 Live from Las Vegas, Nevada, it's the Cube covering EMC World 2015, brought to you by EMC, Brocade and VCE. Welcome back to SiliconANGLE TV's live coverage from EMC World 2015. It's day two, it's Federation Day at the show. I'm Stu Miniman with Wikibon. Here with my co-host Steve Chambers. It's actually his first time he's co-hosting the Cube but he's treating it like a pro. So, Steve, thanks so much for joining me. Really excited to have one of our favorite guests, one that's been on since the first time we did the Cube back at EMC World 2010. You say that to all the guests, Stu. And it used to be that only John and Dave could interview this guest, but lately I've been pulling in. So either it's me doing better or maybe even that we've got too many presidents at EMC now, so. I think it's the latter. All right, so while he might not need many introductions here at EMC World for our audience, this is Chad Sackage, president of EMC Global Systems Engineering. Hello, everybody, guys. It's great to see you, Stevie. It's good to see you too, man. It's been a while. You've done well since we last met. I don't know, there's a certain principle that says your happiness and productivity is inversely proportional to your title or your job grade. So, you know. Yeah, so Chad, right, the Peter principle, right, is you're going to keep it promoted until you're useless. Right, and I've clearly passed that point. It's just all downhill at this point. I don't know, I've been reading your blog posts and they're still the same chart, right? Lots of detail, lots of numbers. Winds of War, you know, 3,000 words. I mean, Stevie writes some pretty long post-cad, but you know, boy, I have a tough time reading. What I need is when I listen to podcasts now, I love the new app on my iPhone, I can listen at one and a half speed. I'm a pretty fast reader, but your stuff, I want to chew on it a while. Can you get somebody to read those for us? I think I need to. So, I got a very nice tweet today from someone that said, I love them, they're long and they're detailed. That one person is outnumbered by thousands who say, Chad, for crying out loud, can you please give me the notes? The weird thing is, I write it that way because that's actually how I think. So, to me, the way I think is I start with the strategic why. So, look, we have VX Rack, I could go, the one line version is, we now have a hyperconverged rack scale offer, period. I could go one step further and kind of say the how. So, it's composed like this, it uses scale aisle like this, but to me, the way I start is the why, like why would we do something? Why would we open source the Viper controller? Why would we create VX Rack? Why did we acquire Extreme IO? But that means that there's a lot of preamble. All right, so Chad, let's start first. In your role, you got systems engineering for EMC, had the Federation up on stage. Can you give us the update on how the companies are coming together? You've got the Federation Enterprise Hybrid Cloud, you've got the Data Lake solutions out there. How are you guys working together? What's changed since the last couple of years from the Federation? So, what changed is at the tail end of 14 and then the beginning of 15, our customers started to say very clearly and loudly to the whole exec staff and to everybody. A, we love Joe Tucci's principle of open. Don't mess with that, but when we choose to accelerate whatever we're trying to do by electing one, two, and three together, we're going to run Cloud Foundry, we want it to run on the VRealize Suite, we want that to run on top of Converge Infrastructure from EMC, we want EMC's object stack to be in VCloud, we want, when those things come together you guys need to operate more like one. So, I have to say the other rallying thing was increasingly... I'm sorry, so how do you act as one? Yeah, I'll get to that in a second. The other thing is that our customers' requests to us are changing. So, if you're an SE, one of the roughly 4,000 SEs in the field, engaging with the customer to go, let me tell you about Extreme I.O., let me tell you about Icelon, let me tell you about Scale I.O., VMAX, VNX, the latest thing that's going on, it's an impossible thing. Increasingly, the customers don't even want that. They don't even want to hear NSX, VRealize, blah blah blah, so on and so forth. What they want to hear is, help me build an enterprise cloud. So, the customer posture to us and our own posture back to them has changed. Now, the way that you try to drive that together is you basically say rally around the points where there's complete convergence. There's complete convergence around the how do you build platform two app stacks better? You do it on an enterprise hybrid cloud, the best enterprise hybrid cloud is built on the VMware SDDC stack. The best way to deploy it is on converge infrastructure and off to the races. The field is aligned around that and I take the SEs and I group them around minors to go off and drive that. The honest truth, however, is that there's places where the federation does not align, right, being very transparent. And that's a reflection of the idea of open. So, to the EMC field, if the customer says, you know what, I want to run cloud foundry, but I want to run it all on AWS, that makes the VMware field and the EMC field unhappy. But hey, if the customer's happy, then that's the right answer, right? Likewise, what we're hearing from some customers is that they like that VMware stack, but then there's other customers who are like, no, I want the VMware stack for this and I want to go not, how did you call it, Fopen, but I don't think that that's being Fopen, by the way, but they want to go full on open