 Welcome back everyone, this is Silicon Angle and Wikibon's theCUBE, our flagship program. We go out to the events, extract the signal from the noise. I'm John Furrier, the founder of Silicon Angle. I'm joined by my co-host, Dave Vellante, the co-founder of wikibon.org, and we are here live in Barcelona, Spain, for day three of our exclusive coverage of HP Discover 2013 in Europe, and I'm pleased to have them on theCUBE, Antonio Neary, a CUBE alumni, and now the Senior Vice President and General Manager of HP Servers. First of all, congratulations, it's a new role for you. You were moved into this role to head up the service group. Welcome back to theCUBE. It was great to be here, thanks. Again, big role, servers, they're not going away, right? I mean, they're getting bigger, bigger market every day, getting smaller in size, but larger in scale. You got the pods, you got a lot of things, a lot of market share to talk about growth. So I got to ask you first, what's it like in the job now that you've been there for a few months? Tell us, give us some color around what's it like, how's it feel, what's the dynamics, and then talk about your vision for the server, division, server group. Well, nice to see you again, it's always fun to come talk to you. I think it's a very exciting job because as we talk about all the time, right, we have to be able to drive the transformation to provide solutions for the new style of IT. And for the servers, means we have to provide new solutions for the style of compute. So this is why we kind of change a little bit, say it's not just about the server, it's about the compute. And our vision is very, very simple, which is to provide the right compute for the right workload at the right economics every single time. So it's not anymore just about a general purpose server, but understanding those key workloads that deliver specific business outcomes and how we can deliver the right compute for the right economics to deliver the best scalability, best cost, simplicity, agility, and efficiency. And this is why you have on the floor a significant amount of innovation targeting specific workloads. Dave and I were talking this morning on the ride over here, we interviewed, you're now Pierre, Tom Joyce, and you're Vice President of Converge Group. And we were talking about- The Sharkman. He said, it's Shark Week here, we're in the Shark Tank, you can now call the Shark Tank, not Sharkanotto, which is a viral hit that went south, but the Shark Tank here, but he's got Converged, he's trying to package it up. HP kind of was the leader in Converged. But the way you guys defined Converged was servers, networking, and storage, kind of different elements together worked in a Converged infrastructure. Now we're going fully Converged. How do you guys talk to customers about this trend of Converged systems? Is it a packaging issue? Is there software underneath the covers? Clarify that relationship and that trend around convergence. Well, I mean, virtualization is absolutely the underpinning of the cloud architecture, right? So, obviously you have different ways to drive virtualization. We are very proud to lead virtualization with our HP Blaze systems. And now with HP OneView, which provide an architecture around virtualization to be very efficient on how you deploy that, and how you manage that infrastructure. So that becomes kind of the critical components on this new style of IT, which is the Converged system, the Converged infrastructure, and with the announcement of the HP Converged system 300 and 700, we are taking the best of great components, right? If you remember listening to Bill, you're talking about the best of great components and then packaged in a way that are fully optimized between the server resources, the storage resources, and the networking resources using our software stack, and therefore delivering a superior experience when it comes down virtualized environments. And the whole point is to simplify all the administration that goes with it because customers have told us over and over and over that they don't want to be in the integration business, they don't want to be in the deployment business. What they want to be is provide agility and cost efficiency to serve those customers as fast as we can. So that's why one of the key value proposition of the HP Converged system, 300 and 700, is that you can order it in 20 minutes and you can deploy in 20 days, but what they're going to get is a superior virtualized environment using our server technology, our three-part technology. And the other piece of that too is the customers don't want to have to pay for a unique statement of work for those services every time. They want you to do it in the factory and ship it to them. Exactly. So we can all prepackage for them based on their needs and be able to deploy for them because at the end what they care is not so much about the server, the storage, what they care is that I need 1000 virtual machines fast so I can provision those virtual machines to my clients as fast as you can. And so you roll the new infrastructure and you provision that as fast as you can. That's what they want. So you know from your previous Cube interviews that John and I, we love the services angle and I've always said that services is a great feeder of information back to product groups. You get excellent visibility there. So my question is what did you take away from your services experience that you're now bringing