 Hello everyone, welcome to the Cube Pod episode 43. I'm John Furrier with Dave Vellante into the week here. Big news week this week, obviously a huge mega deal with HPE and Juniper. We had great team coverage, Dave, great to see you. Also great, great, great action this week. CES happened, lot to review there. Also in the tech world, AI continues to boom along and just so much action happening. So great to see you. Yeah, hey John, how you doing? Nice job this week, putting together the, what'd you call it, the emergency cube? That was fun. It had Melania on and Jake and Zias. It was awesome. Shelly did a hit on that. So yeah, big news. It wasn't really an emergency pod, it was an emergency cube because we had to bring in the analysis and I appreciate the quick data you pulled together through the Cube Research. Phenomenal work, and again, really impressed with the response from the community on the Cube Research Initiative. Super excited to continue to build that out this year. Again, we're just continuing to keep the content going. Our mission this year, doesn't really change from our North Star from 13 years ago, continue to get the content out. This podcast will be our time to riff, Dave. So I always loved this. And I think this year we'll start adding guests in there, bringing some guests in for a whole hour. We can spare some minutes to bring in the Andy Jassy's of the world. So we'll see that. We had some guests last year. We had John Chambers, right, last year came on, but it wasn't really a main focus. People like this. Again, we'll keep testing it, keep pushing it out there. We're gonna work on the promotion of the pod, but if you're listening, take a minute to like it, share it and put it out there and give us feedback. So always great. So Dave, this week, a bunch of talk about things, talk about. So first of all, the HPE Juniper, we'll get to that. Man, the layoffs just massive this year. Again, we said on the pod, and I can't which pod it was, early pods, that the planes would be falling out of the sky. Absolutely, that's what the case is. Huge amount of layoffs. Dude, the market's hemorrhaging at many levels. If you're not on the right side of history here, we're gonna, you're gonna be roadkill. So we're gonna get into the big segment on that around what startups do have a path, which ones don't. Exciting news from the SEC. Finally, the approves the Bitwise deal. They're actually ringing the bell. I was just talking to the New York Stock Exchange just earlier this morning around the fact that you have ETF trading on Bitcoin. That should change it, but Bitcoin's down 2000 points. So. Well, do you see Ether? Ethereum's closing the gap. Bitcoin's been outpacing Ethereum all year. Ethereum's catching up now. So it's really kind of interesting dynamic. It's like sell the news and then Ethereum's been rocketing. I have an opinion on the whole crypto thing. I think it's gonna mirror the dotcom bubble. Once the shit gets out of the bubble burst and all the carnage is done, it gets back to normalcy. I think crypto, I'm long on crypto. Obviously, and blockchain, you know that we both are. Now that that's out of the system. The OpenAI debuted their GPT store for paid users. That's happening and starting to see people starting to put their stuff out there. Notice a little slow response piece, right? So, yeah, already three million plus chatbots so far. Everyone's taking their content and rolling it in. There's also trivia coming on the network now from Charles Fitzgerald pointing out that some of the large language frontier models, he's calling them or original models, proprietary models, the large models are actually outperforming the small ones with good prompts. So I will get into that one. Twitch just laying off over 500 jobs. That's a sign. Amazon Studios cutting back just a ton of action going on. If CES was just all things AI, you know, you start to see AI bring back those stuck industries, the smart home, automotive, smart manufacturing. These areas have been stalled, Dave. AI's bringing it back. So big discussion there. AI's talking to companies on media to index their stuff. Just so much happening in the world there. And obviously, you know, Google's laying off people. Discord laying off people. Just- I gotta give you some stats on that, John. So I'm looking at the latest ETR survey. I can't tell you too much because they haven't released all the data yet but they have this drill down. And they're asking people, okay, you know, what's your budget gonna do? Increase, decrease. For those that said they're gonna decrease budget, they said, what's your number one or what are the methods that you're gonna use to decrease the budget? Number one now is reducing staff. Okay, that's 23% of the subsector that said they were cutting. But this is what's really interesting. When you look at the industry verticals and you do IT, it jumps up from 23% to 35% of those respondents said that's how they're gonna meet their targets. They're gonna reduce staff. And then the other thing is the layoffs are definitely higher, somewhat higher in North America than they are in like Amia and very high in APAC. So, but it stands out. And so in IT. So- Yeah, and again, there's a bunch of stories out there that have similar threadlines to them. One is Meta. There's a story out there talking about how AI replaced the Metaverse. We talked about this on the bottom before. Remember how Meta, Metaverse? That was my prediction last year. Is that AI, you know, generative AI wins where Metaverse failed. Well, there's a huge story out of Bloomberg with sources that's saying how, describing how AI replaced the Metaverse with Zuckerberg's top priority, leading to massive ruthlessly cutting jobs and then pivoting quickly for AI products. We saw what Meta did with the open source donation. That was a huge coup, as I pointed out on the pod before. And then another weird story came up on Charlottes Fitzgerald Fitzsie's point is open AI inflection and cohere, held back channel talks on AI policy and safety with Chinese state backed groups in Geneva in July this past summer. So- So I want to comment on the Meta thing. I mean, it's like a Nadella moment. Like when Microsoft went all in on the cloud, remember they were sort of missing cloud, they were trying to put windows on phones and said, hell I give it. But so I think that's what Zuckerberg's doing. He's like, hey guys, let's just pivot. You go hard after gen AI and they seem to be getting a lot of traction. They're showing up again in the surveys. Lama is outpacing some of the other proprietary models, like Anthropic, play a little bit. Ms. Charles getting traction, are they in the survey too? No, they didn't show up. Cohere and Anthropic show up. And then of course, open AI is like seven times bigger than anybody else in LLMs. Lama is maybe 20% above Anthropic, which is kind of interesting. This is just random surveys of IT pros, 1700 N. Open AI is still dominating them. Oh, dominating. I mean, they are still up to the right. Who said that first mover advantage would be a key for them? No, I said, yeah, yeah, you didn't. You didn't, we had a breaking analysis. Sarbjit and I were like trying to be contrarian, saying they're not gonna be able to leverage their first