 Live from Las Vegas, it's theCUBE, covering HPE Discover 2017, brought to you by Hewlett Packard Enterprise. Hey, welcome back, everyone. Live here in Las Vegas at SiliconANGLE Media's CUBEs, three days of exclusive coverage. We're on day three of HPE Discover 2017, our seventh year covering HPE Discover, our second year of Hewlett Packard Enterprise Discover. I'm John Furrier, my co-host Dave Velloth here. Next guest is Flynn Malloy, Vice President of HPE, point next solution, pointing to what's next. Welcome back, good to see you. Thank you, good to see you guys. So, nice clean positioning, point next, nice and tight, nice messaging. Thank you. Clean positioning, new opportunity. Give us the update. What is the positioning? How's it been going? And what's the reaction with partners? Yeah, well, when we last spoke in London, we told you we were going to do something big with our services business, and that's what we did. In March, we launched HPE Point Next, and we've got really fabulous reaction from the market. We see it, all of our customers across the board, our marketing numbers in terms of our inbound, what it looks like, the amount of interest that we're gathering, really, we couldn't be happier with how point next has gone. Flynn, for the record, just why, what's the motivation behind point next? Why do this? What's the official position, and why you're doing it, and what's the impact for the customer? Well, a year ago, just before this show, we announced that we'd be spinning out our outsourcing business, and up to that point over the last five years, six years, we'd approached our largest customers with a run message. We can help run your IT. And I think Meg and the board of directors and our senior leaders really took a look at it and said, that's a good business for a certain segment of the market, but where HPE wants to go is we want to be more about advice and transform. We want to help you get there, not necessarily do it for you. That market's changing. And so as we announced and moved out that business, we took a look, in fact, I think the very first question you guys asked Antonio in London was, so jokingly, pure play product company now, right guys? And no, we're not. We have a big services business, a big part of our business, and that's what point next was, was really to bring that to the front. As we spun out the outsourcing business, we really wanted to bring our very strong services business, our consulting and support business to the front, rebrand it, get it out there and really lead with services. And I think at the show this week, across the board, on main stage, on the show floor, you see again and again, HPE's walk in the walk on really realizing, let's start with digital transformation, let's lead with services first, let's start with outcomes, and then bring in the technology to get you where you need to go. Well, and that's a business that Antonio used to run, so obviously he's got an affinity for that. Flynn, can you take us through the background of the branding and sort of what you went through? It's always fascinating to us is how did you get to point next, right? It didn't just fall out of the sky. Well, we are the company that accelerates next. So that's what HPE does. We believe in what's next. We believe in always looking to the future. HPE has always been about invent and innovation. We all are looking for what's next. And so we sat down with our senior leaders and said, okay, we could certainly name ourselves HPE services and look like everybody else in the market. If you go out there and look at our competitors, you've got global services, technology services, we think it's time to break with the past. We think it's time to look to the future and point to the future. And as we are the company that accelerates next, we have a point of view on where our customers should go. We have a point of view on where technology's going. And so we want to help point you to what's next. It's got to feel it's certainly heavy on advisory. And you heard Meg on stage talk again and again. This is our business. We're not about run. We're about advising. We understand where digital transformation is going. We have a point of view and let us talk to you about it. Let us help you on that journey. And bumper stick of the brand promise for us. What's the brand promise? We make hybrid IT simple. We power the intelligent edge and we have the expertise to make it happen. The bridge to the future is really the customers are looking at the future. And I like the name by the way. I think it's great, it's clean. It's generic and a way point next. Clever. But really the transformation journey is about business process and improvement and changes with cloud and big data. You see in the apps with DevOps, you see certainly that movement, top line revenue growth. This is really about crossing into the future, right? I mean for the customers. The having that headroom option. That's where you guys see the advisory shining. What do you guys, I mean, how do you talk to the customers? Because again, they start on a journey. As you guys always talk about. But ultimately there's going to be some unknowns that they have to face. How does that play into what you guys are doing with the hybrid IT message, simplifying hybrid IT? Well, you know, I'll definitely say, completely agree with that. And that's the way Annapin's hook, who you guys spoke to earlier today. And that's the