 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, welcome back to HP Discover, everybody. This is Dave Vellante. This is theCUBE, this is our day three. Winding down our day three coverage, going strong here. Randy Meyers here is the Vice President and General Manager of the Mission Critical Systems Group at HP, a CUBE alum. Marty Edelman is here, he's the Enterprise Architect, IT Store Home Depot, IT Store and Credit Systems at Home Depot. We all know Home Depot, we love Home Depot. Gentlemen, welcome to theCUBE. Hey, thanks for having us. Yeah, big time of year for you in New England, everybody, it's the Home Depot, right? The sun comes out, the snow melts, boom. This is our Christmas. Yeah, this is our Christmas. This is our Christmas, we love spring. Yeah, so what's happening in your business? Tell us. You know, we are doing a lot of pretty innovative things right now. Things are growing like there's no tomorrow. The company is doing a lot of new things to try to deal with the customers in new and innovative ways for instance, the e-commerce place, buy it on your phone, pick it up in the store, buy it on your phone and send it someplace like to a vacation house. It's all about the technology, it's all about letting the consumer experience it the way they want to experience it. HD, great company, awesome story. So Marty, that ties into a lot of the themes that we're hearing here from Meg on day one, the digital economy, the idea economy. We've got a lot of ideas that would imagine at Home Depot, so what's in store? What's new for you guys? Well, I mean, mission critical is having this renaissance going on, right? You got everybody with a phone. If I walk into his store, I may be standing in front of an item in Home Depot and pricing it at one of his competitors to say, gosh, I could save $3 if I drove down the street. I've got access to anything, anywhere, but guess what? When I do the transaction, I expect it to work. I was telling the story this morning to a group of customers. I was in Tokyo about a month ago and in the cab ride from my hotel to the HP office, I paid all my bills, I bought my wife a gift and I checked some stock prices and made some stock trades, and guess what? I just expect that to work. The back end of every one of those is a mission critical system. Some of them are Unix, some of them are non-stop, some are VMS, but the front end of those is now all this mobile device. It's all where I want it, when I want it, how I want it, and you know, what's weird, Dave? Definition of an application has changed. We used to think about application as monolithic, sit down at the green screen, all those sorts of things. Now, no, the application's just all these pieces and parts moving together and I expect them to work. And so we're watching customers say, how do I live in that environment, right? This whole converged, composable idea economy. But at the same time, it's got to work seven by 24, it's got to scale big, and by the way, I need the cost coming down. So that's where we're seeing people move to things like non-stop X, Superdome X, where they're saying, I can go get what I used to get in Unix or Mainframe or something else and drive the economics into the x86 world, save on software licensing, save on all my administration costs, but I still get the same goodness that I was used to when we ran everything on a Mainframe. So describe your environment a little bit. Let's kind of get the systems of record. You were talking about the in-store experience changing, so you've got the systems of engagement now emerging, and you've got the big data coming in, you've got systems of intelligence so you can predict how to help me as a consumer. But let's start with the core. What's the infrastructure look like from an architect's perspective? So we're running a classic three tier. We've got the edge systems, which is how we're dealing with the customers. It could be a phone, it could be a tablet, it could be a point-to-sale device, or just a normal PC. Behind that in every store, we've got a mini data center. People don't realize that we've got 2,200 data centers. I've got two pretty big servers sitting in the back of the store, happened to be HP, heavily virtualized, so I've got Linux and Windows running in the back. I've got a RAID back there. The store can fall off the networks and continue to take money, because that's what we do. And those are x86 servers? So in the back today, they're not x86, but the next turn of the crank, which is happening probably in about another year, will probably go to the x86. It's all about the commodity piece now. Then you go back to the data center. I've got four pretty big non-soft complexes. Now we just bought the X and we are still running on the itanium, and those are the databases of record. Have to constantly be available. You, as a customer, expect that when you walk into a store, you could transact. You bought something in New York, you want to return it in Chicago, California, Guam, doesn't matter. Centralized database that is doing thousands of transactions a second. Has to be there. Time zones are now at the point where I can't even have a 15-minute window at night to do anything. I get one shot a year for four hours to do a hardware and operating system upgrade because the