to the product division? Well first of all, services is we call it a glue but it's really all about driving customer relationships and the amount of customer insights you get every day is tremendous. So think about how people use the product, how their service, how they are managed, how they are automated. How we take that information and we feed it back into the product development to make sure our technology is differentiated and as efficient as we can. So one of the things obviously with my services experiences, we are building in all the right communities between the services organization and the product engineer organization now in my server group to make sure that close loop feedback is accelerated as fast as we can. So for example, we talk about intelligent management infrastructure is what type of enablement we need to put in the product to make sure we drive the simplicity, agility and cost efficiency as you service those products in the marketplace. That's an example. Anthony, I want to ask you about, now that you're the chief of the division and the server is really important to me obviously with the emphasis of big data and cloud and the modern era of computing, new style of IT as you guys call it. A lot of people are evaluating architects as they're revamping their IT and infrastructure company-wide from instrumentation for big data, cloud, enterprise, data centers are changing. We were talking on the Gartner conference this week as well about this, the data center is changing. So I want you to talk about the mega trend right now which is confusing customers that we talk to. And that is, hey, I see Facebook, I see Google, I see Amazon buying their own servers. Why don't I get some of that open compute and build my own. And so it sounds great, right? It sounds easy. One, do you have the money to do that, right? Some don't. But it begs the question. It's becoming a leading indicator of a trend, meaning DevOps, whatever you want to call it. So we sort that out for us. I mean, because you guys make servers, you probably supply gear to Facebook and others, but that's a trend. We know Amazon definitely makes their own and then build their own proprietary. So how do you guys talk about that and talk to the enterprise customers out there about this trend and how you guys are working through that? Is it a black swan trend? Is it an anomaly on the unique use cases? Right. No, I think if you look at what some of the customers are trying to do is figure out how they can implement an infrastructure that's really optimized for their app. And obviously software is going to be the key component, how you optimize the hardware to that application. But the challenge is that you have to have the right engineering heritage, the right services support capabilities, right? Because at the end, there's not just buying standard components and building up this farm. It's how you manage them and then how you maintain them, right? With the right level of service levels and the efficiencies that you need. Now, we work closely with a lot of the service tier one providers where we provide actually engineering designs for them as they build these scale out solutions. And I think the reason why they work with us is because ultimately they want to get the, not only the engineering expertise, but the supply chain scale that we have and also the services support scale that we have, the procurement scale that we have, and then at the end, there's an overall package. It takes a core competency when you're saying it. Exactly. To do that. And so the little nuances are in there like engineering, right? And making sure the software is all working. It's a flu case. I'll say it's kind of a flu case and you have to be the size of Amazon or whatnot to do that. I'm sure you guys probably have a non-disclosure around some of the supply and relationships you have with them. Okay, so the next trend I want to talk about is obviously with virtualization, you're seeing the consolidation of the data centers. We talked with your CIO and talked about how HP consolidated down to seven data centers, consolidated and rationalized applications down to seven. It's awesome, right? So that's another trend. So talk about the data center model, which is are people going to be buying data centers in the future? You guys have pods, we're seeing that trend certainly with Dave, where it's like Facebook is kind of a poster child for this, where hey, here's our app, we want fully integrated infrastructure for the app. Right, that says give me the data center for that. I don't want a server. I don't want to buy storage. I don't want to mismatch. I want, give me a data center. Will they be ordering data centers in the future? Customers? Well, you know, the explosion of the data, right? And at the end, in the current course of speed, we are not going to be able to sustain this. The huge hunger for more and more and more compute. So we have to really transform the way we do compute. So for example, let me start with a moonshot, right? Moonshot is a great example of how to really transform the way we deliver compute to our clients in a much smaller scale, meaning in a smaller form factor, which drives less energy, less space, but really a super optimized compute per watt on that specific application. That's what we always refer as the software defined server because you are actually giving programmatic access to the data center. Now the problem is obviously while you can