 Live from the Austin Convention Center in Austin, Texas, it's theCUBE at Dell World 2014. Here are your hosts, Dave Vellante and Stu Miniman. Welcome to Austin, Texas, everybody. This is Dell World. We're here live at Dell World 2014 inside the Austin Convention Center. Stu Miniman and I were here all day yesterday. We're going most of the day today. We got a bunch of great guests on from Dell, from the ecosystem, from customers. We've had analyst segment. We had Matt Eastwood on yesterday. A lot of buzz here this week. We're documenting the story of Dell taking itself private, transforming the company, giving itself the time really to morph into an enterprise powerhouse. You know, it's very interesting, Stu. We were talking yesterday when Dell left the public markets, our last sort of benchmark of data. Dell was approximately $60 billion in revenue and they were probably trading at 50 cents on the revenue dollar. So we're talking about somewhere in the high 20s, you know, for valuation, if I recall correctly. And Michael Dell timed this perfectly. The headlines at the time were terrible. I think, you know, of course, HP was talking about spinning off its PC division before that and then decided not to and now has decided to split the company again. So there was all this sort of turmoil in the marketplace. The PC market was down. The stocks of the old line PC companies were down. In a somewhat related incident, IBM was talking about selling its X86 business to Lenovo. Actually, the Dell going private predated that, but there was that tension in the marketplace to do that. So Michael Dell timed this perfectly. Now some of it was dragged on by the fight with the great icon, but he did two things in my mind and I want to ask him about this today that were very, very difficult. One is he timed the market perfectly. Maybe that was luck, but maybe not. The second was he beat the great icon. I can't end it up with the crumbs. You know, I've said many, many times and you have as well that VMware was the greatest acquisition in the history of enterprise tech. Maybe even in the history of tech, maybe Microsoft's acquisition of PowerPoint. Didn't they buy in their word processing package at one point, but that would maybe created more value. But Dell has an opportunity to create as much value as VMworld. If you think about it, if Michael Dell and his team were able to transform this company over the next five years and even get one times revenue, they will have created approximately $30 billion in value, which is pretty close to what EMC received with VMware. So that is going to be an amazing story and I'm just really pleased that we're here to document it. Yeah, that's real good analysis, Dave. You know, went to the keynote yesterday in the afternoon, really the theme was let's talk about the optimism from new technology. And I think that's what Dell's really, you know, building off of here, Dave. So they have the two authors from the second machine age at MIT. It's Andy McAfee and Eric, you helped me with the last name. A Bryn Yelfsen. Thank you. Yeah, just doesn't roll off the tongue this early in the morning. But it said that basically this second machine age, which is built off of mental power, things like Watson and big data, analytics and everything, is going to be even bigger than the Industrial Revolution, really plays into a lot of the research we've done at Wikibon, Dave, talking about the industrial, you know. Internet. The industrial internet, thank you. And how big data is going to create so much value for the practitioners. And in the keynote, it talked a lot of a bit about the changing jobs. We need to really change the way we educate people, not just in college or in elementary school, but really thinking about how we retrain people because technology changes are going to keep going on. I mean, I know for myself, I've been through probably three different careers. I did sales, I did engineering, and I'm an analyst now, since you pulled me out of the big vendor community. But people are going to have to change because what you're doing today, chances are technology is either going to morph your job or could get rid of your job. And that is a threat, of course, but it can be an opportunity if we go about it in the right ways. And the discussion yesterday, of course, was very data-centric, talking about the data's impact on this change. And of course, we've been batting around inside the Wikibon community this notion that the data revolution can be as impactful, if not greater than the industrial revolution, particularly as you're pointing out on jobs. And I think, Stu, there's something else going on here. And we've talked about this a little bit in the terms of this notion of the digital matrix or what some people are calling the digital fabric. This idea that industries, historically, have had their hardened built stacks of production, design, distribution, sales, ecosystems, partnerships, et cetera, supply chains, within that industry, financial services or medium entertainment or healthcare or education, et cetera, government. And those hardened stacks have led to expertise pools that are aligned to those stacks. And people stay in those industries for their entire careers. And what you're seeing now is this so-called digital fabric emerging where you've got these horizontal technologies playing like cloud and infrastructure as a service. You're seeing security increasingly move from an internally focused area to one that's externally focused. You know, the old analogy of in the old days you'd dig a moat around the castle to protect the queen, but sometimes the queen wants to leave her castle. And so security is becoming much more data-centric and application-centric and it's floating external in. And then you've got social media now where you're signing in with Twitter and Facebook and LinkedIn and we're sharing things like we never have before. So the ability to publish and communicate is extending across those industries. And then of course what they were talking about yesterday was the data layer. That data layer floating at the top providing analysis and insight. Again, cross industries. People