 Okay, we're back here live at the OpenStack Summit. This is SiliconANGLE's exclusive coverage of the OpenStack Summit. This is theCUBE, our flagship program. We go out to the advanced extract of signal from the noise. I'm John Furrier, founder of SiliconANGLE.com. Join my co-host, Jeff Frick. And we're here with the senior vice president, GM of HP Converged Cloud, Sargillai. Welcome back to theCUBE. Back to theCUBE, great. We talked in HP Germany. And HP has a big presence here at OpenStack. We talked briefly last night at your event. Thousands of developers were there just doing the HP mingling, and you guys put on a great social event last night. And you were saying that things are coming together in your organization. So before we get into some of the Q and A around OpenStack, I want you to just update us from when we last talked in the fall around in Germany, how it's all coming together with the HP cloud. Now that you're sitting on overall, the different groups in coordinating and orchestrating, it's more coherent strategy now. Just explain to where are we with that and how it's all mapped out within HP. Sure. Well, I mean, as we discussed when we talked in Frankfurt, right, my organization is a Pan-HP organization that sort of manages cloud across the entire portfolio of HP. When we talked in Frankfurt, we were just starting. Since then, we've significantly built the organization up. Now I now actually have a whole engineering organization that's building core technology. We've set up common architecture. We've started sort of working in a much more, I would say coherent fashion across organizations. And so from a strategy perspective, actually nothing's really changed. We set out our strategy in April, 2012 about building a cloud that provides customers with choice, consistency. And we haven't really changed that, but what's changed is that now we're executing much more in a coherent fashion. So the engineering side's key, and HP's made a lot of strides in, say, open flow, for example, and we're going to have Martin Casada on later in the queue, talking with his role at Nasir and now that they was bought part of BVMware. So SDN has been a big part of the whole cloud. Can you describe your vision, how HP's kind of coming together as a company around OpenStack and the cloud initiatives? What is the converged cloud product vision and how are you guys executing? Sure. So, well, you mentioned two different things here. John does that. Yeah, there's two different things, so I'll just have to take my pick and I'll pick them up. We'll start with the converged cloud product. Converged cloud product is all about having one common architecture that provides customers with choice, confidence, and consistency across all deployment models, whether it's private, public, or managed. That's really the vision for converged cloud because really if you think about cloud, our cloud is about having that flexibility seamless deployment across models and so forth. And so that's the vision for converged cloud. Now the way we put that together is we take all the different products that we have in HP. We ensure that they're designed with the common architecture in mind, common user experience, and we package them together as a solution that provides customers with that experience. From a customer perspective, they don't need to know or care which business unit it comes from or so forth. They get a converged cloud solution that gives them that flexibility. So that's really what converged cloud is about. And even today, if you get the cloud system 7.2 with OpenStack, you can easily burst into HP's cloud as well, so on. So we're already starting to do that. We're already starting to provide that. And in the next year, we're going to be providing more and more pieces that are going to have this really common architecture, common experience for customers. Talk about the HP presence in OpenStack. And obviously, most recently, your competitor IBM joined. That created a big splash in terms of, wow, this is really going mainstream. But talk about you guys, how long you've been involved with OpenStack and your relationship with the foundation. Sure, well, I think that we talked about this in our keynote which I'm sure everybody who's watching this attended, barring some late sleepers, but really, he should have been. We broadcast it live on SiliconANGLE.com. So there you go. So we actually, in 2011, we started working on OpenStack. 