 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. Welcome back everyone, you are watching theCUBE. We are live here on the ground in Las Vegas for the next three days for EMC World 2016. This is SiliconANGLE's flagship program. We go out to the events and extract the signal from noise. I'm John Furrier, my co-host Dave Vellante and we have two cubes here again for the second or third year. I can't remember, but we have two cubes. Third year. Double barrel shotgun. Third year, two cubes. Of signal, Stu Miniman, Brian Grace, we'll be manning cube number two. Dave and I will hold down cube number one and again, live coverage. This is our seventh year going back to EMC World 2010 in Boston when we kicked off theCUBE as part of SiliconANGLE Media's continuous coverage. First SiliconANGLE Cube had the Cube at South by Southwest kind of as a prototype and then got it going here at EMC World. Dave, seven years and one thing that's been constant, guys, is Joe Tucci. And here today, a significant moment in history that torch has been passed to the new generation of EMCers under the leadership of Michael Dell who's only 50 years old and Joe Tucci really gave a heartfelt goodbye on his last time on stage as the EMC chairman and CEO as the Dell EMC merger still underway. Guys, thoughts about this EMC world, what's so strategic, what is the opportunity, can they do it, will the merger happen? Thoughts on Joe Tucci? Well, so back in 2010, John, when we launched the first live production cube, we were coming out of the downturn and EMC was actually in a very good position. They had a number of assets, not the least of which of course was VMware. We all know the story at least inside of SiliconANGLE Wikibon, the Stu sign, the original VMware NDA, but that asset powered EMC for the better part of this decade. What we're now seeing, I think, and Brian and Stuart love your thoughts on this, is we're seeing the cloudification of enterprise IT, the consumerization of IT, and it's clearly hollowing out the high margin businesses of the likes of IBM and EMC and certainly HPE and each of those companies that I just mentioned as well as others, Cisco and others has their own strategy in terms of how to deal with that. EMC's, of course, is to be acquired by Dell, which is my view anyway, what you guys think, the end of an era. Yeah, no, I absolutely agree. We saw the original sort of four horsemen of the internet. It was Son and EMC and Cisco and Intel. We've seen Chambers and now Tucci sort of moving on from that. Right now, Amazon is the lead dog. They're setting the rules. They're not the largest, but boy, they're setting the rules. And this show is really about that transition of where does the traditional hardware-centric companies go from here? Will customers follow the cloud route? Will they follow the on-premises data route? So it's a big decision point for both the companies, but also for customers. They've got to figure out where they want to go next. Yeah, I mean, Dave, first of all, I mean, it's my 14th year at this show and it's changed a lot. I mean, Joe Tucci talked about the first year it was wizards, we used to joke. There's no salesmen, there's no ties. And this show started out with very strong technical routes, get the engineers out. I was actually in EMC engineering, used to come, used to love giving presentations, talking to the users. Kind of the once a year I got out of the office to go see what was going on. Look at where we are now. It's 10,000 people, it's down a little bit from the last couple of years, but very strategic in the industry. What's going on in the space? In the portfolio, the broad portfolio that is in the future going to be called Dell Technologies Companies kind of replaces the old federation that we thought of. Stu and Dave, I want to get your thoughts because I think this is really important. It's a Joe Tucci goodbye. I think it's worth talking about because Dave, you knew EMC when you were at IDC, when they had that small building on Route 9. Stu, again, you were there at engineering way back in the day. Brian, you were most recently at EMC trying to get that whole DevOps movement. It's funny to see that's in the main stage being kicked out as Michael Dell's really calling card. But the legacy of Joe Tucci and the cult of Joe Tucci, he got a standing ovation, and he's really loved and revered by the customers. But also by the industry, he took EMC from a box-moving storage company, transformed them. We saw Jeremy Burton come on in 2010, I was the anthem of the marketing, but transformed the company. He buys VMware, Stu, you signed the original NDA as an employee of EMC, as Dave pointed out. But the cult of Joe Tucci and the transformation of EMC and the legacy that it leaves behind and the young whippersnapper in Michael Dell who takes the torch and gave a pretty damn good speech. He talked about DevOps. He was talking about Agile. You could see that he knows his stuff. This is a guy with a spring in his step who's got a lot of mileage in the tank. Dave, your thoughts? Well, Joe Tucci took EMC from sort of brass teenager to adults, and interestingly, many of the people that were part of the brass teenage culture are still here. Billy Scandal now running sales. He's been here for a long, long time, but many people aren't. And Joe, under Joe's leadership, EMC transformed the company. Stu, you lived through that transformation. Brian, you were sort of partners. You saw the sort of tail end of that transformation. And now, like you said, John, Michael Dell laid out this vision of the future. He was talking about 2031, what the world is going to look like. And essentially, basically what I heard was Dell and EMC or Dell Technologies is going to be an arms dealer for the next generation of digital technology. Well, legacy of Joe Tucci. Will he have the legacy? Did the federation work? This merger, he says, is looking bright, Stu. So John, I mean, first of all, when Joe Tucci took the baton from Mike Rutgers, we were entering the big dot-com burst. I mean, so there were many that didn't know if Joe would last that first year. 15 years later, you