are grabbing data from different industries. They're grabbing sources from government. They're grabbing financial services data. They're grabbing credit card data. They're grabbing retail data. And they're analyzing that data and new weather data and analyzing it in new ways. And what's happening is the companies that are building new business models are riding on top of that digital matrix and creating huge amounts of value. Examples, Netflix, Uber, Airbnb, all new business models that don't necessarily own their own stack. Rather, they're riding on top of this new matrix which is just a fascinating trend. Yeah, Dave, that whole digital transformation discussion is fascinating. And Dell provides a lot of the substrate to allow these things to happen. They're not so much focused on transforming too many applications because they're going to work with whatever the application is. So the cloud place where they get broker, they've got infrastructure that's going to give a lot of, live a lot of places. And tactically they have software components that add in there. So it's a little bit different from the discussion you'd be having from some of the other big players who are pushing things like IBM Blue Mix and HP Helion where they've got really their PAS layer. The partnerships around Cloud Foundry, what Red Hat is doing with OpenShift. And Dell's partnering across a lot of these environments. They are partnering with Red Hat. I saw that there's some presentations here talking about what they're doing with OpenShift and helping enable some of those changes. And when they can lower the cost of IT and enable choice and flexibility like they are doing with both their virtualization and cloud offerings, it gives customers a little bit more options to be able to move from what they were doing before to newer environments. Stu, one of the things that people have been asking me on social and out at the events last night, a lot of parties going on last night, there were some small parties, there were some medium-sized parties, Intel threw a big party and they went late into the night. Luckily, we got out of there a little earlier. But people have been asking, okay, where does Dell sort of leave off with its own IP and pick up with partners? I mean, a good example is Nutanix, right? It's a converged, a hyper-converged solution or whatever sort of buzzword you want to put around it. At the same time, and we have Jimmy Pike coming up shortly here, Dell has so-called engineered systems as well, which are converged systems. Aren't those things competitive and how are customers sort of understanding and where to put each and how is Dell helping them rationalize that? Yeah, Dave, you're absolutely right. We've talked to a lot of the people on the program saying Greenblatt yesterday walked us through many of the solutions that they have and absolutely they're going to fit into the proper ecosystem. So they said, Dave, there's a Microsoft environment, there's a VMware environment, there's a Red Hat environment. I was joking with somebody. It's almost like there's microclimates in IT. So many people look at it as, oh, it's black and white. I'm either on premises or I'm in the cloud and it's like, well, we know it's a hybrid environment out there and people have a lot of stuff. Unfortunately in IT, when I try that great new thing, I'm not throwing out all of what I had before. There's not much Greenfield out there. Service providers and the web scale guys are building at such a past pace that they can be act like a Greenfield environment but Dell's going to, of course, work with you. They've got decades of working with the existing environment and they're going to help you go through that refresh cycle and move to the newer technology. I mean, they've been following Moore's Law for a long time so they know how to move people to that newer thing. So is the answer to my question that looks like Joe Tucci says overlap is better than gaps and is that what Dell's strategy is to do is to try to identify, I mean, we talked to Alan Atkinson yesterday who essentially did the, catalyzed the Nutanix deal and he was, one of the things he said was, look, when you looked at what was happening in the marketplace and the traction that Nutanix was getting and the buzz around them, we felt like they would make a great partner because they, even though as you pointed out, they really weren't at the time using Dell hardware and maybe that's the other reason. Maybe they said, hey, they should be using Dell hardware but so is that the strategy? It's like better to have overlap than it is to have big gaps. I think Dave, a little bit of its overlaps and the other thing is as we talked about the software defined storage environment is really nascent. So it's early in the game so Dell wants to make sure they place a lot of bets, let's see what's taking off and maybe they create something inside or they buy it because long term, really think that Dell is going to have their primary solution be something that they own control of most of what they do. We're going to talk to the Nutanix VP of the OEM Alliance today and one of the interesting points I found with that deal is Dell does not have any ownership stake in Nutanix. So if Nutanix keeps growing at the pace that they're growing how much is the Dell relationship important? I think it's very important but if there becomes tension between the in-house solutions that Dell has and Nutanix, they are not married, they are just closely partnered today. We also want to talk to you about Dell's cloud strategy. It's dramatically different than their large competitors like IBM, like HP. I'll throw Oracle in there and others, VMware, which is really not a competitor, it's a partner but EMC's a competitor, EMC owns VMware, you know this crazy industry we're in now. But Dell's cloud strategy is significantly different. Dell has not said, well the end is near, we have to go out and own our own data centers in order to compete with Amazon. No, rather Dell has said we are going to enable our customers to be cost competitive and agility competitive with the likes of the public cloud. And oh by the way, if they want