business is 24 by seven. Our dot-com plate can't ever take it down. We are growing that business in a remarkable pace right now, and if we have an hour of downtime, we're going to lose that business. Our downtime costs us more than a lot of companies won't make in a year, and you just can't do it anymore. The customers always expect to pull out their phone, be able to go online on their app and say, I want three of these. The whole showroom thing, you're standing in our store, you're looking at prices, we've got to make sure that our prices are always competitive. So as you're showrooming us, we're actually looking and using technology to make sure that our prices are still day-in and day-out, the lowest out there. It's all about the technology play. You can't sell things in this day and age without having a very robust infrastructure behind you. So the backbone of that is non-stop, is that right? So, yeah, all of our customer-facing apps right now, all of them are off of the non-stop. Okay, so those apps are largely developed in-house over the years or usually? All of them are in-house developed. We've got a pretty talented staff of folks. We started out with a package 15, 16 years ago. Al grew it and just said, the heck with it, we'll rewrite it ourselves. So when you walk into a store and you're standing at a point to sell and you want to use a gift card or you want to do a refund and look up a receipt that's six months old, that's all coming off the non-stop. Oh, that's awesome when that happens because I never have my receipt and Home Depot is so great about it. We don't want you to have a receipt. I got that, no problem. We don't want you to have a receipt. No questions asked, that's why I love doing business with Home Depot, right? The key, you're a weekend warrior, you're doing a project, you don't have a clue what you need. We'd rather you make one trip and buy a ton of stuff even though we know you're going to return a bunch of it instead of you making 10 trips back and forth. Buy everything you need at once and then when you don't have the project, you just take it, throw it on the counter and you could have made 10 different trips. We're not going to ask you for receipts. We'll just scan it all and we'll say, okay, how'd you pay for it? Scan a couple of credit cards, we'll match them all. Kick it back, yep. And done, you walk out, everything goes back and you've been in and out of the store in a minute. I mean, and you've been doing that for a while. I remember the first time that happened, I said, really, you're just going to put it back in my credit card? Yep, boom. We built that, I'm trying to remember, because I actually was a developer back then and I actually wrote that code. It was 2002, I think is when we first put that system up. You guys were one of the industry leaders in doing things like that. It's fascinating to watch. There's how technology changes the way you interact with a business, right? And you say, if I can buy something from him and I'm not a home handyman, my wife will tell you, I can't hang a picture straight. But every once in a while, you got to go do something. And so if I go think I need these three tools and it turns out I only needed the one for the project, the fact that they'll take it back directly is a big deal. And you know what, the first time it fails for me as a customer, I'm really upset about that because I've gotten so used to doing business that way. I don't know if you saw the example today. Southwest Airlines had a fair sale yesterday, crashed their website because everybody and the brother went to it because it couldn't scale up to handle it. I'm flying home on Southwest tonight and couldn't get my mobile boarding pass to load. I'm not happy. And you look at that and you say, there's a great example of scalability impacting the availability of a system. I hear you. I mean, I'm flying for the first time spirit air tonight. They want to charge me 10 bucks if I don't print my boarding pass. I'm like, why can't I get it on myself? That experience is just, I won't forget where's the one you just described, right? That builds loyalty. People say that IT, Nick Carr wrote the book, IT can't provide competitive advantage. Obviously you don't buy that. I totally disagree. It's all about the lighting, the customer, where they are, how they want to be treated. If they walk into the store and they can't do what they came to do, they're disappointed. I use this all the time. It's an overused cliche. It's like oxygen. One time you notice it's when it's not there, right? That's the way we view the nonstop and that's the way we view the technology. People take it for granted, which is a good thing. But when it disappears, lots of bad things happen. Yeah, it's plumbing and you don't think about it until the cool, clear water stops running. You know, and that's part of living in this mission critical space. The customers I talked to, so one of our new Superdome X customers, big investment banking company in Japan, they're running a foreign exchange trading desk that trades $5 trillion a year in Forex contracts. 