 Live from Austin, Texas, it's theCUBE. Covering Dell EMC World 2016, brought to you by Dell EMC. Now, here are your hosts, Dave Vellante and Stu Miniman. Welcome back to Austin, everybody. This is day two of Dell EMC World 2016, and we're pleased to be here. Covering the transformation of Dell, our first Dell world was in 2012, and Dell was a public company. Largely comprised of PC revenues, transforming the company slowly. And we are now seeing, witnessing the largest acquisition in the history of the computer industry, the $67 billion acquisition and merger of EMC. Michael Dell came on stage today. He was the keynote, top keynote speaker. Go big or go home was something he declared last year. He reiterated that this year, and then flowed through a series of non-product visions, but specifically around digital transformations and connected devices and how Dell EMC was planning to power that next generation of IT. As well as the collection, the new federation of companies, the Dell Technologies Portfolio, which comprises seven companies, including Dell Classic, Dell EMC, RSA, VMware, Virtustream, SecureWorks, and several others. I'm probably missing a couple in there. I'm sure, but that portfolio that Michael Dell claimed allows them to be nimble like a startup, but at the same time, bring together a portfolio of services for its customers. The other thing that Michael underscored was, he was there at the beginning. Dell was there. He talked about we, he never used the term I, but we, he said, were there at the beginning, democratizing technology for the masses and providing it to the middle classes. And now we're entering the next generation, what we sometimes call the second machine age. Michael Dell talked about that in his terms, and Stu, I thought it was a very good presentation. No power edge, no laptop, no storage. It was just a vision of the future. Your thoughts? Yeah, definitely, Dave. And I felt there was that little touch of Jeremy Burton flash, when Michael Dell came out, the doors break on through to the other side. He actually came out of, looked like a digital door in the screen. Some good emotion. I've seen Michael give a lot of KKinos, and this one, I think he's definitely engaged. He's energized. Yeah, I like some of those higher level messages, things like the internet of everything, how they're going to transform our culture. Reminds me of what Dave, we've talked about, kind of an IBM type of business impact type discussion. Rather than write, let's talk about the next, spin of the Intel chip set, and what's happening there. It's been critical usually coming at Dell show, is it's like it's PCs and servers, let's hug our metal, or something like that. This is the impact on the world, on the individual, and it was a good message over there. We heard this morning, this was the largest Dell world, Dell, of course it's the first Dell EMC world, so of course it's the largest, but thinking about Dell world as the classic event, 8,000 people here from 87 countries, and then of course we heard, you love this, the combination of Dell EMC, Dell's number one in everything. They're a leader in 20, Gartner Magic Quadrants, they've got 40,000 patents, they're patents pending, they spend $4.5 billion annually in R&D, they've got 60,000 services professionals around the world. Some other comments that came out is, it was interesting Stu, and I tweeted this to note, Michael Dell's posture around public cloud and comparing that with Andy Jassy's. Michael basically, his narrative was look, if you're a public cloud only company, you're not complete, essentially is what he was saying, and of course to compare that to what Andy Jassy, I incorrectly tweeted Andy Jassy's handle, thank you for correcting that, but Andy Jassy's view is, look at really very few companies are going to own their own data centers in the future. Yes, I guess he's sort of admitting that there's hybrid, he's somewhat capitulating that there's hybrid, but it's really to him anyway, and I think to Amazon a stepping stone into the public cloud. Even though those two disparate visions are coming slightly together, I'd say the divide is still quite massive. Yeah, absolutely, neither Dell EMC nor Amazon, really they don't want to be, even Amazon doesn't want to be in the data center business itself, it's about the services they offer, and we get down on the arguments as to kind of how much, where is that boundary? How much do I own it? David Fleurer, our CTO, wrote a few years ago about kind of mega data centers, and even Amazon, yes, they own some of their own data centers, but they also leverage some others out there. The whole VMware on AWS, a lot of that is just getting the customer out of that data center business, and that's a discussion we've been having at Wikibon for many years, is to what should the customer get out of? There's very few companies in the world that are really good at making data centers. Everybody else should get out of it. David Goulden followed Michael Dell on the stage this morning, and he said 80% of people are still looking to buy kind of components. They want to buy storage, they want to buy servers, and my retort on that was like, well, that means 20% of you are on board with Hyperconverge and Cloud, and the rest of you need to get on board because they use the old Baker analogy of if you see all those pieces and you want to put that together, that's probably not the most efficient way. We had a conversation yesterday, Dave talking about your aunts making their own tomato sauce, and that's great to do sometimes, but that build versus buy, we think that it's going to go much more on the put together solutions, especially in the enterprise space. We're going to shift that operational dollars. More of it is going to go into platforms or to the vendor side because much of what vendors are doing today is not something that they need to have expertise on. They need to have expertise on their business and where IT is an enabler for things for their business. I was struck, quite surprised yesterday when Chad Sackich was on, at the degree to which he was pounding the converged hammer, which by the way, I totally