2011, we were looking at, okay, what is going to be our next generation cloud architecture? And we looked at some proprietary systems, we looked at some systems out there in the industry, and eventually we chose OpenStack. And not only did we choose OpenStack, we went full force behind it. We worked with Rackspace and partners to make it so that it's not just one vendor, and we actually put up a public cloud with it. Then in 2012, in order to continue pushing OpenStack and ensure that OpenStack is going to be very successful, we worked again with Rackspace and other partners to create the OpenStack foundation because when you have a lot of big companies doing things, you've got to create a structure. And we were actually very instrumental in doing that. Eileen Evans, our top lawyer, actually put together the whole structure for how it will work and so on. And so we're very active in there. Obviously, besides that, we are number four contributor to Grizzly from a code perspective. We run the whole CI chain for OpenStack. Monty Taylor does that. And so we were actually very, very active in the community around OpenStack. The other thing is, because we run, actually run a public cloud on OpenStack, that gives you a lot of insights, right? There's one thing to talk about OpenStack, there's another thing to actually run a business with it. Yeah, and that's their mantra, mantra is here is to bring code to the table. You also, it sounds like you brought expertise in terms of corporate governance, legal work. That's probably saved some money for the foundation, but more importantly, you have experience doing that. But talk about, go back, you said something that was interesting before. I mean, HP has a lot of technology in their tool chest. I mean, you could have gone into HP Labs, gone across the product groups and cobbled together a proprietary cloud. You mentioned you decided not to do that. Was that an internal decision? You said, hey, you know what? We could do something here, but let's go open, was that a conscious decision? Absolutely, absolutely. I mean, if you look at the history of HP, right? HP actually has a strong history in supporting, you know, open source, right? We were actually, in 2003, right, for those of you who remember, we were actually the first company to indemnify SEO and tell enterprises, indemnify UNIX, Linux against SEO and tell enterprises it's safe to use Linux, right? Remember that? Yeah, I do. You remember that? Yeah, I do. So we have a strong experience with that and a strong experience in terms of how, you know, the power of sort of the ecosystem to create innovation. And so we have a ton of technology in HP and we're going to leverage that technology and we're putting a lot of management, a lot of our tooling on top of OpenStack, we're developing some differentiated hardware like our Moonshot, but in this case we felt that there was some really cool technology out there and the ecosystem is going to build something that is very useful. And so this is something that we felt would be best advanced by a whole ecosystem, right? A question, you guys have huge footprint, obviously, in the enterprise. From all the customers that you're talking to and can you speak to kind of the, their changing attitudes about cloud? Is it a carrot that's driving them? Is it a stick that's driving them? Are there specific types of applications that are either, they're using as a spearhead to enter into this space or are just so much better suited for the cloud that that's really where you send the early adopters? Well, first of all, everyone's doing something, but I think that there's sort of multiple aspects to your question. The first issue is that, you know, the whole interaction with cloud for customers is a journey. Hey, the average Fortune 1000 company has 5,000 applications, okay? Even if cloud, everything was perfect and done, you will not be moving all of those to any cloud in one day. So it's a journey of choosing which workloads you want to do and so forth and how do you want to move there? And that's sort of what we work with customers. Now, there are obviously certain applications that are sort of the first where you get your feet wet and the most obvious one obviously is this dev test automation, right? Because if you look at dev test automation, the day when you do dev tests, when you're setting up machines and so forth, that you know, you go from, it's a very simple use case, you go from 90 days of setting that stuff up to three hours. And so usually that's the first thing people get their feet wet with. But once they feel better about that, then they start looking at other things. Obviously today in cloud, the systems that are most prevalent are systems of engagement. So the applications that were designed with the cloud in mind, terms of horizontal scaling and so on, but you're also starting to see people looking at how do I move traditional applications as well. So the key thing to understand is it's a journey. It's not, I'll do this and that's it. It's okay, let's look at my business. Let's look at where I can get value. Primarily speeds, cloud is about speed. At the end of the day, it's time to value. How fast do I get to a result? That's what matters, right? Result of a new service or new business. Time to value. And so where is, can I get the most time to value? And that's where you go apply cloud. And over time you apply to other places. And sometimes you'll start with private and move to public. Sometimes you'll do it in public, bring it in house. It's a journey. And that's why it's really important to have this sort of holistic approach across all models because you don't want to start siloing everything. Right, right. So let's talk about that time to value. I want to drill down on that. I mean, one of the things we commented earlier about Rackspace was how they handled OpenStack