 For this special segment at Red Hat Summit, I'm pleased to welcome to the program from Permabit. We have Tom Cook who's the president and CEO of the company, and Louis Emerson, who's the vice president of product. Gentlemen, thanks so much for joining me. Thanks for having us today, Stu. All right, so Tom, first of all, Permabit, give us the update on the company. Yeah, so we've been historically a provider of data reduction technologies to OEMs. So the major storage vendors have been big customers of ours for years and years. And today, we're really pleased to be introducing here at Red Hat Summit 16, VDO 6, which is a product that's tailor made for the Linux environments and Linux platform, Linux Storage Stack, to support data efficiency and data reduction in the platform. We're hugely excited about it because of all the energy that's behind hybrid cloud, it's the perfect product for that. All right, so Louis is the VP of products. Bring us inside, what was the catalyst for this product and what led to the announcement? Sure, so VDO 6 is a whole new concept for us around data reduction for the Linux Storage Stack. It's the only modular data reduction available on Linux. All of the other solutions out there are complete storage solutions that have data reduction in them. We allow a different approach. And what's really cool is you can use our data reduction with all of the Linux components. You can use it with CIF, you can use it with Gluster, you can use it with KVM, with Direct Attach Storage, with LIO, with NAS, File Shares, NFS, CIFs. It all just works because we're a module that sits at the block layer. And it's easily installed as an RPM on Red Hat. We've introduced a new product with this release called VDO Optimizer. And VDO Optimizer is a file system plugin that works with VDO to provide our higher levels of data reduction for backup and archive use cases. So we're offering essentially the only product out there that's optimized for data reduction, not just for primary storage, but for backup and archive as well, all in one package. Okay, great. So we've seen Linux proliferation everywhere, especially Red Hat, it's not just on-prem, it's living in public cloud environments. Announcements for Red Hat's been making a lot around containers. So does this product then span everywhere Linux goes? Yes, and in fact, while our initial release is on Red Hat Enterprise Linux, of course we'll be supporting other Linux distributions as well. We're obviously at Red Hat Summit, we're excited. If you think about it, it really impacts positively rel, the storage products, SAP and Gluster, containers, virtualization, and OpenStack environments as well. So it's a huge value proposition. I mean, what can't you like about at least forex data savings so that you can save on the infrastructure and hardware investment? It's really a positive step for the Linux marketplace. Yeah, Tom, I'm wondering if you could comment. The storage industry is an odd beast. We're seeing a lot of industry consolidation, but at the same time, it's always been heavily fragmented. So as a storage software company, how do you maintain kind of your independence and still fit into the overall discussion? It's a really great question because this is the product that we're talking about today and we're introducing that now, service providers and enterprises can utilize that's been vetted very fully by a lot of large companies. We've been the vendor of choice in the data reduction area for companies like IBM, EMC, HDS, NetApp, NEC, and Oracle. And so now we have a chance to bring this directly to companies that are building out their own clouds and really getting the advantage of this through Linux. So what's not to love? Open source along with the best data reduction in the business. And we think that's a huge value proposition. All right, so, Lewis, can you talk to us? Is some of the benefits of the product, any financial things that you can share, any early customers? Sure. Well, I mean, the most telling proposition about this product is really, you know, comes from that four to one data reduction that Tom spoke to. And if you think about, you know, not just storage savings, but data center costs, and you consider for a second that the typical data center cost is $3,000 per square foot to build out a data center. And you then think about what four to one data reduction would save the industry in data center buildout. You quickly reach a number of $1.5 trillion between 2020 and 2020. That's five billion square feet of saved data center space because storage consumes 30% of a data center today. That's a huge number. And because of that, we've got wins already. In the telco space, major APAC win with a telco provider, major win with government agency as well, and we're moving into financial services and telco providers very aggressively here. So the value proposition is really compelling with people that are building out extremely large data centers. Yeah, Tom, I mean, there'd be criticism in the storage industry for a bunch of years. It's like, oh, all those storage efficiency things, they want to sell more capacity because that's what they make their money on. But I'd say it's over the last five years that most of the storage companies, they understand. They have to, things like deduping compression and all the other things to reduce the cost. If they don't do it, somebody else is going to force that. So what differentiates what you're doing compared to the other storage? Yes, they have come along and they started to build that out. Well, the reality is if you're building a cloud and you're concerned about brand, then you're doing it wrong. Okay, there's a lot of margin that's left there and that's why there's a great opportunity to fill that with Linux. First of all, really superior and excellent technology that's caught up and beating many of the proprietary vendors. But they've done something that's very specific to each of their stacks in general. And they've lagged behind on performance, scalability, and they need almost a supercomputer on board on some of their systems. Now, because our system is so efficient and so footprint can operate on such a small footprint, we can operate truly on any platform. So that means the combination of white box proliferation, Linux and Red Hat supported software availability and software defined environments really brings a whole new universe of efficiency to the marketplace. I think for the first time, the entire ecosystem around open source and hybrid cloud is aligned for efficiency. And that's something in the proprietary world that has always been a little bit, there's always been a little bit of tension on that. And I think, overall, the proprietary vendors would love to maintain 55% gross margins and growth businesses. But when we look at the infrastructure space, Red Hat continues to grow at an extraordinary rate. High teams, while the other named infrastructure players are starting to have a lot of challenges. So it's a new world out there. We're really pleased to be part of it here. Okay, great. So can you speak to the go to market of this? Customers that, you know, intrigued, you know, who are they turning to? Are there certain OEMs that are announced or what's the best way that they can find the products? Really great question. So we've been an arms provider to big companies that have their own sales force. So this means a little bit of an adjustment for us. And it's because we are approached by companies saying we're building out a cloud, hybrid cloud, can you help us? So we're now working with a select group of systems integrators and companies that do development and are building clouds for people. What we're seeing with a lot of companies that are moving from proprietary to now open source-based hybrid clouds, they're doing it with help. They're doing it with consulting help. They're doing it with people who are architecting, helping them architect. And then people like Red Hat that are supporting their environments. They're not going naked in the environment. It's a very complex set of technologies that are building out. And so we're really happy to be part of that. So we've got go-to-market with Red Hat right now. We've got go-to-market with the systems integrators that are starting to adopt this and build Linux practices for hybrid cloud. And we're really excited about that too. So in the next coming weeks, we'll have some announcements about the partners that we're coming to market with. And it's really a leverage model so that we can get out there and be part of the specification from the beginning. We believe there's a land grab that's going on right now in the hybrid cloud market space. It's really important to win today because by 2020 or 2017 to 2020, depending on the analysts that you talked to, most people believe 80 plus percent of the marketplace will be moving to the hybrid cloud. So it's very important to win those customers today so you're part of that movement over the next five year period. All right, well, Tom and Lewis, thank you so much. Congratulations on the product launch. And appreciate the update on Permabit. Thanks, you've been watching theCUBE.