mover advantage. Jerry's still out, but it looks like you were right and I was wrong on that call. Well, still early to tell, but again, it's just, again, this is the innovation dilemma, right? So, and in other news, we're seeing VMware being assumed by Broadcom. There's a lot of channel press going out there around some of the changes that VMware and Broadcom are going through. It looks like as you had predicted, Dave, I didn't really disagree with it, but you were really almost nailed her move. Every play in the book, you've nailed with Broadcom and VMware that they were gonna pull the gutting and they're actually doing it exactly as we had predicted. And simplifying that the products, VMware has gone to just simple swim lanes. No more vSphere, you get VCF, VMware Cloud Foundation, which includes vSphere and everything. You get all the products and the price just went up. Can't buy vSphere by itself anymore, the 1500 or whatever, you gotta buy everything. And VCF does very well in the market. It's got a lot of momentum. I think that's really smart by VMware to really double down on that, package it up. Say here it is, use the tools, you're paying for them, use them, if prices are gonna go up, that's gonna intensify people's desire to use them. You don't really have a lot of choices as a VMware customer. Where are you really gonna go? You're gonna go to Nutanix? You're gonna go to OpenStack? I mean, maybe if you're a telco, but you really don't have a lot of choices. You're gonna go to Microsoft, I guess, maybe, but you're not gonna get off that stuff easily. It's interesting, one of the things that came out of the HPE Juniper Networks, HP buying Juniper for 14 billion and our breaking analysis on our video. Quick hit there was the consolidation play of Broadcom is becoming kind of a standard, right? In how they do it with certain companies. So, your point about how Broadcom is gonna operationalize the core VMware and keep some stuff around as upside potential, as again, it's just an extra bet that's gonna always cut. It's interesting, right? So, they're very sticky Broadcom with VMware. So, I think they have a lot of leverage as Fitzgerald pointed out on his blog, Platforming Engineering. They're gonna chop down the 6,000 or 600 customers that can't move and just jack the prices up on them. So, meanwhile, the other areas are all hedges, Tanzu, security, and they have a telco business, which is just simply just VCF for telco, which is like just same thing, but just for telcos, little customers. Well, I had said, I thought Carbon Black was ripe for delevering, I still feel that way. You know, Tanzu's interesting, I mean, I think that is maybe one that I got an initiative. We'll see whether or not, because it's a whole cross cloud thing. And in the whole cloud strategy that Gelsinger initiated after several failed attempts, begin it gonna be interesting to see what they do with cloud, will they bunker in on prem hybrid? I have a prediction. I have a prediction and on some sources, again, I haven't confirmed this, but I'll just say it because it's at rumor at this point. And it's my prediction intuition. Broadcom selling, they sold Carbon, they spun out Carbon Black, get rid of that and user computing. But I wouldn't be surprised if they drop the VMware cloud on AWS, because what does that help? If they're going all in on the data center, because that's what Haktan's doing. Okay, Haktan and team are all in on the enterprise. Data center, Edge, cloud operations, maybe Tanzu fits in there, maybe that hangs around, but they might cut VMware cloud on AWS. What does that give them? Dave, what does that give them? It gives them license fees, but it also- It gives Amazon their customers. But yeah, no, I was just going to say, I remember when they first announced that, we were down, we were at AWS public sector. 2016. And yeah, we were talking to customers and the customer's like, yeah, this is kind of a one way street to the cloud. Now, there's talk about repatriation and I'm not a repatriate, but I could see Haktan saying, why are we giving him this fast lane to the cloud? Let's just keep them where they are. So remember, AWS created a bare metal instance to support VMware cloud on AWS. VMware has also done similar deals with other cloud providers like Microsoft, like I think Google as well, they run on all clouds. But so it gets them license fees and it does get them super cloud, but- Hold on, hold on, I have an opinion on this. Here's my take. So first of all, if you're Haktan, and you're looking at what Charles Fitzgerald was pointing out in his post about how they're going to jack the prices up, he says when private equity, because he says it's a private equity, when private equity comes, starts alamagating, start migrating, that's his kind of famous line. And so if you're a VMware customer, you might say, I'm out of here, but they can't really switch. So if Haktan knows that's the case, and that's his whole strategy to up the prices, why would you want to give them an option to go to AWS? Now, if you can host vSphere on AWS all you want, but why would you want to use VMware on AWS? If you're Haktan, you kill that, because that's basically a backdoor out exit strategy for migrating. And what's the revenue implications? Okay, just cut it out. There's no one's going to buy it, we just cut it. I mean- Well, I mean, if your business model is Hotel California, you don't want to have, give them a backdoor to leave. I mean, that's- Well, I will go on record saying that I would not be surprised if VMware or Haktan and Broadcom just say cut AWS VMware on AWS cloud. That doesn't mean they can't have vSphere and stuff in the cloud as cloud operations. But if you're a data center, he's going all in on the data center. I mean, that's their whole bread and butter. And they don't want people switching. And what are people going to do? If I'm a CIO, say I don't want to buy anymore VMware, they're going to hold the line for a couple of years till they get fired or quit. And then the new guy is going to come in saying, wait a minute, how come we're not expanding? So the new guy didn't want to spend license on this. What does that mean to kill it? Are they just going to stop selling it? Or they can't stop supporting it? I mean, they've sold it, right? They're going to just say- Pull the plug? Pull the plug, lay off the people and just shut down that out, wind it down. Because it's VMware on AWS, you can still run vSphere on the cloud in context to the VCF on premise. That's my point. I mean, I think Gelsinger did it to streamline. Remember our take on that was at that time in 2016, VMware had no cloud strategy. Remember- Right, so what you're saying is- They consolidated it under one banner, made it look good. And Amazon's been poaching customers ever since. We've been reporting that on theCUBE and SiliconANGLE for four years. Okay, but what you're saying is then, the scenario would be you'd be running VMware from your on-prem VMware console as opposed to doing it from natively on AWS, correct? You don't need it- Which by the way, by the way, to me that makes more sense anyway, because I can manage my cross-cloud estate. Now that's where super cloud makes sense. I run that from my VMware console on-prem or