way she really envisions it. She's an analogy for, you know, like a GM car. In the 70s you had a different key for the trunk, a different key for the ignition, a different key for, you know, the door. And, you know, what customers are looking for one key. You know, that's what they're looking for. And so we want to create that seamless experience for our customers across the board. And you may not always need a high end, you know, big transformation. If that's not what you're looking for, you know, most customers today don't have one giant macro transformation. There's dozens of them going on in different areas. And that's the way we've kind of built this business is to be able to handle the small ones, to be in and out quickly. It's not bringing in thousands of people, you know. It's really to take a look at what are you trying to do? And yeah, let's get some quick wins. And there might be some big ones along the way. You know, one other thing you touched on was business model. And I know we talked a lot about consumption this week. You know, what changing business models are like. And I know we've talked about that at length in the past. And you know, we really see that big sea change around what we believe is a huge opportunity. We've talked about flex capacity a lot this week, right, which is your stack in your environment. You know, we put in a bed at least on top. We run time optimize it, active capacity management. And basically, you know, it feels to you as it flexes up and down, you know, like a public cloud option on-prem. But it's your stack, right? You know, in your environment. And there's so much more we can do with that. And Anna talked about it, I think in hers, about, you know, private backup. We're debuting in here. Private backup as a service, which is basically your backed up data that you pay for as you back it up. But it's on-prem. It's not out there. It's inside of your firewall. It's inside of your environment. And that's a big deal. We're onto something there. Well, and where that gets interesting too, is if you back up not only your data, but maybe you back up data from AWS. Or maybe you back up data from your CRM system. Absolutely. And it goes both ways, right? So you become that sort of center of the data protection service. Absolutely. And there's probably like n number of examples like that. But we've talked in the past about services as a service. We've kind of joked about that. But is that the model that you're working toward? Well, you know, I would say as, you know, the marketing leader for Pointnext, we're not branding services as a service. All right. Good call. Conceptually. We've tested out a lot of different ideas. You know, what we fundamentally believe is that there's a new category out in the market. We believe that, you know, as we say hybrid IT will win in the end. We believe that there are plenty of workloads that are going to go out to the commodity cloud. That's a very important part of your right mix. But we've talked to enterprises across the board. You hear it across the board. It's why flexible capacity has been so successful. You know, there is this whole class of service which is consuming, but consuming on-prem. And that doesn't just mean a lease. You know, that means private backup. That means Hadoop clusters. You know, that means a whole series of IT, but you consume it. You meter it. You measure it. You consume it. You pay for what you use, but you do it inside of your own environment. And that's not only in your data center. Your environment can be your manufacturing floor or your mall or your airport, because we have these great edge assets. The refinery. That's right. And if you're able to, again, same idea, put that sort of consumption model in place at your edge or in your data center, you know, of course bring in public when you need it, but that mix, that right mix, we think this is a huge class of service. We think we have a six-year advantage on the market and we're going to go strong on that. I guess the point is that it, service is traditionally either a maintenance contract or it's an SOW-based business. And what you're describing now is much more of an Azure service, monthly or whatever quarterly billing type of cycle, right? Absolutely, absolutely. Well, I hate to head, I mean, the tailwinds for you guys. You guys have the wind at your back and I think you're right. It's on, you're onto something. Some things that we're seeing here at the show and also other CUBE events we've done is microservices, you're seeing things with cloud native on the cloud side, in general cloud on-prem as well as in public, microservices, people have a composability of Lego blocks and open sources even going down to the point where things are being open sourced like we've never seen before. So people have to cobble together and roll their own solutions. The other thing that's interesting and most notable is that's come up this week is Wikibon's private cloud report, true private cloud report came out and the only one in the market that actually has real numbers points to- Great numbers by the way, we love it. This is complete validation that the right mix is also a good message in the sense that the on-prem TAM, total just one market, it's over $260 billion. That means that IT is not going to be shrinking like some might say, servers shipments are certainly shrinking maybe year and there, but IT is growing in a cloud-like