and where I was involved in some conversations with them going back to 2009. And prior to OpenStack, they had their own issues. They had to build out their cloud sites and integrate that and have a full bonk out similar to what you guys experienced. And they had open source mindset and they needed to create a market. So they went all in on OpenStack and their brand has increased significantly and the halo effect on the business side. They have better cloud. They have more developers built in the white space. So clearly there's a business model there and you chose that path. And the other comment we made yesterday was most of the conversation here at OpenStack summits about cloud is not about hypervisors or VMs. Okay, and that the clear shift is to more of an operating environment model, basically a data center in the cloud. And that's really where it's shifting. So it's not about the elements. And so I want to ask you the question around Amazon in particular. Roger kind of briefly touched upon this. They have a real big presence on the volume, the commodity cloud, if you will, for the lack of a better description. You guys have a much more bigger picture and your customer base has a lot of legacy and on premise. Can you talk about the value side of the cloud with respect to this shift to an operating environment where there's a lot of things to operate within the cloud? So the shift from hypervisor VMs to a much more comprehensive environment and why this distinction between volume and value is important. Sure. Well, I think it's not only a question of value. I think that if you look at where cloud has done so far it's only been very small place. If you look at the overall workloads and the over activity happening in enterprise and IT, cloud's done really well, but it's very, very small. And like anything, as you start to evolve and to expand into bigger areas, it starts to be a lot more of shades than just black and white, okay, well, this is a simple or this is so on. And so I think when you look at enterprises, what we're focused on, they have a much more complex environment. They have much higher expectations for business continuity. They do not think a Twitter feed is how you find out if your service is down. They want to be able to pick up the phone. They want to have an open system. They want to know that they can migrate from on-premise to off-premise without redesigning the application. They don't want the system to be opaque. They want to be able to look at how it is. If it's open source, they know that they can go look at the code if they have to. So it's a different expectation. It's a much more... Is it application-centric more than infrastructure? Well, I think it depends. Again, it depends on the use case. Obviously, as you get, there's different, you know, you do infrastructure when you want to do dev tests, then you go to your basic systems of engagement applications or your high-end applications that are just doing big data. Those are the new... So you're sort of looking at new applications versus sort of legacy applications. Legacy applications obviously are much more complex. And those are going to move over time to the cloud because there are benefits to them. But, you know, it comes down in the end, where's your data, right? You have to think about how you want to move them. And so I think, you know, in terms of where things are in cloud in some areas today and some of these players in the public cloud, they've done the easy stuff, but most of the money is in the hard stuff. And the hard stuff requires a lot more than some of the stuff that's been there yet. Share with us if you can, just some internal storytelling or comments or anecdotals around what's going on internally around HP because obviously this cloud positioning is really hot. What's the vibe inside of HP around cloud? I mean, obviously your strategy is clean right now. You've got... You're orchestrating across, you know, multiple group style because you mentioned big data. Vertica can plug in here, right? We saw Hadoop as a service, very much an element within OpenStack yesterday with Red Hat, Hortonworks, and the Merantis announcement as a signal that, hey, you know, it's not just hardware, it's below OpenStack, but there's some stuff going on above OpenStack that's cloud related. So what's the mindset internally that you can share? I mean, you've got your public company, you don't want to get in trouble, but what can you share with the folks out there about what's happening in HP? Well, I mean, I think, look, the thing is that's really cool that's happening in maybe over the last six months is that, you know, Meg's made the statement that says, see, we're going to be a player in cloud. She's going to invest, she's going to make it happen. She and Bill Vecti have said that and they've put the wood behind the arrow. And so a lot of things that may be in the year before and stuff, all, you know, people at the bottom always know what needs to happen, but it doesn't always happen. So now there's actually a synchronization where they're saying, wow, we're actually doing what we're said we're going to do. We have the money, we