 from Austin, Texas. Extracting the signal from the noise. It's theCUBE covering Dell World 2015, brought to you by Dell. Now your hosts, John Furrier and Dave Vellante. Okay, welcome back everyone. We are live here at Dell World. This is Silicon Angles theCUBE, our flagship program, where we go out to the events and extract the signal from the noise. I'm John Furrier, the founder of Silicon Angles. I'm your host Dave Vellante, chief architect, our chief research analyst at wikibond.com, and our next guest, Paul Perez, CUBE alumni from way back when our early days, 2010, back in the day, chief technology officer of Dell Enterprise. Really a key part of the management team here on Michael's team. Welcome to theCUBE, great to see you. It's been a few years. You look great. Thank you, it feels like a high school reunion. The band's back together again, as they say. A lot of people from HP, a lot of industry legends kind of coming together. I mean, this is a senior management team, you're on, share the folks out there first, just who's around, who's around the table that you're sitting with? Well, let me see. Marius Haas, president of Enterprise. He and I partner very closely at HP and doing corporate development and acquisitions. Brian Humphries, head of Enterprise Sales, was one of the financial brains at HP and had distinguished himself in Enterprise Sales in Europe, and he runs Enterprise Sales worldwide, right? He probably travels more than I do. We have Jim Ganthier, you start the gym, right? So you think about some of the early days of blades where I was a technology force behind it and Jim was a go-to market force. He's doing all of our solutions engineering and his hands are all over the cloud announcement we had with Microsoft today. We have Ashley Gorak-Rawalla as the general manager for servers. Spell that for me. The list could go on and on. Ashley is a deep, deep, long-time Dell employee who's grown up in the server team. And he's- Good day one. Impression and creation. He's running the PowerChempire. We have Alan Atkinson, who has run storage at large financial firms, had been at EMC, has been in startups, and he's running our storage team as a startup. Very customer-focused. And then Tom Burns, who is our general manager for networking. And Tom was the architect of our open networking strategy where we've accumulated 300 customers in less than a year. And you got it. You're adding Paul Moritz, David Goulden, Howard Elias, Jerry Weber. Well, and not to mention- Pat Gelsinger. Not to mention Rory Reed, who came in at the same time I did as our Chief Operating Officer, right? So he's cranking on channel and global services integrators and re-architecting our go-to market. So you were at HP when we first did an interview with Cisco. Now back, Lurden with Dell. Again, that seems to be the lure coming back. All the- I like playing chess against myself. Yeah, now you're in a good spot. You're looking pretty good on the chess board right now. What does it take right now to compete in this market? Because obviously you mentioned, prior to coming on, being future ready, future approvals of where we use an IT a lot. Now the world's changed, cloud, mobile, social, mobility, IOT, massive 10, some people can't even throw a dart at how big this thing is. It's like pretty massive game changing. It's cloud really working. It's working now big. Cloud is part of us. Software defined is critical. How do you become future ready when you have all this complexity, all this uncertainty? Well, I mean, I can answer that question in the context of being a provider or as a customer, but as a provider, I would tell you that there's two things that are required. The first one is to have complete alignment across the leadership team on the strategy and division and be of single purpose in how you execute it, right? And interestingly enough, that was one thing that brought me to Dell. Was the fact that I saw a leadership team that was very well aligned and works great together. The second one is, as we say in Texas, sacred cows make good stakes and you need to have a willingness to disrupt yourself as long as that disruption drives customer value. Quick examples. We have a storage portfolio and we were partnering with Nutanix, right? And we've built a huge sales pipeline with them in six months and especially in the mid-market, growing very fast. I mean, I'm not going to tell you what the numbers are, but it's a big number. Another example is we own a networking portfolio and we created this open networking initiative. We've accumulated big switch, cumulus, IP and fusion as partners. In less than a year, 300 customers, many of them fairly large, many of them already facing into production. But like VCE though, you could cobble customers together. Dell can just throw an early adopter program together and get that kind of customers. But I want to try to get at the bigger trend. What is it pointing to? Why, I mean, first of all, it's not that easy to put together. I'm oversimplifying it, but it points to a bigger trend. They all want new infrastructure, right? I mean, that's what they want. The trend is frankly, it's become an API economy, right? So let's start at the very top, right? Think of it as the most fundamental technologies are the ones that disappear. They become part of our lives, you take them for granted. And I think that data center infrastructure, IT infrastructure is at that stage of evolution, right? People want to deal with their business, drive their business, they engage with the applications. The infrastructure simply has to work. You notice it when it doesn't work. So when you think about software defined, it adds an extra level of abstraction, but it's an API economy and what do I mean by that? In terms of developing applications, customers are assembling application services, right? They're looking