reduce eight racks to one rack, right? That's the example of HP on HP case that we talked the other day, where 30% of the HP traffic now is managed with H chassis in a standard full rack, instead of eight full racks, is a way to not have the need to build new data center. But that will take us so far. And then the question is, what else we can do to improve the energy efficiency? That's why with the modular performance optimized data center, we're giving the customer the choice to deploy fast capacity in a very environmental friendly with significant energy efficiency, a half of the cost that you will take to build a new data center. You know the old expression you have to eat your own to bring in the new. Absolutely. And Moonshot is that, right? So the question everyone asked, and we're getting some questions on Twitter actually around this. Thanks for watching this late in the US and certainly here in Europe. The question asked Antonio about Moonshot as service providers is expected to erode solutions for the enterprise. You bring that point up, right? I mean, the capacity issues of the data center is busting at the seams. So okay, you're consolidating with Moonshot. It looks like you're cannibalizing but the need for compute is growing. So that's your thesis, right? But let's be clear, you know, when we introduced the first time Moonshot and you recall having some of this. We were there with you. Exactly. And you were having a conversation with some of us. You know, we said we are the leader in the server space. We are the leader in the compute space and we're going to transform this industry again. So in many ways, you're actually leading the transformation which yes, is going to transition from, you know, traditional IT to the new style of IT but that's what leaders do. So call it cannibalization, call it transformation. In my view, is a transformation, is the need to deliver the new style of compute. It's a new reality. Right, exactly. It's a new reality. So you get a glimpse of that new reality when you look at the hyperscale business. You see the giant web companies. They kind of started out with this software defined thing and that seeps into the enterprise. You're now seeing these super dense servers seep into the enterprise. You're also seeing a trend which is relatively new to me even though it's been occurring for a while. I didn't realize it. We were at Amazon re-invent and the architects there were telling us, you know what, actually, we're not building on commodity components anymore. We're getting highly customized which is kind of an interesting, sure you say yeah, no kidding, about time. Well, yeah. Exactly. Well, at the end, you know, because you want to differentiate your business model, right? The way you're going to differentiate in many ways, right, is the entire stack, right? So you need the app, you need the right infrastructure to deliver that differentiation and the right cost. But you need the engineering to drive that full optimization between the software, the app and the infrastructure. And HP is a unique position because as I said at the beginning, right, our aspiration is to provide the right compute for the right workload and the right economics. This is why we're applying all that innovation and engineering to be able to help service providers, to be able to help enterprise customers as they move to the new style of IT for the cloud or even small businesses to provide a converged infrastructure, right, set of resources that allows them to be very efficient in their business model. So, I mean, some of the internet guys aren't going to buy from you. They're not going to buy from anybody. They're going to buy from, you know. They have choice. ODMs and they're going to do their own thing. That's cool. Most of the enterprises are going to look to companies like HP to develop those technologies and bring them to the enterprise. We've started to have some conversations with some of these large financial institutions that are trying to figure out which way to go. Should we become mega data center, you know, internet like and start dealing with ODMs? Which would be different for a bank. Or should we, you know, look to suppliers like HP? I'm wondering if, you know, not, you know, the name names, obviously, but do you see that trend where some of these super large commercial enterprises are starting to think, well maybe I can be like a Google? Do you think that's wise? Do you think that's crazy? Have you started to have those discussions with them? Would they maybe migrate to something like Moonshot? What are your thoughts there? Well, I think customers need to understand, you know, what is the best path for them through the cloud based on their unique business needs and outcomes. I think HP is a unique position to provide the best solutions for them because we at the end is not just about the hardware, is about the software, is about a clear articulated cloud strategy, is about providing the entire backhand support from the sales engagement all the way through the services support all the way through the supply chain. Because at the end of the day, when you build these large enterprises or large scale out capability, you need to have somebody who has the expertise. So I think customers really need to look at the entire picture, not just at the component level, and I think our vision is to provide the entire solution to our customers, not just the component. Now, we start with the