600,000 customers and they're running on Superdome X, scale up to 16 sockets on Microsoft Windows and SQL Server. Why did they do that? Because they love the Windows app because it's easy to write for them, but it's got to be resilient and got to be available. If you're on the wrong end of a Forex transaction for them, you know, imagine the amount of money people could lose overnight or we just had a session earlier today, one of our, again, another Superdome X customer from Pella Windows and he was talking about the fact that you can now schedule an appointment, you could be in a store, looking at one of their Windows and you could schedule an appointment with a reseller or with one of their sales reps while you're standing there by going back into their system. Talk about customer, listen, you nailed it. The systems of record have to support the systems of engagement and as soon as you engage the customer and you can't deliver the record, now you've created dissatisfaction. And when you do engage the customer, now you get all this data that you can do something with. So talk about your data play. So you learn a lot, right? So we use the data actually to try to enhance the customer experience. Making a recommendation. If we could figure out that you are building a deck because you have bought some things that look like it's a classic deck. Well, then we can start to start sending you things about, hey, you know, the code in your area is X or you're going to need to do Y to make sure that your deck is safe and secure. Let's us help you be successful. We've got a lot of information that can be used for tax purposes. I had this conversation with Randy the other day. E-receipts, you are buying things to make leasehold improvements to your house. Those E-receipts are going to be tax-deductible for you one day, right? You go to sell the house, now you've got all your receipts instead of on a little thermal receipt that has faded in the back of your underwear drawer. Well, now you've got them online where you could go through, print them all out. IRS isn't going to be able to say, no, you did not spend the money because you've got the receipts. You could break it down and categorize it. You could drop it into Quicken or whatever you want to use. Those are the things that, using the data to help the customer have a better experience with us and enhancing what they're doing. Yeah, anyway, you didn't even make me an offer. You know, hey, there's another piece, but sometimes I don't know what to buy. And I'll stand in front of these choices and I'll go, just make it easy for me. Give me a couple of points off. And I'll go, great, done. One of our better kept secrets, we have a ton of videos how to do it. You could be standing in the plumbing aisle and if you want to learn how to do some basic plumbing feature, we'll give you a URL. And now you could be under your sink with your phone in your hand going, oh, I got to turn the rent like this. We've got a lot of that digital content. We don't do a good enough job telling the customers about it and where to find it. We've got a ton of that type of video out there and the associates in the store are more than willing to walk you through it and then they'll give you a piece of paper that's got some of that same stuff written on it so that you can take it home. And once again, don't have to remember was it step one or step three where I have to, you know, turn this to the left twice. Where do you house that content? Is it YouTube? Is it your own? We have things on YouTube. We have things on our homedepot.com sites. We are on Facebook, we're on Twitter, we're on Pinterest. I mean, it's anywhere a consumer expects to find us. We've discovered that it's no longer about the destination. The store is a destination. You know, it's interesting you talk about that. That's the consumer view of it. I got a customer in Europe, big manufacturer and they make things like compressors and turbines and business to business where they're selling big things. They've done the same data play. They're doing it in SAP HANA, in fact. So they've gone to this scale up in memory HANA for BW. They're doing predictive failure analysis. It says stuff that they used to run over the weekend and they'd get this and it'd take a few hours for the report and then they'd try to figure out what it meant. Now it runs in seconds. So they're finding out, oh, that part's going to fail so they can have the supply chain already driving things there so that way before the part's going to fail, there's a guy on site to replace the part and does it. They've taken $10 million in supply chain cost out in six months. By doing exactly, on the business to business side, what you guys are doing in terms of the consumer kind of data management stuff. What about wireless? We saw Aruba Networks. We had Daman, he was fantastic. He stole the show up here. What about wireless inside the stores? I'm going to say something first, which is I think it is so cool that we've got Aruba as part of HP because the more we're able to connect into these campus wireless networks, the more we can deliver mission critical stuff wherever you are inside somebody's organization, whether it's in a store or something else. They'll tell you how they're going to consume it that that is one of the coolest things. So having Daman as part of HP is just awesome. Sometimes being inside of one of your stores, like being inside of a Las Vegas hotel, it's hard to get