 Hey everyone, welcome back to theCUBE's cover of Red Hat Summit 23rd here in Boston, Massachusetts. I'm John Furrier, your host here with Paul Gillan, breaking down all the action. Paul, great to see you. Good to see you, John. Yeah, it's been a while. Thanks for partnering up with theCUBE this week. Appreciate it. I always love attending Red Hat Summit. It's really a special place. The relationship that Red Hat has with its customers is unique, I think. And it's just open source being so successful and Red Hat riding that way has been such a great run and will never be another Red Hat. We've got two great guests here, we've got Helen Kim, Red Hat's VP partner, EcoSystem, commercial marketing, welcome to theCUBE. Thank you so much, John. And we've got Tom Hepfield, Vice President, General Mayor, Worldwide EcoSystem, sales, HPE, welcome to theCUBE. Thank you. So I'll start with you, Tom. HPE's Green Leg has been a big success. I remember when that was kind of introduced, I was like, what's this, what's this going to be like? Congratulations on the success. Talk about what's going on now with Red Hat. What's the relationship? What are you doing here? Well, so actually we've had a great deal of success to your point with Red Hat. And it goes back quite some time where we actually together developed solutions in the open source community and basically providing customers with meeting their needs around open source technology in an OEM fashion. Now we've taken to a whole other level by delivering this in the form of a NASA service solution. Helen, how about you? What's it been like working with HPE? The Green Leg service has been successful. Customers adopt it. The past year has been amazing, to be honest. And as Tom has alluded, we have decades of innovation and partnership happening to support us here. Number one, one of the reasons why we see this as a really important relationship for us is because HPE and Red Hat, we've been on the same hybrid multi-cloud journey together as partners and industry leaders. Not only that, HPE is our largest OEM partner, which of course that means that we've got thousands of joint customers together using our solutions. And we've been invested heavily in bringing our products into Green Lake, making those available in these new delivery formats so that our customers can have choice and optionality as they move to their future states. So what form does Red Hat for Green Lake take? Is this embedded in a bundle with Green Lake infrastructure? Is it a separate, is it a marketplace relationship? What is it like? So actually there are two elements. One is we have a very substantial OEM business and we're going to continue doing that, right? A lot of success, we continue doing that. Well, at the same time what we've done is we've actually pivoted to taking a look at how we can bring the two infrastructures and two technologies together to be complementary to the marketplace. An example being that first of all, Red Hat was our first ISV going into Green Lake. So they are number one. And we, in fact, when we created Green Lake, they were, we were the only company that approached Red Hat to participate in that regard. But in terms of where we're taking it to the next level, what we've done is we've actually developed solutions whereby we've actually enabled all of the Red Hat products to actually be housed on our Green Lake platform. And so as a result of that, we're now able to provide an as-a-service solution for the entire suite of Red Hat products as we do with our own IT infrastructure in the form of an as-a-service offer. It's been quite a pickup, too. I know it's the storage was one of the first ones to jump in there. Obviously, OpenShift has been a big part of that, Allen, on your end. And it's just saying Matt Hicks was just on the queue, he was on stage, watching his keynote. He mentioned, oh, we've been doing hybrid cloud for 10 years, a decade. I'm like, no, wait, I'm like, well, shit, actually, yeah, decade. I'm like, yeah. I'm like, oh my God. Oh my God. What's the queue? It's digital TV. Okay, good. And I'm like, it has been 10 years. And you guys has well been talking hybrid. I remember, I was at HPE, HPE Discover back then, but HPE Discover in 2012, they were doing microservices. Talk about containers and hybrid. So this hybrid seems to be the key point. Is that the cloud ops? Talk about the role of hybrid and what it relates to your partnerships, your partnership. Yeah, absolutely. So, I mean, hybrid is critical for Red Hat. And it's a critical foundation point by which we are talking about all of our solutions, including the new AI platforms that we introduced today. So in our partnership with HPE, right? One of the things that like the beauty of bringing it all together is that with the addition of Red Hat products on HPE Green Lake, we are now able to fully realize our open hybrid cloud strategy, right? So from an OpenShift viewpoint, customers can virtually deploy their containers, their virtualized workloads, and in a unified Kubernetes approach, if they want to have this on-prem as a services offering as the way that they will consume this, it is a true consumption model that they can take advantage of. And that is only available through HPE Green Lake. And that's the advantage that we see. Lastly, what we also see with HPE Green Lake and the benefits on this hybrid experience, and I think we heard it today with our friend from Barclays who said, they are looking at on-prem as a service in terms of their next steps for efficiency and effectiveness, right? So the beauty of the Red Hat Green Lake relationship is that Green Lake really helps us to simplify the customer