 talk about the future, give feedback to vendors. Steven Foskette, welcome to theCUBE again. Thank you, good to be here. We've known each other now for a few years and you're out there with your team and you do all these awesome events, really chill events, but they're real valuable. You get into under the hood, you talk about the core issues and obviously with converged infrastructure, which is really an old definition, I mean HP kind of invented it going back just as a way to cobble together network storage and servers and give customers this holistic view of the data center, which has always been the right vision. I've been a big fan of converging infrastructure, but it's changing. Just advent of Dell stock price in 2008 was high 20s and just in those five years it's dropped down to 10 and just going back three years, three and a half, four years, three years, flash has come on the scene, virtualization market has changed radically, just a lot of stuff going on. So I want to ask you, your perspective, because you've been following all these things under the hood, so one, what is going on in this modern infrastructure trend over the past three years, and how does that relate to what Dell has? And tell us about what you're finding here at Dell World. Sure, well the big question that I always put to people, I do a series of seminars on building modern infrastructure basically, you know infrastructure for server virtualization. I've done about 30 dates on that topic and I've got more scheduled for next year. The big question that I put to them at the seminar, and I think this is sort of my overriding thought is this point that if you were to design IT from scratch, if you walked in with a clean sheet of paper to design anything you want, would you design what we've got now? And the answer is no freaking way, no way in the world would I make a bunch of giant PCs attached to a bunch of fake disks over a specialized network. None of this makes sense, none of it makes sense, but yet we have sort of a push and pull situation here where you've got conventional applications that are designed for this sort of conventional windows and Unix basically fat PC server world, and you've got to do something with them in the future. And that's the cool thing about virtualization is that it lets you transition from a real backward concept, which is sort of the Microsoft server concept into the future, which has standardized layers and standardized infrastructure. And that's why I'm really excited about this whole idea of converged infrastructure. I love some of the ideas that we're seeing from up-and-coming companies in converged infrastructure because they blow up the data center. You mean like who, like Nutanix? Oh, Nutanix is the best example I can think of off the top of my head, but you've got to mention scale computing and SimpliVity. Verstow is a company that has a lot of great technology in that area. Sure, that's company, right? Absolutely. And in all these cases, what they're doing is they're basically asking that core question which is if we were to do this again, how would we do it? How would we do it differently but yet maintaining backward compatibility? The problem with the cloud is there's no compatibility. Basically, the cloud needs new applications. And those applications are coming, but they're not going to destroy the entire world. They're not going to take over the world instantly. We're still going to have to have the same kind of applications running for 10 years, for 20 years. It's just the new applications are going to run in the cloud. Can you compare and contrast the upstarts, the ones you just mentioned, as a group with the whales? Absolutely. There's a sense that oh, the whales are in this now and the game's over. But based on your comments, I'm inferring not the case. I think that we're just in the very, very beginning of basically those big four companies, maybe big five or six with Cisco and EMC getting into the battle. We're just in the beginning of having those big companies have a really competitive offering. If you look at Nutanix and a converged infrastructure offering from any of these big guys, it is night and day. On a technology level, on an integration level, on management, there's no comparison. Can you add some color to that? In what respect, to me, from your perspective? Okay, so let me boil it down. The hardest challenge in IT, the number one challenge technically is scaling. Getting something, anything, storage, network servers, whatever, getting it to get bigger and get smaller on demand. The coolest thing that the cloud does is scale to tremendous levels. If you look at scalable offerings from most of these major corporations, they scale in moderate terms. If you want to go from two to four to six. They can do that. If you want to go from two to 50, back to eight, there's no way in the world they can do that. Bringing the forklifts. Yeah, it's just not possible. And so if you're going to have a converged infrastructure, it has to scale. And frankly, that's a huge technical challenge. I'm not criticizing them for not having that because it's just, it's not impossible but it's extremely difficult to add scale to an existing system. Look at NetApp. I mean, they've been working on that for almost a decade now trying to scale their systems. And again, my hat's off to them because it's such a massive challenge. Okay, so are the cloud service providers picking up on some of those new guys? I mean, obviously some of the more established cloud service providers are going to work