look at where EMC is, where they sit in the ecosystem. They've done a really good job. Joe has to be commended for that. Had the big downturn in 0708. And EMC, what, 60,000 people, the portfolio of companies they had, they were a good, solid company. He had a heartfelt goodbye. You almost see a tear in his eye up on stage, but you know, I got to say, Joe Tucci is like a commander. I've seen him in the trenches. He's pounding the flesh. He's loved, he loves this show. He loves EMC. It's almost a bittersweet goodbye that it wasn't a bigger bang than the merger. Some say that was a defeat of the federation. Guys. Well, it was in many respects. I mean, he's ready to go. I mean, he basically capitulated and said, all right, we can't survive as a public company, at least it's not advantageous for us. So we're going to go out on our own terms. So I mean, Joe Tucci will certainly have a better legacy than for example, Carly Fiorina. But you know what, look at some of the other greats in this industry, Ken Olson, Edson DeCastro. Larry else is still around. Will Joe Tucci, to me, similar, great legacy, not a founder. Hall of Famer, yes or no? Yeah, he's a Hall of Famer. No question about it. You know, no question about it, but you know what? But he was a steward over the transformation of EMC, but the outcome that he desired, I don't think he achieved. I think the federation vision, you know, didn't happen. And if it's going to happen now, it's going to happen under Michael Del. Well, market forces, we are speculating the cube by the federation. I asked him the question about, you know, the ecosystem seemed to kind of reject. We saw that at the Mware. Brian, you were inside EMC during the DevOps movement. It was kind of a, it seemed like a bunch of false starts. It seemed like hurry up, go fast. Wait, and then ultimately you saw that they really didn't get the kind of traction, but Del certainly has their eye on IOD. Right, and could EMC have done it differently? In your opinion. Well, I'll answer both of your questions. I think, you know, the whole thing with the federation is whether you think it was successful or not, I think it's going to come down. People look back on it and they'll say, it had a lot of great vision. It had a lot of great technology. They never quite... Great revenue. Yeah, they had good revenues. They didn't quite figure out how to make that vision be transactional. And I think that's really the question as you look at Dell technologies going forward. Can they transaction this huge portfolio or does it continue to remain sort of silos? I think in terms of Joe, I mean, you got to put Joe right up there with somebody like a Lou Goertzner and you say, look, huge company went through a big transition, went with a very different model. It wasn't just, we're going to get into something adjacent. And I think he's going to go down as a big part of what happened with VMware story. So guys, I want to get your thoughts on the keynote. We saw the vision 10X and reference the iPod, 3G networks coming online. Titanium, Sun, E25K for the data center. All the legacy relics, as Dell said, but he pointed out that it's going to be a 10X shift every five years. Can EMC, is EMC stew in a position, Brian stew in particular, in a position to kind of make those kinds of gains over the next five years? And what does Dell have to pull out of his hat to make that happen? Yeah, so John, first, I guess I'll have a little critique about what they had there. It sounded like the server presentations we've been hearing for years. We're following Moore's law. We understand how things going. The IoT, billions of devices is good. But when I heard that the enemy that got mentioned a number of times, it was HP. And I mean, HPE just split. They've got kind of their positioning and everything. But if most of we ask, where's the future and where do you have to fight yourself? Hello, Amazon, Microsoft, Google. That needs to be where we're partnering and where we're not. Brian actually mentioned, there's no mention of containers in Docker in the presentation this morning. There was plenty of cloud native in platforms in the Pivotal. It was very high level. But there's not much Pivotal here. By the way, Pat Gelsinger, not here this week. Very little VMware. Pivotal, a little bit of a presence here. But I almost felt last year there was a lot of good discussions about applications and where they're going and came back here. It's a new box for storage. It's a new software pieces. I mean, you seem to pick up some messaging from IBM too, Dave. Systems of engagement, systems of insight. They didn't say cognitive, but essentially that's IBM. Internet of everything. Which is Cisco's messaging. So again, is this an Oracle-like strategy? Kind of co-op everyone else and try to move the ball down the field. And again, the shot at HP. I thought, Michael Dell, like a little kid smiling, shrinking their way to success. Highlighting the Gartner Magic Quadrant as a reference point for innovation. I mean, come on, if you're horizontally scalable, doesn't it beg the question that Magic Quadrants are irrelevant? I mean, guys, come on. It's interesting that he made those comments because here's a company, EMC, their core product portfolio is shrinking. It was down, what, 8, 10% last quarter. The Dell business, when it went private, was under real attack. So now Michael can write his own narrative. That's the beauty of being private. The interesting thing is, EMC continued to spend on R&D. And we saw Jeremy and the analyst meeting this morning, typical mega-launch messaging, product, product, product. So EMC continues to push the product roadmap to your point, Brian, that will get them to a transactional business and allow them to continue. The problem is those curves that they showed, the S-curves of the old business and the new business, new business ain't growing fast enough and it's not big enough yet to offset the decline of the old. And that's the problem that all these companies has. And as I said earlier, each of these companies has a different strategy. IBM is starkly different than what Dell and