 Live from the Sands Convention Center, Las Vegas, Nevada, extracting the signal from the noise. It's theCUBE, covering HP Discover 2015, brought to you by HP. And now your host, Dave Vellante. Hi everybody, we're back, this is Dave Vellante. Dennis Dean is here with Jeff Chuck, and Dennis is the Vice President and the AGM of the Alcatel-Lucent relationship at HP, and Jeff is the Vice President of the Global HP Alliance at Alcatel-Lucent. Gentlemen, welcome to theCUBE. Thank you. Dennis, let me start with you. So what's going on between HP and Alcatel? Could you just describe the relationship? Absolutely, so it's a multi-relationship. Basically, HP has three rich markets with Alcatel-Lucent. We are their preferred partner in terms of providing their IT services for them, which we do through our Enterprise Services Division. We also have a very strong technology partnership in terms of supplying them IT infrastructure platforms as Alcatel-Lucent sell out towards their end telco customer base. And we also have a pretty interesting joint-go-to-market relationship. Yes, the joint-go-to-market is something that we've really been focusing a lot lately, and we've worked to get Alcatel-Lucent products embedded into HP's portfolio. So HP OEM, some of our technology, and calls it distributed cloud networking. They also have just at Discover launched taking our high-end routers into their networking portfolio, as well as some of our optical products so that they can do data replication with HP storage. So you primarily sell to telcos, right? Primarily that's where Alcatel-Lucent's heritage has been, is telco-focused, and that's one of the real strengths of our relationship with HP, is HP obviously has the tremendous heritage in the enterprise marketplace, and that's an area that Alcatel-Lucent wants to break into now, and so it's a natural fit for our two companies to really work together. And then is there another path as well for HP into telcos with things like NFV or? Absolutely, so you hit them now on the head. Now we see an emergency in the industry of a couple of sort of new megatrends. We have software-defined networking, we see cloud, of course, you know, NFV. And what's actually happening is this real convergence between the traditional enterprise IT worlds and the traditional telco worlds. I think what we're seeing is that the telcos are getting more familiarized and they can see the value of enterprise IT infrastructure, x86 platforms and so forth. And at the same time, as HP becomes more relevant in these telco sectors, Alcatel-Lucent also provides us with some additional technology capability to fill some gaps in our own portfolio. So what we've done is we've looked at not these two markets completely independently, but we've looked at them, what is our end-to-end offering as a joined-up portfolio? And how can we best address both the enterprise IT market, that it was a traditional HP space, as well as the Alcatel-Lucent telco traditional space too? We've certainly seen that there have been two worlds of IT and telecom and they truly are starting to converge more and more every day. Our portfolio, again, was based towards the telco marketplace, but the requirements that the telco had, we're starting to see become much more prevalent in the enterprise world as well. So when it comes to scalability, reliability, that was just table stakes within the telco world, that's starting to really have a relevance within the enterprises world. Yeah, you're kind of serving client bases that are sort of birds of a feather in the sense of the complexity. So the enterprise customers, they're a mess. They got a zillion applications, they're siloed all over the place, their organizations are not talking to each other, they're different hardware and software and services and the telcos, maybe even more so. I mean, I'm not an expert in that base, but there's a lot of heterogeneity. And then here they are, and everything's changing. They're competing now with Amazon and Netflix or so, they're thriving into their base. So can you sort of talk about some of the solutions that you guys have to solve those problems and where they fit in enterprise and where they fit in telco? Absolutely. So I think, I'll take the HP side, right? So I think what we've noticed is, as you mentioned before, the enterprises are becoming more like service providers. I mean, you look at a big bank today, they have thousands of customers, in some cases even millions. So the way that their network architecture is actually constructed is very similar to a telco, it's just at a smaller scale. But in terms of their problems and the challenges that they face, their requirements in terms of latency, in terms of security, it almost starts looking like a real service provider. Similar, like you said, Amazon, Netflix. I mean, these are players which are now pushing out video, it's on demand, it's in the clouds, all of a sudden they're starting to look much more like a telco than actually an enterprise space. So what we've done is we've taken a good look at this and we've said, okay, we need some carrier-grade technologies to support HP's existing enterprise portfolio. So one of the key assets has been the high-end router from Alcatel-Lucin. It's