 Hi everybody, this is Dave Vellante, and we're here live at Wikibon Headquarters in Marlboro, Massachusetts. This is theCUBE, where we extract the signal from the noise, bring you the smartest people that we can find, and put the information in front of you, our audience. And it's hard to believe, but 2012 has almost come and gone. It's December 18th. This past year was the year that cloud became a reality. You remember the hype around cloud, and a lot of skepticism around cloud? Well, it really became mainstream in 2012. There was a ton of action around Flash, particularly in the startup area that we covered extensively here at Wikibon and Silicon Angle. Converged infrastructure, which was a, really a two or a three horse race between VCE and HP and Oracle. Now everybody's hopped on the converged infrastructure bandwagon. Big data is really hitting its stride, and there's a lot of activity there, and we continue to see industry consolidation, and bring your own devices, all the trends. So here we are in the end of 2012, and we thought it would be a good idea to look forward to 2013. So I enlisted a couple of my friends to do that. Chuck Hollis and Tom Roloff of EMC Corporation. Gentlemen, thanks very much for coming on theCUBE. Pleasure to be here. Say thanks for the invite. So Chuck, of course you have a lot of experience and predictions. You write a blog in every year. You make some predictions. So we're going to tap. Some of them are actually, you know, it's amazing. We can spend some time evaluating the past one. Yeah, batting, batting. But let's look forward. Yeah. And Tom, we appreciate you coming in. You've got the real CIO perspective. I know you spend a lot of time talking to IT executives. So we're going to basically, you know, run the gamut here. So let's start with the macro trend. What do you, let's start with you, Chuck. What are you seeing with the macro trends? What are your predictions for 2013? Well, if you look at what the analysts are telling us, they're telling us IT spent in 2013 is just a little north of what we saw in 2012. So, you know, resources are tight. The economy's in tight. You know, my guess is the first half of 2013 will look a lot like the second half of 2012. That being said, I think we've both seen some very hot pockets where people are investing deeply. I've come across a number of health care providers are investing heavily. Certain industries are investing in mobile. So even though the aggregate picture might not be, you know, the rosiest in the world, there certainly are some hot spots. I don't know, Tom, anything else? Yeah, no, I'd agree. I think, you know, I think first of all, people are looking to shift spent, right? We talked about this a little bit over the year, right, from running the business and keeping the lights on to helping to create new revenue streams and enabling the business in new ways. That pie has been, you know, 75, 25, keep the lights on for a long time. And I think, I think all enterprises and all the CIOs I'm talking to is, what can I do to get that part that's keeping the lights on to be more efficient? How do I free up dollars to go reinvent myself? And maybe that allows me to keep a similar size budget, but to deploy it in very different ways. So I think there's a cost reduction over here, investment over there kind of conversation going on. Yeah, the other thing I've noticed is that tough economic times tend to accelerate transitions. If you were thinking about investing a new way of doing things to save money or create new value, nothing like having it be bad weather outside to make that move around a little faster. So what are you guys assuming for IT growth? Are we talking three to 4% based on your radar? Yeah, I think it's gonna vary by industry, but I think, you know, low to mid single digits is kind of what everybody's been telling us. I'll tell you that I think larger corporations are trying to do more with less. I see some of the smaller medium sized companies maybe saying, hey, I've got opportunities to really invest strongly here. Healthcare is a hot area right now. Time to double down, right? So again, I don't think the aggregate pattern is particularly interesting. It's when you sort of decompose it to individual industry, individual segments that it really gets really interesting. So my observation would be that IT growth is really tied to GDP now. They're much more in lock step. And so the prediction that I would make for 2013 is the rich get richer. And what I mean by that is if you look at the IT business, it's really becoming oligopoly. You've got five or six or seven players, you know, IBM, HP, Dell, EMC and VMware, Oracle, Cisco, Intel and Microsoft, you put in there. Small club. Yeah, that essentially act as a big group of people that own a lot of the market. So we're all good friends. And yes, well, put it this way, you all watch what each other is doing. So one move, VMware's acquisition of NYSERA creates this ripple effect. And so I would predict that the rich get richer, that that oligopoly actually gains share in 2013. Well, certainly, in constrained environments, I don't think IT customers have the ability to go out and do a lot of window shopping. They've got to be able to buy prefab, ready to execute solutions. And the idea of taking six months to kind of create your