EMC are doing. Right, well, the other big question to bring into this is, we covered the initial acquisition. We looked at all of the debt structure and where the money's going to go. There was an announcement this morning about the Virtustream Cloud. And regardless of those details, you look at what that's competing against. Amazon putting a billion dollars a quarter, Google's putting in a billion dollars a quarter, like that's a different investment schedule against how you're going to sell versus saying, you know, am I doing RNA and RNA and M&A? You know, it's really hard to compare what those two things are going to look like. Amazon's free cash flow doubled last quarter from like three billion and change to six billion and change. Yeah, and shout out to Wikibon guys. You guys did a great job. You were the first to call Dave. We talked about it years ago. I mean, it feels like that whole presentation was cubed from three years ago. Agile, Devos, you called Amazon being way over 10 billion. Well, Jeremy this morning said about Virtustream, once you hit an exabyte scale, you start to throw off major economies of scale. I'm skeptical. I don't think there's any way that Virtustream is going to be able to compete, at least in the near term with Amazon on scale, they're going to have to compete on solutions and value. So a couple of things I saw guys want to get your thoughts on last couple of minutes. David Gould explicitly called out, he addressed it, potential concern. Some of you might have potential concern that we're not the pace of innovation is slowing down. He explicitly called out, I'm saying to myself, oh, thanks for highlighting that for me, slow. So he almost had to correct, it was almost as if they're getting that feedback. Did they slow down pace of innovation in this merger? Obviously there might be some fud with customers, the competition's taking advantage of it, but. Well, innovation at EMC, you guys were there, to me as an outside observer, largely involves making incremental improvements to existing products so that they can keep customers going down a journey. That's really where they focus their R&D. Moore's law meets M&A, you know. Moore's law takes care of the incremental stuff and M&A goes and buys you into those new markets. So they saw the two groups coming, another note was cloud and traditional, we heard traditional, traditional IT efficiency performance, and then cloud native, that's where we were in the DevOps, and then they kind of highlighted Google and said, oh, we created two groups for that. They're credit, they're fighting that battle. I mean, they are. Well, they did make those calls. I mean, we pointed that on the Cube, good props to them, but is it relevant in this market? Can EMC pull it off? And can they be the preferred infrastructure company for this digital transformation? I mean, to me, Dell is the answer there because Dell gives them a supply chain and a cost infrastructure that can compete with the likes of Amazon. Without Dell and without Michael at the helm, this would be a much uglier situation in my view. How you guys feel about that? Yeah, so I mean, we haven't talked much about kind of a converged infrastructure, hyperconverged, of course, a big focus area of EMC, and I look at this as Dell buys EMC and it helps them fight off the ODMs. So they need to get into service providers, they need to get to the class of people that say, I want hyperscale, but I can't just buy some no-name white box and make it work. I don't have the skill set, so how much services do I need from Dell? Can Dell get me the economics? I mean, Dave, you did some really good analysis looking at the margins that Dell lives on versus EMC, and what is that going to mean for the shift to the culture? What's that going to mean to the overall workforce? You know, these next year or two, it's going to be a little bit of pain as they work through that portfolio. Okay, so the new categories are being created, but I want to get your thoughts to the final point for the segment is IT, traditional IT, certainly will go hybrid cloud. We see that extension of the data center. Certainly there's a lot of traditional kind of cloud native, but the real battleground that's emerging in across every event we go to is IoT. IoT is a new way, it's a data center at the edge. We heard edge to core to cloud as they're messaging. Is it relevant guys? And talk about this IoT battle, they call Internet of Everything, which is original Cisco's messaging, but that is connected devices. What is the battleground for IoT look like? Well, for me right now, I think a number of companies have laid out a pretty substantial. IBM has, Amazon has, Microsoft's beginning to through Azure, HP is Salesforce, HP to a certain extent. I didn't really hear an IoT strategy. I heard IoT is a big buzzword. We think it's going to grow a lot. It's a future. Yeah, I didn't hear anything that would tell me to say, hey, I should call Dell Technologies about my IoT strategy at this point. Stu, thoughts on IoT? Yeah, I really agree with Brian on that. The thing that stood out to me more is if you look at the cloud strategy that they laid out, it reminds me of what we're hearing from the likes of IBM and Oracle, which is we've got our on-premises environment and cloud's going to be an extension of that, which is a hybrid message, but not sure that necessarily fits. They're just behind software, you would agree. And Oracle's a whole different animal because of the software content. And we heard new style of computing, which is kind of a rip off of HP's new style of IT. So again, the confluence of all the different trends here at EMC world, we're going to be talking with Michael Dell himself, David Goulden, Howard Elias, all the top executives, all the different groups extracting the signal noise. This is theCUBE. We have two cubes on two different channels for wall-to-wall coverage, a lot of flow coming out of theCUBE here in Las Vegas. Stay tuned and stay tuned for more great coverage for three days live in Las Vegas. We'll be right back after this short break. It's always fun to come back to theCUBE.