 The Cube at EMC World 2014 is brought to you by EMC. Redefine VCE, innovating the world's first converged infrastructure solution for private cloud computing. Brocade, say goodbye to the status quo and hello to Brocade. For EMC World, this is the Cube, our flagship program. We go out through the events, extract the signal from the noise. I'm John Furrier, the founder of Silicon. Join my co-host Dave Vellante, co-founder of wikibon.org and we're excited to be here for the fifth season here at EMC World Dave. What a great to seeing we have the first ever historic Cube event, obviously the Cube. First ever landing was at EMC World 2010 and now we have Double Cube, hashtag Double Cube here at EMC World. We have two simultaneous studios. I said Studio One, Studio Two. Jeff said Studio Blue, Studio White. I think he said just go with the color scheme but really a great event. EMC World, really talking up the modern enterprise platform for IT. This platform three, all the execs are here. Joe Tucci on stage, announcing some amazing news. Let's get right into it, Dave. Let's just talk about the bottom line here is that EMC is making some serious moves. They spend $5 billion a year in innovation strategy and most of it's on acquisitions, 10% up roughly, 12% on R&D but they announced the DSSD, Andy Petrelstein's startup, major news. Is this setting the tone for the new EMC day? What's your take? Well, so first of all, John, that's right. We started here at 2010 in Boston. Your chow to post got it all started so the Cube is really thrilled to be here for the fifth straight year. This is a company that has grown quite dramatically since the 2010 timeframe. It's about a $25 billion company now. EMC throws off about $5.8 billion in free cash flow but at the same time this is a company John that's in transition. What EMC calls, it's an IDC term they call platform two, sort of the old legacy systems silo client server moving into platform three. I guess the internet wasn't platform three but platform three is cloud, mobile, social and big data. So this is a company in transition. Now we had, it's interesting John, we had Jeffrey Moran last week at Service Now Knowledge talking about crossing the chasm. So how is EMC going to cross the chasm? And clearly it's organizational structure to do that. Answer to that is the Federation where it takes Pivotal and spins it out going after a big data platform, application developers, VMware, really the cloud, the private cloud trying to transition into the hybrid cloud. Very software focused obviously in the software defined data center with software defined networking and software defined storage. And then classic EMC which is transitioning into software defined storage. So you've got this company in transition, you've got Tucci trying to buck the trend, the trend being that when a new wave comes along the old guys get crushed and the prescription at EMC is the Federation to do that. We started this journey with theCUBE. We were the only tech blog and organization that really focused on cloud, mobile and social. That was our core editorial. We added big data, obviously social became big data and that was a huge deal for us. And now that is the trend. So I want to get your take. What has changed in your mind since that 2010 moment? And how real and how much has cloud, mobile and social impacted the world? Well in 2010 you remember the tagline for the show was the journey to the private cloud starts here. So what was happening in that timeframe is you had the public cloud came out in 2006 and the large whales in the business, the IBMs, the HPs, the EMCs and others really wanted a piece of that action so they started that private cloud meme. We had Jeremy Burton on that year and he said, you know what? Things are going to change next year. And that's when we started to see this really crisp messaging come out of EMC which is cloud meets big data. Now at the time, we talked about this in the QVMC really didn't have a lot of products around that. And subsequent to that it's made a lot of acquisitions. It's made a number of announcements. It's brought in things like Green Plum. It's spun out Pivotal. It brought Pat Gelsinger over to VMware so it's completely changed in the last five years. So much has changed from the product standpoint, from the organization standpoint. The market has changed. Amazon is now a $3 billion company. AWS growing at 70% a year. You got all these flash startups. Back then flash was really something that you stuffed in to an existing storage subsystem and now it's a system on its own. All flash arrays, Fusion IO with the card phenomenon. Everybody's now jumping on that. EMC making a big blockbuster announcement today. DSSD, Andy Bechtelstein company. So a lot has changed, John. And so cloud, mobile, social and big data really started to come into focus and now the question is, okay, who's going to win that race? Well, Dave, my take on it's very clear. EMC has always been the case. Jeremy Burton, who was the CMO, we interviewed him his first year on the job. Here inside the cube, we were here in the Boston when they had the EMC rule in Boston. He sat down and