at capabilities that are accessible over an API, either on-premise or somewhere on the other side of the internet. And it's how quickly can you tally together a service and deploy time to value, right? That is giving rise to software containers. That is giving rise to the adoption of DevOps, continuous integration, continuous delivery in enterprise, not so much just in public cloud operators. And that is driving a different model for infrastructure. Okay, so take that down to the infrastructure. What's the architecture of the infrastructure of the future? What does that look like? How are you driving all those customer conversations and the sort of value creation conversations back into an architecture that results in products? All those things, what they have in common is, so if you look at our reference architecture, master architecture, we see customers that have started out in public cloud and they've run top very quickly and at some point they realize I need more performance, maybe I need better reliability and they de-stage to say a colo and maybe they develop in public cloud, go to production and colo. Then they realize that to bring maximum efficiency, they have to go back into a brick and mortar. And you know, Jim and I call it repatriation. And regardless, going back to the secret cows make mistakes, I don't think that there's one single operating model that works for people and that's why we believe in hybrid cloud, right? Any combination of on-premise and off-premise capability, tiled together in a consistent operating environment. What does it have in common? It has to rely on open standards. It has to rely on software-defined technologies and it is deployed on a compute-centric model. And what is our number one strength at Dell today in enterprise is the strength of our power-age and server business. So we couple that with some of the software capabilities that we have. Dell Cloud Manager, Bumi for services integration, Foglight for application performance management across clouds, and we can give customers the best of both worlds. So I wonder if we can talk about that repatriation a little bit because the public data suggests that that's not happening, right? Amazon growing like this. And all the legacy, you know, traditional IT vendors growing like that. What evidence can you share with us that that repatriation is actually occurring and what gives you confidence that Dell wins? Well, there's a lot of analyst data out there in the market. I think conventional IT is on a relatively flat growth rate. Right? Cloud infrastructure is on a healthy double-digit year-on-year growth rate every quarter. Some of that goes towards the implementation of private clouds. Some of that goes into the implementation of public clouds and a fair amount, obviously, is at service providers. Even to the point that by the end of 2017, we think that there'll be more compute elements over at service providers than on-premise. Right, which makes, we've been talking about when we first started talking, we sort of expected that that was going to be the case and that would be another form of distribution. And I guess from Dell's standpoint, that never worried you as long as you can sell into that service provider base. And of course, for the last 10 years, we have been servicing some of the largest public clouds in the industry in every continent through our data center services group. And up until now, that team has been very pure. Right, they focused on the largest 10 to 12 largest public cloud operators, or at least the ones that are not self-assemblers. And with a private portfolio that wasn't available in the open market. You know, if you've been keeping up, and I know that you do, on current events, last August, we announced a group called DSS, Dell Scalable Solutions, which combines our engagement model and our public cloud portfolio with our enterprise portfolio for the next 2,000 larger customers. All right, so Paul, you talked about this sort of reference model, reference architecture, that sort of Dell, at least frames Dell's technology. I'm curious as to how strictly you adhere to that. But the EMC is just this tidal wave of IP and product portfolio just going to flood that reference model. How do you deal with that as a CTO? With a lot of coffee and very little sleep. No, I think, look, I partnered with EMC for four years. Right, I've competed against them. And they're worthy of a lot of respect. They are a powerhouse and IP generation. They have a best in class strategy process. And if you look at their evolution, you can't deny that it is a company that can read the market and adapt to it fairly well. That's what I would really be interested in. Absolutely, and they've come up with very innovative models, not only technology, but like the Federation model, the VCE joint venture. And we aim to take full advantage of that. They're very customer-centric too. They're very customer-focused. Absolutely, totally. And when I look at the synergy of that transaction in market coverage, both geographically and segmentation-wise, very complementary. I want to ask you about compare DevOps to what's going on in today's world. Earlier we were talking about DevOps. Really drove the developers-in-charge concepts. Seeing that with mobility, mobile apps, workloads at the center of the value proposition. Now it seems the customers and the users within the enterprises are in charge. That's forcing IT's hand. So the developers kind of forced the whole cloud movement by driving a better environment. The developers went through with the best compute, easy stand-up services, API economy as a result. We're kind of speculating that we're kind of in that mode now where this future ready model is the customers are in charge, the users are in charge, which creates a whole different architectural mindset if you're building. I