 From around the globe, it's theCUBE. Covering HPE Discover Virtual Experience. Brought to you by HPE. Hello everyone, welcome to theCUBE's coverage. We're covering HPE Discover Virtual Experience 2020. I'm John Furrier, host of theCUBE. Great online experience, check it out. A lot of content, go poke around. A lot of CUBE interviews, a lot of content. From HPE, it's their virtual conference, HPE Discover Virtual Experience. We have CUBE alumni, Justin Hotard, who's now SVP and general manager of HPE Japan. Justin, great to see you virtually here for the virtual experience. How are you doing? Yeah, doing well, John. Great to see you again as well, and really, really glad to be here. You know, just reminiscing about our previous interview. A couple times, I know Jeff Frigg has interviewed, I've interviewed HPE Discover a couple years ago. Service provider, edge now is booming. Everyone's working at home. Everyone is seeing the global pandemic play out on a global stage and impacting our lives. But anyone in the IT business or technology business is seeing the massive gaps and the areas that need to be worked on. This is something that we're going to dig into because I think there's a really interesting conversation as someone who's in Japan, obviously big telco presence, but obviously part of the global stage. So I want to get into that. But before we do, tell us about your new role at HPE. What are you working on and what are you doing? Yeah, so, so John, currently I'm the president of HPE Japan. I'm responsible as the managing director of Japan and then also the managing director of our business in China as well. So, so keeping myself busy these days. Hey, Pac, you're on a lot of Zoom calls, conference calls. I can imagine the work you're doing. Pretty big disruptions. I want to get your thoughts as an industry participant and who's seen these ways before. What are some of the disruptions that you're seeing right now? Obviously they're well-documented in terms of, you know, more video VPNs under provisioned. Where are you seeing the big disruptions? Because those are the obvious low-hanging fruit, but it's certainly being an impact. The disruptions are creating opportunities, but major challenges right now. What's your thoughts? You know, I think, I think specific in John and what we're seeing in Japan, and particular is, you know, this is really a big inflection point in terms of how people work. And as you know, when you think about, you know, Japan, the culture and the economy has been very reliant on face-to-face and relationship-driven. It's also, there's been some traditional paper-based activity in that space as well. I mean, things like the Hanco Stamp, the way you sign documents to get, you know, not just for government approval, but even in private transactions. And so all of that is actually under, you know, a great wave of change. And so the obvious part is, we talk about virtualization and VDI, but it's really forcing people to rethink, you know, workflows. And it's not, you know, it's not just one thing generally, it's across many, many vertical markets. Education, manufacturing, obviously, obviously traditional enterprise can be touched on Zoom and other, you know, virtualization and VDI, but it's, I think it's coming to, you know, across all industries right now, based on this change. What's going on in Japan specifically? I know that some GDP numbers were coming in pre-COVID. Obviously when COVID hits, given some of the things you were just talking about, how they do business, the culture there must be impacted by the COVID-19. What are you seeing there? And how do they move forward? I mean, what are some of the changes that need to happen? What are you seeing? Yeah, I mean, I think, you know, as you touched on, I think the economy there was already under pressure. Then you have COVID hit, you know, Japan has a huge, has had a huge tourism business booming, you know, based on the growth in Asia and obviously particularly in China, all of that gets hit. And then obviously, you know, this traditional way of doing business has been challenged over the past few months, but I think it's actually creating quite a bit of opportunity. And some of it is similar to what you see in other parts of the world, but you know, we've seen many of the Japanese companies in medical devices and pharmaceuticals jump into innovation, you know, everything from masks to, you know, investment in, you know, in virology and other areas and testing and all the things that you're seeing. But I think beyond that, what we're also seeing is a lot, you know, a lot more discussion around innovation. One place that we're seeing it, you know, immediately is education. There's a huge initiative around connecting schools, primary schools, grade schools, and bringing IT technology into those schools as a way to accelerate the learning experience. And I think obviously in this new world, in the short term, help manage and, you know, ensure continuity of learning through social distancing and some of the challenges that everybody has, you know, in primary education. It's interesting, you know, those traditional things like you mentioned, just signatures, converting that to digital e-signatures, the stamping thing you mentioned, also the