 Live from Las Vegas, it's theCUBE, covering HPE Discover 2017, brought to you by Hewlett Packard Enterprise. Okay, welcome back everyone. We are here live in Las Vegas for theCUBE's exclusive coverage, three days of HPE Hewlett Packard Enterprise Discover 2017. I'm John Furrier with my co-host Dave Vellante. Seven years of coverage on our seventh year and of course we've had many guests on over those years and our next guest has been on every year, Stephen Dyche, vice president worldwide, service provider of business, great to see you. Good to see you. Seven year, CUBE alumni, been on every year. That's right. Great to see you. Good, just getting older. And smarter. It's like we started at VMworld. We did, way back. Yeah, and Barcelona, I think you were on in Barcelona, we had no live, lots changed. I mean, what's up with you right now? Let's, before we get into some of the historical and where we've been and where we're going, what's happening for you in the news here at HPE Discover, what's the big story? Well, you know, the headline and what Meg and Antonio and everybody else have been talking about is HP Strategy Core Believes a Vision, which revolves around three elements. Making hybrid IT simple, powering the edge and then the expertise that goes along to bring that all together. And my focus is really around that hybrid IT portion. Hybrid IT is pervasive, on-prem, off-prem, traditional IT, private cloud, sorry, public cloud. And customers are increasingly moving to that model given the value that they see of optimizing their IT environment and sticking workloads or sourcing applications from the VEX execution venue. My personal focus right now is around the service providers that will deliver the off-premise element of HPE's hybrid strategy going forward because we made some very clear decisions that we weren't going to do that anymore. We had a public cloud before that we decided to shut down. And with the spin-off of enterprise services, that leaves us dependent or actually embracing partners to deliver all of that consumption-based off-premise service element. I mean, a lot's changed. I mean, the elephant in the room is obviously the decline in people buying boxes and or hardware, pedaling hardware, but the IT's not declining, IT's shifting. So the services model is interesting. Service provider roles are changing. You have anyone who's in the SaaS business enterprises having SaaS products that they offer their customers. So in essence, a traditional enterprise buying data center hardware and software from HPE is now providing a service to their customers. That's right. With digital. That's right. So this is the digital transformation. How does that shift? How do you guys talk to customers of it? Because now the service provider definition has increased. Enterprises have a, maybe portion of the traditional enterprise that also now serves provider component. How do you guys talk to the customer? Because this is truly where the business transformation is hitting the road. How do you guys talk to customers about this trend? Well, let's start it. You mentioned a digital transformation. At the end of the day and in simple terms, it's entities utilizing digital technologies to improve the experience of their constituents. Partners, customers, employees, processes, systems, and so forth that make that. And hybrid IT ultimately is one of the enablers behind that digital transformation. So we're extremely passionate about that because as you're right, that's where everybody's going. Whether you're in small in the market, you're mid, you're a large enterprise, or you're a service provider, you're going through your own transformation as you go forward to be able to deliver against that digital transformation promise. So you said before we're kind of reliant on and then you sort of amended that instead of bracing the cloud. But in fact, if you don't have a cloud strategy today, you're toast. So you are relying on your partners for a big part of that strategy. And it's not just Azure. It's not a one-trick pony. So can you talk about sort of beyond the big partner, what you're doing to differentiate within that next tier and how they're differentiating from the big guys like AWS? Right, right. And you're absolutely right. Look, we firmly believe the world's going to be multi-cloud. So certain workloads will stay in the data center. Certain will be private cloud in the data center. Others will move to managed private cloud off-premise and then others will make a lot of sense to go to a hyperscale provider like Amazon, Azure, or Google. You want the best execution venue for that application or workload. Makes all the sense in the world. That's what we call, and you've heard us talk about this before, the right mix. As customers look to where they're going to put those workloads, we're working with service providers below those big hyperscale, the big gorillas to project or deliver value that the hyperscale providers cannot. Everything is not going to go to Amazon. It's a fact. It's not a winner-take-all game. It's not a winner-take-all. The world is way too diverse. Diverse workloads, diverse geographies, diverse business requirements. So the way we look at it and we embrace the service providers below the agrillas is we want to collectively go after opportunities that the hyperscale providers cannot deliver on. And it really revolves around three things that we believe we collectively, but more importantly, those service providers should be able to do. One is embrace customer complexity. Go beyond simple services. Full-stack SLAs, drive digital transformation, embrace customer intimacy. The big gorillas, they have a very broad set of services, a very rich set of services, but when it comes time to intimacy and customization, you're not going to go there. And a lot of customers remember 98% of the value in the market today is still traditional apps. Number two is geography. So we all know that the big boys are in about 15 or 16 physical countries today. There's still 200 countries that don't have a physical presence. And when you look at data residency, data privacy, and so forth, or even performance and latency, you still need that physical presence. And even in the countries where the big hyperscale providers