 Live from Boston, Massachusetts, it's theCUBE, covering Red Hat Summit 2017, brought to you by Red Hat. Welcome back to theCUBE's coverage of the Red Hat Summit here in Boston, Massachusetts. I'm your host, Rebecca Knight, along with my co-host, Stu Miniman. We are joined by Jay Jamison. He is the vice president for strategy, software-defined, and cloud division at HPE. Thanks so much for joining us, Jay. Thanks for having me. So I was just in your keynote session and you talked about making hybrid IT simpler. You talked about the imperative that you heard from customers to bring solutions, not silos. Can you tell our viewers a little bit about the specific feedback you were hearing from customers that really made you want to tighten your focus? Yeah, I think that, so first off, thanks for having me. And I would say that absolutely customers have been very, very clear at the excitement and the opportunity that they see ahead of them in terms of digital transformation and moving to cloud and taking advantage of all these new capabilities and technologies that seem to be showing up all the time, whether it's containers, whether it's Kubernetes, whether it's Internet of Things, all that stuff's super exciting. But at the same time, customers are saying, you know, look, I've got thousands of applications in a traditional estate or a virtualized estate that aren't going to be moving to anything like a cloud anytime soon. And what I need is a way to start thinking about how do I manage that whole estate so that I can get my existing footprint optimized, I can keep that running smoothly, make sure it's secure, make sure it's reliable, make sure it's low cost. All those capabilities, well, you know, I want to continue to sort of reduce budget where possible there and I want to start spinning up more of my new efforts and more of my new investment onto these new things so that I can be more responsive to the business that I'm trying to run. I can get new products and services out to my customers. I can engage partners and my existing customer base in ways that they want to be engaged. I can enter new businesses. And so that challenge of how do I manage that hybrid estate, whether it's a mix of on-prem or off-prem, whether it's a mix of traditional and virtualized applications and workloads with sort of new cloud native or containerized or even serverless now, those kinds of things, that is really what I see as the problem of hybrid IT today. And our customers tell us that, geez, it's complicated and getting more so each and every day. And that presents a tremendous opportunity for HPE and partners like Red Hat to be able to come forward and say, look, we can start helping you with solutions that start bringing together a comprehensive approach to trying to solve for making that entire estate simpler, make it more solution-oriented, unless a set of different silos and people that are all kind of sort of stuck in whatever technology stack they might be running with. Jay, very interesting point. One of the messages we heard from Red Hat is that application spectrum you talked about. I've got most enterprises, hundreds if not thousands of applications. They have the new ones that they're modernizing and building, but even the old ones, we need to at least re-platform them. The term summer, we used to call it lift and shift. Re-platform seems to be the cool new way to kind of talk about it, but really modernizing the platform that I'm on, being more software-driven, being ready to take that, if I'm breaking it down and componentizing, containerizing it, starting to build microservices. But how are you working with Red Hat? How does HPE, cloud offerings and infrastructure pieces playing in that re-platforming and then moving up the spectrum? Yeah, so I think really, across the board, I think there are a couple of pieces. I think first of all, you're absolutely right. The customers will say, look, I have an existing estate of applications and workloads that I absolutely have to use. So for example, I often think about if you think about sort of a mobile application that you might use a lot from a mainstream customer, like thinking you're like getting your flight reservation on your mobile phone. Of course there are parts of that mobile application that are going to be very modern. Like I can order an Uber from the mobile app that I use on my airline often. But, you know, and that's of course very modern. I'm using APIs, I'm using all this kind of nice stuff to plug in sort of what Uber offers that airline vendor to be able to say you can have that transaction flow through a partner flow. But things like what time the flight's taking off, whether it's delayed, like those are existing systems that aren't sort of new fangled, if you will. And so what customers are telling me is, look, I've got a corpus of data, a corpus of application logic that I absolutely need to be able to access and use and deliver in new ways. And so in many senses, I think that resonates very strongly this notion of hey, re-platform is going on and it's a reality of, again, how do I make this mix of data application tools that may exist and the desires I have to do new stuff? How do I bring it together in a way that lands effectively for a customer so I have a delightful experience? And what we're doing with Red Hat, I think is really exciting in terms of providing opportunities for, in manners, where together we're sort of taking the best of both worlds. So a great example that I talked about in my keynote is