on the industrial side to data, whether that's you have a unique data problem and you need someone to come in with a custom solution. I mean, yes, if you'd just like to run a bunch of workloads on a virtualized infrastructure we can sell you hyper-converged solutions with VMware. Awesome. But if you're trying to figure out something more complex and you're really concerned about how your data's going to be used and leveraged and how you're going to analyze it and blend it, we can be your partner for that. That's what I'm hoping people are going to start to see about Hitachi. All right, well, Bob, the tagline of Hitachi now is an Inspired the Next. Really appreciate you coming on, helping us inspire our audience to dig into what is next for Keith Townsend. I'm Stu Miniman. You're watching theCUBE at VMworld 2017.