 Live from Madrid, Spain, it's theCUBE. Covering HPE Discover Madrid 2017, brought to you by Hewlett Packard Enterprise. We're back in Madrid, everybody. This is theCUBE, the leader in live tech coverage. My name is Dave Vellante and I'm here with my colleague Peter Burris, co-host for the week, covering HPE Discover Madrid 2017. McLeod Glass is here. He's the vice president of product management for software-defined in the cloud group that he would pack at Enterprise and he's joined by Ronald Bearway, who is a managing partner with the sourcing company. Yeah, good to see you. Thank you. Thanks so much for coming on theCUBE. All right, thanks. So I'm excited about this. We've been hearing about Azure Stack for a while now and we've been talking about bringing the cloud model to your business for a while now and it looks like it's here. Yeah, no, absolutely, yeah, we're excited. I think we've worked hard with Microsoft to pull together what we believe is a very compelling solution with Azure Stack. I think this gentleman here can attest to the value behind it, but we've basically pulled together a lot of capability and flexibility in the overall solution that allows our customers to be able to pull together a solution that lets you take Azure-centric type services and run them on-premise for maybe conditions where you have data sovereignty issues or you maybe have edge applications where you can't actually have the connectivity you need to the Azure cloud and be able to start building on those capabilities, so. Well, Ronald, I wonder if you could comment. It's interesting to juxtapose sort of, to take the AWS strategy, which is, hey, get the cloud here, bring it all over. Microsoft obviously has an on-prem estate already, recognizes the customer need for that and says, hey, we can bring substantially that cloud model on-prem. Why does that appeal to you and does it work? Well, actually we do think that for the first time now it's possible to get control of cloud. To us, it's the connection between the devices and the Azure cloud and Azure Stack to us is between in. And as a company, we do have control for Azure Stack, but we can also give control to our clients for Azure Stack. So a user can decide to put things in the cloud and the company can decide whether they go into the cloud or whether they stay into Azure Stack. So they have control of their data and they can keep control of their data. And on top of that, it's our hardware. So the data they decide to store on Azure Stack is on our hardware and it's not a US hardware company. It's a Dutch hardware company. So I should have asked you up front to talk about the sourcing company, what you guys do, what your role is. Well, we are a cloud service provider. We do deliver cloud service to end users. We have a strong vertical focus. We do lawyer companies. We do housing companies and we do care companies. And especially for the lawyer companies we have built our own proposition where we connected several applications together and called Magistra. And that's do we bring to companies, to users? So the model is when you bring a solution on-prem, you build it like it's a cloud, is that right? Absolutely, yeah, it's all paper use. Okay, describe that a little bit more detail. I mean, what are my limitations of that paper? What's different between the on-prem version and the not on-prem? I can talk something about that. We have an Azure pack, which is the former system cloud environment. We call it our legacy environment. That's in a paper month model. So we do report to Microsoft what licenses are used and we do that monthly. Azure and Azure Stack are different. Azure is in a paper second model and Azure Stack is in a paper minute model. So actually for the first time, we're also able to create more flexibility. If in our legacy environment, a machine is on for two minutes, we have to pay for it for a month. If we do the same in our Azure Stack environment, well, we have to pay for the minutes. And for example, at lawyer offices, you'll have people supporting the lawyers and while they work for maybe 16, 20 hours a week, and you have the lawyers themselves, but they bill a lot more. They try to see if they can put 100 hours in a week and we're now able to create more agility in that and to make it more flexible. And so you were early Azure Stack customer? Yeah, we're three years in the Microsoft program now and we decided in March on the airlift of Azure Stack to buy the Azure Stack. So how's it working? Maybe take us through the journey. I mean a lot of times the first Microsoft product doesn't, isn't quite right. The second one starts to get really good and then after it's mature, you know. Almost, yeah. Well, our company was founded almost 11 years ago and we always have to look into ways to simplify our environment. We're founded on the state of Manairo, the business university, and we're not able to put any service over there. So we decided to put them in the data center and that's what we now called our legacy cloud environment. But in that road, we were always searching to simplify our environment. And Azure Pack was a good step, but not good enough. And Azure Stack actually does simplify that. It's a box and nothing more than that. And if the box runs, then the box runs. And we decided when to update it and we decided what to put on it and what that helps us. And next to the simplification of our environment, we also wanted to be able to generate a more standardization. And with Azure Stack, you are forced to use DevOps. The best way to use Azure Stack is to create templates and with the creation of templates, you have a DevOps environment. So that's also the biggest thing. So Claude, okay, what are you guys bringing to the table? What is Microsoft bringing to the table? Yeah, so I mean, obviously we've got a long standing relationship, partnership with Microsoft. We worked hand in hand with them on the solution. I mean, the first of all, it's based on ProLiant hardware, right? Which we all know and love. And, but then we've also worked very hard to engineer this solution. One of the things that separates our configuration, our solution from some of the others is the expandability. Like we allow you to scale it by node. So basically you can add individual nodes. We have some capabilities around adding different memory and different networking configurations that we support around that. And then also wrapping some of our flexible capacity capabilities around that to allow a pay-as-you-go type of model, consumption model, very much in line with what he was talking about earlier, that really kind of builds together a complete solution. And the other thing that we've done is we've co-invested with Microsoft in what we call our Azure Stack Innovation Centers. So there's one in Bellevue and one here in, switch one, the engineer that allows customers to actually go and test and leverage the great capabilities of our solution in a controlled environment. They can actually go there and work with experts to kind of engineer their solution