component because we want to have the best of breed, we package it in a way that's very cost efficient and we wrap the whole experience around those solutions. So those are customers where the financial institutions or all the type of customers, they understand what is the right end to end stack for their specific needs that they can rely on a partner at HP. You mentioned supply chain now a couple of times and I want to ask you the importance of supply chain as a competitive differentiator. Can you talk about that a little bit? Well, I mean, you know, our strategy is clear, right? Which is to provide solution to the new style of IT. We want to be the partner of choice and that's why we have a complete portfolio, right? You're talking about printers, talking about PCs, you're talking about servers, you're talking about storage, you're talking about now converging infrastructure, you talk about software and that gives us a tremendous advantage from the supply chain perspective because we serve from the small SMB customer all the way to the large enterprise customers and through service providers. We serve from the client all the way to the cloud and we actually cover every aspect of the product which means that it makes us able to deliver very cost effective solution for the supply chain. That supply chain, it's got to be more than 50 billion, right? I mean, we support a $125 billion business. So as you know, you know, 170, 170 countries. So I remember, you know, there was all that talk about HP spinning off its PC business. John Furrier was very vocal. That would be a big mistake. I think we put that to rest. We did, but you must be very happy that you still got that PC because that's a key piece of the supply chain and gives you leverage that virtually nobody else has in the industry. Well, but remember, you know, we just didn't do it for that reason. No, I know that. We did it because we wanted to be the provider of the new style of the institutions. Right, understood. And PCs are very critical components, right? I mean, the supply chain is a huge advantage. I mean, people, I mean, this is what I always say, knowing HP, we were just talking about, sorry, HP old days, but like it is such a huge competitive advantage as Moonshot, for instance, gets looked at by say Wall Street analysts. Oh, you cannibalizing your business, but the margin shifts to other areas. One, that's what customers want. They want a more efficient data center so that you're delivering innovation. One, two, you're shifting margin to software. And all the leverage of the supply chain just gives you efficiency on cost and quality, right? So, I mean, I was talking to Bethany Mayer about her six nines. I mean, networking gear is so bulletproof now, reliable. I mean, it's just amazing. Well, by the way, in our service too, because obviously remember, we provide, we actually power 90 plus of the Fortune 100 companies with absolutely the best resilient, mission-critical systems in the world, because those are mission-critical transactions. I mean, you guys have an amazing hardware engineering and supply chain. Had that for years. You've always had a cost of ownership and great management software over the years. So I got to go into the next line of questioning for you, is how do you look at the business from a quote, you got to look at the Mars, you're on a P&L, you have customers to serve, so you're satisfying customer demands with innovation, at the same time, yeah, potential cannibalization at some level, which is natural, eat your own, bring in the new. Around this notion of a software-defined data center, which, you know, I've talked with Shajar Khan in the labs about this years ago, called the data center operating system. So as the data center becomes much more of a cohesive entity, not just ingredients of servers and storage, that's now a big picture right now that everyone's talking about. Can you talk about that operating environment? You guys have pods and shipping, that's a new, well, fairly new, but you know, new innovation there. What is this data center operating system? What is the software-defined data center? Yeah, so first of all, we have a large portfolio of pods, right, from eco pods to modularized pods. And the fact that we announced here in Barcelona, the dedicated pod for, a specific pod for the European market, that tells you the understanding of customer needs for a specific market. And like I said, you know, you can deploy that pod in six weeks and at a half of the cost. Now, going to the software-defined data center, in our view, right, software is going to drive, you know, the next level of, you know, how you drive efficiency through the data center, and it's basically giving programmatic access to the data center. So you can, you know, kind of personalize, you know, well, what is that workload efficiency with the right architecture behind? And I think, you know, this is just the beginning, right? If you think about what Betany does on the software-defined networking, she's actually allowing, you know, making available APIs to be able to manage that network, right, in a most efficient way, which today is really very hard to manage. If you think about what Davis-Cott has done on the data software-defined storage, is another aspect of how we are driving this vision. And in Moonshot, it's obviously the typical example of optimizing to the extreme, you know, an application workload on a compute per power and be able to really