environment. So that on-prem's not going away. So this really comes down to, okay, I got to deal with what I got, build on these microservices, a lot of open source products coming in. This is I think a great opportunity for you guys. How are you going to attack that? How do you go into a customer, because I know the SIs are on it, the Global SIs, Accenture, Deloitte was on earlier. These are big problems to solve. How do you engage with that kind of level of scope? Well, let's start with, we completely agree with the premise. As you know, we've been talking about that for a while. We also believe the term on-prem, on-premise, that doesn't just mean a big air conditioning room in your building. That can be at the Colo, that could be at your host, that can be in a lot of different places, but it's your private IDO, right? That's what it is. I'll be your control. That's the point, it's control. It's about control and security. And once you put that in, as you develop the microservices, we know, to answer your question directly about, how do we engage, we know these enterprise customers, and even smaller customers, they want to move from capex to opex. That's an overused term, but really it means instead of buying 100 servers, and then I've got over provision for six months, and then another 100 servers, if we can get into a way where we can actually put opex, and that conversation is, you're still starting out with the same business problems. This is kind of the thing that we learned. It's not some, you don't go in and say, opex to capex, you go in and say, hey, you need a new customer experience, right? You want a digital experience. It's their business model driving it. That's right, let's talk about, that's right, let's talk about your, the digital transformation you want to put in, what's the technology you need, and then let's talk about the business model that follows behind that. So it's not consumption for consumption sake, it starts out at what is the outcome, and then bring in the technology, solve the problem, bring in the partners, and then you can consume it over time. I think that validates why hybrid cloud is so hot. We've been pointing at it, but really when you break it down like that, with a true private cloud environment, which is essentially IT on-prem or however you, and the way you describe it, then you got hybrid. That's where workloads move to the cloud in that kind of, that destination oriented multi-cloud environment. So we kind of, we believe that multi-cloud will be there. We don't, I personally don't think, and Wikibon's got some research coming out on this, that multi-cloud is a little bit further out. That hybrid is a gateway to multi-cloud. I mean, right now you can be on multiple clouds, but they're just different workloads, but the nirvana is just having workloads moving in and out of clouds, right? I mean, eventually, that's how the SIC, what's your thoughts on that? Well, have you got a preview of Newstack and some of the discussions this week? That's the control point. We've had the PowerPoint preview, and today, this afternoon, we get the NDA preview, so we can see that. Well, so we see that too. We believe that that's the control point, by the way, you're not going to find that from public cloud. You're not going to get that, the overarching single plane, that's not going to come from that side. It's going to come from this side, right? And that's where Newstack is aimed. That's where a lot of our software-defined technology is aimed, and we completely agree, and we think that that's what's going to be that top control layer. Well, you'll get, from the public cloud, you'll get five single panes, or four single panes, or eight single panes. That's right, but you know what? You need a pain for the pain. To reduce the pain. Because it's too pain. Because it's too pain. Flynn, thanks for coming on the queue. I know you've got a hard stop, but I want to just give you thoughts. What's next as you go out and market, point next, great, clever name, simple to get, pointing to the future. We did a little dab with the point. It is a dab. With a point to the future. The end of dab. The right growth. What's next? What are you guys going to be doing in the marketplace? What's the message going to be? What's going to be the cadence of point next from a marketing standpoint? Well, we're going to continue to talk to our customers about the value that point next brings, and this, we're just previewing a few services here this week. We think it's the tip of the iceberg around, private backup is a service, big data is a service. We think there is an enormous amount of work here. We've previewed a little bit of it and has talked about it on stage. I think in the next few months, you're going to see us really come out strong to talk to the market. Because we have, we do believe we have a six-year leadership in this space. We purchase Cloud Cruiser, which is secret sauce that really allows us to do these kinds of services, measure, meter, and I think expect to see a bunch of new messages and a bunch of new services around the space. Awesome, thanks for coming on theCUBE. Great to have you, great conversation, new opportunities, it's the tip of the iceberg. Cloud is certainly changing it, big data, IOT, all happening in real time. This is theCUBE happening here, day three coverage of HPE Discover 27. Stay with us, more live coverage after this short break. Stay with us.