 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. Okay, welcome back everyone. I'm here live in Las Vegas for EMC World. This is the Cube, our flagship program. We go out to the events, we extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE. I'm Joe Michoes, Dave Vellante, co-founder of wikibon.org and our next guest is fellow Riley of VP of Worldwide Sales, Ethernet Fabrics with Brocade. Welcome to the Cube. Thank you very much. Welcome, welcome. And we love having Brocade on. We've been to your place in Silicon Valley. We have beautiful buildings, state-of-the-art, amazing facility. We interviewed you guys last year. You guys have a great event this evening. We'll be attending the tequila party. Of course, the most important part of that is not the fall down at the party. After all these interviews we do. Especially since it's next to the canal. It could be fatal. Yeah. Well, seriously, thanks for coming on. I want to just ask you a couple of questions on Brocade. What are you guys doing at the show this year? Obviously, big, long-time partner with EMC. You guys are great sponsors of their event, but good in the ecosystems. Great, a lot of activity, massive disruption. The third platform's here. We're hearing things like bridge to the next platform, some cool graphics. EMC's really pumping it up. What does that mean from a standpoint Brocade and EMC? How does you guys fit into that third platform equation? Well, it's interesting because we're here because of our long-term relationship with EMC. But we're also here because you can't stop at data anymore. The data center has evolved now and it's not three things anymore. It's not applications, data, and network. It's one thing converged into a single solution to meet the end user expectation. And so we're here to not only talk about the evolution of the virtualized data center on the data side, but also how the network plays in that story. So Joe Tucci said, software-defined enterprises is the future. If you're not taking an offensive position against that, you're going to wither away, or I forget the exact quote, but basically you'll die. I mean, that's over the top. But we had a previous guest on from VM Turbo was talking about, he's a techie, so it was totally off the cuff, but it's relevant right on. The old way of managing things from 26 years ago is over when you have a software world that's really connecting all these new elements together. All the gadgetry of the technology's here, and now it's about software connecting it all together. So how does that change the data center equation from a customer standpoint? What pain points does that create where they need the aspirin to solve the pain, but yet to be positioned for the future to be offensive? What's your take on that? How did you see that? Well, software-defined networking is great, but if you try to software-define a network which is stuck in an old paradigm, you're basically wasting your money. So you have to start by looking at the underlying infrastructure and determine whether or not what you have is capable of being automated, virtualized, is scalable, whether the simplicity is inherent in the design, and in old infrastructure designs, that's not the case. So what we're proposing is that to get the real advantage out of software-defined networking, you need to begin by thinking about the underlying network and converting it into a platform, a platform that will activate your virtualization both for applications and also for data, but a platform on which you can begin to virtualize services as well, and that's really the ultimate goal. Virtualize services in your data center, control it with the software-defined environment which is now driving your data center against a set of business rules, not a set of IT limitations, and then as you create a cloud environment, create a control level above that with orchestration. Brocade plays in every one of those arenas, committed 110% to open source and open resources for our customers. So what happens to the box in this new world? How does it change? So it's an interesting story because people ask me all the time as I talk about this virtualized environment, aren't you going to be out of business? And my answer's always the same. I'll probably be out of the sheet metal business. As the processor capability in a server gets more and more and more pronounced, multi-core, 20-core, true 10 gig capability in an x86 server, you're not going to need the purpose-filled OS anymore. You're going to be able to deploy services in this compute infrastructure which you're sharing with your applications, but performance still matters with those services. So this is not a matter of genericizing services and what Brocade offers in the infrastructure is very, very, very differentiated from our competitors. Meaning the game is exploiting those cores and the balance of the system and all that engineering that goes into that. It's just now executed through software, not custom hardware. So controlled by software and the infrastructure itself, Dave, is controlled by a programmable software layer using, like for example, RESTful APIs so that not only do you get the capability that you have you can evolve that capability as new opportunities present themselves. So what does this mean for the economics of the hardware business? Do they start to