 three-dimensional scaling is the big theme. The audience today has 3D glasses. Now we have Jack Dome on here at 12 o'clock and we're gonna be asking about that. It's unprecedented. Nobody's ever done that. Scale out, scale up, scale deep. We'll find out which parts of that are real, which parts of that are marketing and go deep today. Yeah, I mean I think the sun is shining here in Silicon Valley on us. We're in a great spot here. But we are listening to a revolution with Hitachi because as you know, Dave, we've been asking all of our guests going back to the SAP press conference of the Oracle event and VMworld, is it scale up or scaling out as a fundamental difference? And we've heard different answers and I think what Hitachi's coming forth today with is an absolute message that you need to scale up and scale out and scale deep. Now scaling out is something that's being worked on by the top computer scientists at Stanford, MIT and all around the world. So that's not, that code has not been cracked yet. And Facebook and others are dealing with that. But scaling deep is a data-centric model. And I am really, really blown away again by the difference between the two mindsets. We heard from Oracle, very proprietary application focused. They do not want to be open. Hitachi is absolutely being open. And again, we're seeing this mindset, the cultural difference between the industry heavyweights of open versus closed. That's right, a critical part of Hitachi's strategy is to virtualize the storage, not only the Hitachi storage, but any third party storage as well. That's a unique capability of the industry. Only a few vendors do it. IBM does it with an appliance. LSI is doing it. HP does it with the LSI appliance. And there are a few others. But Hitachi is really the leader there in terms of virtualized storage and allowing third parties in an open manner, as you said. And a nutshell, the key highlights for me that I heard were it's a very customer partner focus. But that's, you know, all corporations say that. But their business model has been changing as they pointed out over five, seven years ago. They've moved significantly from a revenue standpoint where software is driving, you know, over 50% of that revenue. And again, openness. And that is very key. And the data strategy, the data strategy is very, very independent of applications. It's very cloud-based. He talked extensively, must have used the word governance and counted, I counted over a dozen times. It stopped counting at that point. So the notion of governing data in an application silos is a big message. And then content cloud, he said content cloud, I counted almost half a dozen times. Yeah, the content cloud really caught my attention. Hitachi used to essentially, 20 years ago, used to just copy IBM. IBM would come up with a product and IBM would come up with a little bit better product. Or Hitachi would come up with a product 18 months later. This is completely different. You know, EMC is the big competition these days and Hitachi's strategies from a product standpoint and a marketing standpoint is completely different from EMC's. I'm very impressed with that. The platform is different. The approach is different. And this whole notion of unifying content into the high-end mission critical systems is quite interesting and I want to learn more about that today with the guests that we have on. Yeah, we're gonna have a lot of guests on here. But Jack Tomei was very impressive. You know, he's not the flashy Steve Jobs, but he actually delivered great messaging and he's a very cool guy. I will say that he was wrong on a few occasions. Being new to Facebook, as he pointed out, Facebook has more than 400 million users that's well over 500 million. I'm not sure he's got his hand on the pulse with relative to that, but. Oh, he's new and I tried to friend him and he can't friend him, only he can friend you. Well, I mean, I think he doesn't have a real pulse of the latest and greatest statistics, but I think he did bring up social networking as a proof point. And the proof point is that there's two aspects of data that he was talking about. One was the existing current situation, which is enterprises and big, large-scale institutions like financial houses, telcos, insurance companies. They have data. Data that's tied to application silos. So he talks in that framework as a governance issue. Who's going to govern the data? How does this stay persistent? So that's kind of the existing current installed situation, installed base, if you will. Then he mentioned growth. And the growth areas, as he pointed out, was what we've been talking about from VMworld, our talks with CloudEra, and then recently at Oracle Open World with Green Plum, is unstructured data. I mean, he clearly said that this new cloud, this new environment is going to be unstructured data. And that's where he tied in the Facebook point and that social networks are throwing off this new type of data and the innovation of how to manage that data. So he, although he got the number wrong on Facebook, really had his hands on the pulse, in my opinion, on the