own, whatever. That's not a lot of spare resources to do that. Yeah, I mean, I think CIOs are sitting there saying, can I actually consolidate my vendor base more? Yeah. They're saying, I've got a lot of different guys to go manage here. I want to count on a few. I wanted to have them do more for me. And I'm always going to experiment on the fringes here, but when it comes to the core partners that I'm working with, I can't afford to manage 20 of them. Can I get it down to five or six? I put SAP in your bucket there. Microsoft is a part of the enterprise more and more. And I think CIOs are asking themselves, I'm going to need a certain apps. And then when I get down into platforms and infrastructures, how do I actually bet on the right guys? So let's talk about a corollary of that trend, which is service providers. People try to consolidate vendors. One way to do that is to look to a service provider for a certain cloud app. So what are you guys seeing in the service provider space? Well, I'm seeing more behaviors around before we just assume we're going to go do this ourselves as part of the project analysis for whatever it is they're doing, let's go look at external options. Whereas a year or two, I think the prevalence was, no, there may not be anything out there. That's what it is, we wouldn't want it. But whether it's be a SaaS app, the infrastructure is something, people are now purposefully going out and trying to see what the options are out there before they commit to an internal project. I don't know if you've seen some of that. Yeah, I think so with a broad definition service provider, including softwares of service, as well as any workload that you might be moving somewhere else. A year ago, I saw a lot of fear, FUD in the enterprise market around, I'm not sure I want to move all that stuff out there. I don't really know. I think what's happened in the past year is people have done it without really asking themselves the security question. So it's really gone out into service providers, public clouds, much faster really than it did in the 2011 timeframe. I think this is the year of reckoning on that, to be honest with you. I think the robustness of the platform and the availability and the trustworthiness of the platform is gonna get tested. And I think CIOs are gonna sit there and step back from this halfway through the year and say, can I really afford to set critical workloads out to these guys? Or do I need to go create trustee relationships with a few service providers and sort of double down on that in the same way that maybe that oligopoly we were talking about was doubling down on it. But back to your point, I think we both would agree that unless IT brokers that relationship, service providers are your frenemies, right? They'd love to work with IT and if they don't, they certainly know who's consuming IT like the CMO and folks like that. So either have to broker the relationship and manage the discussion or buyers and sellers would fight each other. This is where you've been for a while, right? The idea that Amazon or public cloud is the new shadow IT, right? I mean, I think you've been saying that. I think CIOs in the enterprise have been hearing that and I think they're really starting to ask that question right now. What's actually out there and the service providers that my employees are leveraging and can I broker that and can I actually make sure that I'm comfortable with that? Cause the anecdotes about getting burned are out there and I think IT's gotta get involved. Well, I think too. So my prediction here is that Amazon's gonna get a lot more aggressive in the enterprise. You're gonna see that. I mean, things like Glacier is getting a lot of attention, you know, the penny per gigabyte per month. That's gonna catch a lot of CFOs, eyes and ears. But I think there's gonna be another high profile outage and because of Amazon's big marketing push, I think people are gonna be more in tune with the risks associated with Amazon's cloud and I think that the enterprise guys, you guys, your customers, VMware's customers are gonna respond and specifically, I think their response is gonna be successful in areas of vertical markets. I think that's where you're gonna see the best response to Amazon's horizontal commodity approaches that certain service providers, for example, NYSE and financial services, CERN or in healthcare, you know, it depends, it's like USC in archives and other media and entertainment verticals will emerge and that's where they're gonna succeed against Amazon. Well, okay, so this is the debate that we're having internally. We agree with you about vertical oriented community call clouds. We can make a long list of models where that would work. The coin toss, at least in my mind, is does that go to an Amazon model or will it go to a purpose built set of cloud technologies? You mentioned NYSE Tech. They're not using an Amazon style model, they're using enterprise class IT. So I agree with you on the community cloud side, whether it all goes to a public commodity cloud or not, I think that's kind of a separate discussion. Yeah, I mean, I think large scale IT organizations see infrastructure as a service, as a stepping stone and a temporary thing. And to the extent that the public cloud is betting on cheaper infrastructure as a service as a value prop, I