 So, extracting the signal from the noise, it's theCUBE, covering VMworld 2015. Brought to you by VMworld and its ecosystem sponsors. Now your host, Stu Miniman and Brian Gracely. Hi, and welcome back to SiliconANGLE TVs, live continuous coverage from VMworld 2015. We've got two sets. We're here in the lobby of Moscone North, gorgeous San Francisco day. Last year at the show, hyperconvergence was on the lips of everyone. I really said in some of the research we've done at Wikibon, what we call the server sand market, that when VMworld launched VSAN, it was the biggest thing in the hyperconverged market because it got everyone talking about this space, really trying to understand this new way of doing storage and infrastructure in general. So we're going to dig in this segment. I've got the CEO of Springpath, Terry Cunningham. Terry, thank you for joining us. Thanks, Stu. All right, so Terry, give us a little bit of background on yourself and what brought you to Springpath. Okay. Yeah, so I've been in the storage business a long time. I've been, I ran Veritas for a little while. I ran a cloud services division at Seagate for six years. So I've been in and around the storage industry. And back in the good old days, you remember the client server days? We used to joke about the fact that client server was perfect except for one small problem. You couldn't share storage and that all that disk that went in every one of those servers was either underutilized or overutilized and the fundamental problem. And in fact, when I think about network storage in general, the reason why network storage took off is because that one simple flaw in client server was there's no way to share or create a pool of disk. And so now, of course, fast forward 15 or so years and little things like virtualization has caught on and did a great job for compute. But the storage, the same problem for storage hadn't been solved. And so your prediction of hyperconvergence is exactly right that the idea of being able to virtualize that storage and making it shareable allows the disk to go back into the server. And I was at Seagate for a long time and we like things that consume disk and so the opportunity to put disk back in the server and keep it close to the compute makes all the sense in the world. And one of the things that we saw years ago is that at Seagate, we started to notice that drives were being purchased by the scale out storage guys or scale out applications, Facebook, Google and so on. That's where the drives were going. They're putting them back in the server. So it's the right time. It's the right thing to be happening. And you've seen a ton of these companies pop up that are starting to address that opportunity to put the disk back in the server. Yeah, and it took people a little bit of time to understand this because we talk about capacities and just drives really increased. The way it can network environment really increased. But a core principle of this is it's the software. It's really changing the way that software is done. The storage layer. So maybe can you tell, why was Springpath founded? I mean, it's a software company. And you were in Veritas. I mean, we're starting to see a rise of storage software companies. So maybe we can talk a little bit about that. Yeah, there's some similarities, too, is that one of the things that the early, the first movers in the hyper-convergence space are around the appliance ideas. Like let's wrap some software, some hardware, wrap it up, sell a box. And that makes sense in the beginning of any market. But the long-term success of the market is actually it has to be software. And so without a software layer that sits on top of any server you want, whether you're a Cisco shop or a Dell shop or HP, et cetera, you want to be able to have the servers of your choice with the software-defined layer on top. And that's what Springpath is. In Springpath, the founders are XVMware and they saw an opportunity to build a software-only layer that would sit on top of the hardware, but you get to choose the hardware and then scale accordingly. And what's also cool about things that are happening now is companies like Springpath, not only is it about horizontal scaling and scale-out architecture, but it's also the fact you can mix and match and plug. I mean, one of the marketing guys at the office said it's like Lego, right? We've got all these parts and you can assemble it using the software-defined layer of Springpath into whatever it is you want. You can aggregate, you can disaggregate, you can assemble here, disassemble, and it's much more agile, right? That's really what is driving this whole market show. Yes, so Terry, I always look at it. There's, on the one end, you know, there's flexibility. On the other hand, there's simplicity. You know, when some of the early converged infrastructure solutions came out, you get, you know, a single model. I know VBlock is the example out there. You can have it any color you want as long as it's black, right? But that helps solve some of the problems in the enterprise because, you know, I said one of the biggest sins we have is I create this temple for my application and I have a million geek knobs on it and I constantly adjust it and therefore it's not replicatable, it's not easy to troubleshoot and I waste, you know, 70, 80 more percent of my budget on keeping the lights on. So how do you balance that, you know, understanding of the interoperability and having good stack with the flexibility? Right, and you hit the nail in the head. What's happening, especially in the storage industry, is these things have become so complicated, right? Network attached storage is big and complex. Now, over the years, more knobs, more levers, more buttons to push, it makes sense as an evolutionary step each year, you know, and we did the same thing in previous companies as that. So the opportunity now is to simplify it and sort of dumb it down, if you will, but make it so that the building blocks are more standard and fewer, right? You don't need so many options. The software is where the levers and knobs and can be, can exist and not in the hardware. And so then the building blocks, you can repurpose, these are servers with disk in them, right? So, you know, like nowadays, lines of business, I ran a cloud services operation for six years and guys would come in with an app, ready to roll on a Friday afternoon, we're going to put in production on Monday, but they're not sure over the weekend they want to see how it works and then they put it in production then it doesn't quite work, you know, for internal consumption, they pull it out of production, go back to test. This is the world we live in, you know, dev ops. It's the world we live in in terms of fast moving, agile, and bring it up, kill it, bring, well, your infrastructure, but it's the question every storage guy asks is, well, how big is it going to be? I don't know, well, how many this, how many that? I don't know, I mean, it's a marketing tool that we're going to use at a trade show. We don't know how many people are going to run, they don't know anything. The lines of business can't answer these questions in this unpredictable world we live in, but IT is still built on the fundamental concept of you must know, otherwise