 from the Wynn Resort in Las Vegas. It's theCUBE, covering .next conference 2016. Brought to you by Nutanix. Now here are your hosts, Dave Vellante and Stu Miniman. We're back, Scott Hawkins is here. He's the executive director of marketing for the worldwide data center group at Lenovo. Scott, welcome back, good to see you again. Hey Dave, how you doing? Stu. Good to be here. So what's happening with Lenovo these days? You guys made some obviously big moves coming together, getting market momentum, partnerships, give us the update. Yeah, things are going real well. When you think about just even here for the event and with the Nutanix partnership, we really couldn't be happier with where we're at. If you think about just six months ago, really announced where we were going in this direction. And if you look at a number of the plays that we've done around, not only our own organic development, but these partnerships, we've really got momentum now and especially in this area of hyperconverge with Nutanix, in only six months to see where we've come, announcing one platform now we've got 11. So really good momentum, great conference here, learning more and more about where we're gonna go in the future with Nutanix, but just a great partnership and really a tribute to the entrepreneurship of both of these companies and wanting to work together and move very quickly. How did it come together? If you think back to what our product strategies were and looking at these growth segments with hyperconverged, our strategy was to be nimble and to find the best partner to go to market with and that was Nutanix. And it really goes back to our strategy, which isn't the same strategy for every company out there. We're able to be open and flexible primarily because we don't have 20, 30 year legacy histories of products that we've got to protect. We've got a complete portfolio, server storage, networking, services and solutions. But in this space, there was nothing that we really had to protect. Some of our competition does. So we're able to go partner with the best and that's where that partnership when we started talking with Nutanix, but things aren't automatic. It doesn't just happen like that. You've got to have the same culture. You've got to have the same kind of idea of where the market is going so that you can respond very quickly because if we were gonna partner with someone, we needed to get the market quickly. And if you look at, we announced that partnership in November started shipping product late January. There's not a lot of companies that can do that and the two companies working together tightly integrated in development, go to market sales. That's really how it came about. And if you look at, have we fulfilled our objective so far, we have probably exceeded most of them. So Scott, one of the questions we had when Lenovo took over the System X business was, what would we see different? And would something like this partnership with Nutanix have happened? If the X86 business was back in IBM, I don't think so, but maybe you can share. I'm glad you asked that because the answer is no. And you know that I came from IBM and we had all the best thoughts around our history there, but IBM like a number of other companies, they have these businesses that are entrenched and you're dependent upon protecting them. And that can restrict you from bringing offerings to clients that are the best of the best. And in that time and in the years back while we were very successful in a lot of areas, blades and high-end systems and HPC, probably missed out on a few strategic growth areas because we needed to protect that. You fast forward to Lenovo and that was as we were prepping you and another analyst and folks who were interested in while we were doing this with Lenovo, we knew that once on that side of Lenovo, we'd be able to really take advantage of these opportunities very quickly. We'd be able to identify them quicker and then take advantage and get to market much faster than we could there. And that's what it takes in the marketplace today as a whole, but particularly around the S86 ecosystem. Well, IBM was and still is in many respects, it's a very services-led company. So you had this sort of inbuilt distribution channel, that's changed. Right. And so there's this two-sided coin there, I suppose, but how has that affected your strategy overall? Well, I think you speak about services and that's still going to be very important no matter what market that you're in at NIT and one good thing as Stu definitely knows is that we brought all of our assets with us. So we brought the engineering services capability, support capability and the portfolio and in fact that portfolio was one of the newest overall portfolios in the marketplace. So we bring that to us, but what we had to commit to do is to continue to innovate. You have to innovate quickly here, so you look at things that we talked about with you guys a couple of weeks ago around new networking operating systems or new hyper-scaled platforms with the SD350 and other areas, software-defined storage. We're gonna continue to innovate there, but we're also gonna look to where we can bring the most value to clients very quickly. We're gonna partner. Yeah, it was, as you know, I was at the Lenovo Tech World just a couple of weeks ago in San Francisco and what was really interesting is YY, great presence, real good. He was playing virtual reality games with BK, the CEO of Intel, but he's like, okay, we're gonna take five minutes and talk about the boring infrastructure stuff and then we'll get back to the cool stuff with that, okay? As opposed to you come here to Nutanix, I mean you've got 2,500 people here, clapping and super excited about infrastructure. What's your thoughts on the community's gaps? And I think most people knew YY was probably poking fun at that. It may not have come across, that you can imagine the beads of sweat broke out of my forehead when he said that, but in that keynote and how we worked up to those announcements across the whole spectrum of Lenovo, the point was whether it's mobility, virtual reality, all of these things, it's all running on infrastructure and data centers somewhere. And part of the value proposition around Lenovo overall is that we have expertise in all of those areas, particularly in the mobile business, so