 from Las Vegas, it's theCUBE. Covering EMC World 2016. Brought to you by EMC. Now, here are your hosts, John Furrier and Dave Vellante. Okay, welcome back everyone. We are here live in Las Vegas for EMC World 2016. This is SiliconANGLE Media's theCUBE, our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, my co-host Dave Vellante. It's our seventh year, theCUBE started in 2010, and we interviewed our next guest during that time. I think every year since, Howard Elias, welcome back to theCUBE, President and COO of Global Enterprise Services for Dell EMC, and also leading, co-leading the integration between the merger. Howard, great to see you. Congratulations to you, John. Thanks, appreciate being back. It's a big job. It's kind of like a big construction project. You're like the foreman on the job. You got to make sure everything runs on time, effectively. I mean, the biggest acquisition in tech history. It is. We're going down a lot of conversations. I mean, there's whatever it's talking about. So tell us, how's it going? What's the status? Is it going to close on time? What's the stock price going to be? Oh, it's not top of the top. We'll talk about a lot of things, probably not that. We're going to get edited out by the, seriously, on a serious note. Big project. It is. Two cultures aligned. What's your thoughts on what people are talking about and what would you like to clarify? Well, let's start at the top. As you said, it's the largest tech combination in history. It'll result in the largest privately controlled integrated IT company on the planet. Pretty exciting stuff. We're part of making history here. And it's actually great to see the integration teams have come together very well. And at the highest level, the transaction is on plan, on track, on the original terms, on the original timeline. So when we said back in October, the expected close, we said it would be sometime in Dell's Q2 or Q3. So between May and October, we're right on track. The vast majority of the regulatory approvals have occurred. In fact, there's only a couple of things left to have happen. The SEC will finalize their review of the S4 registration statement. This is the statement that Dell will use to issue the tracking stock. Michael Meadows of International Things. China, right? Well, I was going to get to that, right? So the SEC, just to get the registration statement finalized in the final proxy statement, that needs to happen, and we're very close to that. Then comes the shareholder vote, where the EMC shareholders actually get to vote on it. And then the last of the regulatory approvals is China. We have the vast majority of all the other ones. But everything's tracking exactly as we expected. And then once that happens, the teams will set a closing date. So EU's cool. EU's already done. US is already done. All the other major countries around the world that typically weigh in on something like this. And it all happened to completely on track. How would you compare and contrast this transaction with others you've seen in the industry? Because a lot of people like to, I mean, first of all, people will have opinions on M&A organic growth versus inorganic. This is a big monster transaction, as you pointed out. What is this like, if anything, like anything others? Or how isn't it like other big M&A deals? Once certainly you've been involved. It's a great question, and you may know I was actually involved in the DEC compact combination as well as compact and HP. So I have a lot of experience and battle scars along the way. And look, here's what makes this one very different. First of all, it's larger, but it doesn't actually mean it's more complex. The complimentary nature of the product technology portfolio. Very complimentary, extremely little overlap. There is some overlap in the mid-range and low-end of storage. But if you think about client and server and storage and CI and virtualization and cloud infrastructure and cloud-native apps, no overlap. So that, you know, it bodes very well, right? Number two, very complimentary customer segments and go to market. While we all sell in all markets, EMC is really strong in the large enterprise, large public sector, large telco, large service provider. Dell's strength really lies in mid-market and SMB. You know, third, the cultures are very, very similar. You heard Michael talk about that at his keynote this morning. And I've seen the microcosm. We're bringing 170,000 people together. Well, we've had several hundred people together now for six months, working across 16 teams, building the integration plans, getting ready for day one and beyond when we do full integration. And these teams have really come together as one. Very open, constructive, collaborative. We focus on customers. We have a desire to win. We're results-oriented and we act with integrity. And then finally, let's not forget, EMC and Dell had a long-term partnership, nine years, that at its peak, was worth a couple of billion dollars. Michael and Joe know each other very well. The management teams know each other very well. And we've demonstrated how we deliver value to customers. How about the IT piece? It was also announced that you will, after the merger, run IT for the merge company. Huge, you know, task. So congratulations, I think. So I want to ask you about, you just saw HP split apart, right? And actually the IT piece seemed, anyway, from an outsider to go pretty well. I remember, you guys might remember this, when sun transitioned from its Amdahl mainframe to its Unix sun systems, it was like a disaster for three quarters in a row. Is IT just better today? Are there better processes? Is it just more mature? And what have you learned from observing some of these other, either mega mergers, I've talked to once before, but even HP split, is IT just better? Do we know more about it