stack as close to trunk, on KVM, you know, and go. And EMC and Pivotal have got to go down that path. So, short answer is you basically focus where the customer wants you, you build your solution stacks in a tightly coupled way, and then you also acknowledge where you're going to go different paths and you do it openly and transparently. Yeah, absolutely Chad, in some of it, it's terminology. If we talk about sometimes it's the, you know, there's flexibility and choice, which you're good about that from a federation standpoint and it's not always, you know, this one configuration, but you know, open kind of means open source so far, but you know, we hear a lot of VMware here, you know, Microsoft ignites going on this week. Other than we had John W. Thompson on yesterday here on theCUBE, you know, chairman of Microsoft, I know your field and your products are doing a ton with Microsoft, but boy, that's way down the list of things because the federation message is so loud. Yeah, I get it. I'll give you like an example that you can't make up. This morning I had breakfast with about 50 customers from France and I love speaking French and I love our French customers so it's always fun to, you know, hang out with them. I actually asked them, it was universal, they all basically acknowledged we need to build a well run hybrid cloud model on off-prem, it needs to be well orchestrated and automated, we need to do that for legacy and for new workloads. Check, no dispute, 100% consensus. I then asked them, how many of you think that you're gonna do that on a hyper-coupled all VMware, homogeneous, pivotal VMware EMC stack? Out of the 10, there were only two, so one out of five who said, I'm all in on that path and I'm trading off choice and variability for rapidity of outcome. Now Pat said a pretty ballsy statement on stage, there was pretty black and white, you know Pat can be very black and white which is his superpower, he basically said people who are gonna be assembling stacks are destined to lose, right? The other four out of five basically said no we're gonna have a hodgepodge mix and match, right? And we're gonna have, there's efforts within our company to go pure open source on commodity and a more tightly coupled enterprise stack. Then I met with a giant enterprise customer who said no we're going, all, his word was optionality. We want optionality at every element of the stack in every dimension. And then before I came here I met with giant enterprise customer that we all use, everybody used them every single day. And they basically have been trying to assemble their own open stack for the last 18 months. And I asked them the question at the end, how much have you helped your company blank? And they said, zero. And then by the way I asked them, how was your on-prem cloud foundry deployment? They go, it made the open stack on-prem deployment look easy, right? So what people are discovering is that optionality and choice does actually inversely trade off speed of outcome. Yeah, I mean Chad, our position's pretty easy on this. We believe in platforms, not products. Extensibility is a good thing. Anybody that says we're going to do the entire stack for you end to end, I mean I think you've spent a lot of your career fighting against the one vendor trying to do it all. So the Federation has lots of pieces and they can put together and offer that full solution but there needs to be some options. Again, being very, very transparent, which is terrible to do when there's a camera looking at you, but hey, we live in the internet age, everything's public, right? There's other little stupid things that matter. So for example, trying to eliminate, Essies don't think too much about compensation. Sales people tend to think about their compensation more. The best sales people don't, right? The best sales people think customer first and inevitably they often tend to actually win the most, right? We did little things in January to align the compensation of our fields to go and say, hey look, in the end, you're not that we're not incenting them to go walk the customer into the Federation but there's not a disincentive. Previously there were actually disincentives for the field to actually build an integrated solution. Little things like that actually make a big difference. Okay, so we've got such limited time here, so many topics to cover with you, Chad. One of the things we've been poking at just from an industry standpoint is, back in the 90s, Microsoft delivered software with marginal economics that we knew. Print another CD is free. Today, you look at Amazon with what they're doing with AWS, adding another thousand customers, adding another feature is the same marginal economics. It's like free, I mean eventually it lives somewhere but for all intents and purposes, it's free. So we see the shift of software growing in the market. Hardware, being commoditized, it's going down. Services, so the companies that have a hundred thousand employees that do services are going to have some challenges here. Do you think that's the way things are going? How's EMC positioned for this world? Are we going to see that product mix? I think back to when Tucci first came in board and it was a hardware company went to a hardware service and software. The pies looked the same for almost a decade. Is that going to change in the next couple of years? Yes. Excellent. So I wanted to try an uncharacteristically non-chat answer. So look, absolutely, absolutely fricking literally. So the good news is that we never had a massive services go to market. For us, services were always purely a necessary component to deliver technology outcome. Increasingly, like for example, on VMAX 3 