agree with you. You know, I mean, we were one of the first to forecast that. In fact, we were the first to forecast that and we're quite aggressive in our forecast, more so than the current estimates that you see from the likes of Gartner and IDC. By the way, we were very aggressive on flash. You've seen those guys increase their flash forecast that past is not prologue. That doesn't mean we're necessarily right on converged infrastructure, but I think that generally speaking, as organizations move toward this digital transformation, move to become data driven, they just can't afford to do this. What we often refer to as non differentiated heavy lifting, it just doesn't make sense. It doesn't add value to the business. I'm reminded of Alan Nance, former CIO of Phillips when he was on theCUBE saying, you know, 80% of our infrastructure spend adds no value, our CIO laid down an edict years ago that said we will stop doing that. And I think that other companies will follow its penguins in the iceberg and then everybody's going to jump into that. A couple of other things. A lot of people have been talking about winners and losers do on the VMware AWS deal. I didn't see much talk about virtue stream in the trade press as a loser. You and I were talking about that off camera. It's like, okay, where does this leave virtue stream? I was again struck by the commentary today on virtue stream. We got a lot of love on stage, but let's talk about that. So essentially what I heard from Michael Dell, I wonder what your thoughts are, we are going to compete with virtue stream on the basis of SLAs and quality of service. Personally, I think that's a tenuous value proposition that it will be short lived. What are your thoughts? Yeah, Dave, absolutely. So, you know, virtue stream spread in butter is those mission critical applications. I mean, their number one use case is SAP and that's awesome. And they have, you know, a great customer base there and they have room for growth there. However, watch it what's happening in the public cloud space. And of course, you know, we're seeing a lot more mission critical ending up in the public cloud space. And now if I could put VMware on Amazon, there's an alternative there. If I can run it in a virtualized environment, I can now, I've now said IBM software, yes. You know, you know, Amazon, yes. You know, what about Microsoft and Google? You know, those are there. So it definitely does erode kind of some of the opportunity for virtue stream. And I think the positioning still needs some work as to, you know, where the value is for virtue stream, long stream. I think that's right, Stu. And I think in general, I'm reminded of VMware in the early days when Paul Moritz stood up in the, you know, mid to mid part of 2000 said we will run and Joe Tucci said the same thing. Any workload, any application will run on VMware. And a lot of people pushed back on that and said, you know, we're skeptical. I think we were skeptical at the time, too. You know, we're not always right at Wikibon. I think David Floyer was pushing at the same time. You know, we also noted at the time that IBM mainframe achieved that. So we felt like it was possible, but we didn't think it was possible in the timeframe in which VMware achieved it and it did. So I'm reminded of that now. You see Amazon saying something similar now. Of course, there is speed of light issues. Let's not forget about that. But nonetheless, Amazon is committed to being able to run any workload and any application at scale with high performance in the cloud. Yeah, absolutely, it's funny. They have an event that the closing keynote tonight is going to be one of those fun yet educational videos. It's the dark IT night. And the villain I think is the evil bookseller. And, you know, I get a little annoyed at that because I'm like, okay, we go back 10 years and say, oh, okay, Amazon's a bookseller. You know, Dell's a PC company, right? I mean, Dell's grown and changed a lot in the last 10 years. So is Amazon. I think it, you know, it demeans the audience to just kind of call them a bookseller. And they're now a partner of the Dell Technologies family through Amazon and their piece of a puzzle. So we need to have a good conversation as to, you know, why workloads go in various places. You know, there was really good conversation talking about some of the operational model. I know you said, sent a tweet out Dave. We said cloud isn't a destination. It's an operational model. Something we've been saying that that shift there. So that's the conversation. I want to hear more about how Dell's creating software, how Dell's helping the operational model, how Dell, you know, has a right in what pieces they have to kind of, you know, put their arms around those workloads whether they are on Dell gear or not and what data centers they're in. We got to wrap it up, just really rapid fire. Some of the other things we heard today that you will have, you will live in a multi-cloud world was a statement that Michael Dell made. The cost of cybercrime astounding 2.1 trillion annually over the next five years. Wow. And then I thought I was struck as well by the references. We had Jeffrey Immelt of GE, Randall Stevenson, who's the CEO of AT&T, Marcy Clevorn, who's the CIO of Ford, whom we've interviewed. I was waiting for Jamie Diamond to drop. Jamie Diamond is a reference for Dell, but was not today. Awesome logo slide I thought that Michael Dell was standing in front of one of the biggest that I've ever seen. And then they did a survey of 4,000 executives. 45% of businesses fear they'll be obsolete within the next three to five years. 48% think their industry will change in unpredictable ways. Yeah, and I, Dave, I said the other 52% are diluting themselves. Right, right, so it will change. And then Jeffrey Immelt said you go to bed an industrial company, you wake up a software and analytics company, I thought it was a great quote, and we'll close with Michael Dell's killer quote, which was, world-class technology democratized, boom. On stage is day two. We're here at Dell EMC World 2016. This is theCUBE, the worldwide leader in live tech coverage. We'll be right back.