a 7750 service router, we're really excited about. It's been positioned within the HP networking family of products and we will take that to market. The second part is the optical switch, the 1830 PSS from Alcatel-Lucin. Super high speeds, very, very secure, speed of light, right? That's what the optics are all about, which is combined with our storage. So HP storage is already a great value proposition, now we have the transportability to connect data centers at the speed of light together. So we're super excited about that. And then finally, we look at the application side and we're seeing some convergence in the communication, so video and voice. And what we've done there is we've taken Alcatel-Lucin's rapport solution, which is based on their IMS application and we've pulled it together with our HP Helion Cloud. So the three assets are being launched here at Discover, we're really excited about it. And we see them being extremely relevant in the HP enterprise space. Absolutely, to continue on to Dennis's comments. With Alcatel-Lucin, we've been helping our telco customers for years, effectively deliver cloud services. If you look at something like IPTV, which we helped launch all around the world, that effectively really is a cloud service. And so the capabilities that we've had with those telco customers for years when it comes to managing multiple points for a single user, getting in and actually looking at the specific service of that user as opposed to a port. For example, the ability to rapidly turn up and equally as importantly turn off services, those are things that we've been doing in the IPTV world for years. And working with HP, we can now leverage that capability that we have inherently within our portfolio and our areas of expertise and take that into the enterprise world and the cloud environment also. So Jeff, let's unpack that a little bit. So you're talking about granularity of services and the ability to turn them on and off sort of real time essentially. What does that mean for your and customers and their monetization strategies? So if you take, for example, distributed cloud networking that HP uses today, if you think of your cell phone, when you flew out here, you didn't have to coordinate with your cell phone provider ahead of time to tell them, hey, I'm going to be in Las Vegas and when I get there, I'm going to need all these features, right? You came here, turned on your cell phone and it works. And that's effectively what DCN or distributed cloud networking does in the data center as well. It's a policy based system so you can set up and say, okay, I need a new virtual machine. That virtual machine has a certain profile of characteristics, DCN will build a network connectivity within the data center automatically, nearly instantaneously in the same way that your cell phone works, effectively. So take that through a little further to the enterprise customer. Give me an example of how somebody might use that. How it drives business. Yeah, no, it's a great question. So I think we've been playing in the virtualization market for some time so HP has been very strong in the data center space but now what we're seeing is rather than virtualize a server, our customers are virtualizing whole data centers and then the question becomes, what do you do when you have multiple data centers spread across multiple regions? Why do you need to have the physical boundaries anymore? I mean, at the end of the day, the software and what the client experience the users want to see, they don't care where it's hosted from a physical perspective. What they need is the right service at the right time, at the right speed. So with technologies like DCN, what we're able to do is actually create the optimized path of the network, irrespective of the underpinning network actual infrastructure, doesn't matter which switch it is, doesn't matter which carrier it is. So technology from Alcatel Lucen allows us for our enterprise customers, just by flicking a switch on the policy based system, they can create a VM wherever it's needed in any data center of the world in any manner they need it. It could be a large application, it could be a small one, it could be for a branch office, it could be for the head office. So that kind of disaggregation of the physical layer and the virtual layer is really starting to pay dividends for enterprise customers because they no longer have to marry the two together and do painful configuration of port by port, they can actually build application centric profiles and then the technology from Alcatel Lucen will help build the appropriate paths throughout the network to ensure the right client experience. Is there a, okay, so that's, I get that and that sounds like you're solving, there are largely a hardware problem, is there a software analog as well, my software management layer on top of that? Can you? There is, there's a couple of different assets. I mean, we talked to, when you think about the software behavior when a client is using it, right? You usually run into a couple of traditional pain points, right? One of them is, for example, the speed, right? The latency, the actual response time of the application. The second thing is security, right? So