versus VMAX 2 and SIM, the services mix is way, way down. And that's on still classic hardware appliance, man. And it's fundamentally because the products are now simpler and easier to deploy. While there's some that look at it that and go, oh my God, our services revenue are down. At the company level and even at the senior at Howard Elias' level, certainly, we go, no, that's a good thing, right? Any organization that is built around services to deploy infrastructure is in deep do-do, right? Now, services however, to help customers transform, to build new app stacks, to figure out data analytics, man, that is climbing. So it's just a shift of value, right? I think one of the things you're most famous for, Chad, is the Chad's Army V Specialists thing that you did, right? I mean, you rallied a group of passionate people all together around VMware. It feels like the focus is shifted now, you know, it's not as much being an expert in one of the areas. It's how do you bring it all together? So how's that going to impact your organization? So it's a perfect example. You cannot rally around a product anymore. You have to rally around an idea. The V Specialists thing was passionate people that were motivated by the virtualization revolution. And human beings are motivated by their own passion, right? So if you can tap into people's passion and focus that passion, you can do great things, right? And that's not rocket science, that's how humans work, right? That team, for example, while they still keep the V Specialist brand, their charter has shifted to cloud and DevOps. How do I build infrastructures as service stacks in a myriad of different forms? How do I industrialize OpenStack and VMware integrated OpenStack? But there, if you look at the internal and the partner communications on the distribution list now and on the community pages that are out there for our community, it is furious passion around new app fabrics, new data fabrics. I mean, Stormtrooper outfits, but it's not the truth. So I looked at that and, you know, whenever you do these events, I look at them with great pride as an EMC employee. There's times you see things where you go, A, for effort, I'm like, first of all, I'm glad that we corrected it. I mean, the Federation has nothing to do with Star Wars. Come on Chad, I'm expecting all of the competitors to have Joe Tucci on stage with the Imperial March playing and the Stormtrooper fuck up. And they said, that's what we said forever. EMC is the Yankees, they are the Death Star, they are exactly. So talk about, you know, you've got to have some people in your organization that are like, you know, I know storage well and I'm good at doing it. There's, you know, this Docker stuff, there's DevOps, there's all these things. How do you, is it a retraining? Is it a shift in some of the workforce? You know, what happens? Again, honest answer. For all of 14, we tried to retrain and what we found is that doesn't work. Not because the people's brains don't have the capacity, they're unbelievably bright, passionate people. It's that if they got trained on something and then immediately they drop back in the same cycle of what they were doing, because the customers need that, they would never reinforce those skills and expand. And let's be very, very blunt. Docker's so hot right now. Containers, Rocket, CoreOS, Mesos, Kubernetes, you know. Bingo. Project Caspian, open sourcing Viper, oh. But that is all awesome. There are customers whose entire, like put it this way. I flew here. I'm glad that the plane arrived. That ran on a VMAX and then I took money out of a bank and I'm really glad that the bank balance was correct. And the list goes on and on, right? I mean, the reality of it is, is that the whole platform two thing is very much real and alive. So the SEs have to support both. So you know what we're doing now? We're basically giving access to the training to everybody but we're actually looking at the SEs and we're saying, do you operate in a district and with customers that are biased towards infrastructure up or are you in a district and with customers who are biased towards applications and line of business down? I got to ask Chad, you travel the world pretty extensively. How much of it is a valley thing versus the world or is there, who's driving that change going forward from the customer standpoint? I can tell you right now, answer, 17%. So you're like, what? So when we did this mapping, account by account, customer by customer, we said that in 2015, roughly 17% of the account SE population had to be biased based on their customer focus towards the application and line of business down versus the classic infrastructure up. And that's why it's important for us not to over rotate on buzzword bingo. Not because they're not real, but it's because it's and, it's not or. And what I really need to reinforce to every human being and it's true to anybody watching as well as SEs and if you're at a customer, if you keep the lights on running a VMAX, thanks. That is awesome. If you're somebody who's running a VMware stack, you know, thanks, great, awesome. If you're an SE that's helping them do that, great, thank you. If you're an SE who's helping someone build a data lake and a whole new way of building apps, great, those are all good. And we shouldn't over rotate on buzzword bingo. All right, well, Chad, unfortunately, we're going to have to leave it there. I hope next time you come back to Hopkinson, you can pop up to the Marlboro studio. Happy to have you any time. Chad Sackage here with Stu Miniman and Steve Chambers. We'll be right back with lots more coverage from EMC World 2015 right after this week. How awesome is it? It is awesome.