saying, look, we're trying to take, we're working very closely with Red Hat and specifically their Ansible team, to say look, what customer, what users of Ansible love is building playbooks that enable them to automate infrastructure using Ansible playbooks. That's sort of what it's all about. And what Ansible has been great with those playbooks is setting up and running and automating virtual machines. What we're doing with, because HP tends to have infrastructure and great infrastructure management tools that say, look, down at the hardware level, we want to make it easier and more fungible for IT shops to be able to manage that physical infrastructure. And so what we've done is we've partnered up with Ansible to say, look, we want your users of Ansible to just have their playbooks and we will connect our OneView APIs, which is our infrastructure management software that sits on top of hardware, say it connects. And so when your users build an Ansible playbook that wants to change how the infrastructure works, we'll take care of it all in one view. It's not something your users have to change or learn anything new. It's just all of a sudden Ansible gets more powerful because it's connecting to HPE hardware and providing a richer and more flexible infrastructure experience. And so that's some of the stuff that we're doing now to sort of make our hardware more flexible and more modern in the context of an Ansible developer or Ansible user, but over time that's going to get even better. So the things that we're doing with Synergy, which is our new brand that is focused on building hardware infrastructure that has composability, which basically says, look, well, it looks like a hardware device, but from an operator's point of view, it's very fungible. You can refactor and make your blend of compute or storage or networking kind of shift on the fly. So a very cloud-like experience with on-premises infrastructure. And what we're doing is we want to work with great technologies that are very cloud-centric, such as OpenShift from Red Hat to say, look, we want to be able to enable customers to using API, spin up bare-metal instances of OpenShift. Very powerful in terms of time-to-value message for a cloud-native customer that says, look, I need to run cloud-native applications. I want to have containers, but I want to do it on-premise. This solution will be something that we think is a really powerful message for particularly our Red Hat OpenShift-style customer looking to build applications. And I'm familiar with the Synergy platform and composable infrastructure, like the ideas, right? You can break that down into smaller components. What we hear all the time is, right, I need to build distributed architectures and, as they talked in the keynote, predicting and forecasting where that's going to go is tough. So the big challenge customers always have is I buy these boxes and three years into it, I'm only using 40% of it. The utilization inside data centers is horrible. Even with server virtualization, it helped a little bit, but not as much as what you see server fighters in clouds and the like. So where are we with the rollout with Synergy? Do you have any proof points of customers that are saying, oh, I'm getting better utilization? My OPEX is much better, and I'm... Yeah, what I would say is, so first off, I would strongly agree with you in the sense that if you talk to most mainstream enterprise customers today about their data center utilization rates, it's often very poor. And I think one of the big draws that customers have when they look at public cloud opportunities is they'll say, well, the nice thing about a public cloud is, I feel as though I'm getting much higher utilization rates because of the way the payment structures work and so on. Now, that may not always be true. You'll have some, at times, people say, well, these things are sitting dormant, but that's the instinct, right? We had server sprawl, we had VM sprawl, and now we have cloud sprawl. Now we have cloud sprawl, exactly right. The server will still fix it all too, right? Exactly, exactly right. But you absolutely have the challenge of underutilized data centers, and so it's imperative for AHP, and I think really the industry to say, look, the solutions that we're putting forward, whenever we talk about hybrid cloud solutions or hybrid IT solutions or private cloud solutions, whatever it is, to me, it comes down to look, am I able to show you in concrete terms how am I increasing the utilization of your data center and how am I helping you lower your costs? And Synergy will over time become a great solution and platform in that manner because for a couple of reasons. One, you've described the fungibility and the composability of resources makes that something that is very much simpler from a technology standpoint. But then at the same time, when you couple it with pay-as-you-go style business models that HPE makes available to its customers through our financial services, you start to then say, look, you're not just sort of writing us a big check in CAPEX and waiting three years and then being disappointed. What you're doing is you're going to start getting the notion that says, look, this is going to show up, you'll have a small amount of pod you're paying as you use, and we're able to then sort of work together to forecast when will capacity requirements get to a place where you absolutely need to add more capability and refresh that hardware, or extend that hardware, excuse me. On the customer adoption, it's