experience, right? By combining the acquisition of Red Hat products and solutions together with the pay-as-you-go model, and of course with world-class support surrounding it, we just believe the value proposition is as strong as ever. Tom, I have to ask you this, when IBM acquired Red Hat, some people were cast doubts on whether the existing OEM relationships or partnerships that Red Hat had would be compromised. Have you seen any impact from your partner, your partner Red Hat being owned by a competitor? No, we have not. As a matter of fact, we continue to develop technologies even together that are very complementary. So an example being that if you think about it, and we talked a lot about what we're doing on the Green Lake front and certainly the Green Lake has actually enabled us to work with a lot of different partners. As a matter of fact, we kind of look at Green Lake as the fourth cloud, if you will, whereby we even work with some of the other hyperscalers, if you will. And so we actually have connect points to make sure that there's ready access and we're able to do this as a service working with these other hyperscaler partners. So we see that as more of a co-optition at times, but to be candid with you, we see a lot of complementary capabilities and offerings between Red Hat and us. If you think about, for example, the Red Hat Ansible product and actually providing automation and it's doing it at the application layer. HP, we have a technology as well, which is HP OneView. It's not a competitive product. It's actually a complementary in that we're actually providing automation at the infrastructure layer. So when you think about that, we're providing automation together across the entire data center. So we see a lot of complementary capabilities and rarely do we find ourselves in a competitive situation. Yeah, the cloud really makes that partnership work better. It's API first. Love that cloud aspect. OpenShift 2 has been also successful at Kubernetes and containers. Where's the customer journey and you guys, how do you feel about where the customers are at right now in terms of where they are on the digital now business transformation? Because with AI, the push has been like, okay, I got cloud scale in public cloud. I got cloud operations on-premises. Edges right around the corner, you guys weren't seeing that. Distributed computing, this is what we're talking about. Been there, done that. You guys, HPE and Red Hat. What's the customer? Where are they in the journey? Is it, are they a third where? I mean, are they still on VMs? Is it both, the containers? I've seen different stats. I don't know which one's the most accurate, but still a lot more room for migrating over to container and Kubernetes. What's the progress bar look like for customers? Well, I'll tell you, from my perspective, it's a tremendous headroom left for us. As I said before, we're going to continue to do our OEM business, which is highly profitable. But to your point, the real opportunity is really what we can do in the form of an as-a-service kind of model. To give you an idea of the level of scale we see from a market perspective is that there's tremendous growth and acceptance and adoption and marketplace between our joint offerings. As a matter of fact, at this point, we're slightly north of $10 billion total contract value from an HPE GreenLake perspective. By the way, that consists of about 65,000 customers. To put it in perspective, even larger than that, we have over 900 partners who actually are representing that platform, not only selling it, but even delivering some of that content. When we think about the scale that we have and from a data perspective, we're actually providing more than one exabyte of data that we're managing within that environment, that platform. And so when we think about who's participating from a customer perspective, and many of us actually are in the very same large accounts, 80% of HPE's largest customers are using GreenLake. So it just gives you an idea of the amount of scale and capability and capacity that's still. And you guys have had customers together for like, it's not like it's new, it's been for decades. Since Red has been around, I've seen it, they've been on HPE Gear. Tens of thousands. Tens of thousands, yeah. Where does HPE currently stand toward the goal of making the entire portfolio, hardware and software available on GreenLake? Well, actually, one of the things that Antoni Nero, our CEO, stated in 2019 is that he was going to make every product that we have inside HPE GreenLake enabled. And we've met that objective. As a matter of fact, this year was the third year and we actually met that objective. He actually announced it at Discover last year and certainly has shared that with the endless. So we're well on our way in that regard. So the products and the portfolio we have in HPE, it's all HPE GreenLake enabled. And how has that affected your sales mix? I mean, how much are customers buying, actually buying, paying upfront for on-premise infrastructure right now? Well, as I mentioned, you think about 80% of our customers, our largest customers are subscribing to HPE GreenLake. So the adoption's very, very high. There's still a tremendous opportunity for us to continue to grow that business. But the opportunity of scaling, as I said before, it's about $10 billion that we see from the total contract value right now. That number continues to grow. We're getting a great adoption with our partners, particularly system integrators in the reseller community. And that helps us actually grow at scale. So it's on a tremendous trajectory right now. And we've been meeting all of the financial