think a tenet of our future ready enterprise is customer choice. Right, and the reason we say that is because operating environments have more affinity to the application environment and the application, both the dev and the up part than to the infrastructure. Every customer out there wants to have an operating environment that's independent of the infrastructure. And for some customers, I have a large manufacturing customer that develops on .NET and Silverlight. They'd like to build a hybrid cloud that is Microsoft optimized with Azure and they will most likely be a very large cloud platform system customer. Another customer, this is a manufacturer in banking. They've been buying VMware products over the years and they've bought into the Evo SCDC value proposition. They're working with us to deploy Evo SCDC as soon as they can and take advantage of eCloud Air. We have a telco customer. So, diverse requirements. Yeah, I mean, it varies by industry, right? Other customers want open source, they want open stack and we want a huge big deal in Latin America for an NFE cloud running open stack with Red Hat. So, Microsoft's interesting. The announcement today is very, I've been saying, you're going right at the Achilles heel of Amazon, which is on-prem cloud. They don't believe in, you know, on hybrid. Hybrid, you know, hybrid cloud, they don't believe in that term. But I wonder if you could help us from, and this maybe is a better question from Microsoft, but you're a technologist so I'll ask you. My understanding is that, you know, the vision of hybrid cloud is I can do what I do on-prem. I can take my same governance, my same security, my same policies, move that to a public cloud if I want, seamless. That's the vision. It's been the vision since, I don't know, the last six, seven, eight years. My understanding is there's a little dissonance there in the Microsoft world that what's happening on-prem with the stack, whether it's SQL Server or other components, isn't quite there in terms of being able to live up to that vision. Now, you talk about VMware, I think VMware probably could live up to that vision, but nobody's really using the VMware. I mean, nobody. It's not, it doesn't have the volume of Microsoft. You know, Oracle talks that game. Seems to be, at least on paper, able to do that, but you peel the onion and there's still a ways to go. Where are we, Paul, in terms of actually fulfilling that true vision of hybrid cloud that many of us have been talking about since 2009? I think that different offerings and different solutions are at different gestational periods, right? So some of them are more mature than others. But I think that it is not necessarily about being able to move a workload from here to there or what we've called bursting in the past. I think that this is more of an operating environment for example, a customer may want to develop stuff on public and deploy on premise. It's one and that is very viable thing to do today. And then depending on the application requirements, depending on the regulatory environment or the compliance requirements, depending on the data privacy needs or constraints, there's a lot of workloads that are fairly mobile today. Now, I'll give you a big honking caveat. I know a fair number of very large customers whose average age of applications is 21 years. I was going to say 19 or 20, but okay. A 20 year old application is not going to deploy on a software container in Kubernetes anytime soon. Yeah, it's just not ready. So talk about the data fabric. IoT's out there front and center in the messaging today, obviously a huge opportunity. Where's the data fabric? Where's the storage layer? I mean, I'll see diversity all over the place in terms of application. I think when it comes to IoT, there are several things that are coming into play. One of them is computing is moving to the edge. And you think of Hadoop and big data as being an early indicator of computing in place. You aggregated all the data into one central place and then you brought the workloads to the data. IoT is kind of like the inverse of that. Where the data is being sourced at the edge and you're going to move the compute to the edge. And what you're transmitting is potentially partial resorts or insights, more so than data. Where at least in real time, it'll be partial results and maybe the data gets transmitted more lazily, cheaply. Maybe to a cloud, maybe not necessary to a backend data center. Talk about the integration of the EMC acquisition and all these, now you have a huge management team already on Dell side, the bands back together. But you're adding on some great talent, human resource talent, executives and staff and products. Integration is going to be a challenge. I mean, who's going to lead the integration team? Integration team, what we have announced is that Howard Elias will be the integration lead on the EMC side and Rory Reed will be the integration lead on the Dell side. And we're setting up the governance. Is he a technologist or, is he a technologist? Rory? Rory is our chief operating officer. Now, for example, I will lead one of the work streams on technology and roadmap integration and I'll have a PR at EMC and we'll be comparing notes and making decisions or making recommendations. Are you looking forward to more nights in our sleepless nights or the integration or what's your forecast? My forecast is I look forward to Dunkin' Donuts Coffee in Boston. The best ever, by the way. My favorite Dunkin' Donuts, D&D as they say. D&D, go Patriots. Paul, thank you so much for coming under the queue and sharing your insight. Great to see you. Congratulations to you all and your cohorts. Back together, the band, back together here, Dell, huge opportunity. We'll be watching. You're right back after this short break. I'm John Furrier with Dave Vellante. We'll be right back.