that we understand where the market's going and the stress loads that that's gonna put on the data center, so we're gonna continue to develop the solutions that are gonna satisfy for that, but that was definitely interesting. You're not gonna let us forget that either. How would you describe Scott the shared vision between you and Nutanix for the data center of the future? I think both of us share the same vision when you think about, and you could put in a ton of buzzwords here, journey to cloud or that, I think, and it was spoken about in the keynote this morning, if you try to say where is the data center gonna be 10 to 20 years now? I don't know that anybody really knows. Things are just developing so quickly. I mean, 10 years ago, what were we talking about? Still talking about virtualization, early cloud, and a lot of talk about form factors. Now it's software defined storage, it's hyperconverge, hyper scale, but with Nutanix and Lenovo, I think we share that same vision that customers are gonna look for flexibility and they're gonna look for the best solution. The days are probably behind us where our customer is gonna be, you know, look for a sole provider technology and in the hot areas that come around like a hyperconverge, hey, I'm gonna wait three to four years for my incumbent supplier to develop that capability. They're not gonna do that, they're gonna want the flexibility, they're gonna move into the cloud, they're gonna be able to come back, find middle ground and hybrid, and that's where we align, I think, both independently but together with Nutanix on that vision of where hyperconverge but larger cloud operating models within enterprises, and particularly around the consumerization of that experience, right? No one's gonna take the time to mess around with poor usability and things like that in the future. Well, you're making a great point, I mean, 10 years ago, there was no iPhone. Right. I mean, we're talking about, mobility was kind of this problem looking for a solution looking for a problem, and then all of a sudden it became this huge opportunity, and one wonders, okay, what's next, we can't assume that nothing is on the horizon in the next 10 years that it's gonna totally disrupt and change the center of gravity. 10 years ago, I remember discussions going on about the burgeoning explosion of text messaging. So we weren't even on video yet. I mean, it's just crazy when you think about where we've come, it's crazy. How about, it hasn't been, virtually any talk about IoT here, although we saw drones, it's an opportunity, it's enormous, there's tons of discussion going on and buzz in it, and it appears like it's got legitimate legs. What's Lenovo's take on that topic? I think folks are just maybe, that IoT may be the fastest buzzword to become tired in the industry, but the fact is, and it's also not new, right? There's been this load of sensors around forever, but now everything's wireless and over the network. When we look at where this is going, we definitely feel like there's a big play in edge and network technology servers and we're exploring solutions with that. But it's also gonna come down back to, while everything is on the fringe and on the edge with IoT, it's still gonna come back to computing capacity in the data center. And that's where, while we're talking a lot here about hyper-converge and cloud, you still have big data, which is almost seems like it's an old term now, but getting into things of big data analysis and taking that data harness it and making decisions and even the stuff I talked about earlier around contextual, the contextual area of this information and things like that, we're gonna continue to look at what it's gonna take to be a player in that as well with IoT is massive. And again, sort of like in hyper-converge with so many folks getting into this business, IoT, even that ecosystem is gonna be massive. So you're gonna have to be able to work with a number of suppliers. So Scott, back to Nutanix piece, we've had conversations with them as, how do they maintain the integrity of the channel while working with the OEMs? And their answer is they've got some kind of pretty stringent OEM deal registration pieces, which if you speak about how Lenovo fits into that, how you differentiate, why you're okay with that is because boy, I would look at Dell, Lenovo, Nutanix, there's definitely lots of opportunity for collisions. Yeah, it certainly is. And I think Nutanix has a sound strategy in orchestrating that traffic of opportunity because I think as was said earlier today, their customers are gonna look for solutions for multiple suppliers. So they're gonna satisfy that by partnering with a number of different suppliers. And so you gotta orchestrate that traffic because you don't wanna have customers that have a bad experience in trying to acquire the technology. For us, we support it. We feel like we have a unique value proposition. As more players are in this market, it builds the market base of customers that are looking at it. We've done our own research. The adoption rates in our own research say that 60 to 80% of customers out there in some recent surveys, we did are gonna acquire hyperconverge appliances in the next three years. So we know the opportunity is big enough for us to get our fair share and more there. And our value proposition around bringing what we feel like is the best hardware, a deeply integrated appliance with a long future roadmap as well as these workload optimized models, as I said, going from one to 11 models. That is all about tailoring a Lenovo and Nutanix solution to the workloads clients are deploying. Is that a remote office, back office? Is an SMB entering this market? Is it compute heavy? Is it storage heavy? Is it flash? So that's how we're gonna approach the market and find our share of that market and grab it. Scott, can you talk about the channel a little bit more? So I remember when IBM announced the deal, it was announced in January, right after Q4. So it was not to totally disrupt the channel. But I remember we were at Edge that year, which is in the fall and the channel was still pretty freaked out. How were you able to navigate through that, solidify those channel relationships and then I got a follow up question. Well, I think it was mainly to leverage those relationships, many of those folks that