core issues. It was only 100 million off, John. No, but I think more importantly, he knows the issues. I mean, the issues are unstructured data, massive growth in data management. You know, is that going to get easier? No, it's going to get harder. And so by focusing solutions on that, that was an interesting point I learned. And Latachi's messaging focusing on that is new and different, right? You think about Latachi, you think about the most mission critical, high-end OLTP types of applications. And now Latachi, a couple years ago, bought a company called Archivus out of Waltham Mass. That was a content play. And now you're starting to see product merge together. And that's something that's actually quite unique in the industry that, now NetApp obviously talks a lot about unified storage, but at this level, at this high-end mission critical level, you typically don't see that. You certainly don't see that from EMC in terms of bringing together the content and the mission critical OLTPs. That's different, that's new. Let's find out how real it is. The other thing that I observed is Hitachi's very proud of their culture. I mean, they started the whole presentation up with the drums beating. I mean, you know, they're obviously a multi-national company. Ishigaki-san is now on. Yeah, so I mean, the heritage, they're proud of that. I mean, they're not known for their marketing hype, but clearly here, they're putting a lot of effort into pushing out messaging that's really kind of game-changing. So I was actually encouraged to hear and see that kind of cultural, you know, they're not hiding from the culture, they're proud of it, and that was interesting. Yeah, 100 years is quite a milestone. Let's talk a little bit about the folks that we have on today. So we're kicking off the morning with Roberto Basilio, who, and we're going to take a product focus. He's going to tell us what's new in the product, what's different, and what their vision is, you know, and where they've come from. And then we've got a number of analysts on this morning. We've got John Webster from the Evaluator Group, Ray Lucchese is coming on our own, Wikibon's David Floyer, Mark Peters from ESG is going to be on, and then we've got a segment with the IDC analysts, Rick Willers and Laura Dubois from IDC, and then we've got some bloggers on. DeVang, StorageNerve, many of you know DeVang, and Rick Vanover are coming on for a session. And then we go in to the afternoon and Jack Domey is going to kick it off at noon. Really excited to have Jack. 12 o'clock is a big interview. Jack Domey is dynamic, he's the CEO. Having him on will be really, really fun, and we're going to ask him some tough questions. We're going to put his feet to the fire and have him come into the cube, inside the cube. And I really want to hear from him more about some of the strategy and tactics that they're executing in this marketplace. Obviously Hitachi is changing their focus, obviously from a marketing standpoint, but the product differentiation seems to be a unique thing, and they've got that product leadership from what we're hearing, but I want to see the meat in the bone. I want to hear from him. What is his cloud vision, right? We've had a number of big execs on recently. We had Joe Tucci was on, Mike Cappellus, we had Dave Hitz last week, we had Tom Georgins on. Of course, I'm going to ask him the question that we ask every CEO, is storage sexy or hot? Let's see what he says. We had a great answer last week from Dave Hitz. What do you think he's going to say? You know, I'm curious to what he's going to say. We've heard a different answer from everybody. Joe Tucci didn't buy into it, right? It's kind of like, you know, the question, what's the craziest thing you've ever done? The answer is actually very telling by the personality. So we'll see what he has to say. And then later on today, we've got some customers. The GM of Intel's IT is going to join us. The head of trading and infrastructure at Lloyd's Banking. And then the University of Utah will be on. And then at the end of the day, Brian Householder, who we heard from this morning. And really, Brian sort of is the overseer of all of the marketing and the strategy. And that's really his role. Brian has been very active in the strategy of the company. So he's going to be a great guest. And then we're going to try to get some other guests on as well. We're here at siliconangle.com, siliconangle.tv, continuous coverage of Silicon Valley. We're here at the Hitachi Data Systems, massive launch of their new product, the virtualized storage platform. They supported us to come here. Siliconangle and Wikibon are independent media and research organization. We're excited that they requested us to come down and helped out a little bit with some of the costs to do the cube. So we're really thankful for Hitachi for inviting us. But we want to get to the heart of the issues here. We want to dig in, Dave. And I want to ask you about Hitachi. And I want you to tell me about how they've changed over the past five years. Jack Domey mentioned it. But I also want to ask you about that