wherever, my colo. And I'm running across clouds, which I'm not going to run across clouds. I'm probably not going to manage that cross-cloud capability from Amazon. So that's the scenario- You run cross-cloud. You run cross-cloud from a VMware origination. You're using VMware operations. You can run vSphere and vStand in the cloud, all you want. And then, but you're running it under that umbrella. You're not just gonna- Yeah, so that makes sense. Now your prediction makes a lot of, actually I think you're dead on. I think that I would do the same if I were a hawk tan. We'll get him on theCUBE. It's going to be a matter of time before he realizes that we're the best out there in terms of getting the analysis done. So we'll get hawk tan on theCUBE very shortly, as well as the other execs, because what's going to happen is that Broadcom is going to integrate from the chip to the app. It's so clear to me that the chip game is about what the stack looks like in a converged world of distributed computing, meaning you got to have chip advantage. It's so sticky. Broadcom moves so fast. I love their business model, even though they come from a chip DNA, semiconductor DNA, because if you look at the competition Broadcom's had with other people in chips, they just out-innovate everybody. They move faster and they actually build good shit. Their stuff's good. And what happens is they get leveraged there and they create stickiness. By the time the competitors match the price and speed of their chips, Broadcom's already changed the game and moved the goalpost with better product and more integrated stuff. So what came out of HPC for me, you're talking to Jazz Tremblay who runs some of their data center business was, it's clear to me what they're doing with the chips is what's around the chips. That's the key. So you've got a CPU, GPU, whatever, what's around it. And with the Ethernet stuff that they're doing, Ethernet going gigs and gigs and gigs fast, or hundreds of gigs, you're going to have connectivity. And again, we saw with HPE and Juniper, the network action is going to be where that last battle for cloud supremacy and AI supremacy will be because the latency, everything's about the network. How fast can packets move? How fast is the data moving? Networks will be the holy grail. Just like the old days. Do you remember, I'm sure you remember this. You and I went down to Armank to meet with Bob Pitchiano. Bob Pitchiano, for those who don't know, he was, he's like a legend inside of IBM. He's a very high quality executive, super technical. And he was running their data and analytics business and they kind of, Ginny kind of jettisoned him to make him run the power of business. You remember that? And we went down there and he was doing the whiteboard. This was really early last decade. And he was like, look guys, here's what's happening. Cause he was, he knows Silicon, IBM roots, long time IBMer, super technical guy, great executive. He was drawing on the whiteboard. Remember John, all the alternative processors that were happening. Now, of course they had an agenda against x86, but he's like, look, the NPUs, the CPU, the NPU, the GPUs, all these alternatives are emerging. And that's going to create a lot of contention of inside the processor complex, inside the system to move data around. And that's where, to your point about Broadcom's bet, they bet, this is early last decade. Broadcom bet on that connectivity across all those alternative components. So that network-centric architecture inside the system. And that has just become a huge source of value. And they're just creating a lot of revenue from that and a lot of value for customers that's sort of hidden under the covers. Yeah, Bob Picciano, Northeastern grad, first class of the computer science college. He and I still debate that whether that was my year or his year. Right, because he was a year earlier than you, right? And he says, 82 was the first year for computers. No, 82 entry, 87 exit, five years, five years. Right, so 82 was, he said, that's when they started the computer science program. And you were like, well, that really wasn't the real computer science program. It started in 83, your freshman year. Well, my debate was that Northeastern started the College of Computer Science in 1983, my freshman year. He might have been in the College of Engineering that had the computer science program, but in terms of establishing the college, that's where we get in that pissing match. Anyway, we've had that argument, not fun argument for a decade. What a great guy. I miss Bob Picciano. We should reach out to him and find out where he's at. I know he's sitting on some boards. He did a lot of great work at IBM and he was pushed to the side. He had the whole insights early with data. Him and Rob Thomas were two great executives. Rob Thomas is still there. We should ping at IBM and find what they're up to. Anyway, so Dave, just quick, quick, another head nine note here, just while I got it here. Bitwise, which is one of the ETF, SpotBitcoin ETFs on first day of trading has early data coming in. They saw 238 million of inflows into what's SpotBitcoin ETF on the first day of trading. So, okay, now you got BlackRock and Fidelity coming in too. So, interesting. And Arc, right? Cathy Woods. Yep, mm-hmm, yep. You got a lot of people coming in. You got Valkyrie, SpotBitcoin, Grayscale Bitcoin. Those numbers have not come in, but you're looking at a total of almost a billion dollars if you combine some of these other flows. But Bitwise is more specific in releasing the numbers today. That was according to the block.com, block.co, which is the news site for crypto. Interesting. So, I think the mainstream adoption is coming, Dave. This is, I mean, I saw a lot of us that were early on at Bitcoin doing a little celebration today because this is a mainstream aspect of it. Yes, I mean, it popped, obviously, big time. Well, of course, first, you remember there was a hack and the SEC's Twitter profile got hacked and somebody put out, hey, we approved the ETFs and then the Bitcoin popped and so somebody was gaming the system and then Gensler came out and said, no, no, that was a hack. But anyway, ultimately, they approved it so that you can now trade a Bitcoin, or you can now buy a Bitcoin through an ETF. Now, so why would you do that? I guess you'd do that. You're not really owning Bitcoin. So when you buy Bitcoin through a Coinbase or direct through other markets, you own the Bitcoin, but with these ETFs, you're not owning the Bitcoin, right? They're tracking essentially the Bitcoin. So why do you buy them? Why would anybody want to do this? Because the fees are lower. I mean, Coinbase is going to hit you for, I don't know what, 1% fee? Now there's a fee war starting with all these ETFs. It's a beautiful thing. They're charging you, I don't know, 0.1, 0.2. And so it's a lot more efficient way to get into the market. But I'm excited about these other baskets that they might create with, give me some Aave, give me some Solana, give me some Cardona, Solana, you know. And so, but yeah, I heard Kathy Wood on TV the other day, I thought she was very articulate. They've been in crypto for a long time. You and I have been, we've done so many crypto shows that were just awesome