provide that experience. I like that term, personalized data center. I mean, we're living in the era of big data where essentially general purpose seems to be going away, the notion of, remember, general purpose computing data? Well, by the way, general purpose service is still very good for certain workloads, right? But what is clear that big data, for example, is going to drive the need to have a very optimized set of architecture. This is why, you know, we have a system called the SL, the DL-4500, which basically is the SL-4500, which is a highly optimized system with memory and storage and compute to be able to run the extreme workloads, right? Like Vertica, for example, right? Hadoop, and so forth. And then we can deliver the best performance per cost on those extreme workloads. What is that? So, the server business is a massive business. It's highly competitive. Margins have been under pressure for a long time. It's, you know, consolidation. It's actually a lot bigger than people realize because of so much you don't see, because it's going into this giant data center, right? So, how should we think about, and there's some changes going on. We're just talking about general purposes. There's a place for it, but there's so many new use cases coming out. So, how should we think about the server business and how it's evolving? What's your perspective on that? Well, you know, I think you have to really segment the market, both from the customer standpoint, from the workload perspective and then from the product perspective. Think about the three-dimensional metrics, right? This is why we are becoming super laser focused on that segmentation. And then, so if you take, for example, a SMB on a specific workload, what we're trying to do is drive a complete solution to that customer, which includes compute, storage, and networking, so we can deliver that complete package to the customer. But when you talk about that market, right? You're talking about what is the right compute for that specific workload? And this is why, you know, we are really driving a lot of work around that workload application so that we can optimize with our engineering capability that specific compute power. And this is why, again, it goes back what I said at the beginning, deliver the right compute for the right workload that the right economics. We had Tom Joyce on yesterday and John asked Tom, when you talk to Meg, what do you talk about? He said, segmentation. Segmentation is key, segmentation is key. What are you talking to Meg about? When you talk to Meg, Meg, we're going to get you in the queue. You're watching, I know you're watching in your hotel room. We're going to get you in the queue someday. But the other one is how you present the clear value proposition to the clients around business outcomes and this is what we really focus on. So before we get into some of the personal questions I have for you, I want to ask you about the biggest trend you're seeing in the data center. Okay, as you talk to customers and you've got the HP story down, what are the customers telling you? What are the biggest issues? Is it footprint? Is it capacity? Is it power and cooling? Is it DevOps? Is it developer environment? What are the core issues? All of them. But I think it starts with, you know, they really, they understand, right, that what they are doing today is not going to work in the next two to three years. They really have to change. Some customers, you know, they just need to modernize their IT. Some customers really, they need to change the infrastructure for the new style of IT in the sense that, you know, be ready for the cloud. But at the end it comes down to reducing footprint, reducing power consumption, improving, you know, service levels and then obviously reduce cost and this why simplicity, efficiency and agility are kind of the three key areas that we really focus on. Simplicity in the sense consolidation and in terms of infrastructure and management. Agility meaning react quickly to the business needs. Yeah. And then obviously cost. That's something that we're hearing a lot. We hear, they use the word flexibility when we talk to them. And what they mean is, what you just said, we need the ability to move on a dime to put resources on a project. Immediately. Immediately and that's sometimes ad hoc. It could be a fire drill. It could be a new business opportunity. It could be a new application. Exactly. Great. Okay, Antonio. So I really appreciate you coming on theCUBE. Great, great guests. You're leading the charge and servers. Great big business line for HP. Obviously changing in a great way and in a new way. Energy is a huge issue. Moonshot is great promise. We hope to hear more about that. But I want to ask you a personal question. You've been at HP for a long time. Yes. And I want to get your perspective. Take us through what's going on around the culture now. You were there when I was there in the 90s when Bill and Dave were kind of exiting out of the company and then it became Lou Platt, a CEO. And then you had the different regimes, if you will. Different CEOs come in. Carly, Mark Herd, Leo, and now Meg. What's this new HP like under Meg? And how is it, look at that, because she earns points with me when she puts Bill and Dave up there. And I know that gets me going because I love when I see that keynote. She's basically saying, we're bringing back Bill and Dave's vision, which is the soul of the old HP. And so I like that. So