have the budgets. People are very excited. They're very excited. It's got a lot of energy. You know, I have people, you know, I have lots of different, you know, openings in my group and I got lots of people applying from within the company, from without the company. It's not hard at all to hire people from the outside. It's just a rallying cry. People are getting behind it big time. They're getting behind it. I think people, again, people believed in the strategy from day one, but I think, you know, after Meg, since Meg's put her foot down and said, I'm going to put the wood behind her, we're going to invest. This is an area that we want to play with. You know, you guys could do, you know, you'll get whatever you need. Just go push hard. And people liked that, right? That's what we want to do. And the open stack investment here has been paying off because, you know, you're doing a lot of, you did a lot of early pioneering work and helping the foundation come together. And you didn't just, you know, you're not Johnny come lately into the party. So you're there. What do you see open stack growing? Because, you know, enterprises we talk to, like open stack because it gives them the benefits of building fast and then integrating in and doing some tweaks. And how do you see open stack evolving as a community and how are you guys going to accelerate your presence there? Sure. That's a good question. I think open stack has done really, really well. There's a long way to go. It's still not as easy as it could be to deploy it. So though I think with System72 it's going to be better. You know, enterprise is mainstream, right? Enterprise is not a few guys playing. It's mainstream. And what we see a lot of people right now in open stack is they're playing, but they're not deploying. And so we need to get them over there. And the way they're going to get over there is by making it easier to use, making it plug and play, providing a lot of tooling around it that makes it easy, you know, putting it out. I mentioned this today in the keynote, right? We should have one Linux server in a minute. More Linux servers than anybody else in the world. Imagine what happens if we put open stack in those servers. So it's probably... And you get the Moonshot announcement. It was very innovative. Gontier and Mark Potter, their team, put together killer announcement. Amazing, amazing piece of hardware. So, you know, I think what's next for open stack is it needs to sort of, now that we've sort of got it, it's working, people are using it, you're going to get into the usual things of terms of make sure the upgrades work properly because open stack, you know, it's continuous integration. This is not something you upgrade once every two years. Every quarter you get a new load and it better be stable, everything. So that all has to work out. The management's got to be key, you know. Yeah, and management actually is an area where you can add a lot of differentiation. The tooling around that, that's what I said when we talk about open stack, there's the kernel, then there's all kinds of tooling around it, and how you talk to applications, how you build ecosystems around it. So there's a lot of work to be done around it. Opportunity for developers as well. I mean, that's a golden opportunity. Absolutely, it's, again, we're moving from the, I mean, we're sort of at the beginning, we're at the end of the beginning. Yeah, right. Roger's like, we asked Roger what ending we're in. Back to what ending are we in of the nine? He said with Star Spangled Banners being sung and I'm like, oh, okay, that's pre-game. So no, but so I think the thing that to look at is what I always tell people is, look at the slope. Okay, the slope is very high, right? And when you look at ecosystems like this, right, they have the power of the network. The more people involved, the faster it moves. And open stack, I mean, we're talking about this now as a matter of fact, but a year ago it wasn't like that. Yeah, yeah. Right, a year ago, some people were saying that. We were saying it, Rackspace was saying it. A lot of people were saying, oh, this is too many companies are involved in this. It's never going to happen. No one's been questioning that now. They're just saying, how fast are you moving? Yeah, and we were big supporters of the open stack cons at the beginning, but we also turned skeptic. And we do fall on our sword when we see the natural things happen, but we were saying, hey, this shouldn't be a pool party. Everyone jumping in and splashing around. It should be real industry standard kind of event because it's otherwise becomes like one big vendor, Barney kind of loving each other, you know? You have a few good swimmers. Yeah, so our last talk was in Germany. So I got to ask the international questions because cloud, because that's something that you guys have a huge footprint. Cloud issues and run data is critical. I mean, obviously Germany has their own policy, but outside of the US, outside of North America, how do you look at the cloud there? Obviously, the would be is behind the arrow and how do you look at the global market? Well, first of all, I