actually, how are you building that? How are you routing that? Where's the packets going? How do you do it? And the third thing is scalability. So traditionally, if you think about a financial application, you know, it's got a month then, let's say, you know, the CFO is running reports, you know, all of a sudden, you need to spin out a series of VMs. You might need to burst out and get some additional compute capacity. That's usually been a bit of a manual effort so far. With this kind of technology, what we're able to do is have the actual compute layer as well as the networking infrastructure respond to exactly what that application needs when it needs it. Build up those compute services and the processing power with the right network connectivity, but also collapse it back down again so you don't have wasted resources, you know, and ridiculous amounts of bandwidth sitting idle. So that's a good enterprise example. Now let's come into the telco side of things. And I don't know, is the telco world even more, I said it before, heterogeneous than the, I mean, enterprise world is largely Linux and Windows OSes, right? The telco world sounds like it's got a lot of more specialization. It's certainly evolving very rapidly and particularly when you look at the go to market, how we as Alcatel Lucent have been taking some of our network functions to market in the past, such as IMS that Dennis just mentioned, you know, you'd also touched upon NFV and that certainly is the trend that the industry's adopting is toward NFV. We as Alcatel Lucent, we've had a long history of working with HP and using the HP hardware as the underlying capabilities on top of which our software then wrote. And so we see now where the telcos are trying to decouple those two. They want to build this NFV environment and then they want to buy the network functions directly from various vendors and have one common NFV environment. So we're working very closely with HP to make sure that our network functions can work well with HP's NFV environment as well. And vice versa, you know, it's important for HP to work back with Alcatel Lucent to show that the NFV architecture that HP is proposing has wide industry adoption and interoperability. So you're essentially virtualizing the network function and then sort of abstracting that from the hardware. So now my hardware problem goes away. Same question though. I would think there's an even worse software management problem in the telcos. Is that a problem that you guys can attack yet or is that sort of? We work together with that. So if you look at the open NFV architecture that HP has, for example, you'll see distributed cloud networking as one of the components in the open NFV architecture. So the capabilities that Dennis was describing in that enterprise environment are very true in the telco world as well. And it's that burstability. And again, it's not only bursting up, but one that application is not being used. It's the ability to go back down and free up those resources for some other application that may be bursting and requiring those. And that's the capability that we help bring. I think, you know, what Jeff is saying is it's a similar behavior in the enterprise is just at scale. I mean the carriers at the end of the day they have to make a decision in terms of how they want to run their operations. They have a series of extremely powerful apps, how our cell phones work, how our fixed line works. These things need to operate. So in addition to having their network as virtualized as possible, there's also a secret sauce in terms of how they orchestrate those VNFs. And that's where we have a lot of good discussions between us in terms of what does that optimized stack look like? And the truth of the matter is it's a relatively nascent industry. You know, we're talking here 12, 18 months old maybe. And at the moment we have different joint customers who are doing different things. Some are in trials. Some are actually, they've made a big bet, you know, they're in production. And I think it's exciting because I have a couple of, you know, we've got some very good telco customers we've engaged with together and we show up as a team and we say here's the HP perspective and the Alcatel Lucent perspective and this is what we think is going to be the winning combination. And I have to say it's starting to pay dividends. You know, they started to recognize that the combination of telco and IT technologies as well as our respective points of opinion are helping them differentiate in the marketplace as well. So how do you guys look at the market? You've seen customer problems, there's some similarities, you get together, hey, we can help solve these problems, we can make some money at it. So how do you look at the market? You do TAM exercises and I mean, you got to justify the effort that you put it in. How big is this opportunity? Yeah, and certainly we've looked at whenever we've added products to the HP portfolio we've done business cases for each one of those. And then certainly with NFV that's a whole other area as well. You know, with NFV I know that that's one of the big bets of HP as well. And it certainly is a huge opportunity I think for both companies. So what the total