in context to Oracle. I mean, I'm just seeing two different animals here, Oracle and Hitachi. Oracle is coming across as an evil, land-grabbing, telco-like environment. Well, Hitachi, first of all, is a $97, $98 billion company. I mean, it's just an enormous firm. They build trains and medical equipment and all semiconductors and disk drives. And obviously, HDS does the storage subsystem piece as well as some other things. What's been striking to me, and I've been following Hitachi before they were Hitachi data systems. And as I said, they used to copy whatever IBM did. And they've really strived to do innovation. I've been to Odawara a number of times in Japan, which is their innovation center, where they design all these subsystems. And they really try to leverage the other parts of the organization, the networking piece, the semiconductor piece, the disk drive piece, which they purchased from IBM several years ago. But I think you're absolutely right with regard to Oracle. What impresses me about Hitachi is how they're not just copying IBM anymore, not just trying to copy EMC. They're really trying to break new ground. And they've proven that for the last five to seven years. We're saying leadership on the high end, low end, mid-range, all the above. What would you say that, from there, putting their stake in the ground gives you the competition? Their legacy is unquestionably the high end. And of course, management several years ago saw that the high end was a managed decline business. And so they struck out, they've really developed a much, much stronger mid-range product called the AMS. And they have a partnership with Blueark, a really hot California company who's been growing like crazy. And they've worked together to really build up, using that, again, that content archivist platform to build a great vision. We heard a lot of it today. We're going to hear more of it. Relative to Oracle, Oracle's a whole different ball game. Oracle's going to take its applications and really build a big giant, ironically, hairball around the Oracle applications and the Oracle hardware networks. Let me dig into that. So Jack told me the CEO of Hitachi this was on stage saying, he wants to free up the data from the application. And he must have said applications as I was a few times. What you're saying is Oracle is application-centric. They don't want to do that. No, they want the Oracle applications to be the center of the universe and the Oracle slash Sun hardware to be managing that. So they're really not very, not all inclusive of other. In fact, Sun used to resell Hitachi's high end platform. One of the things that Larry Ellison has said publicly when he took over the management of Oracle, said we didn't make enough money off of the Hitachi platform. Great product, one of the best products out there, but we didn't make enough profit so we cut it. We're going to sell our own stuff. Really very profit-driven. Sun is now chasing profits, not revenue. And innovation. What's innovation with the Oracle versus Hitachi? I mean, which open, closed architecture, which one of those, in your opinion, is most innovative? Well, I mean, Oracle owns the database, right? So it doesn't have to innovate the same way that an Hitachi or a NetApp or other companies have to innovate or they'll die. Tom Peck was on the show, we talked about StackWords, but one of the questions we asked him at SAP Sapphire was breaking down the silos here. Jack Domey was talking specifically about applications silos relative to data. Although Tom Peck didn't talk about that, and obviously the CEO of Levi Strauss doing theCUBE a few times, an alumni there. What is your view on the application silos and then Hitachi's position, which is saying, hey, we want to break that down and bring data into this virtualized storage environment or content cloud or information cloud? Well, some of the themes that we've heard, and Hugh Yoshida now, the CTO of Hitachi is on the stage, but one of the themes we've heard from VMworld on really here is that 70% of the investment that IT organizations make is in keeping the lights on. I call it run the business. And only 30% is spent on grow the business and transform the business. And the big reason why is that IT infrastructure can't support that grow the business and transform the business because it's all developed in silos, the applications, the middleware, and the infrastructure are all silo-based. And it's very, very difficult to be agile with that type of environment. Virtualization is changing all that. One of the things that we talk about at the market level and the end user impact all the storages. Storages, as we always say, sexy, but it really does impact the end users. I wrote a post earlier in the year called Mobile Innovation Cycle. So if you go to Google and type in Mobile Innovation Cycle, you'll see a post that I wrote was really groundbreaking at the time. But now everyone's using it, which is data is the enablement of innovation and relative to the growth of mobility. But one of the things Jack Domey said on there, and we could unpack that for a good half hour, was