face-to-face with education, every vertical is going to be disrupted and an opportunity. So that's what you guys see. And obviously transformation is part of that. What are some of the patterns you see emerging so that your customers and prospects can capture it? What are some of the highlights? What's the big picture? Yeah, I think at a high level, we talk a lot about digital transformation and remote work. These, by the way, were discussed before COVID hit. So I think it's just an acceleration. The other one is really around Edge and IoT. You know, Japan obviously, great tradition of manufacturing. This actually is going to probably create new investment around manufacturing as Japan looks to build its manufacturing base. It's part of what we expect from the government. There's the stimulus programs that they're investing in. And I don't think the factory that'll be built tomorrow is going to start off with a traditional labor view. In fact, it's going to start very organized against robotics, AI, using IoT, using sensors to drive greater levels of automation. You know, a lot of that exists today, but I think this event just creates more opportunity for an acceleration, particularly in Greenfield. So we're having conversations with customers around all those areas right now. You know, one of the biggest observations I would say in my past 10 years, looking at the wave we've been on and looking at the massive wave coming in now is culture is always a part of the blocker of adoption. And you're kind of getting at some of this with the world you're in now where the culture has to shift pretty radically fast, whether it's the remote workforce, the remote workplace, workloads with the robotics and AI, everything work-related, workplace, workloads, workflows, workforce. I mean, all's changing, right? So this is a critical cultural thing. Your thoughts on this, because this has to move faster. What are you seeing as catalysts, any kind of technology enablement? What's the data tell you? Yeah, I think a couple of things we're seeing. I think one that we're seeing that's a pivot that we've obviously seen in the rest of the world for a number of years now is a shift to consumption. And we've seen that grow from customers, right? So they're looking at how do they accelerate this experience, how do they stand it up? How do they get it running? And consumption as a service models are becoming even more attractive. And so we're seeing new interest in that as a way to build things, to scale things, to create flexibility for future growth. And it's not just public cloud, it's public cloud and on-premise applications. It's integration into the virtualization stack, obviously with players like VMware and Nutanix and Red Hat, it's with OpenShift and containers. It's bringing all of that scale and flexibility and the other place, honestly, we're still seeing it as even in some of our traditional businesses. And we had a very large consumption model and a traditional transaction processing business. And for that customer, it was about creating the flexibility for growth. And so I think we're, I think we really are on the brink of a very different IT model in, certainly in Japan to enable a lot of this innovation and to provide more flexibility and more automation for the companies there and the businesses there. And I just want to just validate that by seeing the day that we're looking at and the interviews we've had and even our internal conversation with our editorial and Cuban research teams is it's happening now in the change. You can't ignore it. I mean, you could ignore it in the past. Oh, we're not ready for it. People, process technology, three pillars of transformation. Well, with COVID and we're just having this debate with our team this past month where it's not so much an acceleration into the future. The future got pulled to today. And people are now seeing it and saying, wow, I need to move because the consequences of not changing are obvious. It's not like a hypothetical. You starting to see specific use cases where the folks that underinvested or didn't make the right bets might be on the wrong side of history coming out of COVID. So to your point about growth is a really key point. This is what everyone's thinking about right now. So I got to ask you, what solutions do you guys have ready to help customers? Because right now solutions walk are really all that matters. It walks the fine line between making it and not making it. So having the right solutions is key. Yeah, and actually, I think one of the things you mentioned a great example of what you're talking about in transformation, right? In the airline industry, we're seeing that we're going to see this in Japan. This is a place where face-to-face service was considered a premium experience where you go to kiosks and automation. But now I think we're going to see, we're seeing already interest in complete end-to-end automation bag check, bag drop. And that stuff's been talked about for many years but now it's an acceleration of the experience. And the difference is going to be, no longer is it going to be a premium to talk to someone that's actually about speed. So that's a place where obviously that's a heavily impacted industry but as we see it come back in Japan