a new platform and it's just coming out and we're getting great early adoption, I think, particularly from users that were in the beta. We had very satisfied beta users and we're starting to see, I think, really strong early adoption of the product. We actually had someone at our MIST recent discover, I was talking with them later and I think it was Hudson Alpha, which is a biotech researching style institute that often tries many of our things and what they were saying that I thought was a really interesting point which I'd not heard of in the context of, hey, what does composability do and how does this drive up utilization rates many of these things. One of the things that he was saying that I thought was really interesting is he was starting to use Synergy to deliver what he called spot instant style on-premise infrastructure where someone could run a workload for a period of time and then if someone else needed the infrastructure more badly and he had a way to sort of basically just blast away the old thing and put in the new thing there and he said, this is great because during the day there's a certain set of workloads we have to do. At night, there are different set of workloads I want to do and Synergy gives me the capability to be able to do all that very simply and so I think that those kinds of capabilities while still early will be very powerful value propositions for customers that are looking to solve the problem you're describing of. How do I get out of a data center that's under 20% utilized? I need to get more efficiency here in order to lower the cost and be responsive to what my customers need. Jay, before you were at HPE you worked as a venture capitalist at Blue Run Ventures in particular looking at opportunities in mobile and consumer internet and enterprise software. If you could put on your investor hat here and talk a little bit about the cloud market and the cloud industry, what excites you and what gives you pause in terms of where you see the market heading and where companies are putting their money? Oh, that's a really good question. I think that, well, I would say that putting an investor hat on I think that particularly in the enterprise space I think it's a really exciting time particularly for and not to be super self-serving for what HPE is doing but I think there's a set of problems that are out there that are big and broad where there will be large companies that get created. One area that we're very interested in at HPE that I think is an area of sort of investor interest whether it's HPE making the investment or whether it's venture capitalist or what have you is really in the notion that I describe of as hybrid management and what that basically means is, look, I'm a user that's going to have some VMware I'm going to have some cloud stuff running on AWS I'm going to have a desire to use Kubernetes and containers and so on. Help me get one pane of glass that gives me a way to think about seeing those different applications understanding how they're running I want one way to do things like firmware updates for the stuff that needs firmware updates I want one way to do application firewalls I want one way to do this and I think that's going to be a very interesting and sticky market to go off and win. So if I were in the investment space that would be an area that I would be looking at very deeply. Another area that I think is going to be really interesting and important we talk a lot about sort of AI and machine learning in the context of kind of everything in the world of enterprise sort of seems to have this label of hey we're using AI and machine learning but I think what you really have to get back to is what about artificial intelligence and machine learning is actually going to help you solve a problem how is it going to make your business actually better? And I think that often we're I think right now at a place where we're a little bit too over our skis in terms of saying look these are really interesting technologies AI is going to do everything and drive our cars and basically make us little house pets in the corners cause they're doing so much in our lives but I think that there tends to be one customer was saying to me you know what's really interesting is dozens of startups will come and tell me about how AI is going to solve a hundred problems I didn't know I have what I'd really like someone to come and talk to me about is about I want them to talk to me about one of the problems I know I have cause I've got a hundred problems I know I've got that I want solutions to and so I think a big opportunity is really to try and figure out how do these new technologies particularly in that space around big data and so on how do those become things that are really truly impactful to making a mainstream business that may have a hybrid estate how does it make them more effective and that can have impact in terms of how to make their IT ops more efficient how to predict outages how to be more secure all that sort of stuff all the way to how do I do a better job delighting my customers and predicting where the next new markets are going to be so those are some of the areas that I'd be the most interested in sort of as an investor and really as an operator and a strategist at HPE and yet you remain a little skeptical of what you're hearing about the AI and machine learning in terms of where it really truly is at right now and the opportunities that yeah what I would say is I think it's if it's technology the technology is really