he said, there are new forces, new environments, and cost pressures with managing the data growth. And he said, the new ways to manage data growth are in three areas, servers, applications, and consumers. He's essentially talking about the areas of virtualization that have a data-centric component, obviously server virtualization. We all know that market, application, virtualization. That's where the storage is separated from the applications and the consumers. The consumers having iPhones and iPads and mobile devices, they're going to get virtualization, which we heard at VMware loud and clear that there's an end user component of this. So he actually laid down a foundation I was impressed with that it's very, very relevant, that three-legged stool, servers, applications, and consumers. And I liked Dave Hitz's answer on his storage sexy. He said, if we're the plumbing, if we were a Hollywood movie, we wouldn't be the leading actor. We wouldn't be the star. We'd be the supporting cast. And that's really what storage is all about. And so that's not what we're hearing from Hitachi. Hitachi's saying today that they want to be the lead actor. Well, but he's saying we want to be the change agent with 3D scaling. Yeah. So the interesting thing, does NetApp have an answer to that? Well, first of all, you heard Brian Householder say, every customer wants to do more with less. OK, and so Hitachi as a storage supplier has to provide that. I mean, whether or not a company in the storage business can actually be that leading actor, I think remains to be seen. We're hearing some interesting things about the content cloud and bringing together virtualized infrastructure and the content cloud. That make it a leading role. Again, I kind of like Dave hits his answer. It's the applications. You call it the cold, clean water running through the pipes. You use the plumbing. Versus dirty water. The dirty dark water, lukewarm, dirty water. So bad data is bad water. So to me, what makes storage sexy is it's a growing and profitable business. And it's interesting. A lot of characters in this business. That's what makes storage interesting and hot. So do you think, let's talk reality now. Let's bring this down to some proof points. Do you think Hitachi has some legs to stand on with this big announcement? I mean, honestly, they're talking a great game. Let's drill down. And when we get the guests inside the queue, I want to ask them some specific questions. What questions do you have in your mind to kind of flesh out and bring out the reality of this message? Well, so first of all, I want to understand what's new. So to your point, Hitachi has a lot of proof points. Hitachi's been doing this for decades. And Hitachi's one of those companies that makes slow, steady, consistent progress. Now, that whole thing about 3D scaling. Scale up, scale out, and scale deep. Now, I get the scale up. I mean, Hitachi's always scaled up. And I get the scale deep because they're allowing third-party devices to attach. And they can go deep, cheap, and deep with those third-party devices. It's the scale out, as you said. There's a lot of computer science around that. And I see bits and pieces around the clustering technology that Hitachi has that I think give us clues. But I really want to know what kind of legs that piece that Hitachi has because that's on the scale-out business. The scale-out piece, that's right. Well, there's all kinds of issues with scaling out. As I see this round trip times on the network, and you've got data coherency. All kinds of data issues around updating. Because you can spread the data everywhere. That's great. But there's real innovation and real math that goes involved with that kind of architecture. You're talking about the coherency. Well, just scaling out is putting data anywhere. It's interesting. And it's a really, I think, important part of the future. And we've had a lot of conversations. We've had Fusion IO on Dave Flynn. He talked a lot about these Web 2.0 companies like Twitter and Facebook and MySpace scaling out. And they need to scale out because they're moving so fast. They need building blocks that allow them to grow and not have it infrastructure needed. Let's talk about one of the key pieces that we liked. One of the things that I liked, I heard, was this openness message. And you just mentioned that any third party can attach. Can you elaborate more on what that means? We saw a Falcon store in there who's been on the queue. You mentioned Fusion IO. You got a hint of all the partners in there. Intel's in there. What does all that mean? What does that mean a third party can attach to Hitachi? And they get the benefits of that. Hitachi early on decided it had to differentiate from the likes of EMC. And so what it did is it came up with this notion of a virtualized platform, very powerful platform. And they had this innovation where they said, let's allow third party disk subsystems to attach to our engine. And a lot of people think, well, that's strange. Why would you allow third parties to attach? Well, Hitachi recognized that there's a lot of data out there