innovation, but. I think you can expect to see crypto become much more mainstream. A lot of people are on one side celebrating this move, because it's more legitimate, more trustworthy for retail. The hardcore decentralization folks are like, oh, this is kind of like against the grain. We'll see. I think it's a positive sign. I think it's going to bring more liquidity into regulation. The SEC gets a little comfort blanket here. So that's, I think that's key. You know what else I too was, Brian Armstrong was talking about this the other day. You would think maybe he's against this, but not at all. I mean, he was like very, you know, complimentary of these ETFs. Of course it obviously helps training volumes and the like, but you know, he was basically saying, look, we still want some guidelines. You know, the SEC saying that this is a security. The other side says this is a commodity. I would just like to see the government be a little bit more, you know, a little less opaque about what they really want. They're just trying to say, all right, we're going to apply these old rules to the new crypto in a typical situation. Gensler seemingly has been trying to kill it now since his entire tenure. And then, and then as if the other thing is the, the all in guys, Shumat, who was early on in crypto said on one of the all in podcasts, crypto's dead. And so I don't think crypto's dead at all. I think to your point, crypto's like going to start building a base. Maybe it's dead from the standpoint of the pump and dump guys like Shumat, who could get in and get out like he did with the SPACs. But I think for the mainstream, crypto's not dead at all. I'm just sending a note, Bob Picciano pinged me on LinkedIn. So he says, hello. I said, hey, we just talked about you, your ear's ringing. I just pinged him on LinkedIn. He's a rocket software. He's a board member at SolarWinds. I didn't realize that, helping them kind of recover from that disaster. Maybe he can be the CEO of our technology business. Maybe he'd love to have them. Bob, if you're listening, come by. Well, you can run some tech over here, you're great. Amazing guy, yep. The other thing I wanted to talk about, Dave, that happened last week, what's interesting is that if you look at the CARDA issue, I don't know if you follow what happened with the CARDA, CARDA alone sales rep went out and basically poached the cap table information, used the cap table information of a startup to sell a secondary buyout to one of the angel investors without the founder's knowledge. So the founder went ballistic, took it to Twitter and called him out. And then the CEO, it was kind of founder on founder and the CARDA CEO was kind of cocky, but he then kind of said, hey, why call this out publicly? Send me an email. So obviously the guy had an axe to grind and the CEO's response was like a PR nightmare. And then it went to sideways from there. And what happened was, it was quite the scandal. And then the CARDA ended up reversing its policy and said, oh, this rogue salesperson. And then the CEO said, we're getting out of this business and just shut it down. So, the rumor had- So explain that a little bit because CARDA had a business, the one they shut down, which was to get private companies liquid. Now these are the guys that run probably 50% or more of the private company's cap tables. So they have a service. Let's explain this. CARDA has a service that allows companies to use their onboard SaaS software to handle all the administrative work around a company's equity ledger. So who holds what stock and capitalization tables or cap tables as they call it. Cap table is how a company is capitalized. You have the founders own equity, maybe a percentage. There's a stock pool, venture capitalists on an external investors own a percentage. And then you have details around when they bought the stock, how they bought the stock, when it's gonna invest, when it's gonna be due, how much it's worth, the strike price, all the grunt labor that's involved in tracking and it's a dashboard. You go in and when there's a capital call, it tells you how much is due and how much you owe and how much you've committed. And it's just a, it's a great service. It's a great service because it solves a lot of problems but they have all the information. And remember the old Facebook adage? You're the, if you don't know who the product is, you're the product. So the joke about Facebook was the users were the product, not the application itself. In other words, Facebook used the data of the users to do targeting and make money. But they also had a service, but they also had a service to get holders of private shares liquid. So they created markets. Carter figured out that they could make more money selling separate division that sold, got employees stock liquids and they had it. So it was just another transaction vehicle for them. And so what ended up happening is you had rogue behavior of a sales rep who snuck into the system to look at the cap table and start matching buyers and sellers without the founder's notice or board. That is just fricking wrong. Right. So you have a clear conflict of interest, right? That's right. First of all, good business model. I think I would keep the, I wouldn't have shut down the second day. I wouldn't have given to the mob. If I was the CEO of Card, I would not have given it. I would have said, Hey, we're really sorry. We are going to spin this out as a separate division, separate building, separate systems, but it's lucrative business model for us. And we want your trust because it's a trust business. Right? I think he made the right move, John. I think that was the right PR move shutting it down. I don't know about it. It's too much of a conflict of interest. Maybe they weren't making any money, but I don't think there was that lucrative for them. I think it was maybe a few million bucks of their business. Why, why risk the whole. Well, their core product is trust. And you know, if you're a company, you don't want to have your cap table information being held by someone that's going to be as evil as Facebook relative to the position. So good call to shut it down. I guess I would agree with you, earn the trust back and bunker in. So that was, that was one, I thought big opportunity there. The other one was just their influence that was there. Now the other thing is everyone jumped on the bandwagon. Angel list came out. And so the question is the other founder, the motivation for him to go public. I'm suspect because he's the next Y Combinator guy and his friends have businesses and the stockholder involved was his relative. So it wasn't like he was like affected like in a blowback based from a shareholder was more of this was, I think this was the, the system punching up the card up saying, Hey, because then all of a sudden came out of the woodwork Angel is going to service as like five other companies come to us. So I guess that's how it works now, Dave. It's kind of a, you know, it's a street brawl. I mean, we're in a market where this shit is happening. This is a street brawl. People are going to go after our business, your business, their business. It's interesting. So it's going to be fun to watch how this, this generation of leaders handles the fast