connections, right? So wireless is one of the anyways. It's about the same size. It is. Yeah, tell me about it. I've spent a lot of time walking those stores too. The cement is really unforgiving. Such good shape. So don't know if I could even mention this, but I don't really care, but we're actually doing a pilot with Aruba in one of our stores in the Atlanta market. We're pretty impressed by it. We'll see if it can survive in our hostile environment. But we've got multiple wireless networks in the store. One of the things we discovered a while back is that consumers want to use an app in the store. Maybe not our app. They want to showroom us while they're in the store, just like they do showroom your best buy before they go to Amazon. Right. So we're going to provide them that wireless coverage. You could go anywhere in our store and in our parking lots and you'll discover that we have a consumer free wifi that they could use. Side by side with that though, we have our private one and all of our associates have what we call the first phone, which is a purpose built phone that runs proprietary things, including our POS application. And we could service the customer anywhere. So if it's Christmas tree season and you're out in the parking lot buying Christmas tree, I'm not going to make you go into the store to pay for and then come back out again. We can service you where you are. You are standing in the garden department and you want to know where two by fours are. He could pull up, he or she could pull up a map, say okay, you want to go here, you want to go here. This is where it is. Two by fours are easy to find, but when you're looking for that little nut or bolt, we have all of that available on the phone. Where's the duct tape? I mean, duct tape is typically by the hand tools. I kind of know that, but I'm like, okay, is that aisle 17 and boom, if I could pull in my app, I would use that. I would use that. 2200 floor plans. That's one of the problems with, you know, every store is different. And so therefore, if you go to the either of our apps, we actually do have on the apps maps of the store. It will figure out what store you're in. You could zoom in on it. It's got a 3D component so that you could actually go and zoom in and fly down on it. We are trying to make it so that there's a set of customers who don't want to talk to our associates. Makes us sad, but there are people who just want to run and grab what they want, run out. Yeah, when you're in a rush, or sometimes you can't find the guys, you know, they're busy. So be great to them. Hopefully that's not as true as it is. We've spent a lot of time working on that and we are getting better about that. I mean, it's a big store, right? It's what people want. Yeah, no, but it's a huge store and sometimes. You know what, though, I think, you know, I have two millennial kids, 22 and 25. They really don't want to talk to people. One was proud. He just bought a house and he said, got my house insurance. Didn't have to talk to a human being. It was cool. It all worked. And that's how he grew up using this stuff. He's like, and I said, well, but Chris, you know, didn't you have any questions? He says, I could have called if I had one, but human beings slow me down. It's like, okay. But insurers is different than I experienced it. I kind of like going to Home Depot. Hey, say my wife, let's go to Home Depot today. You know, let's see if you can poke around, you know. It's fun, yeah. I walk stores all the time and I always find new and cool things. I have more things that I will never use because they looked cool and I knew I had to have it. I mean, it really is sad, some of the power tools that I have that I should not own. I mean, I still have all my fingers, but I can't guarantee that if I use any of these, it will still end up being the same. Well, I guess what I love is, every time I hear you talk about this stuff, it's about how you sell things to people, how you make money in the stores, how you create a customer experience, how you maximize your inventory and manage what you, you know, you don't want to have the snow shovels going to Miami in the summer. And it's IT as a support for all of these different business processes. And boy, as a customer, I get hooked on having what I want, when I want it, and knowing it's there. You know, IT is enabling. It's, we don't do anything but enable the business to do what they would like to do. I can't tell you that I understand merchandising. I can't tell you I understand workforce management. I know I have systems that do it. They meet the needs of the business, but those are the experts. And we just enable them to do their job better. It's as simple as that. Let's get the aprons, our associates, face-to-face with the customer, instead of in a back office doing things that don't provide value to the customer. We don't need to do things for ourselves. We need to do things for our customers. Awesome, Hope Depot, amazing story. You know, $150 billion market cap company and still growing, very impressive. So gentlemen, thanks very much for coming on theCUBE. Really appreciate your time. Thanks for having us. All right, keep it right there, but we'll be back with our next guest. This is theCUBE, we're live from HP Discover 2015. We'll be right back.