pretty much pulled the Babe Ruth. He forecasted the home run that he was about to hit, which was he wanted to modernize the messaging. He wanted to control the narrative. He's since put in EMC TV, cloud meets big data, moved from turning the private cloud to cloud meets big data and has been executing a series of transformative initiatives, both from a marketing, messaging standpoint and putting meat in the bone. We've always criticized EMC, Dave, even though we love EMC for supporting the cube so much. We've been critical of their products and they've been admitting like, hey, we're going to put some meat on the bone. They have been putting some meat on the bone and they are not afraid to spend money. And this acquisition is a testament that they're saying, hey, you know what? Pure storage, $3 billion valuation. Hey, we know we're going to just take it right down Main Street with EMC. Well, let's talk about that a little bit. You know, the big question we always ask on the cube is can large companies innovate and can EMC innovate? Or they have to do that through acquisitions. Now, of course, large companies can innovate. Just take a look at Apple. Apple is a very large company and they're innovating. But can large enterprise companies innovate? Can Cisco and IBM and HP and Oracle or do they really have to rely on acquisitions? If you look at how EMC really got into the flash business in a big way, it was in an acquisition of Extreme I.O. Now, one of the areas that EMC is innovating on is Viper. Certainly trying to innovate. They're spending a lot of R&D money on it. So EMC announced Viper 2.0 today. They announced the availability of commodity disk drives. They announced block capability through Extreme I.O. Georeplication, adding into object and HDFS, which is what they announced last year. So the big question, John, is Viper the future of storage, the future of software-defined storage, or is it a way for EMC to placate its customers' frustration with so many different silos and build an abstraction layer and bring all those silos together? Or is it both? Dave, I want to ask you, well, first of all, I think it's both. I think one of the things that I see EMC as something that they need to watch on their messaging is, and Goulden was up there. And my only critique of Goulden was that he's still pushing the best of breed message. When I think the disruption that they're actually talking about is going to be much more horizontal. And I think you're going to see a move from best of breed to a much more of an integrated approach. And the acquisition of the best of science company is the sign of that. But also, the SAP announcement with Bill McDermott, Joe Tutti's friend, he's like, he's really a friend of mine. The first thing I thought of was Donnie Brasco. He's a friend of mine, you know? There's like, you know, Tutti. I'd be your friend too if you spent that much money with me, John. Of course he's a friend. You get him a good discount. But the SAP thing is interesting because now they can go up against Oracle. So I want to get your take. What is that mean? Because you've got now the flash, the pure systems answer with Best of Science Company. And you now have SAP looking at an engineered architecture with VCE and a variety of other things that are happening with virtualized on them. It's a very interesting dynamic, isn't it? They've got a common enemy in Oracle, but they're really a friend of me. EMC spends it probably a million dollars a year sponsoring Oracle Open World. Most SAP shops run SAP on Oracle. But I want to ask you specifically, can EMC and SAP tune a platform that could compete with Oracle? Well, I mean, they are doing that. Now, the question is how meaningful it will be and what kind of impact will it have on the marketplace? And, you know, Oracle, Mark Hurd, Safra Katz and Larry Ellison scoff at SAP HANA. There's my question, John, is SAP HANA the new disruption or is the disruption Hadoop and Spark and real-time big data analytics and no sequel? I think that, frankly, from an economic standpoint will have much more legs long-term than SAP HANA. Well, I think HANA's going through a transformation. Obviously, Vishalsika, the anchor of SAP, resigned abruptly. Wall Street Journal cited for health reasons. I don't believe that. I think it was much more of a HANA just not making it. I've always said HANA is a great product. Might be the Ferrari for the roads that are built for Ferraris yet. So I'm not sure HANA has really made it over the chasm in my mind. With all the disruption in open source and what's going on, certainly in the database world and the flash world, certainly DSSD is an indicator that the infrastructure certainly is changing and might not be HANA friendly. We're going to hear some news around HANA with EMC. I want to hear more about that. I want to get into a couple other announcements here. Elastic Cloud Storage, last year, last fall EMC announced Project Nile. It's essentially cloud in the box. It's denial, bigger river than Amazon, get it. They're claiming 23 to 28% less lower TCO than Amazon and Google. I don't know where those numbers come from. They weren't sourced