were working with those partners came with us to Lenovo. And look, you always have to prove to people when there's times of change that things are gonna remain constant. And I think we've done a good job of solidifying those relationships with business partners, the same technology, the same innovation, not disrupting the models and giving them the support. And I think a lot of the partners have seen in the channel model and Lenovo overall, we're able to be more nimble and more proactive but also react quicker when they need help in the channel. So I think we've done a great job in taking advantage of the relationships we have. And we've also expanded the channel. So we've increased our market coverage in the channel. Well, that's kind of my follow up question is the channel is evolving. I mean, it always is, but it's really started to change. You got sort of box movers who still sell probably most of the, do most of the revenue, but you've got the solutions guys. We've always been talking about solutions, but it seems like suppliers like yourself covet the channel partners that can really understand whether it's whatever workload, Oracle, SAP, big data, Microsoft, I mean, that level of expertise is increasingly important. And then you've got this whole hoodie crowd in the DevOps world, you know, maybe it's not a direct channel, but they're certainly an influencer. And obviously the service provider. So the channel shift sort of coincided with the move for IBM sell off its x86 business. So what's happening there? You said you've expanded the channel, presumably into some of those solution partners or how is it expanding? Yeah, exactly. And to the point about solution partners, as this market, as these different segments like hyperconverged grow, those solution providers become even more important because they're gonna invest in having the subject matter expertise and the technologists in their own camp to be able to sell to their customers. So it takes that specialization that usually you find mostly in your solution providers, but other partners as well. But we've got to cater to that and we've got to foster that. And one thing we're doing is making a major investment globally in expanding our training offerings. In this scenario we needed, we heard from our solution providers and our resellers and distributors that we needed to do deeper training. And so we're investing in that, one of our largest investments that we're making right now is in expanding our education offerings for them to enable their sellers to sell and understand the market as we see it in our portfolio. Back to the expansion of the channel. And that was a move where again, maybe where we were before, we had to tightly protect that channel model and have fewer channel partners because we were having to protect a number of other businesses and things like that from colliding. Here, we have a number of partners and if folks want to sell Lenovo Enterprise systems, we wanna help them do it. A lot bigger swim lane now. Definitely, and that's the S86 market. I mean, it's the dominant, by far we could have said this eight years ago, but it's the dominant share of the IT space now. Yeah, well, and again, let's face it, inside of IBM, it was always the sort of stepchild, okay, we'll keep saying the right things and now it's like, Lenovo loves this business. It's like embracing it. So that's gotta feel good. Well, it's the best of both worlds, right? You're in a place that's gonna get the investment to grow kind of unleashed to a degree so that we can go into neither markets that we need to, as we said before. But also, there's the protection of the innovation and that's what you've seen so far. You'll continue to see that Lenovo didn't acquire the business just to get the assets. It acquired the business to be able to invest and if you look at what they've done in other businesses like the PC business, it's not the same business, but they took that business from low share to number one in the world. So that's the model we're gonna follow here. Continue to invest, focus on customer experience and innovation and then wrap that up and our strategy is gonna be to help clients remain open and flexible so that they can pivot when the market's turning and bring the best solutions to them. So Scott, the HX solution is pretty new. We expect there's the typical training and building the funnel, but what can you expect to see from Lenovo Nutanix going down the road map? Yeah, I think you're gonna continue to see the traction we have. We trained, within a number of months, we certified over 1,000 of our sellers to sell HX series partners. We're gonna continue to expand our go-to-market, marketing to acquire new customers. So there's more of that, but also look for deeper integration in our own management stack. We have some of that today with X-Clarity, but we're continuing to work closely with Nutanix to develop even deeper integration in the management stack because you see a ton of the focus from Nutanix and a reason they're successful is that user experience. So we wanna latch onto that and find capabilities in our management stack that can integrate and make it even easier for customers. Are there any applications or ISVs that might be prime targets that hit? That's a great question because I wanted to address that. We talked about combining organic development along with partnering to bring that development. A good example of how you can do both of those and then bring them together is you take an HX series platform and certify it with SAP, right? With their solutions. So that's what we're gonna continue to do is what can we do with this platform, with Microsoft, with Oracle, with SAP, with other ISVs and bring tailored solutions to that. And again, back to the workloads, that's where we have a number of different models that we've tailored toward SQL or toward SAP or to Oracle database. So we've got a lot of potential to go there, but we're working on that as we go now. All right, Scott, we have to leave it there, but thanks very much for coming on theCUBE, giving us the update on the NOVO and really appreciate it. Thank you for the time, have a great time. You're welcome. All right, keep it right there, everybody. Stu and I will be back with our next guest right after this short break. We're live from Las Vegas, this is theCUBE.