or they can actually connect remotely to those. So, and we've also spent a lot of time training a lot of individuals. I think somewhere in the neighborhood of about 6,000 individuals in the company from a service and support standpoint to support the solution. So we were very excited about it. So as I understand it, you're a cloud service provider, you're a service provider. So how does this granularity provided by Azure Stack translate into a superior experience for your customers? Well, it simplified our platform. And while simplifying our platform, we have time up and in that time we can do other things. Well, if you look to Magistra, Magistra is a complete workspace for lawyers. And while we are forced to keep it standard, do it in a dev-op and keeping the template up to date. So while doing that, we don't have to bother about the things below the template because that's taken care of by HP and by Microsoft. So that keeps, that gives us time to think of other things that helps lawyers. And we like to think in things what helps them enable more productivity. For example, for a lawyer, it is absolutely a thing to keep time-writing right. And we just announced that we will extract that time-writing with artificial intelligence and keeping up what they do during the day. And at the end of the day sells them, okay, you worked 48 hours for 48 minutes on that document. We do think that's from that client and swipe to the right and it's accepted and swipe to the left and change it. And that things we like to do to enable more productivity for our end users. So the advantages are at least that you can now put more time and energy into creating services. How do you go to market? Do you go to market? Is it all self-service? Do you have a direct sales organization that's going out and meeting with law firms? How do you sell your service? The things we do most is go to eFence and a sponsor eFence and tell people that the magistrate is there. And then the second is one-on-one meetings. That's person-to-person, so you have people that actually sell. Yeah, yeah, yeah. But we do think that we did put a lot of time in finding out what they need and what keeps them awake at night. And we did try to translate that into a software and into a product, Magistra, what helped them not being awake at night. But for many years, one of the challenges of doing this approach for a partner like yourself was, you want to present the solution to the customer in a form that they understand, but the underlying provisioning of the assets and ultimately the costs end up being presented in infrastructure and technology terms, which means the salesperson's having a hard time, the customer's having a hard time. Does this kind of common, simplified approach allow the customer, the salesperson, and the business overall to use a common template to articulate and make commitments about what's going to be delivered, have conversations about what's needed. All of those things is just simplifying not only the technology, but the business and how the customer perceives value. Well, look at it in this way. The implementation time is quite low because when we go to an office and ask them what software they want, well, we need at least two, maybe three months to implement that. But why we have think about the solution in Mahistra, well, we just run the script. It runs for seven hours, and then it's there. The environment is there. 21 servers are enrolled. The SharePoint, the document management system is enrolled. The things are put in place, so the functionality is there. And maybe it's not entering all the functionality. Maybe it's entering 60, 70, maybe 80%, but it's fast, and that's what they like. What is keeping your clients up at night? To a lawyer, we do think three things. They want to have a good office functionality. To us, that's Office 365. They want to have a good document management system, being sure that they're not having two colleagues working straight to each other on the same case, and time-riding, and those three things, what are the first we are able to enable in Mahistra? Michael, so what's your expectation for this business? I mean, you guys have been, the market's been waiting for it for a long time, and it looks like it's here and ready to roll. Yeah, we're very excited. I mean, the interest has been very high, especially with customers, especially in the service provider space, and customers that are looking to deploy Edge applications. That's been really where we've seen the most uptake, kind of at the beginning here. And also, some of the other kind of common use cases are things like areas where compliance or data sovereignty is a concern, and we're very excited about it. It's been great so far, so we're looking forward to it this year. Do you think other large cloud service providers, namely AWS, are going to have to respond with something like Azure Stack? We think they will. I don't see how they could just let that big of a market go. But it's capitulating to the dogma of everything has to be in the cloud. Here's what we know. You would presumably welcome that. AWS can just say, hey, we want to partner with... Hey, we believe the world is hybrid, right? The world is hybrid. The world is hybrid. It's going to be hybrid. This is not a belief. And that, yeah. It is, it is today, and there's not a lot of changes expected in the laws of physics that are going to change in the next couple of years to make it easier for AWS. I think it's going to be the same basic physics. So from that perspective, it suggests pretty strongly that while there's a lot of use cases, there's a lot of money made just on that central piece and then introducing new technologies like serverless and functional to approximate the ability to serve. But you can't do an office environment easily in a serverless computing world. It's just not, it's not how it's going to work. So at the end of the day, AWS is going to be able to do a great business doing what it does, because there's a lot of open space. But if they want to claim that it's everything, if they want to get everything, they're not going to do it by just claiming that this is all going to go away. I mean, the TAM of this opportunity for HPE and Microsoft is quite large, right? I would think. It's enormous. Anyway, I'd be surprised if you don't see some people there. They have to respond. Anyway, guys, last word on HPE Discover. What's the bumper sticker pulling out of the show? Well, they have it, it's stable. They have it all on the right, no. On the right path, okay. On the right path. We're just continuing to make hybrid IT simple. And you've seen more of it here at the show. There's been a lot of exciting announcements and a lot of the technologies that we're bringing together. Azure Stack's just one of many that we've got in our portfolio that we're extremely excited about. Gents, thanks so much for coming on theCUBE. It was a pleasure to have you. All right, thanks. You're welcome. All right, keep it right there, everybody. Peter and I will be back after this.