with the EMCs and the HPs and maybe IBM and Dell's but are the other emerging, the new cloud service guys picking up on these new modern converged infrastructure players because I would think that scaling would be really attractive to them. Yeah, they're definitely, the cloud providers, a lot of them, well, I think it's probably fair to say that most of their dollars go to traditional companies. I mean, Dell is one of the biggest arms vendors to the cloud in existence. I mean, in fact, I don't know if you know this but Dell actually has a specialized server that is not available to ordinary customers. It's only available to massive scale cloud customers. And Dell sells those things like. Dell has ODM. Absolutely, and Dell is incredibly competitive too. So if you talk to the cloud providers, a lot of them originally had these ideas that they're going to go direct to the Chinese OEMs and manufacturers and they're going to buy stuff out of Taiwan and integrate it themselves. They abandoned that idea once they saw the reality of it and they started going to just buying Dell, Dell, Dell. And that's good for Dell. It's not high margin, but it certainly is high volume and high volume helps. Well, and Dell makes money off of this. I mean, because of their scale, right? So it seems to me, I made the comment to John earlier, it's almost like Dell refuses to shrink too fast. I mean, one strategy could be just shrink down and then start growing again. But it's like Dell almost refuses to do that because their scale allows them buying power where they can compete in markets like this. What are your thoughts on that strategy? Do you think that's the right approach? I think it is. I think it was a terrible, dreadful, awful mistake on HP to even ponder getting out of that volume because that volume is so tremendously valuable in terms of purchasing power. I mean, what does Apple have? Apple has volume and the minute one of these big guys gives up that volume, it hurts them. I mean, I think IBM has been massively, massively hurt on the server side by giving up the desktop business because they can no longer go to Micron and to Intel and to all these other companies and say, you know, we're your number one customer, work with us. And their x86 business is in a box because of that. Absolutely, and that would happen to Dell. If Dell gave up on making laptops, on making desktops, on making, you know, any of this stuff that is admittedly low volume, I'm sorry, low margin, they would immediately lose a lot of their ability to command, you know, attention from itself. Supply chain leather. So we're all kind of older school guys but playing in the new world. We all remember that Dell, Dell transformation into the mobile. They had, they had a mail order PC, then they had this industry standard PC that became a, but it's just a staple, low cost, direct mail, so on, but they had no notebook back in the 90s. And, you know, they built a great notebook business from scratch and they did it in a way, in the Dell way and they were very successful. So, you know, begs the question, why can't they just build tablets and mobile phones the same way? And we were talking about that and Mark Hopkins and I and Dave were talking about this and the issue was they had an OS to build on. That was Windows, Windows was a standard. So pretty straightforward differentiation. Hardware availability, low cost, done reliability, they won that game, they did great. Now we have an OS challenge, right? So, doing great on the servers, Unix, Linux, Windows and Windows Server, NTL, that stuff's happening still there, but right now it's a jump ball between Android and Windows 8. I mean, if you look at Apple's success, anything over a $2,000 price point is Apple's dominates. Quality product, crushing everybody. Below the $2,000, say $1,500 price point, you have tablets and you have phones, right? So, Android is killing that market. So, you know, you're being cannibalized on the edge. So, this whole BYOD could blow up. So, the question to you is one, do you agree with, let's talk about that, do you agree with that? And two, what could Dell do to differentiate themselves with Windows 8 or with an Android phone? Because I don't think Dell has a problem building something fast that's going to be reliable and strong. The question is, what's the OS? And what do they differentiate? Is VDI an opportunity? Are these things there? So, what's your take on those two topics? Windows 8, Android jump ball, and then the virtualization or a VDI kind of component? Sure. Well, let's start with the mobile devices. I think the true test of success for anything in the market is when it becomes just, it ceases to become an unusual thing and it just becomes the market. I think BYOD, the tipping point has passed. BYOD is not just here. It's a must have. And not only that, I think that the term will never catch on because it is an obsolete term because who cares? That's just how things are done. Yeah, it's a must have. It's a must have. To the point now, yeah, where people are just going to walk in there and they're going to say, this is my MacBook and this is my iPad. Get it on the network. Yeah, absolutely. Totally agree with you. And the IT has to do that. I mean, IT is the house elves of Harry Potter. Basically, they have all the power, but none of the controls. We lost our lights. We still on camera. We still on camera, we still got some light. We're going to cut it off, okay. All right, we're right back after this. This is the cube after dark. Yes. Let's do some dancing. What the?