 Live from the FIIA Barcelona Grand Villa Compensator in Barcelona, Spain, it's The Cube at HP Discover Barcelona 2014 brought to you by headline sponsor HP here are your hosts John Furrier and Dave Vellante. Live in Barcelona, Spain for The Cube at HP Barcelona 2014 HP Discover I'm John Furrier with Dave Vellante for day two of wall-to-wall three days of live coverage. This is The Cube, our flagship program we go out to the events, they strike a similar noise. Day one was a big hit Meg Whitman did their keynote and kind of a mirror image really of the USA show in North America which happens in Las Vegas where The Cube was there on the ground. A lot of the same tone Dave you know with day one was great last night we had a chance to go out and meet some of the executives went to all the VIP parties and got a chance to see what was going on on the ground and clearly there's two major pockets of activity in the evening events which was the cloud party and the storage party. That's when we get all the information, all the scoops and share that with you. A lot of stuff happening, a lot of good changes, a lot of people trying to figure out internally what's going on at HP and certainly we are as well and sharing that here on The Cube and today we have a long line of great guests and we're going to ask them all the questions we need to know and Dave I want to get your take obviously HP is in the turnaround phase five-year plan. We speculated yesterday that as Meg Whitman announced they're splitting off the PC and printer division consumer part into two Fortune 50 companies and not a lot of negative backlash on that. I'm not seeing that at all and I think the general sentiment was hey we're two separate companies anyway I was talking to some senior executives in the hallway here and the consensus is that there really is two companies so why not just create two companies. And that's okay so I think there's not a lot of backlash so that's a real big surprise to me. I thought that would be a little bit more controversy apparently there isn't. People kind of relieved like okay let's just get the show on the road here with our performance and let's retool up and bring the products to market. The other thing that's happening is the NFV, the network function virtualization really is a big growing part of their business and a lot of technical kind of sharp elbows if you will whether it's open daylight you see that conversation we had yesterday to hybrid public cloud is another conversation and just in general you're seeing the real tech stuff happening here at HP a lot of innovations deep you know what's your take for what you saw. So we saw well obviously Meg Whitman's keynote we talked about that yesterday we're in year three of a five-year HP shifting from a tenor nation to a positive cash position in a position to do other tuck-in like acquisitions such as eucalyptus and giving back to the shareholders in the form of dividends and stock buybacks so we sort of heard that high-level message from Meg that things are stabilized and they've invested more in R&D increasing R&D spending 10 percent last year coming up with a bunch of new products and innovations and so forth so we heard that from Meg there was also several product announcements of note like to obviously review those anytime we're at an event like this one of the big ones with Superdome Antonio Neary basically announced the new Superdome they cut away and actually went to the booth and showed a Superdome with a customer there I think the customer was Cerner and this is important why because not that Superdome's going to change the world but HP's business critical systems line of businesses under fire it shrank 29% last quarter of course that's because a lot of customers knew this new product was coming so they were sitting on their hands in the old product you remember John when HP bought digital and tandem they took some of the high-end systems from those two companies and created this business critical systems and eventually sort of amalgamated them under something called the Itanium line which was a specialized Intel processor that they were making for HP and the reason why that's important is because the world is moving to x86 Xeon so the significance of the announcement yesterday for Superdome is they're announcing x86 on Superdome we're going to talk to Antonio Neary about that will it stabilize the base will it allow that base to continue because the the longer you can keep that base alive the better it is it's a managed decline business so that was a one big announcement the other one was in storage 3 par announced this integrated block and file and object store with a single user interface they also announced that a capability to to migrate data from competitor systems particularly going after VMAX I think they gave an example of a customer David Scott interviewed that customer yesterday that was a VMAX customer they you know migrated you always see these things in the tech industry right vendor a stealing from vendor B and vice versa and the the the stealing vendor makes it seem like the whole world is going that way and then vendor B can show some other examples so it's interesting but I will say this since its inception or at least rise to prominence 3 par has been a major competitor of the high-end emc VMAX line and the interesting thing about that discussion that David Scott had we'll have David Scott on later with the customer is the customer could have chosen an alternative from emc like extreme IO so that's you know a win of one example looking for for more as proof points the other two big things the register has a story today which we sort of knew this was coming but the chef reseller deal with HP which was not a formal announcement by HP I think actually chef is making the announcement chef of course in the competitor puppet automate infrastructure provisioning so that's a big deal it provides cloud like capability for on premises infrastructure doesn't have to be in the public cloud so that's a big deal for HP to be able to deliver that kind of cloud like experience for its customer and it's obviously a big deal for chef to have a partner like HP and the