think that's pretty ephemeral and you gotta do more than that. I had a CIO just kinda nail it for me. He said, I look at Amazon and those guys as temp agencies. Nice to call them up when I'm short of few bodies, need a little help, wouldn't wanna build my entire workforce on temps. And I think that we have to realize those things are now just part of the mix. They're not a substitute for strategy but they're an enhancement to a strategy and knowing that there are nice variable services out there to consume adds to it. I thought this whole analogy around my temp workforce was probably pretty accurate. It helps you think about it the right way. It's a spot market for IT, right? Yeah, it's good. So you can get out there and get it when you need it, go get it but you gotta ask yourself is that really worth what you're taking on there? Yeah, I don't know about you but we're getting into winter here in New England. I'm not on the spot market for my heating oil. I prepaid. Yeah, so some people might try to arbitrage but it's a dangerous game. Yeah, go there if you want. All right, let's get into the tech discussion, right? I mean, we all love to talk about the technologies. Let's start with big data. I mean, Gardner talks about the hype cycle. We've got to be close to, if not, a little bit beyond the peak of the hype cycle. What are your predictions, Chuck, in big data? Well, I think last year it was all about data science, data scientists and the tools for them. I think in 2013 we'll kind of go one level down from a hierarchy and see a broadcast of analytically enabled executives, managers, leaders. We're taking a subset of what the data scientists do and applying it more to business problems. Five data scientists is good but I think there's room for 50, 500, even more analytically enabled managers, leaders, executives, whatever you want to call them in an organization. I call it the democratization of big data in the enterprise in 2013. That's an interesting way to put it, Chuck. You know, I think that big data has been an IT push and I think that's got to change. You know, there's, we're at the top of the hype cycle from the IT person's perspective around big data because I think every CIO believes this is a way to go become more relevant to the business. But I think IT needs to do more to engage the business in that conversation and get the business to appreciate what's possible in ways that I really haven't seen them do this past year, right? What can we aggregate and what interesting things can we do with that aggregation? I think we got to get to the point where we're turning that into less of an IT push and more of a business pull. I will say one thing though, you know, some people wonder why don't you hear more about companies doing stuff with big data in the industry? As I meet with these folks, this stuff is R&D. It's rocket science. They don't want to be talking about this to the press. They're not going to talk to us vendors. So I've been amazed about how many people are actually doing things as opposed to the small number of people who are willing to talk about what they're doing. So I think this is actually moving a little faster, a little harder than we might give ourselves credit for. And sometimes it'll come under the rubric of analytics or BI, it might not be classical big data. We'll all come to know and love it. But it's the rare customer that I meet that isn't doing something in this area. So I think that, I guess my prediction in this area is you're not going to see a red hat of big data. And as a result, I think one of the big platform vendors, either Cloudera or MapR, is going to have some kind of exit either IPO, but I don't think they're there in terms of IPO. I just don't think the financials are going to support that. So I'm predicting one of those will get taken out. It's a bit of a long shot, but either Cloudera or MapR will get taken out. And that will create a ripple effect because there'll be this feeding frenzy of people who think that there will be a red hat of Linux. So that's my sort of big data prediction. I kind of move my prediction elsewhere in the value chain. I think the action is going to be in community-based clouds doing purpose-built analytics for consumption, the travel industry, the energy industry, the healthcare industry. So you take the cloud model, you start thinking about predictive analytics and service provider models in for a particular industry. I think that party's just starting in 2013. Well, I guess the other point I would make there is there's a lack of applications, packaged applications and big data. And I think that rather than see a bunch of packaged applications come out in 2013, I think we're going to see some platforms where people will actually produce development platforms and two APIs will actually put that infrastructure in place. I think 2013 is going to be the setup year to actually enable some of those applications to be developed down the road. People want to consume the stuff. They don't want to handcraft it. If I can go to a nice, well-lit place that has all the data and all the tools I need for my industry, plus a community of data science professionals to help me, boy, that seems a lot more attractive than spending five times as much to try to do that. Without having to be a map-reduced expert. That's