I can't buy the right box. Well, imagine a world that says you don't need to know any of this stuff. In fact, start with three or four nodes called servers, put some disk in them, and run them. And then when you find out it needs to be bigger, add more. And then when that app dies off and you don't need it, shrink it, put those servers somewhere else, put it in a different cluster, just move it around as much as you want. That flexibility, that agility is what, I mean, IT guys dream about having that much flexibility. That's the challenge they face with storage. Other areas, like virtualized computing, has been enjoying those aspects for years. Storage hasn't. So that's why now, finally, the opportunity is here to reinvent storage. So, obviously, converged, hyper-converged, huge momentum in the market. A lot of people want to use software defined as the buzzword sometimes. Yeah, we call it SDX. I mean, so I have to find anything. What's really driving this? Is it, people want to do new things with applications and they need the infrastructure to be less complicated? Is the ops team going, I don't have a choice, I have to keep up, you use that example? What's ultimately, when you talk to your customers, what's driving them saying, you know, I need the spring path platform? What is that key thing? Right, so, interestingly, for me, what I was most surprised about was it's not money. So, at the end of the day, we're talking about converging budgets as well as converging technology. So, the server guy has been buying servers independent of the storage guy. Well, now, those storage and server guys get together and say, well, look, if we got $4 million to spend, can I do it more effectively if I do this hyper-converged thing with this budget that I have to spend? And the answer is yes, because you're getting compute with the storage and so now you got more flexibility. But what's really driving it, because normally, IT vendors want to sell, it'll save you a bunch of money. Well, the truth is, this won't save you a bunch of money if you compare your current compute with your current storage and so on. It saves some, like from a TCO standpoint, there is a savings, but it's 10 and 20%. It's not disruptive, it's not 10X. But what's the real driver? Is that agility? Is that flexibility to say, well, I can change my mind tomorrow. I don't have to commit anything. I don't have to decide. Like, I ran a cloud services group at Seagate. The storage guy would come to my desk once every quarter with their storage requirements and say, okay, we need to buy all this stuff. I got NetApp at EMC, I got all the storage requirements. And I said, okay, how do you know? How do you know that's right? He goes, well, we've done our customer onboarding estimates, we've got storage numbers, we've got this. This is how much we need. Six years times four quarters, that'd be 24 meetings exactly. Never right. Never was he right. Not, he was either over or under on every single estimate. So that's why I ended up at Springpath because I used to laugh at this guy saying, how do you feel good about yourself? I mean, you kind of suck at your job. And he goes, oh, it's really complicated. You don't understand. Like, you're right, I don't understand. I'm sure it is a complicated problem to solve for with all their fancy spreadsheets and estimates and predictions. And then when I found Springpath, I was like, all right, this is cool because I don't have to decide. In this world, you do not have to predict anything in this new hyper-converged world. You can just let it grow. Which is what Facebook and Google have been doing for years and in taking advantage of that scale-out architecture. So now it's simple scale-out storage for the rest of us. All right, so Terry, can you bring us through? Where are you with customer deployments and what are those conversations you're having with customers, what brings them to Springpath? Right, so a couple of things about our business model. My background is software, obviously. Also, my first company out of college was a company called Crystal Decisions. It was a, we built a product called Crystal Reports. And part of the business model was OEMs. And where we created market share dominance because we bundled with other people's products. And so coming to Springpath, I saw the same opportunities go work with all the server vendors and deliver software through their channels. And so that's starting to go now and it's actually really a great way to get to a customer. We have dozens of actual end users using technology today. And we are now looking for what you can expect to see from us is announcements in the area of OEM deals and strategic alliances and all this stuff. Because at the end of the day, this is a ubiquity play, right? This is an opportunity to get millions of people consuming this technology, not 100 or 200. And the traditional model of businesses that are early or first movers, is they go and get one customer at a time and prove it and make sure it's working. And that's already happened in hyperconvergence. The Nutanixes of the world have done a great job explaining the benefits of hyperconvergence. So that's happened. Now the question is, who wins? And the alternative business model I like to think of it is the long-term view of ubiquity and lots of users. So Terry, what do you see as the inhibitors to the growth there? What solutions doesn't hyperconvergence fit to that maybe you need to grow to? Right, so any new hot category ends up solving all problems to mankind, right? And I spend most of my time saying no. That's not the right place for hyperconvergence. So we look at the market as the typical pyramid. Way up high is all flash, pure type stuff. It's all about performance. It's all about those very special use cases and workloads that need that kind of performance. And then at the bottom of that same pyramid is the ultra-cheap NAS. So it's just how cheap can disk be? How cheap can the storage be? And in the middle is where hyperconvergence plays. And that's the middle of the, if you got pure at the top and cheap NAS at the bottom. Seagate WD is going to own the cheap NAS. When a storage device, 80% of the bomb is disk, that's going to be the drive suppliers. And up here, there's going to be lots of players going after the all flash. In the middle is a huge market, $30, $40, $50 billion. It all depends how you spend the numbers that say, all right, look, I need compute. I need some storage. I need it all in one place. And I need it to be simple and scalable. And I don't want to have to think about it. I don't want to have to be on it all the time, hands on. I just want to let it run. And what's cool about SpringPath and others like this is when you add a server to their cluster, just, oh, do you want that? Yeah, yeah, we'll take it. And it just consumes all the resources. All right, so Terry, unfortunately we're running out of time. People want to find more information about SpringPath. Is it just SpringPath.com? It's SpringPathInc.com, and we're down to booth 21, 29, down in the middle. Well, thank you so much. Definitely a hot topic. A lot's going on in this space. And excited to see where the company goes. So we'll be right back with more coverage here from VMworld 2015. Thanks for watching.