you were both there and I were there. So talk about that. I'm absolutely excited to be part of HP, part of the turnaround story. I think Meg has brought a completely different view about what we should be focusing on and the how, which is very important. I think we are very optimistic about our strategy, what we're doing. We are convinced this is the right strategy. And you can see it, you can feel it, right? I mean, if you work here on the floor, the excitement of our employees, customers, and partners about our vision, our strategy, and the way we're executing. So I think from the cultural standpoint, I think it's kind of almost, kind of a new way to approach the business. And I am super confident the way we're approaching this. And Meg has done a phenomenal job in rallying the company behind the vision and the strategy. And you can see that people are super committed. Does she talk internally about the Bill and Dave story? Absolutely, we talk about Bill and Dave's and the roots of the company and the fact that we are trying to transform the company for the next 75 years. Because at the end, HP is all about innovation, is all about our customers. Without the customers, we are nothing. And our partners are super critical part of the ecosystem. The message is super, super consistent. I never worked at HP, but I've said a number of times that I've always felt that HP has to get back to its roots and its original logo, Invent. Do you buy that, or is that just nostalgic and HP really has to look forward, or is it a combination? Innovation is live and well at HP. And I mean, just walking on the floor, right? Just walking on the floor, look at how much innovation is there. Well, your new manager, Bill Vecte, who's now in charge, is he Chief Operator? What's his official title now? He's the Executive Vice President General Manager of the Enterprise Group. Yeah, so he's now, he's running the Enterprise Group. We'll get him on the queue too, we want to hear from him. But he had an interview I watched on Bloomberg yesterday. You know, it was obviously remote in San Francisco, a little delay, but I liked what he said, you know, and what he said to the anchor person, Emily Chang, said, you got to feel it, you can just only be here. And I got to say, being here, Dave and I, you know, we're not just saying this because we're here, but it is a good vibe. You can see a spring in the step, a sharper improvement since Frankfurt, in terms of overall energy, cohesiveness in the story. So it is a good vibe here. Well, I mean, the excitement, you know, when you walk and talk to people, you know, you see the amount of energy around each of the booth. You know, we have our server group area, right? And we refer that very affectionately to the petting zoo because people want to see it touch the technology, right? And how they can apply that innovation technology to their specific needs. And so it's an incredible, you know, excitement when you go through the park. So tell us what your goals are for the next year. What are your, what's your high level, you know, ocean or big goals that you have? Well, first of all, is to focus on the customer. Absolutely priority number one, our customers are our top priority. Obviously we have to continue to drive the innovation at the right cost for this new style of IT. And I am very excited and confident that we are on the right path. And you know, you will see new innovation over the next two, three, four quarters as we come. And I'm sure we're going to see each other again in Vegas and other places, in other words. So we'll talk about that. We've done all the moonshot launches. That's been exciting from day one. Exactly. Bill and Dave's office to the New York. Right, exactly. Love that product. And you know, and then, you know, continue to drive, you know, what I call the solutions together with the rest of the enterprise group because we have the best of great components. We have the engineering to provide this converging infrastructure solutions. We have the software to really differentiate our product. And we have the services really to help customer in this journey to the new style of IT. So my key priority is to continue to drive the innovation in the compute space and then leverage the power of HP to meet and exceed the customers. We're getting the hook. I'm getting messages on my screen. You got to go to a meeting. We'd love to. Bogart, the time here with Antonio. Great guest, a super nice person. High integrity, great person. He moved up the ranks from HP from 95 here. Great veteran. Final question, end it with a bumper sticker. It's leaving Barcelona. The car's leaving Barcelona. What's on that? What's the bumper sticker on HP to discover this year? HP is your partner for life. I'll call it for that. But again, one thing I want to leave is that we're really focused on delivering the right compute for the right workload and the right economics as a part of the new style of IT. We'll be watching you guys. Obviously servers we've known for a long time but pods are exciting. It's basically shipping data centers. Moonshot, revolutionary energy savings. Changed the game on footprint, et cetera. And we'll be looking at the software angle to how you guys tied all together. This is theCUBE. We'll be right back. Exclusive coverage here at HP. Talking to all the top executives. We'll be right back with our next guest after the short break. I'm John Furrier with Dave Vellante. We'll be right back.