really the attractor. You and I probably could learn R if we sat down. R, yes. I'll put it for you. What are you going to see in 2013 in the spaces that applications and big data are going to converge in a way that they haven't, right? If you're an enterprise today and you want to go consume big data, you want to insert it into a business process in real time, you've got to change an application that's running the bank the way it's being run today. That application that you have that's a legacy app can't consume big data in the way you want it to, which makes big data an analytical rather than in a transactional business process or anything. I think you're going to see that change this year. Well, interesting, I think actually just another trend I think we'll see is that the transaction databases will start to feed the analytical databases in real time and I think you'll start to see that really take shape. You've seen it now in ad networks. I think you'll start to see it in more use cases in 2000 years. I think Tom's point is pretty valid because, okay, I found my crystal ball. I now know about a new business process that's analytically enabled. Let's go build one. To your point, the first thing I want to do is start sourcing data from all these legacy systems of warp speed. They weren't designed to do that. I want to be doing decisioning as quickly as possible in memory, some of those technologies. And I think Tom and I would both agree. In fact, I think our executives agree that there's going to be this new cast of application tools and application methodologies that don't look like what we're doing today to build these next generation predictor analytics. Now, there's going to be some infrastructure to support that. One which is flash, you mentioned in memory. There's a big debate now going on about in memory versus memory extensions using flash and the economics of that and the trade-offs and so forth. Let's start with you again, Chuck. What are you seeing in flash? What's your prediction there? Well, it's kind of funny. We've been talking about flash and storage since 2008 when we first started shipping flash drives in the Symmetrics. And in 2013, I think people are going to have to think twice before they do a disk-based type storage implementation. Yeah, for archival and content depots and that sort of thing. But I think everyone's going to gravitate to either all flash or mostly flash and how they think about storage going forward. The costs have come down. There's now tiering within flash. In 2013, we're going to see real-time D-dub, which will get the cost down even further. Anybody who's ever owned a MacBook Air knows what flash can do for your performance. It's just pretty hard to stare at a disk array now and say, yeah, I can live with classical disks for this SAP process or something. I don't know. I think the other thing I'll predict for you that flash will drive is that we'll start to question where the value is in the storage stack. Is it in the fact that I've got whatever, the right combination of disk? Or is it in the fact that I can manage and orchestrate all the different levels that I need to when I need them in real time with an intelligent approach? And I think flash is giving another tier to that and is putting a lens on the software, really. That's behind what storage has become. And I think in 2013, we're going to get really confused because what is a server? What is a storage array? To your point, those lines start blurring very clearly. So we put a very modern storage proposal in people these days. There's server elements, network elements, and array elements. And all of these are going to start mushing together pretty quickly here. You also see this reflected organizationally. I see server and storage teams starting to come together. It used to be the storage guys over on one side and the server guys on the other side. They never went to lunch together. Now they're having to come together because these technologies are meshing very, very tightly. Yeah, and I think that you're going to see the redefinition of the classical tier one reliability, availability of service ability. That's morphing with this tier zero. And it's multi-tenancy, mixed workloads. And I think that Flash is going to start to drive new levels of productivity, bottom line productivity of the organization as opposed to just cost. And there's a whole bunch of things that we had to learn in the disk world, like storage data placement on disk drives. Just don't exist in Flash. So at least we'll find at least the storage professionals are going to have to unlearn a lot of stuff and relearn the things that are now important in this new world. OK, how about security? Tom, let's start with you. What's your crystal ball say about security in 2013? I think security has been this term that's about, how do I, first of all, secure the data center was a conversation. Then we talked about identity and access management information. I think we're broadening the definition of security significantly, and I think enterprises are starting to look at maybe not just security, but trust in the information infrastructure. And I think people are using terms around business continuity, disaster recovery, backup, recovery, and archiving as part of a broader conversation about how I secure my information. So