that has to be moved, that has to be managed, that's stranded. And so what they did is provide a platform. It was actually quite brilliant because the primary use case for that was to suck data into the Hitachi platform and migrate it. But nonetheless, a lot of companies will attach third party drives and use them as a cheap and deep storage. So it extends the life of your existing assets. And what Hitachi does with its software is it embraces those other third party assets. So it brings life, if you will. It breathes life into these old, stale, third party devices, whether they're from EMC or 3PAR or IBM or HP or whomever, they support these devices. And it was a very interesting strategy. You've seen IBM have some success with that, with its SVC product. LSI with a product called SVSP. Actually they OEM that to HP. LSI calls it the SVP, I believe. So a number of companies have hopped on this. Now EMC with Vplex has jumped into the game. So you're seeing confirmation. Talk about EMC, Ashley. We know EMC, they support us with a cube and everything. But you're talking about EMC is on the high end. Okay, Hitachi has market share numbers that show them as number one in virtualization. You wrote a post and I wrote a post amplifying the fact that EMC is number one in virtualization. So who's number one? Yeah, let's clarify that. So EMC is number one in VMware. And presumably, according to this, so ESG came up with some data that suggested that in terms of share penetration within VMware and other virtualized accounts, EMC was by far the dominant account. And that's not a shock, right? You would expect that, right? They work hard in VMware. They own VMware. It's a big, big area of emphasis for them. They get a lot of... So they're number one in VMware. So they're clearly number one. And in my opinion, and the data shows it in the US. Anyway, it was US data, but I wouldn't be shocked if it's overseas as well. In VMware environments, hands down. Now, that's different than Hitachi. Hitachi is number one, or maybe number two, but right up there in virtualization of storage, the virtualization of the storage back end, until Vplex, EMC really didn't have a solution for virtualized storage. And I would say Hitachi's number one there in terms of maybe licenses sold, I don't know about revenue. We'll have IDC on. Maybe they can give us some perspective on that today. But very clearly, Hitachi is leading. Hitachi's claiming number one on that, so. I would believe it. I think it's certainly number one from a function and a product standpoint. Whether or not it's revenue, it's hard to tell because they ship licenses with this stuff, and it wouldn't surprise me if they're number one. It's Hitachi and IBM with SVC right up there. And SVC's really an appliance that doesn't have storage in it. So I would tip the hat to Hitachi because of the revenue associated with the internals of that device. Yeah, the other thing that we heard from him was anyone's storage. And the idea of having efficiency and mobility of data. And then he talked about the key things of this, which was optimizing the infrastructure and optimizing discovery. Those two variables were key on Jack Dome's list of the areas of innovation around virtualization of storage. Which he did say, virtualization of servers have been amazing, but virtualization of servers is dependent upon storage. So you and I have been talking about the linchpin of cloud is storage. It happens to be true. He talked about that. But importantly, if you optimize the infrastructure and then the ability to discover the data, you can integrate that into data and applications. So that, to me, is a big focus. I mean, we talk about the Apple iTunes and the App Store, the world seeing all these apps, tsunami of applications. So applications are hitting us left and right on the marketplace. All the data from those apps cannot live in a silo. Yeah, and I think it's smart. It's clear to me. I think it's smart for Dome to message around Facebook, for example, because you think of applications in the enterprise and obviously you think Oracle and SAP and you think these big conglomerates, but there's so many emerging applications that are driving innovation. We've talked about the consumerization of IT. It's true for the applications as well, don't you think? Yeah, I think anyone who could take the applications and give them freedom around how the data is managed and accessed will be a winner because application providers now have distribution characteristics of big application developers all the way down to what they call the long tail of applications, the small guy. Someone who bangs out an iPad app or an iPhone app or an Android app and gets 100,000, maybe even a million downloads. You can have a three person company do that and make money, have a great life, buy a boat, buy a house, use the cloud. But do they want to build a backend data center to manage that data? No, they'd love to have a Hitachi cloud solution for content cloud. So I think this content cloud has legs. I want to ask them specifically what software is being innovative to make that happen.