moving AI way that's coming. So I think, I think it's going to be a very serious business climate. And that that's on top of the layoff. So my prediction is you're going to see a shift in mindset with the culture. Again, the revolution's happening and people are going to be fed up. I want to see serious business. You know, that line in, in, in the, the, the movie, the show, the HBO special where the guy goes, you guys are not serious people succession. Remember that scene in succession? You are not serious people. That's the message happening right now in Silicon Valley is that, you know, if you're not a serious business, you're out serious business means watch your cash, don't run out of cash, drive value, get product market fit and, and get escape velocity. And so I think you're going to see a culture of more business model, less grandstanding, less of this hand waving, fake it till you make it. I mean, look at the companies. You know, there's a couple of companies I know out there that are hand waving their way around. They're faking it till they make it. They buy acquisitions, make themselves look good and then try to flip the company. This market is not going to tolerate that Dave. If you don't have fundamental business model with revenue and a team with legit reference checks, not just hype and social media selfies, you can't sell your company. And so I think you're going to see an M&A market be very tight. We saw some of that, you know, kind of pump and dump. Obviously you and I saw it in the dot-com boom. You remember how out of control that was. There were very few, like really great businesses that came out of that. There were several, but in terms of the percentage of overall and a lot of people made a lot of money, just basically selling crap. Yeah, the pump and dump. Yeah. Well, okay, I know we talked about the HPE and Juniper deal at length. There's a mega post. I posted it on Substack on LinkedIn. You wrote a blog post. You did a breaking analysis. Shelly posted. Shelly Kramer posted. We got videos. We got our ecosystem together. We got our great cube collective coming together on news. You can see a lot more of this folks out there, by the way. You can see the cube bringing people together on camera super fast and do animal analysis. But, you know, as you said, you're quoted here. I want to quote you here. You said, well, we don't see this move as a dramatic growth drive for HPE. The acquisition will improve the quality of HPE's earnings. Ulster is free cash flow and further strong, support stronger momentum in the networking business, giving more ammunition to compete with the market leader, Cisco and other networking pure plays. I actually shared that on Twitter, your soundbite around Dell versus HPE and having higher margins. Even though it's a consolidation play, you see this as clearly an opportunity for HPE to solidify the base and drive value. I do. Look, we have companies winning with the consolidation play. Like, security is the best example. Palo Alto Networks, CrowdStrike, even though the stock, CrowdStrike's kicking ass, I mean, they're doing really well with that story. Zscaler is winning. This consolidation story plays. Why not have it play in networking? Cisco is in a good position to do that. So I think Antonio Smart, Aruba is their best business from a profitability standpoint. They're winning in networking. They pick up Juniper. You know Juniper much better than I do, but it's a strong product portfolio, good leadership. They got some AI chops with the missed acquisition. So I liked it. It was interesting to hear Steve Mulaney, who is a long time operator in the networking business, CEO of NYSERA, he was interim CEO of Palo Alto, CEO of AVATrix, worked at Cisco. So very, very strong executive. He's saying, well, I would go if I were running HPE, I'd go for the growth play. I'd roll the dice. He's a gambler and he's a really awesome guy. I just feel like where HPE is and the board is and the mistakes they've made in the past, not so much HPE, but HP that Meg Whitman had to come in and clean up that they're much better off trying to make the conservative play, drive free cash flow. I think it's a test for Antonio, no doubt, but I think he's up for the test and I think it'll be a good move. Not a radical move, not a huge transformation but a very strong stepping stone in improving their margin profile and the quality of their earnings and ultimately their valuation. Yeah, not to toot our own horn, but I will. I think you and I are probably the most experienced analysts in the market when it comes to HP and HPE. We've covered them for so long. I used to work there in the 80s and 90s. We've been following every step of the way. Since the cube and Silicon Angle has been covering, you've been covering them. So I think we know a lot about their DNA and their people. Like I said on our panel and our news coverage, they got a good culture. You may, people may throw water on their numbers. Maybe their growth is not where they need to be. Some even though they're still in the billions. Antonio's got the HP culture. Like at the compact HP culture, the best of both in my opinion. They're in Texas. They didn't move the headquarters from Palo Alto, which sad for me personally, but they still have the other HP up there in Palo Alto. So the HP split has kind of worked out. I don't think it was the best move personally. I wouldn't have done it, but I think it worked out for everybody. And I like HPE's prospects there. They don't get the fanfare they get, but I like them. I like the people there. They're solid. We cover them every year and we always get great content. And they're always delivering value for customers. They may not be the fastest moving company, but they run a good business. They know their business. You know, I'll give you Antonio props. You remember the gory days when Meg had to slog through. You used to say to me, Dave, she's taking one for the team for Silicon Valley, which is exactly what she had to do. And then people- Well, after the Leo debacle, debacle. Oh my God. We're a CEO in their history. But so after they split the company, there was a lot of dislocation, a lot of people griping, and ah, that's a mess. It's a shit show, blah, blah, blah, blah, blah. But when I went down to HPE, it was my first time at the New Houston headquarters last April, I gotta tell you, the culture and the enthusiasm was palpable. People were genuinely excited. When you look at their body language, they were proud to be HPEers, if that's even a term. They were excited to hear Antonio speak at the all hands meeting. It was fun. It was cool. It was energetic. I loved it. I was really impressed. It wasn't stodgy, what you'd expect out of a legacy tech company. It was people having fun, people dressed cool, great music, bands, strong messaging, substance, and a lot of pride. So good for them. And I'd like, obviously, HPE, HPE, great American brand. And Juniper gets a good home, they have good chops there. Although MIST AI is the hot product, I'm going to do a special with Alan Cohen next week on theCUBE. He's coming in to do a deep dive on MIST AI and the AI ops around networking. It's going to be very interesting now. Alan Cohen, he basically worked at Airspace, which was