and probably throughout Asia, I think we're going to see a very different model. And to your question on technologies, what I see us doing is really kind of three pieces. I think you've got solutions like VDI where it's literally out of the box and we built it with partners so that customers that are small, medium or large that want something standard that they can just take into play quickly. We have a platform for also things like SD-WAN through our group of business. And we're seeing significant growth there. Obviously, mobile access, wireless access, another place where we're seeing demand just building on our core business and really seeing healthy growth. I mentioned education as one vertical but we're seeing it in obviously in places like manufacturing. And I'm expecting us even more growth and enterprise there as many of our customers come back to the office and bring employees back in. And you can't have a traditional, just density of desks, right? You've really got to think about how do people have mobility and have flexibility to maintain distancing and even kind of be in and out of office, right? How do I maintain that work experience and the productivity whether I'm in the office for a couple of days and how? So I think those are places where we see the technology. Then we talk about consumption service so the flexibility to consume it as a service which in all of those solutions we have offers around and then ultimately even on top of that our HPEFS, our financial service is giving customers flexibility and payment options, which for many people that are cash strapped solves a real challenge, right? We talk a lot about the technology but fundamental business challenge of saying, gosh, I want to invest today. I need to get my workforce up and productive with VDI but so they can start generating revenue and cashflow but I don't have the cashflow to invest in that productivity. And so this becomes a place where we're just seeing a lot of traction with our customers or we can help them actually get that up and running, not create a huge cashflow outlay up front and they can get productive and get back on their feet and definitely in the mid market and the smaller businesses we're seeing a lot of activity there. That's a huge point because right now more than ever that need is there because of the financial hardship people are seeing and that's evident and well reported. Having that financial flexibility is primary. That's a key thing. So that's great. So good to hear that. The second thing I want to ask you on the business side that's important is not just the financing it because you want to have that consumption by as you go from a cloud technology like standpoint as a service but now you've got the financial support. Check. Next step is ecosystem. What are you guys doing on the ecosystem side? If I'm trying to rebuild my business or have a growth strategy, check technology, check I'm going to get some business help on the finance side. Third is partners. What's the status there? Yeah, I think there's a couple of things. One is there's obviously the global relationships we have close relationship with VMware, the Nutanix relationship, Red Hat others that were standing up solutions. And some of the things I mentioned like VDI literally packaged out of the box experience with a complete turnkey solution. So our partners don't even have to optimize it, they can just deploy and enable their customers. I think the other place in Japan, it's what we didn't touch on it earlier but one of the really important things in Japan is most of our customers depend on their vendors, depend on their partners to actually do a lot of their IT work. It's a little bit unique in Japan versus the rest of the world. And so this is a place too where we're spending a lot of time with our partners and with our entire partner ecosystem to make sure they're ready. And I was just actually in a conversation yesterday with a partner talking about the investments they're putting in to really bring that core innovation around VDI and around SD-WAN as an example and working with them to make sure that they've got all the tools they need from us so that what they can deliver into their ecosystem is very turnkey and easy. And I think that's really, really, really important. So it's not just the global technology relationships that we talk about, but certainly in Japan, it's also about stitching together that entire ecosystem that allows the end customer to have a turnkey experience and everybody that's involved in that delivery to have a seamless experience to get these customers up and running. And it's great too. You guys had that foundational services but also now with some great acquisitions you've got the cloud-native experience across environments and then the reality of the edge, obviously workforce and workplaces are changing VDI, et cetera, but you got edge exploding. You guys also made a great, has been years of investments in edge. So with Telco and Wi-Fi all kind of coming together it kind of sets up for a nice kind of front-end piece with the app development piece going on. You seeing that in Japan as well? Yeah, I think all of our major Telcos there have announced 5G projects and launches. We've got a new, you know, we've got