now? Yeah, first of all, I will want to say, until the transaction closes, I'm still have my day job here at EMC and co-leading the integration. So yes, post close. Michael has asked me to look after the overall global services and IT. And look, as we all know in talking with customers, not all IT is created equally. Depends where you've started, what, where you are in the journey. The good news, and I've worked with the two teams coming together here, they're of like minds. But the very interesting thing is, just like the complementary nature of the overall strategic rationale coming together, same thing is true for IT. EMC's IT is really built on a lower volume of very high value, complex configurations, integrated solutions, converged infrastructure to deliver. The Dell IT was really purpose built for very high volume, extremely large number of transactions on a daily, weekly, monthly basis. A lot of attach going on with that. And so we're going to preserve and protect the value that each of us have created, even as we look for ways to bring together common customer, master, common reporting. We're going to be very thoughtful in the approach. And the good news is, the IT being agile, flexible, modular, that will allow us to do that. So they always say people process technology. Technology is the easy part, it's the people and process. It's the people and process. Is that what you expect to spend your time? It's exactly what we're spending 100% of our time, people process and the operating model. Because the operating model, how you interface with the product teams, how you interface with the business, how you interface with different customers and different customers' segments. Everybody looks at their, what does it mean to be a trusted advisor to me? Well, if you're a large enterprise or a mid-market customer, it could mean different things. John and I have been talking a lot about the operating model, it's cloud. Cloud isn't a place to put stuff. It's not a place to put data or apps. It's the operating model. It's the style of computing. So how will cloud play into that operating model? The same way we work with our customers. It'll be a hybrid cloud environment. We'll have private cloud instances for agile, flexible, where the workloads are predictable and especially for those mission critical applications. We've already started to introduce VirtuStream even on the EMC IT side to be able to make the choice whether it's our data center or a different data center. But we'll also utilize SaaS-based offerings, partner-based offerings, and even public clouds for the workloads that make sense. Howard, I got to ask you because a lot of people talk about M&A and deals like this, like changing an airplane engine out at 35,000 feet. It's very difficult. And so there's a non-disruptive, operational kind of mindset or guiding principle. So my first question is, two-part question, one is what is the guiding principle of the co-team that you're co-leading with your Dell cohort on this? What's the kind of the guiding principle? And what is the hardest areas to work on? Is it sales teams? Is it operations? Is it the product? Is it IT? How do you stack ranked the challenges? It's a great set of questions. Let me start by, we actually did, from day one, set out those guiding principles. First, it is do no harm. Both companies are great companies in their own right and have created tremendous value for the customers they serve. So protect the value that we both create, Dell with the Dell products and the Dell go-to-market, EMC, same thing. Second, let's make sure we deliver a phenomenal employee experience. The most important thing we can do on day one is have employees feel like they're part of a new company. It's not part of the Dell part of the company or the EMC part of the company. Unify everybody. It's get to everybody to a common vision, a common mission. We understand what we're trying to accomplish. But even simple things like, let's make sure on day one, that employee experience of collaborating, being able to message each other, be able to work together with the tooling is all very important because if you have great employee experience, then you can focus on the next big thing which is the customer experience. So we want to make sure the customer is gets everything they get today, but then the other thing that we'll do very close to day one is show the power of the combination through new offers. New product offers, new solution offers, new service capability that we're going to be able to deliver. So that's really the focus we've had the guiding principle. What are the watch out points? We have got 16 work streams working on go-to-market services, IT, supply chain, operations, you list them all. The most important thing that Rory read, my colleague and I are focused on is majoring on the majors. Make sure we all understand this is about building that great company. And it's really the five things that we're focused on. It's that employee experience. It's the customer and the partner experience. It's the new capabilities that we're going to show the power of this combination. And then it's the revenue and the cost synergies. Now, every big combination like this is going to have some cost synergies. There's going to be certain areas of duplication and redundancy. But we believe the revenue synergies are going to be at least three times the cost synergies. And frankly, the more time we spent working on this, the more opportunity we see. So it's- Everyone's smiling. Well, but it should be no surprise. If you go back to the thesis, complimentary products, complimentary go-to-market. Well, that's a question that's come up in our community. It's a security question, not a technology question. It's sort of a business question. You'll be, I presume the CIO, you're not the CIO. The CIOs will be reporting