sold to Cisco. And remember when I had my wireless days back in the early 2000s, Alan was in the same class of that group as I was. And so he and I both have intimate networking chops so those early 802 Wi-Fi days and then big WLAN implementations. He told me that a lot of the Airspace guys were moved over as part of that MIST. He's got a perspective. Also next week on Wednesday coming in, next week on theCUBE is the new, and CEO that Intel Spinout Articulate, a rune's coming on. He was the Intel executive that's on SuperCloud 4 with us. He now is the CEO of this AI Spinout that Pat Gelsinger and Intel did. He's going to be on theCUBE on Wednesday. We should have a great lineup with him and that's going to be kick ass. So a lot of theCUBE interviews coming up, Dave. So he was awesome. I want to share with people. So what he said, we were talking about AGI at SuperCloud 4, I think it was. And I was asking him about AGI and what's his thought on AGI. And he said, you know, do you remember this? He said, let's do a thought exercise for a minute. Imagine just for a second that AGI is already here. He said, wouldn't the AGI be smart enough to know that the humans would be scared? And wouldn't it fake us out? Like do things like hallucinate and lull us into a state of complacency before it took us over. And I was like, hmm, yeah, probably. It's a thought exercise. It was sort of a mind death. Well, speaking of AI, you know, let's go into some of the news here. There's a lot of stuff going on. Microsoft briefly stole the top spot this week as the most valuable company over Apple for a brief minute. Apple, as you know, is worth so much more. And Microsoft actually had a top of the spot. So, you know, as you pointed out on their momentum, Microsoft's well poised to continue the growth. Again, easy to work with, good channel. They're clouds weaker than Amazon, but their enterprise go-to-market is just so exceptional. They do such a great job. And you know, Amazon's got their hands full, they just got their hands full to compete with that. Although they got the better product, but given some of the trends slowing down on growth, you know, this might come down to who's got the better army, Dave, with customers. So, Microsoft, Apple, same realm as most valuable company. Amazon, AWS, Identity Crisis, we'll see. We'll cover that like a blanket. Again, I hope to get Adam Splewski and Jassy on the pod coming on this quarter. So we'll stay tuned for that. I was just to say, the remarkable thing about, to me, about Amazon and Apple, and it's similar in the sense, in the following sense, that they're both very hardware centric. Obviously, Amazon does software, but the software's made to run the hardware better. Apple, you know, similarly, it's hardware and software integration. And they've been able to win both companies, but Microsoft, it's software. It's software economics. They showed us in the 80s and 90s, the power of the, you know, marginal economics at volume. I've often joked, but not really joked. Even Bomber couldn't kill the company when they were largely irrelevant, going sideways for a decade. You know, as I said earlier, trying to put, you know, do the Windows phone, everything was Windows, Windows, Windows. And, but their software estate was so large and so profitable and so good enough that they were able to just continue to throw off tons and tons and tons of cash to the point where they were able to transform and become the most valuable company in the planet for a quick moment. That's, it's an impressive. In other news, we got Nvidia's latest GPUs bringing AI to millions of laptops and PCs, generative AI, ask AI breaks down, silos with customer raises 11 million. That's a good start up. Intel's targeting the automotive sector with AI generation enabled chips, systems on chip for next generation cars, the $18 million funding for multi-lingual enterprise content generation, contents.com. And then Luma, a developer of generating a mouse that creates 3D race, 43 million. Quora, remember Quora? They raised 75 million led by A16Z for its Po AI chatbot creator program. So they're spinning out something. So Quora is spinning out a new venture. Great data, Quora. And Amazon Cloud, they're cutting their fees on data transfer to zero. And just, a lot of things happening. PC shipments grow after two years of decline. I saw some other analysts saying it's a PC revolution. No, no, it's evolution. The revolution already happened. It's a PC revolution. Well, you know, 43, 42, 43% based on the survey data from ETR, 42, 43% of the employees continue to work at home. You know, you thought that was, most forecasts had that sort of reverting back to, you know, 33 to 36% that stayed up above that. Of course, there's an article in my favorite paper, my favorite dead tree recently on how the work from homers aren't getting the promotions, but maybe their side gigs are making up for it. It was a viral video that went out around the Cloudflare employee who filmed her debaucher. That went super viral. It was so pathetic. It was bad. It was sad. But, you know, Jen Z, she recorded the whole thing. Literally had the camera on the Zoom speaker. And you're right, she's a work at home and she just started and they were turfing her and they were claiming it was, you know, performance related. She just started the job and then hit like the holiday season. So she didn't make her number. They clearly were turfing her because they're cutting back, but they used them, excuse me, but she recorded the whole thing. Dave, you're right. People who are working at home are getting cut, okay? That's the unwritten kind of thing that's happening right out there, unspoken. It's a public secret. Everyone knows it. That's why the whole pushback to the office has got a lot of blowback because people are like realizing it. Yet some other guy go nuts on Amazon because Amazon's essentially firing people, but not firing them, just basically reassigning them and kind of forcing a, I wanna say quiet quitting, but like shifting jobs and okay, you got three months to find a job internally, good luck. And then no one's hiring remote. So this is gonna be a blowback to the work at home thing. We're gonna get, we should get Rebecca to work on a story on this because I think it's a real problem. I think work at home is fine for some people. You know how I feel about this? You know, there's a lot of virtual companies that are very, very successful. Some require in-office presence, some don't. I agree. I think there's many, many examples of effective work from home, but I think if you're out of sight, out of mind, you might miss out on some of the interactions. You certainly miss out on the chalk talk. People have been trying to force folks back. And I think actually, I think that works well. I know for instance, Amazon, I think is what three days a week you got to be in the office. And I think that works pretty well. You can bookend the week. I know Dell sort of changed its philosophy. If you're within, I don't know, I think it was maybe a hundred miles or 50 miles or whatever it is, you got to come into the office. So I don't know. I mean, if you're a coder, I think he can be very effective remotely. I think a lot of jobs, I think there's real benefit to