mean, I actually spent a week in Europe with some of our top customers and it's amazing how fast they want to move. I mean, certainly in terms of OpenStack, I mean, Europeans are very sensitive to cost and OpenStack to them represents a tremendous ability to unshackle themselves from some of the proprietary software that is used for cloud or for virtualization today. So they're very, very excited about it. You know, I think from European issues in terms of data sovereignty and so forth, they're working through that. And they're finding out that there's like everything at shades of gray. I think people are like saying, oh, Europe, oh, they have all these issues. No, I mean, there's a lot of people like we talked about, I mean, there's a lot of things that are perfectly happy to run without worrying about all those things. So like anything in cloud, right? As cloud matures, you're going to see more sort of different flavors. They'll be the cloud for government with data sovereignty, they'll be the cloud for something else. But, you know. It's elastic, so it's a resource you can plug and play, right? You know, some cloud will have to be like anything, right? Some cloud is going to have all these regulations so the industry can work and some won't. And I think that's okay. That's maturity of the industry is when you start to fragment the specialization. So let's talk about the maturing industry. So obviously we're early days and you guys are investing big and it's going to be comprehensive cloud from public all the way into private, et cetera. Et cetera, you know, you guys, we covered that. So the question always comes up. When do you address security? And, you know, Dave Vellante and I always talk about on theCUBE, is security a do-over? Every time, you know, you come in these inflection points, these transformations or do you have to have some strategy on security and it's always a moving target because, you know, it's early days. You got a lot of. It's a good work. Yeah, so it's a moving target. So how do you look at the security? I mean, you got to look over the portfolio within HB and data is one issue. We talked about the international piece, but now security as we saw the hackings is going on. So what's your view on that? How do you look at that? Sure. Well, first of all, I mean, it's not like it's a do-over in terms of, you know, we are focused on security a lot, right? We have, you know, a large group that is focused solely on security in our public cloud. I think, again, we need to think about, you know, when you think about security in terms of cloud, the fact that we're using as the open source makes it more secure because more people are looking at it, right? You have a whole community of experts looking at this every day, and it's not secure because nobody knows what's going on. It's not a black box. So that actually is a tremendous asset in making security. When you look at Keystone, you know, how many security experts are looking at Keystone? I can guarantee you a lot more than one vendor. Yeah, yeah. So that actually is helping a lot and drive security. And that's why when you saw our friends this morning, you know, from the three later agencies, this is why one of the reasons they also wanted you because they can see the source code, they know what's going on. It's not someone promising them everything's okay. Yeah, well, that's proven to be a good model. I mean, open source has been been, I mean, although you claim you can see all the code for the bad guys, but the good guys can see it as well. Look, the bad guys will figure out how to see the code. And so you might as well make it secure, assuming they can see it. Don't assume they can't see it. That's why open source is a better strategy. Great. What else is on your mind these days? You know, just on a personal or business level, what are you thinking about? And what are some of the things that, you know, when you kick back, when you're traveling and, you know, and just kind of relaxing, what are you thinking about in terms of the industry? What's on your mind these days? Well, I think what I think about a lot is that we're lucky to be at this time, right? It's always fun to be when there's a fundamental paradigm shift, right? It happened, you know, in 2000, it was a fun time. And now we're the same time, it's a paradigm shift. And it's fun to be at the front end of a paradigm shift. It's exciting. I mean, if you like excitement, if you like chains, if you like, you know, all kinds of dynamic things, it's a really exciting time to be. And you know, people don't appreciate how fun it is until, you know, until. That's why we do the queue. We do three days of nonstop coverage. Until it settles down and it's like, oh, back in those days. You know, I remember when, and I remember when, you know, people, you know, I was come from the networking world. I remember when people were talking about Wi-Fi and were arguing about, you know, where we're usually 8 or 2 to 11 X, or we're going to do this, is this. I mean, we're arguing about all these things today. It's like, I'm just going to connect. Yeah, yeah. So it's exciting to be at the formation of the