to IDC or Gartner or anybody. I think they're internal EMC numbers. I feel a little bit like it's apples and oranges. I think people are buying Amazon web services for a solution. This is a solution to build competing services, in my view, to AWS and Google. Do you think EMC's message here is about redefining scale out or is this just more of Jeremy's setting the agenda for EMC's next couple years? I think it's, you know, they see Amazon coming. I think Amazon's theme is reinvent. And they're saying, no, you don't need to reinvent. What you need to do is redefine. We don't throw out the old, bring the old, put a big blanket around the old and we'll bring it into the new. That what they talk about Platform Two and Platform Three. And I think that's very good messaging. That's what a lot of IT customers want. Not necessarily the ones on the edge, not necessarily the startups, but that really is what EMC's trying to accomplish. I think one of the things that was highlighted for me was Joe Tutti's comments around Amazon, Google, Uber as disruptors. He talked about the enterprise and he's more software-defined to disrupt. And if you're not on an offensive position with the new technologies, you will be obsolete and ultimately will go away is what he was saying. But I think the Amazon envy, if you will, the Amazon depositioning through some of the language, again, Amazon reinvent, EMC redefine. Absolutely a coincidence in my mind. Sure, absolutely. Jeremy Burton knows what he's doing. The other thing was the cloud storage systems and appliance, they call it elastic cloud storage. It's an appliance, it's not a service. Again, does this confuse the customers? What's your take? My take is this, John, that the, it's all about economics. The economics of services are changing with the cloud. Services used to be have diseconomies of scale. In other words, as you increase the volume, your marginal economics got worse. Cloud services is changing that. As you increase your volume with cloud services, you start to have marginal economics that look like software. So marginal economics of software go to zero. Now the marginal economics of cloud services are going to zero. The marginal economics of hardware will never go to zero. So everybody talking about software to find this, software to find that, commodity this, commodity that, hardware is never going to go to zero. So it's really not a race to zero. It's a race to see who can really get on the cloud services bandwagon and deliver those services at volume faster. And the big question for EMC and the Federation and VMware is how do they get that scale? Do they need, for instance, a partner, you know, like an IO, we had George Lessman on it at VMworld, a company that can bring them scale? Or can they do it with these piece part partnerships that they have? That to me is a huge challenge for this company. What do you expect to hear from all the folks to be on theCUBE? I want to get your take. For day one, we're going to be here live for three days of wall-to-wall coverage. Again, EMC World Double Cube, double barrel of thought leadership here. We've got Jeff Frick as Steve Kenneson hosting our second cube. What are you expecting to hear throughout the course of the event? EMC World is where this company sets the tone for the rest of the year. EMC has put forth some very aggressive financial targets and I think it's going to hit those targets and the way it hits them is it brings everybody, all its customers, its partners into EMC World and it starts laying out its roadmap for the year, its innovations and getting its sales plan essentially locked and loaded, you know, for the year. That's what this is all about. It's about the products, the innovation and really helping customers understand really where EMC is going to take them in 2014 and beyond. Joe Tucci talks about, oh, we won't lock you in, we won't lock you in. Their version of lock-in is to hold the customer's hand, go belly to belly and really do a great job of carrying them through the next generation. Okay, everyone, this is the Cube, our flagship program. We go out to the events, Extract the Silinoys. I'm John Furrier, I'm with Dave Vellante, hosting the Cube for the fifth season here, kicking off EMC World. Always an emotional point for me because EMC really has been embraced because Jeremy Burton has come on board. He's really embraced open source media. Jonathan Martin is now the new CMO. We're going to hear from him. He took the stage today and I was saying, it was a very impressed day with Jonathan Martin. He ripped some cords out there. I actually thought he was doing some air guitar. I'm like, okay, here we go. No, that was the real deal. I'm like, okay, and then he started really going nuts there. So, Jonathan, great job. CMO-like, he's got the Jeremy Burton suit going down. These guys know where to buy suits in London. I can tell you that right now. The British Invasion of EMC, got Stella and the team here doing a great job. So, this is the Cube. We're going to see a lot of action here. At EMC World, I'm John Furrier with Dave Vellante. We'll be right back with our next guest after this short break.