being in the office. But I'm biased, John. I come in every day. Even during COVID, I came in every day. I just, I like the collaboration. Others I think are more effective. I love being in the office. I like to be on the road. I mean, I like to be out and about, but I definitely love being in the office. I mean, if I'm not in the office, I'm usually bunkering down on either some work, or hardcore work, or, you know, meeting people or relationship cut sales, or whatever is dead, or employment recruiting and meeting, be getting data for reports. But yeah, I got to get there. By the way, I meant to mention this in the funding. Cloud-based network detection company, ExtraHop, raised 100 million in growth capital. They're Cube alums. So good to see ExtraHop, 100 million in this market, Dave, growth capital, hats out to ExtraHop, okay? So, you know, I mean, that's, you know, Cube, you know, member Jesse Rothstein. Yeah, I was going to say. Yeah, yeah. He's been on four, five times on the Cube. One, two, three, four, four times, going back to 2018. AWS Reinvent, Reinforce. We had Mark Bowling recently on at Falcon. You had him on at CrowdStrike event. So ExtraHop doing good. Yeah, and he saw, and remember, were you with me? No, I guess I was with Stu at Doug Gorley's little meetup in San Diego. Were you there? No, I was at Cisco Live. And Jesse was there, you know, part of that crew. He's a cool dude. He's got the pony tail. He's got the gray hair and the pony tail. He's like a hipster. He's like a hipster. Elsewhere around the web, apparently there's big thing with Substack. So one of their most prominent authors, Casey Newton, who used to be with The Verge, and now has a thing called Platformer, is leaving Substack partly because of the, the site wouldn't cut Nazi other right wing nut jobs content. So there's another, that says what he's saying publicly, but he's leaving because he's, he said in his post, I've seen this movie before and I want to stick around to play with it. Saying that he's seeing other publications being promoted by the algorithm and he's afraid that if he stays there, they're going to use their algorithm to promote him. And he moved to Ghost. Ghost is what we use. It's an open source blogging software we use for theCUBE.net. We use WordPress, Matt Mullingwig's product for the Silicon angle, which by the way, Matt Mullingwig just turned founder of Automatic, which does work, it's just turned 40 years old. I said to him, happy birthday, young and young one. Yeah, I met him. He's still a young man. I met him when he was 20. Wow. 20 years we started WordPress. Great guy, what a great journey. Again, distributed company. So you start to see the trends, Dave, you know, you got, you got Substack, which is trying to turn into a platform versus a publication. So very interesting dynamic around journalism going on. You've got the Founders Fund, General partner Keith Rabos joined, rejoined Coastal Adventures. He slingshot back there. So a little Silicon Valley news there. And then just a lot of stuff. Oh, Maranthus' co-founder, Alex Friedland is returning to the company as the CEO. They've had a revolving door of CEOs. They were part of the Docker divestiture, remember? Docker sold them the Enterprise Docker. We did a couple of events with them. Swarm, right? Don't they have, aren't they swarm? Or no, dockers, they kept swarm. Docker kept swarm? No, they killed that. They killed it. Yeah, they killed it. So a lot of action going on. Again, cloud meets data, meets AI. Silicon Valley is under a lot of pressure. Again, in journalism we're seeing a lot more companies going under. Again, we said that last week, we saw the destruction of media layoffs. Just a lot of challenges in this market. If you're a startup and you're in between rounds, you gotta get customers and you can't run out of money. So, you know, this is a tough moment for entrepreneurs right now who haven't had product market fit. And, yeah, I've been advising a few of them. My advice is we can help, but the bottom line is you gotta get customers, you gotta find an exit ramp. Either sell the team. There's more companies available now than ever before, Dave, to start. I mean, you can start a company. This is the best time to start a company. And every town market, what comes out of it is the people who hit the streets, hit the lobby con, go to events, meet the other entrepreneurs and just reform another company. And I think that's the key here is that if you don't have a path to profitability, you should shut the thing down or merge it or get an exit. And there's this narrative that you can, you know, you can start a company a lot less now. And I get that, you know, same with the cloud, you don't have to buy Unix servers and, you know, EMC disk drives and Oracle licenses. So that was true. And I know Jason Calcanus is big on, you know, hey, you can do a company with four people now and get it to escape velocity. He's not saying, I'm overstating that, but... No, he's saying product market fit, not escape velocity, product market fit. I understand, but I guess what I'm saying is when you look at like all the money that's being raised, it was raised over the last 10 years, most of it went to promotion, you can go to market, right? And a lot of that was wasted because people would go try to get go to market fit before they even had product market fit. I guess my point is, you're still gonna need all those surrounding elements, the sales, the marketing, the partnerships, the channels, I don't think those are gonna go away. Now, you can maybe get to that point to your saying product market fit with less money. So that's a good thing for VCs, I guess, because your denominator is gonna be lower, the money you have to put in to get to a return. But I think at the end of the day, there's still these war chests that are gonna happen and these games are gonna be played where a lot of money gets thrown at these companies and the VCs push them to do unnatural things and they hope that one of them breaks out. I don't think that's gonna change. I don't either, I think what will change is the speed of product market fit. You can, just like data centers in the cloud, we're a big dynamic in getting a company up and running, you don't need to buy servers to get a company, put your credit card down, get your demo out there, get funding. That generation from 1998 roughly, I'm sorry, 2008 roughly to 2014, that window of startups, you saw the likes of box.net, you saw the likes of Dropbox and Airbnb. Those were SaaS companies that were started by young kids in their 20s, 30s with ideas and they just put their credit card, they didn't have to over provision. So when they go and get their first run of funding, it was fast, they don't have to do a PowerPoint slide. They can say, look at our demo, we got users. Wow, and the VC jumped all over that, that changed the game. That dynamic is happening now with AI, where AI is providing a similar acceleration to value for funding, meaning here's not only my product, I don't need as many people to work on it. You can do two to three people could hack together with AI and cloud and show a killer product. Then you get the funding, like say 300K or a million and you're done. You only have to hire four more