I think you'll see that conversation shift to an extension of backup, recovery, business continuity, disaster remediation, identity management, access management, security in the sense of information security, and ultimately also compliance and how we prove to people that we're actually living by the policies and the regulatory environments that we're all under. So I think that conversation gets much broader in 2013. And I think CIOs and CISOs are going to start taking that all together. I look at it kind of the same way Tom does, but from a different angle. We've all built business models in the physical world, and we've learned how to protect and secure and supply chains and all of that. We're reconstructing those same business models in the digital world around social and mobile and analytics and all of that. We need to be able to do business with the same confidence that we used to do in the physical world. So yes, it's security, but it's also availability and compliance and all these other things. My business is now a digital business. Can I do business with confidence and trust? If I were to double click on security, the big thing that I've seen is everybody, using different words, but it's basically big data analytics meets security. Can I use the same predictive techniques for using consumer behavior and energy distribution and all these other great business processes to better predict and react to the next security threat that's out there? And the security crowd is kind of interesting. They always, you know, they're a little different. They want to use different words and concepts. And they hate it when I say, oh yeah, you're just doing data science. You're just kind of doing it in a different area. They're very offended. They always like to use different words, but you are seeing that gross importing of concepts and methodologies from the data science world into the security world. It's happening pretty fast. All right, here's my layup prediction. I'm gonna get to the end of 2013. We're gonna look back and say, we're less secure than we are at the end of 2012. My question, Chuck, is will it matter? Yeah, I don't think we'll care. It's kind of funny. We've been talking about privacy and security and bad things happening for at least as long as I've been in computers, which is 30 years. Every year the risks get greater and every year we seem to care about it less. I think it'll be more of a narrowing and focusing on the risks that matter as opposed to avoiding all risks. If you look at security thinking four or five years ago, it's, oh my gosh, we gotta prevent everything everywhere all the time. Now it's like, well, we kind of presume somebody's inside our network. We kind of presume bad things are happening. How do we focus on the things that matter? So I think we'll care less, but the things we do care about, we're gonna care about a whole lot. Yeah, I'd add the one thing in there is that the regulatory environment across the world is heating up. And the things we're gonna care about are things that land us in jail. And so we are gonna worry, we are gonna worry about that part of the broad conversation. Well, I think it underscores too that the business value of these initiatives really brings enough far or wide to offset some of the risks and concerns. So more of the same there, although we're starting to see, as you say, the widening of the notion of security and really trying to attack the problem from a data standpoint, as opposed to just putting a wall around the queen when she wants to leave the castle. That's not gonna work anymore. All right, let's talk about IT organizations. Tom, this is something that you spend, it may be just business technology organizations, as you'd call it. You spend a lot of time at the intersection of business and technology. So what are you seeing for 2013? I'm gonna get two trends there. One is that I think, with Cloud Trust and Big Data, people are realizing this is not just a technology revolution. This is people process and technology. And that affects the way we run IT. That affects the way we organize IT. That affects the skill sets we need in IT. I think as Cloud and security and Big Data become more pervasive, people are reexamining the way that they organize and run IT. And I think you're gonna see that really take off next year. There's some tremendous technologies out there now. As they get absorbed and mainstreamed, it's gonna change the way that people take on the process and organizational side of IT. I've kind of seen that already happen. I mean, a year ago, we were talking, hey, you're gonna need new technology infrastructure to go do this. I think by now, everybody realizes you need a new operational model and a new consumption model to go with it. And those are the hard parts because that's people process and politics, right? They're not easy. That being said, I'm gonna have a sense of deja vu here. We are very proud of ourselves. Hey, Cloud, information is a service, blah, blah, blah. Remember what we used to call IT organizations back in the 60s and 70s? IS, information services. That's where the information came from the business needed to do it. So I almost see, we're coming around the lab again, that it's not about the technology in IT. It's about the services that the business needs to consume to run