other one was was a haven on demand so you're seeing the Vertica guys and the autonomy people take an idle on-demand model which should John young Johns is the guy that basically helped develop that model bringing that to Haven so a haven on demand so Vertica and autonomy on demand HP moving to a SAS model so you're seeing bits of cloud here and I said yesterday John you get think of cloud in three layers infrastructure as a service platform as a service and software as a service and those are the three areas that we should be tracking and thinking about an observers should be watching HP's progress in that area HP's an infrastructure vendor so clearly they should do very well in IAAS questions remain as to how they'll do and pass and SAS the market I think in general has questions about pass you and I have talked about that is it I is an infrastructure as a service plus or SAS minus is there really a need for that middle pass layer well Oracle would say yes for example Oracle database and middleware and tools certainly pivotal companies like pivotal would say yes but companies like Amazon and Salesforce might say no they should be integrated in the top and bottom layer so we'll see how that shakes out but it's a little bit unclear to me John how HP plays in that past layer and clearly they're trying to play in the SAS layer but they don't give us much guidance on how big that business is nor do they give us much guidance on how big the cloud business is because I think it's still emerging so those are things that we should be watching yeah and we're going to talk to the cloud group and I think Dave you pretty good point and we were talking about this last night at the storage party the cloud group is young and I think a big mission ahead of them and they're gearing up for battle if you will a lot of work to be done there certainly a lot of objectives to take care of in in-house they got to be a customer internally for other groups but also serve the external market of the customers but the key to success of the cloud is building a community and I think what I'm seeing at HP is that their digital marketing efforts don't really take into account a lot of the social I think that's an improvement area I would make a note of and say you know HP's got to do a better job of really understanding that the community is a very big part of their ecosystem growth strategy what I mean by that is that HP like a lot older companies have known practices for digital marketing and website drive sales drive people to their pages and then you know get them in a chokehold and sell them something that is change right people are talking to their peers before they even talk to to the to the vendors these days and so savvy marketers are going out and using the new social channels as a way to to galvanize a work we were debating yesterday on crowd chat but to really get the crowd activated and use the crowdsourcing techniques to build the community I think what I'm seeing the cloud group and and certainly the SDN group is you know this it's kind of just on their radar screen they really have embedded operationalized the social piece into their operations so to me that's a really tough lift heavy lift for the cloud group which is they got to do all this work in a very short time get a market position and and when developers over to their platform without developers they have no juice in my opinion so you got a you got to have a social community you have to do what storage group has done you know the three-part storage team has essentially rebooted HP storage it's a shining example of success of HP and I got to say that they have a great community who could just their attendance of their parties and that the people feel comfortable and that's done over sustained period of time so you know hats off to David Scott Craig Nunes and the entire storage team because they built a really really great community around their efforts and I think that is one example of an HP that I think everyone should emulate but I think that's a great point because if you look at HP storage business in general it's it's in decline because the old stuff is declining very fast this is years and years and years of no R&D investment that's why HP had to go out and buy three par but you're seeing that like you say shiny new toy all the action is around three par and and the new sort of R&D stuff that's come out on the backup side the other area I wanted to mention quickly John is networking clearly there's a lot of momentum in that business people are going to spring in their step and the other area that was kind of interesting that we found out yesterday is that sort of data center care area helping customers get to a cloud-like infrastructure whether it's on-premise or hybrid seems to be getting a lot of traction within HP again the services business in general is down but there's some real bright spots and that's what Meg Whitman talked about those are the things that they HP has to shine a light on to regain market momentum three days of wall-to-wall coverage here at HP discover in Europe the European show and the European shows got a different flavor to it it's a different vibe obviously it's in Europe that do things a little differently more elegant I would say and in the layout Europeans a little bit different I would say I would notice that the Europeans also don't tweet a lot of tapes so like you know observation in the social media lounge talking to Tim Crawford and others there is you have the signs that says join the conversation with the conversation well it's on crowd chat net slash HP discover we're documenting that conversation join the conversation if you don't want to join you just watch it and watch us comment we don't have a transcript for you after but it's a really different show European also market also has a big affinity towards the telcos and you've seen a lot of NFV discussion here so we're going to bring it all to you what it means all the analysis all that data will share that with you here inside the queue we'll be right back after the short break with our guest next guest coming up here inside the queue live in Barcelona I'm John Fourier with Dave