exciting and developing very very quickly that I have no question about what I often have questions about and I hear customers questioning is is this a technology in search of a solution or is it just kind of we're saying hey this is a really cool new thing that it can go solve everything and I haven't thought specifically about how to actually solve the specific problem that exists at hand and that's the challenge it's ultimately I think of it to dig in a little deeper it's really a product management question or problem of hey do I really understand what problem my customers trying to solve and am I using this tactic to do a great job so as a quick example machine learning or those kinds of things are great for what computers do well one thing a computer does really well is the same repetitive task thousands and thousands of times so things like email marketing automation or thinking about how you use a business development manager to reach do outbound selling like that you can have a computer do a lot that imitates a human being to say hey I'm going to send you an email and try and sell you something and get you interested on a call I don't need to have a human being do a lot of that stuff that to me is really straight down the fairway very clear business problem that AI and machine learning can do a great job bots all that sort of stuff can do a great job starting to have an impact on but to think it's just going to do everything out of the box is something that you have to think about okay where does this tool and technology really provide the value that customers are going to see Jay you know we've had HPE on the cube lots of times in red discover in London so you know I think we're pretty close to where your cloud strategy is but you know I look out next week's open stack summit some people in the industry is like oh HPE pulled out completely of open stack you've got HPE Discover coming to Vegas soon after that we'll have the cube there also John and Dave are really looking forward to it give our audience a little bit of an update as to you know where HPE is and isn't when it comes to open stack specifically and just kind of you know the cloud positioning and job Yeah right so what I would say is I think that it's a really good question because I think there's been a lot of transition I think customers are still and the market is still trying to figure out okay what and where does HPE play and I think that what I was talking about today and the keynote and what I think sort of represent sort of where we're going and what we are doing is we're really focused in on this notion of saying look we want to build a set of solutions that make a customer's hybrid estate simpler and that hybrid estate as I describe it cuts across proprietary virtualization technologies like VMware or like HyperView with Microsoft it's going to cut across open stack it's going to cut across Docker it's going to cut across public clouds et cetera and I would say that where HPE is most focused sort of when we look at how do we help customers get better leverage and value across that whole mix of estate what we would talk about is we think we're moving a little bit more up stack into the sort of notion of saying we want to invest and be really great at managing across that estate so when I was talking about areas that I'd be interested in as an venture investor it wouldn't surprise you that at HPE we're really we talk a little bit about this concept of new stack and it really is this notion of saying we want to be great at managing a hybrid estate across public and private across proprietary and open source so what that generally means what that means then as it pertains to okay what are we doing with open stack what are we doing with respect to Cloud Foundry or in the case of Red Hat OpenShift it means we're a lot more partner centric because our assertion is that we believe the customers will have a mix of it's not going to be an all open stack world within a data center we think it's going to be a mix of open stack is going to be part of the estate we also think Docker is going to be part of the estate we think VMware is going to be part of the estate we think that's where things are going and so what you've seen us do in terms of the work we're doing with whether it's Red Hat at some levels whether it's SUSE whether it's even VMware whether it's Microsoft whether it's Docker we've done work and partnership with all of them and I think you'll see that partner centric approach continue we certainly are interested in helping support customers that are existing and we'll move forward with respect to open stack with Cloud Foundry in terms of what we're doing there but I think that increasingly over time there's going to be a deeper alliance on partners as we look at those infrastructures of service and paths layers because we look at that and say there's a tremendous amount of world-class talent that's off building out those distributions in the open stack communities and other big open source communities in those areas where we can most likely partner and have those take advantage of things like our infrastructure management layer of one view can be very well leveraged within our new stack product and project that we're working on and so on so that's really where we're heading and how we're approaching it. Jay, Jameson, thank you so much for joining us. It's been great. It's been a pleasure, thank you so much. I'm Rebecca Knight for Stu Miniman. We will return with more of theCUBE after this.