TAM is for that, I frankly don't know off the top of my head. I just know it's big. And it's in the beads. Yeah, it's in at least 10s, maybe hundreds of beads. I don't think hundreds of beads. That's the way that things are going, right? I mean, people don't want to have hardware that's dedicated to a specific application because like you said, it creates this environment of so many different varieties that you have to then manage. They want to try to simplify that world. You do a commercial off the shelf, underlying technology, hardware technology, and then have the applications run on top of that common information. Yeah, I mean we learned from the hyperscale guys that homogeneity is the key to scale. And if you have all this diversity you're going to limit your scale. That's really true in the telco business. Increasingly, if you want to go into the digital enterprise it's true in your country. When you look at the digital enterprise, when you look at how many end points you as a user have today, that's something that's just rapidly growing more and more, right? I mean, you have your cell phone, you have your laptop, you have a tablet. You may have a desk phone or you may not even have a desk phone anymore. Maybe you have an application on your tablet that is your old desk phone. There are all those new trends that are out there. So it's not even you as one user anymore. You as one user now have multiple devices that you're working with that the IT departments need to manage within that enterprise. So now a 10,000 employee enterprise really is like a 40 or 50,000 user enterprise, right? And more and more what we're seeing, it's trying to predict the future with a crystal ball. As much as the products that both companies have, we feel they're industry leading, we try very hard to have them. It's about the solutions and it's about repeatability. So what we're trying to do is develop this winning combination of solutions that address certain problems. And the way we do that is we take a look at our flagship products. We say, how do these coexist? It's going to be a little bit of a competition. Sometimes we partner with a lot of people, so does Alcatel Lucent. And at the end of the day, we think about the customer problem, not from how can I put this particular product in that particular customer. It's what's the problem they're trying to solve and then what is the aggregated solution? And within that solution, you're going to have some HP technology, some Alcatel Lucent technology, some services wrapping around it. But at the end of the day, I think what's very exciting in this space is we take these different assets, whether it be a hardware underlay, network infrastructure, compute servers, or whether it be software assets, orchestration, helium, I mean, any kind of virtual environment. And I think that's what's exciting right now. Every engage when we do, we're starting to recognize certain characteristics that they all require and look for. However, the actual end solution is still down to customer choice and their particular problem, right? Where they're based, what they need, what their size is and so forth. So it's an exciting time for both of us. So what should we look for going forward? Out of time, you guys got to catch a plane. In all this digital world, it's still got to fly. It's physical. One day we'll teleport. Limitations. So what should we look for? It's sort of indications of progress, signs of success, things that are going to make you guys happy. Yeah, we're certainly continuing. You know, we're adding more capabilities together as we work more closely together. We're looking to do things to help automate the rollout of, to address the small and medium businesses with some things. And I don't know how you want to describe that. The virtual CPE. We're trying to, we have our basic building blocks today. The three solutions that Dennis mentioned, the Distributor Cloud Networking, the resale of our routers, the resale of our optics. We're adding the rapport capabilities in for a next generation type communication suite to offer people. And then we're also trying to simplify the approach of rolling out those services to end users themselves. So we're also, in addition to working directly with enterprise customers, we're also seeing a major opportunity to work with large service providers to help them reach enterprise customers in an automated fashion. I think, just spot on, at the end of the day, what it means is you'll see a lot more HV Alcatel-Lusen partnering in the field. We feel that there is a winning combination here in terms of a strong network equipment provider like Alcatel-Lusen and a player like HP. You got two powerhouses. I mean, it's not a Barney deal. A lot of times, I didn't know what to expect. And a lot of times people go, eh, we get a press release. But no, it sounds like you guys are really tightly working together. And that's because the dollars are big, big opportunity, and the problems are large. And time is now. Awesome. Well, thanks very much for coming on theCUBE, sharing your story. Appreciate it. Right there, everybody. We'll be back right after this. This is theCUBE, we're live from HP Discover. HP Storage Guy Calvin Zito, and I want to help.