objectives and targets that we have, particularly around a new logo kind of attainment. So even the existing HPE footprint, we have customers who are now moving from traditional CapEx procurement over to the GreenLake and Naples offerings that we have. Obviously, you guys talked about your joint customers, the history, where's the growth going to come from? Where's the key sectors? What industries do you see? What use cases are emerging? Obviously, AI is one, we're hearing it here. It's obviously hyped up, but still it's in me impactful. Key growth strategy for the partnership. What areas, what use cases? Well, I'm sorry, from a customer segmentation perspective, we're seeing it across all segments. We really are. We have a number of examples where we can kind of cite some, I'll give you an example on the financial services side. There's a very large bank in Japan, it's JCB Financial. They have about 140 million card holders. With that, about 37 different organizations with whom they do business with, right? They were looking to move their solution to kind of grab additional customers. And what they were looking to do is actually create new applications that would be easy and readily deployed, showing flexibility in a way in which they could ramp these up very, very fast. They wanted to do this in a hybrid cloud environment. And as a result of that, what they did is they actually went off with HPE GreenLake and actually went with the Red Hat as well. And so when you look at the joint solution that we actually provided, and the OpenShift is actually providing that capability around giving them great access to a lot of different platforms. And here we are on the GreenLake side, really enabling that through a consumption services model, help them meet both objectives. So in the financial services, it's really taken off. The other reason being is because when you think about some industries, be it financial services, public sector, and there are a few others, there's really a propensity of wanting to do this on-prem. They want to be able to maintain and manage control of their data. So those are a couple of industries that we see a lot of attraction, but it's across the board. We see them, as I said, public sector, health and human services. It's just really manufacturing, just totally across the board. You agree? Absolutely. I mean, similar to the transition to cloud and public cloud, the use cases are very broad across industry. Of course, we've got some great joint customers that are like first movers, which is awesome in financial services, public sector. However, we see that interest growing across all of our base. How do you see hybrid cloud evolving at this point? We're a few years into this phenomenon and a lot of products, a lot of companies have emerged to help customers get to the hybrid cloud. Where is that, where are the technology trends there? From a trend perspective, I mean, look, we work with partners like HPE. We work with our entire ecosystem now of partners more, I think, more collaboratively than ever to really bring the full solution and the options that are made available to them. So whether it's on-prem, private, public, hybrid, there are so many ways that we are working across our ecosystem of partners to really fully realize our solutions together. And I think it's this value of the ecosystem message and value of the ecosystem engagement that we see as being an extremely important part of our go-to-market strategy as we move forward, simply because customers want solutions to help solve problems. They don't necessarily want the point product per se. So we're working very hard to build those hybrid solutions with all of our partners like HPE. And if I could just add to that, based on what Helen said, I couldn't agree more. What we're really finding is incredible adoption with our partner community and it really is a true ecosystem play. So to give you an example, when we worked with another example, we were working with an auto manufacturer. In fact, a couple of the large auto manufacturers, they were looking to develop a solution. And when you think about what they're doing in the autonomous drive arena, it's a tendency I want to collect incredible volume of data from a lot of different data sources. And what they're trying to do is really collect this data and create these really complex algorithms and having to be able to solve for these things very quickly. Otherwise, the cars will start to reckon to each other and have some real challenges. What we've done is working with not only partners such as Red Hat, but we also work with a few other partners, ISVs. We're actually creating this ecosystem solution. We're finding a total end-to-end solution all as a service, providing that single solution to a customer. But it's really the power of bringing in the entire ecosystem together where we create even greater differentiation in the marketplace. Helen, Tom. Thanks for coming on theCUBE. Really appreciate it. Helen, I'll give you the final word. Cloud and partnering and as the ecosystems are changing so fast, better together seems to be a theme with partnering because there's so many new opportunities to... It's more than a theme. It is a reality for us here. And more than ever, working together with partners like HPE and our entire ecosystem is fully in focus for everyone here at Red Hat. Awesome, thanks for coming on theCUBE. Appreciate it. I'm John Furrier with Paul Gillan here. Day one of Two Days of Wall to Wall coverage here in Boston, Massachusetts. Cube coverage, go to silkenangle.com. Stories will be flowing there as well. And we'll be right back with our next guest after this short break.