into you. Yes. A conversation in our community is, how is the conversation changing between the CIO or CISO and the board? What should the board be know about security? How should the CIO, CISOs be communicating to the board? So if you have to communicate to the board the new merged company about security, what should they know? It's a great question. I actually do sit on an outside public board as well. So I have this experience from the other side. And to a board member, it's really part of the risk management framework, right? You have to look at things like reputational risk, operational risk, market-based risk, financial risk, and now cyber risk. So it's part of the overall framework the board has to look after. And both the CIO and the CISO has to be in a position to be able to clearly and articulately explain to the customer, here is the risk profile that we have and here's what we're doing to mitigate the risk. You can't eliminate all risk or otherwise you won't do business. But it's understanding the B2B, the B2C parts of your business. It's understanding those attack surfaces and rolling it up into an overall enterprise risk management framework and get folks comfortable about where you're going to take the risk and where you're not going to take the risk. Is there an increasing recognition that it's not a matter of, if we get compromised but when and then how should we be responding to that? Is that a shift that's occurring? That shift has happened years ago. There's only two kinds of customers left in the world. Those that know they've been compromised and what they're doing about it and those that don't yet believe or know that they've been compromised. The bad guys are everywhere and by the way there's some bad guys inside our companies, right? And so it's how do you actually manage the risk profile? How do you either think about segmenting your networks, classifying your data but at the same time we've all got to do business in an open collaborative way. I want to ask you another question. It's VCE related, Acadia related. You started off- Oh my goodness, way back. A lot of people don't know that but you incubated, you were the original team. You led that team to create that. As you look back, how does it feel? What are your thoughts on what VCE has become? The whole converged infrastructure industry which you guys certainly started or one of the few that were involved early on. What are your thoughts on that? Oh thank you for that. It feels awesome. It's great to see, you know, we started it. My colleague and I, Gary Moore at Cisco and Rob Lloyd and a few of us got together and had this great idea. And look, I don't know that we would have described it the way we do today back then but it actually is the best way of putting a point on what we had in mind and that is why would a customer buy, you know, build what they can buy? And so the fact that we're able to integrate a more complete experience around the infrastructure and the data center where customers can focus at the app level on the people process and operating model and frankly on the digital transformation journey that every customer has to go on. And it's great to see the multiple billions of dollars of results, customers voting with their dollars each and every day. But it's also great to see the expansion of the product line, the expansion of the team, blocks, racks, appliances for more traditional systems of record apps but also now for systems of engagement and system of insight apps. The new VxRail is just a home run and VxRack for those scale out applications as well. It's just great and the team has also matured. I know you're going to have Chad on at some point here. He'll do a much better job of explaining the future excitement going on there. Well, you guys made a good call there because now the Rage is purpose built in our engineered type system. It's an Oracle leading with that and now you're seeing some of the innovations is not about the commodity hardware anymore. No, it's really about delivering that engineered system and customers I think are finally over the fact that they don't have to tweak every knob and dial that they just want to now buy and implement versus build and focus their dollars and their resources elsewhere. Howard, thanks so much for coming on theCUBE. I know you're super busy at the integration. I'll give you the final word. What is the, for customers watching and certainly employees of both companies, give a quick sound bite on the vibe of the integration, the plans, et cetera and share some color on that. Well, you know, it's great. I'm out with customers all the time. There's been research that have been done as well. The vast, vast majority of customers are looking forward to the combination. We're humbled and pleased to know that most of those customers actually say to us that they believe they will spend more money with the new combined company than they spend individually. And I think it's because they see that value as well. As customers go on their digital journey, as they modernize IT, as they think about the future trends of converged infrastructure, software defined everything, cloud infrastructure, cloud native, next generation apps, all done in a secure and mobile way, this will be the essential infrastructure company for this new industrial revolution. There will be no better company on the planet that can deliver that integrated solution to customers. Howard Elias been there, done that and now driving the bus on the integration, man on the job, big task, congratulations. Good luck, continued momentum. Hope we get closed on time. It looks like it's going to. Thanks for sharing your insights here on theCUBE. Live here at EMC World, I'm John Furrier with Dave Vellante, extracting the signal from the noise. You're watching theCUBE. It's always fun to come back to theCUBE.