people. And then escape velocity is a whole nother ball game because then you say, okay, we're really hitting the big time, we're gonna hit it at an inflection point. That's when you go for the big round, the VCs will all be like his 50 million, his 100 million, look at perplexity. They just raised a round and it could have been bigger. It was only, I mean, it was still a big round but the valuation was only under 600 million. And so that tells me that the founders just probably said, hey, you know, I don't wanna be over the top here. Now, because exit values can matter in this. So again, psychology is still the same. I'm an entrepreneur, I see an opportunity, I wanna go after it. How do I get, how fast can I capture the opportunity? Okay, that is a simple game and people overcomplicate entrepreneurship. See it? Opportunity recognition is a skill, capturing it is a skill, that's the triple threat if you can raise money and tell that story and do those two things, that's the triple threat entrepreneur. That's alpha in my opinion. That's the alpha entrepreneur. That is what I look for when I meet people and I say, wow, you got all the right stuff. See an opportunity, you know how to capture it. By the way, capturing is not easy. It's a zigzag, it's not a linear path. And then telling the stories about just getting champions, customers, investors. That's this holy grail. And look what OpenAI did, they did the same thing. And then people left OpenAI to start enthropping. And other companies. I think that's good analysis, John. I think you're right. You get to that product market fit and then the game becomes very similar, right? Even though you're using tools differently. I mean, if you're a huge company now, like all these big tech companies, they gotta have, you know, I know this for a fact, they got internal people saying, all right, how do we drive AI to the company so that we can have less employees? I mean, that's really what they're doing. They don't say that publicly, but some of them do actually, but that's what they're doing and why wouldn't you? And we got so much fat at these companies and you can drop it right to the bottom line. And so you're right. We should get Rebecca Knight, you know, to come on and talk about this because she's a real pro at this. So a couple of things I wanna share with you on Y Combinator and Sam Altman and OpenAI. So first of all, at the Y Combinator batch, the 2024 kickoff of their batch, they call them batches, Sam Altman suggested to YC founders, build with the mindset that chat GPT-5 and AGI will be achieved, quote, relatively soon. And most GP-4 limitations will get partially slash entirely fixed in GPT-5, according to one of the founders there. So pay attention, okay? GPT-5 should be a big fix, all that stuff. Now that being said, let that sit for a minute. We'll come back to my point here. At the same time, it's being reported today in Bloomberg that the COO of OpenAI, Brad Lightcap, is reporting that the chat GPT enterprise has reportedly gained traction with the enterprise with 260 businesses signing up for the service within four months of the launch, okay? That's huge. Remember they launched the enterprise version? So now you have enterprise version, they launched the store on Wednesday, okay? So custom versions of the chat box coming out and it's being reported on Twitter and others that the larger models, and Fitzgerald reported this on his blog, that there's people coming out doing analysis saying that good prompting of the bigger models is better than the specialized models. Yeah. The QBAI, they're probably not as good as the QBAI on certain prompts, but could be at better data. But that brings up an interesting question, Dave. If OpenAI can continue to move the needle on innovation, they can, it's a matter of pace. Can they keep the pace between them and the second place person the same gap? Can they keep it? I mean, when we did this, the breaking analysis, January 2023, and we sort of, I was spitballing and saying, hey, this is sort of controversial. Let's take a, you know, Sarbjit and I took a contrarian approach saying they won't be able to maintain their first mover advantage. You of course said, you thought they would. I remember after that, George Gilbert pinged me and he's like, Dave, I think you're wrong. He's like, I agree with John. They're gonna be collecting the most data, the best data, and they're just gonna be better at this stuff than anybody else. And that so far seems to be proving true. I mean, their launch before they fired Sam Altman on that OpenAI launch day was, I thought amazing. And I think I'm excited about the store. A lot of people like poo pooing it, but I really am impressed. And I think that- They could, you know, our AI could fold into them. I mean, we don't know. We have to play it by ear. You know, we got to look at that again. Yeah, a lot going on, Dave, it's an exciting time. 2024 is ticking off. We're going to be at theCUBE. We're going to be all over the place. We're going to be doing a New York visit. I'm probably going to pop to New York to do some CUBE there. Just got the phone today with executives at SAS, Red Hat, Lenovo and IBM around doing something in the Raleigh, North Carolina area. We're going to experiment with taking the CUBE on the road. You'll see us out there. We've got Mobile World Congress happening on the 26th in Barcelona. SuperCloud 6 is coming up on the 13th of February. So market calendars. If you're interested in speaking and doing a panel, let us know. We've got the super panels coming out as well. The focus again is on, it's really data, data and AI. So SuperCloud 2 was kind of data focused. This is going to be more data and AI focused. So if you're interested, let us know. We've got NVIDIA conference coming up in March, the CNCF, KubeCon in Paris, and then just a lot of going on in the Q1. So pay attention to the CUBE. We've got tons of analysis. You're going to see a lot more news coming out of our studios in Palo Alto in Massachusetts. Where Dave's at, that's our kind of big super pops points of presence with the CUBE. And again, our on location, you see a lot more of a CUBE live everywhere at events, as we always do. And again, silkenangle.com, we had a great uptick in traffic this month, Dave. So the audience is growing. And then on the LinkedIn network effect is good. 2024 is going to be the year community. I think we're going to see a lot of community, Dave. We've had great community engagement this past year. The CUBE collective is a vote of confidence that our audience is going to lean in and contribute with us. Shout out to the folks participating in the CUBE collective. You'll see more experts and executives, right? And executives that are retired, they're like analysts now, Dave, because Bob Pichiana wants to meet in Boston in February, get him on the CUBE collective. He's a genius. Just a lot of great stuff happening. So give us feedback on the CUBE pod. Let us know what you think. Guess you'd like to see on the CUBE, what you just want to see us cover. A lot of events coming up again. Another big year for the CUBE capability. You'll see some new hosts as well. And we'll see you next time. Dave, thanks for- Back to you on a good Friday and enjoy the weekend everyone.