are, you still need the girth of resources, technical sales and so forth. And sometimes that's missing. And enterprise customers and mid-market customers want to embrace that and need that. And finally, you know this as well as everybody else, and you made that point before. As customers evolve to hybrid, they have to manage that environment. The combination of on-prem, let's call it Tier 2, Tier 3 service providers, and then the AWS's and the Azure's and the Googles of the world. That's a challenge. That's a big challenge to be able to manage that hybrid environment. The service providers that we're working with, we want them to be that hybrid management. We want them to be that broker in order to mitigate the risk, to determine the best execution venue, and really deal with the challenges that these guys are going, including cost, time, and skill sets. So if I could follow up on that in terms of the sustainability of those three differentiators. Complexity, I think you're okay. I think he just keeps getting more complex. The GEOs, maybe slowly over time, that changes, but your point is the local resources is probably not something that the big guys are going to put in place anytime soon, belly to belly. Although it was interesting to hear the CEO of Wipro talk about hyper-automating, but there were still decades away from eliminating all the people required. And then managing multi-cloud, that seems to be a big one that is a white space right now that nobody is really cornered. And it's not likely that any one of the, Amazon's not going to own multi-cloud management. That's really not even their interest. Oh, that's single cloud. So that to me number three is a multi-hundred billion dollar opportunity for the market and HP specifically. Absolutely. So we go hard at all three of those, and some are more defendable than others. The geography are absolutely right. But the resource issue will continue to, I think, be a challenge for folks. But number one and number three are clearly ways that our service provider partners can take advantage of opportunities that the hyperscale providers will not be able to. Okay, and why HP, E? Why HP? I mean, at the end of the day, look, we bring best in class technology. We bring best in class commercial models. We bring collaborative go to markets. And by the way, we don't compete with our partners. And I challenge folks to look at their existing vendors and ask those questions, if particularly if you're a service provider partner, ask those questions to your existing vendors and ask them, why are you competing against me? We are very, I'll use the word clean, strategy is very simple, very clean. We're not competing. No hair on those partnership deals. There is no hair. Okay, so if you take out the big hyperscalers, AWS, Google, and Facebook's of the world, there's a big torso mid-range market that you guys are going after. But you're going to have competition. You're going to have all your normal competitors that we all know and talk about going after that same space. Again, differentiations are what you said. How are they approaching it? I mean, they're going to try to create fun around what you guys are doing. And certainly this transformation market that we're in is kind of confusing. People are now being more educated on cloud, which is a good thing. But there's still no real definition of what multi-cloud is, right? So multi-cloud is happening. How are you guys competing directly with the competitors? And how are you guys going to win? Well, you know, I think the fact that we're a partner first and we already understand how partners function and what they need and the requirements, it sounds a little simplistic. But at the end of the day, remember, you have a whole lot of service providers, partners out there that are pure. But you have thousands of service providers and what they've done, they've evolved from being a traditional reseller or a solution provider to adding the third business model of being a consume-oriented service provider. And the fact that we understand the journey they've been on, the challenges they go through, I will challenge our competitors to have that deep of insight that have not been channel-friendly at all. Is that the big transformation, that third point you mentioned? Is that the big change in the service provider transformation, is that that consumer focus? It is, because we all recognize the big service providers, whether you're a big cloud service provider or a consumer service provider, like an Uber or Spotify or a telco. But think about all of the service providers out there. Let's call them, for lack of a better word, a hybrid partner. They have a resell business where they do transactions, they have a solution business and then they have a consume business. Those are the ones that are actually capable of pulling off the differentiation. They can get intimate with the customer, they have specialism. They have specialism, they have professional services, they have industry insight and they understand their customers much better. So the channel's turning into the customer for you guys in the way the partner first message. That's a different type of partner. Different type of partner, absolutely. Those three swim lanes, we look at partners will either be in one, two or all three of them. All right Steve, thanks for coming on theCUBE again. Appreciate seeing you. Big takeaway from the show here, the transformations in full swing. The market's kind of going crazy with cloud and IoT. What's your big takeaway from this show this year? The clarity, the clarity in the focus that Eulet Packard has and the fact that our partners and customers are really embracing it. That's the key message that I've heard from everybody. Everybody's super excited and there's a focus. And I think there's maybe in the past we've been a little, because we've been so big and so complex, but the fact of our skinning down going in opposite directions as some of our competitors, that clarity will lead to execution excellence, I believe. Awesome, Steve, thanks so much for taking the time. There's theCUBE live coverage from HPE Discover 2017, our seventh year with covering the transformation. More live coverage after the short break. Stay with us, we'll be right back.