to go into the public cloud that's fine, we'll help you get in and out, we'll partner with Docker, we'll move, if you want to move data from Amazon's cloud to Google's cloud to Microsoft's cloud, we're all cool with that, VMware's cloud, whatever. Interesting strategy, I wonder if you could talk about that a little bit. Yeah Dave, it is interesting because if you were to ask most of us in the analyst world and say okay, do I need to own my own cloud and my own data centers to be successful, we're leaning towards yes, but should I start something now? And of course if I'm starting today and trying to catch up to the big guys, there's no way you can do it. They are spending three to $4 billion a year, they've got, Amazon's been doing it, launched the solution over six years ago, so you can't catch up. So if I can't catch up, but I need to be involved in the cloud, Dell's going to give you a lot of options and the question I have, Dave, is how does Dell really make money in this cloud broker environment? How much of their own IP is in there? How much do I go to Dell to do this when I can just swipe a credit card on some of those big clouds or go to a trusted partner like IBM, EMC, Oracle, Cisco even with their inter-cloud, there's so many options for cloud out there that Dell has to push hard and I do like what they're doing with Docker and they've got some interesting pieces that can pull people out. I should say to that Stu, I think that all those guys you mentioned have, they're biased. IBM wants you in the IBM cloud, HP wants you in Helion, Helion, I always say Helion, they always correct me. Cloud hell. No, Helion. And VMware wants you in its cloud or at least one of its 4,000 partners that are using VMware. So they're biased. Dell is biased with the fact that they want you to use Dell hardware and Dell software but they don't really care who's cloud you use. I guess they do long run because they want their technology to be in that cloud and it's not going to be in the hyperscale guys. But I think that play of allowing you to float across clouds is interesting because if you're locked into the Amazon cloud or you're locked into the Google cloud, how do you get out? It's kind of like a service mesh play before CSC bought them. Kind of interesting floating across the clouds except the difference is Docker now. Yeah, Dave. And so they made the Amstradius acquisition. We definitely believe that that multi-cloud management is critical and Dell has some of that software components and know how and some really smart people that are working on this issue. So. Well, so, but again, the bet is that unlike what Andy Jassy says where he says very few companies will own their own data centers, Dell is making the bet that that's not true. That most companies will have some kind of hybrid. And I don't know, what do you think about that bet? You know, it's interesting. We're going to be at re-invent next week. You hear Andy Jassy talk and you hear frankly the rest of the IT industry talk with the exception of Google and I guess Microsoft, Microsoft sort of in between, but the different ends of the spectrum. Who's right? Who's wrong? Are they both right? Are they both wrong? So right, Andy's very dogmatic. You know, everything's going to the public cloud and it's all going to be there. I'm interested to see next week, you know, do they allow for a little bit of on-premise discussion because there's been discussion that there's going to be perhaps a, you know, new onsite appliance to help pull data into the Amazon cloud. You know, Dave today, you know, we know that there's a lot more equipment and dollars going into the on-premises environments. So, but, you know, they're also adopting public cloud. So, you know, I think, you know, Dell really gets to play the field here. We've been using a lot of, you know, gambling analogies with how they've been placing bets. But, you know, if it's, you know, red, you know, for the public cloud and black, you know, for being, you know, in-house, you know, Dell's placing bets. Here's the big question. We've got public cloud workloads, you know, a lot of the web stuff, a lot of the mobile stuff, a lot of the cool apps going into the public cloud, no question. The legacy stuff is not going there. And Amazon doesn't really have good examples of hardcore OLTP stuff going into the public cloud. There's some, but it's sort of lightweight. Those two worlds, the question is, will they collide? I personally think that people are going to build brick walls around their traditional bet your business OLTP systems. And that's really where the private cloud is going to excel. And it's just got to be, it's got to be good enough. It's got to be agile enough. It's got to be orchestration and management friendly. And that is going to continue virtually infinitely. But I do think at the edge, a lot of these new apps are going to go into the public cloud. And if there's going to be a big sucking sound for a lot of the crapplications out there. Yeah, I mean, how fast does NoSQL take over the old database world? How much do new analytics environments pull all of my data? And, right, Dave, am I going to be left up with, left with just a few old environments sitting in my data center? So, I've still got the mainframe sitting there and the AS400, the i-Series sitting there. Is there just going to be, is the in-house solution going to be that next generation of just that old thing that sits in the corner somewhere and makes some people some really good money, but isn't something we talk about all that much? All right, Stu, we got a big lineup today. A number of folks from Dell, from the product side. We got some partners coming on, like Nutanix. We got some customers that we're going to talk to. And of course, the climax of the day is Michael Dell's coming on. He will be here actually at 1030 local time. So, 1130 East Coast time, really excited about having Michael on. Honored, Stu, to really be here and have an opportunity to interview Michael and his team. All right, keep it right there, everybody. Stu and I will be back with our next guest. This is theCUBE, we're live from Dell World 2014. We'll be right back.