a new entrant in the Telco space in Rakuten launched just a couple of months ago, their 4G solution, but I think all of that is very favorable to driving greater levels of connectivity. And I think, you know, it's a lot of times when we talk about 5G we talk about kind of the next mobile hands and we think about the next mobile device or handset but it's also a lot of the private LTE and connectivity and I think we'll see that actually the intersection of 5G and Wi-Fi in some cases we're having conversations about, you know, are there opportunities in 5G and as the backhaul and actually using Wi-Fi in a smaller medium sized office or home. And so there's a number of things like that that I think will be compelling and great, great opportunities for growth because Japan's an incredibly, you know, as you know, John, Japan's incredibly well connected society and a lot of connectivity, but I think this is also creating new demand. I mean, people weren't working at home all the time and we obviously see that in other countries where maybe media streaming and video conferencing weren't in the plans when people got their original internet service. I think in Japan that's even more so because this tradition of I go to the office and work and I, you know, when I'm home, I'm relaxing. I mean, this is fundamentally under a huge shift right now. And so I think it's going to be a real significant wave of growth and in 5G and in Wi-Fi as this new edge, this new remote work experience, this new mobile work experience happens. A lot of architecture to rework a little bit, not radical, but certainly transformative in its benefits. A lot of exciting time, tough environment right now. A lot of people working hard have to come out of it, but it is super exciting from a tech perspective, what it can enable. Really appreciate it. Of course, we're here at the HP Discover Virtual Experience bringing you the best content. So I have to ask you what sessions do you think people should turn into for the virtual experience? Well, you know, of course, the one that I think everyone has to make and I never liked the miss is the keynote. Is that obviously Antonio always gives us not only some of the great technologies and launches, but also really a vision of where we see the industry going. So I think that one's foundational. But we've got some great sessions on consumption and as a service that are actually set up for some of our customers and partners in Japan and across Asia. And I think those will be really good discussions with folks like Marci Tio, Kumar Srikanthi and our global general manager for Greenlight Keith White. And so I'd encourage folks to tune in to, you know, tune in and really learn about as a service. Cause I think a lot of times we talk about the cloud and we think about public cloud only. And I think for certainly for many of my customers and partners in Japan, I think with everything we just talked about, the cloud is going to be an inevitable reality, but the cloud is an architecture. And that's where some of these new technologies and services that we're bringing out will be really, really valuable, whether it's in storage or it's in, you know, compute and virtualization, you know, enabling collaboration or, you know, some of the things that we're doing right now, John, but, you know, via video conference, but also even just in automating the data center and bringing, you know, bringing new levels of productivity back into some of the traditional data center as we need to do that in order to enable the new edge and some of these new applications around AI and machine learning that are going to be necessary to support the growth of the economy. But, you know, net net, I think this is going to be, these are all things that are going to support growth and a recovery for Japan. So I think it's a great opportunity and, you know, a discover for our customers and partners to learn what they can do to help accelerate that and accelerate the recovery. Certainly cloud has shown the way it's an operating model. It's not just public, it's on-premise, it's in edges, so it's not just multi-cloud either, it's multi-environment. This is where the market's going, so you guys are on the right track. Justin, I really appreciate you taking the time, but I want to ask the final question. I want you to complete the sentence from me as we end this out on our virtual experience. Our competitive advantage at HPE, HPE's competitive advantage to our clients is that we are blank. Our competitive advantage is that we are the best partner deeply understanding their needs and bringing them the right innovation and value that they need to deliver their business outcomes. And in this case, obviously, recover and get back to growth. Chancellor Hochard, managing director and president of HPE Japan, great to see you. Congratulations on your new role over there on Asia Pacific, and thanks for checking in on the virtual experience. Thanks for coming in and good to see you again. Great, great to see you, John. Thanks again for having time for me and best of luck for a successful discover virtual experience. Awesome. Okay, I'm John Furrier here in theCUBE studios getting the remote interviews for this virtual experience for HPE Discover. Thanks for watching.