industry. You can then look back and say, look at all these decisions that we made, look at all this. I don't think people appreciate just how exciting these times are. And Open Source gives you guys a lot more collaboration touch points as a big company. You guys, you know, can be nimbler with Open Source. So I got to ask the question because you are the czar atop of the cloud vision of HP and you report right to the top. Obviously a lot of startups coming out of this community, you know, and you guys do M&A and HP doesn't, you don't just take your M&A policy, but, you know, there are startups out there. So what advice would you give to growing companies, whether they're venture-back or self-funded or just a couple guys in the garage coming out of the product that, you know, are going to look really well, but at some point they're either a feature in the white space or, and then that might be a target for HP or somebody else. What advice would you give them as a senior executive out there who might be looking for, you know, moving faster through acquisition as well as the organic R&D? Yeah, so obviously I will make no comments on the acquisitions whatsoever, even if we do that. But yes, we, you know, I think, I think for my startup advice, I'll always give them the same advice which is solve a real problem. That is a real problem. Don't, you know, just because something you can do with technology, so what? Nobody cares, right? Solve a real problem and ideally something that is fundamental. Cloud does represent a challenge because there's a monetization challenge for Cloud which is why actually big companies are in a better shape because they can monetize across a much wider swath. But, you know, solve a real problem. That's, you know, that's my main thing. Okay, final question because I know we're tight on time, you got a rolling and we're on our next guest coming up, looking out on the five-year horizon, just, you know, your personal perspective, you're going to be driving the Cloud ship for HP which is going to touch a lot of things within the company. It's going to be an operating system. You have edge of the network, you have the intelligent edge, devices, bring your own device. So, you know, infrastructure as code, how do you look at the next five years, shoot the arrow forward and think and share your vision for the next five years for the industry, you know, across the industry and HP as a player in that industry? Well, five years is a long time, I mean, it's right. Or five years in this industry is, you know, I can predict seven things and I'll be wrong on, you know, six and a half, but I think the, if you, I mean, you should look at, we should look at the evolution of them. I mean, funny enough, look at the evolution of the smartphone and look at what happened there in terms of everything's automated, it's simple, it's auto-install, you don't have to think about it. Right, today, Cloud is not like that. You're thinking about a lot of things, it's this big thing, you worry about, you know, five years from now, it just should be, right? You shouldn't be thinking about all these things. It should all be in the background and you should be just managing services and all the internals of how it happens, how it's governed, where are your app shops, how things get upgraded, where do you get your solutions? Which cloud is it, public or private? That should all be seamless. You shouldn't have to worry about it. It should all be hidden from you the same way that on your smartphone, all the stuff that happens in the background is completely hidden. The user doesn't care. Again, at the end of the day, it's all about the user or the customer. All the technology is fascinating, but the more you can hide it, the better it is actually the experience will be. And so a lot of the complexity that we're now dealing with as we're sorting through and building these solutions, that's all going to be hidden. And really, it will almost be pretty much like this services, I mean, Cloud's about services. And whether it's services that you're consuming are going to come from a private or managed or public and how are you going to pick up new services or the catalog's going to be here, there it will be seamless for you. You'll just go to a catalog somewhere, pick out your service and they'll be sourced from where they need to be sourced. And in many cases, they'll be composite, right? So you may get a service from here and it may pool service from a bunch of other places, but you're just going to get your service and choose it on your menu. Sar, great to have you on theCUBE and great to see you again. And we'll see you at HP Discover. You're leading the ship at HP. You're driving the big cloud bus and going across the company. We're pointing right to the top. You guys have made a great investment in OpenStack. It's paying off and folks should know that. And congratulations to HP for that bold move. So we really appreciate you coming on theCUBE. This is Silicon Ankle's exclusive coverage of OpenStack Summit 2013, Portland, Oregon. I'm John Furrier with Jeff Frick. We'll be right back with our next guest after the short break.