their next business model. So maybe we are going back to the main frame again. Yeah, I mean, I love the idea. And I think maybe to play off your IS-IT world, I think the focus in 2013 is gonna be on the eye in IT. Yeah, and the consumption model isn't through technology, it's delivering it as a service that everybody wants to consume. It's okay, so I would add to that. We always talk about the 70, 30 mix, 70% of IT investments are spent keeping the lights on, 30% on innovation. I think we get out of that morass by the CMO is actually gonna drive the information agenda. And actually, as it relates to innovation, actually spend more on innovation than the IT organization itself. So that would be my organization. I would certainly agree, CMOs are forcing functions. So put it all together. It's a digital world. We need a digital business model. Typically the marketing function is the one that's all into the social and the mobile and the analytics and all that. This is happening in our organization. So they're now coming to the IT guys and saying, look, I need to get a whole bunch of stuff done here really fast. It's not what you guys did two years ago. We're either gonna join together in a very tight partnership or we're gonna part ways right about now. And I like forcing functions. At the same time, I meet IT organizations that are looking to do new things in a new way with a new part of the organization. So in many ways, the marketing function becomes the first anchor tenant for the cloud, for the analytics, all of that. So I'm seeing kind of a, hey, we're trying to do things new way and we got a guy here who needs things, done new ways. We use this as the basis for reinventing how we do IT in our organization. And it's great when you see it. I don't know, any other thoughts? Yeah, no, I think starting with a customer and thinking back to what that means you need from an information perspective is a great way to go. And I think marketing is trying to get that, what's the 360 degree view of our customer? And how do we understand that customer better? It's a natural place for that big data and aggregation of information to be. And I think it'll create a lot of value in the enterprise if marketing can start the ball rolling in that direction. Yeah, and at least I've seen it in our company and other companies as well. That partnership only feeds what marketing needs to get done very quickly, but also is the first anchor tenant that encourages IT to deliver new classes of services in new ways. So it's a win-win when you find it. Excellent, okay, last, I'll give you guys the last word, actually I'll give myself the last word, I'm gonna start with you. Sure, sure. So surprises in 2013 or any last predictions that you'd like to make? I think I put most of them in my blog. I think what we always get surprised with is how fast this is all happening around us. I'll point to the Digital Universe study, and I don't know if you tracked what IDC did. Yeah, it's just a demo. A year ago they said, well, by the end of the decade we're gonna be at 35 zettabytes. Last year they said, no, no, we were wrong, by the end of the decade we're gonna be at 40 zettabytes. So look at this, in one year they've taken their forecast for the end of the decade of five zettabytes. So we keep undershooting how quickly all this stuff is happening by an order of magnitude, and that's what impresses me, just as how quickly we get this wrong and move on to the next thing. You know, my prediction, and I won't get very specific about this, but I think what you're seeing is the acceleration of technology. There are some firms, and we talked about a bunch of them in the beginning, right, who are the trusted IT firms for the enterprise. Some are keeping up and some are not. And I think 2013 we'll see the winner take all, as you suggested early on. We'll see an example of how that really happened. You know, we saw it with Oracle buying Sun a few years ago. We saw the beginnings of winners and consolidators and consolidates. I think we're gonna see at least one of those companies that you mentioned early on being a very different corporate structure by the end of 2013. Oh, a big prediction. Okay, I would say, just picking up on that theme, Tom, that software is gonna be the defining characteristic of those winners. And we call it at Wikibon, it's still gonna go software-led infrastructure. I know VMware calls it software-defined. I think that's actually gonna happen a lot faster than people realize. I think that it's more than just marketing. And I think that, you know, the basic premises you're layering, services on top of commodity and standardized hardware, that's really nothing new. I mean, Google's been doing that for a decade. What is new is metadata management. I think that people are gonna begin to realize that unifying metadata and actually having a single control point across the network, that's really gonna be server-led. Managing data from fast servers is gonna be a tectonic shift that we're gonna start to see emerge in 2013, so keep your eye on that. Gentlemen, thank you very much for coming on theCUBE and making this really easy for me. I really appreciate you sharing your insights with our community. This is Dave Vellante at Wikibon.org. This is theCUBE. Thanks for watching, everybody. We'll see you next time.