look like the software business? In other words, the hardware gross margins start to look like software gross margins? Does the business actually shrink in revenue and the profitability grow? Or is there still just this huge, untapped available market that's going to prop up the business? What do you see shaking out there? Well, I wish I had a crystal ball. I'd make my investments. But I have to be honest with you, I think that eventually the hardware companies will become much more software-like. I think that's inevitable. But I think what you're going to see is the relevance of partnerships. So you get these converged solutions. For example, what Brocade is currently doing with EMC in terms of building converged solutions that don't isolate the data environment. They integrate it with the network layer and from the top down, integrating the network layer with the application layer, those are the important steps. So the evolution of partnerships and the evolution towards software functionality as the key differentiation, I think that's the future. How long that's going to take? We're not exactly sure, but we want to give our customers the opportunity to have the choice and flexibility to make these decisions when it's right for them. And when you talk to hardware companies, they all point out, and I'm sure you guys would do the same, that a lot of your engineers for years have been software guys. I mean, that's what you're hiring, that's what you're deploying, it just so happens you're delivering it through software. So I got to ask you, what progress you guys have made on the fabric side? Because Ethernet fabrics are hot, they've been around for a while, and it's kind of one of those things that's like the year that Ethernet fabric seems to be upon us. What is going on this year? What progress have you guys made? We felt like John the Baptist about five years ago. When we talked about fabrics and everybody threw them under the bus, now everybody has a fabric. I can say without the risk of contradiction that Procade is the only company has the right to talk about fabrics because we've been building them for two decades. We've been building sand fabrics, and now we have IP fabrics. The market has exploded, our customer base is expanding just exponentially because the use cases for the fabric have expanded so dramatically. What's the differentiation on those fabrics? You mentioned other people coming out with fabrics, it's like a Me Too, kind of copycat kind of thing. What are you guys differentiating around right now? What's the key thing? So we learned our lessons in storage area network, where customers are looking for three things from a fabric. They're looking for incredible flexibility, so indifferent to topology and packets. They're looking for real automation, true automation in the design itself, and they're looking for the kind of economics with regard to scalability that are unavailable in their current network. Those are the characteristics of a sand, driving efficiency, driving scale, driving automation. Those are the characteristics that we've built into the Ethernet fabric, and the marketplace is responding aggressively. What have you guys done on the business side getting the word out? Because obviously Brocade has always been a company that's always been getting the marketing game up. Every year it seems like you've been upping your game on the marketing. The new CEO came in the last year saying, hey, we want to get the word out. From a sales standpoint, getting with customers, what do you guys do? What's the main message there? Channel, direct sales, mix, both. So we have a new CMO that I'm really excited about, who's going to help us really get this message out. Brocade, its legacy is going to market with partners like EMC, that's our history. So exercising the new muscle of a direct customer engagement has taken us a few years to figure out. But now we're leveraging the power of our indirect as well as our direct channels, and those two together are really, but I think they're right. Tell us about the new CMO, what's the new CMO like? Take it to the street, big messaging. She's a very down-to-earth, very pragmatic, but she believes that we need to get away from being the geeky engineers that we've always been. And talk more about systems, then about the boxes, and about ports, and about things like that. You guys definitely not going to get away from the geekiness, because you guys really were doing a lot of the SDN stuff before, it's fashionable too as well. Is there any campaigns you guys running, anything new coming around the corner? So I think you'll be seeing some new things coming out here in the next quarter. We certainly have made some announcements with some of our key partners, and I think you're going to be seeing, particularly as the Viata products are network function virtualization products, become really dominant in the marketplace, the way they're growing right now. I think you're going to see more and more announcements around our involvement in NFV and SDN. And you got the Goodbye Status Quo initiative going on. Yes, that's true. Hello, Brocade, what's that all about? Well, I say it all the time to my customers. Brocade really only has one competitor, and that's the Status Quo, because we don't have a legacy to protect, particularly in IP. So we're able to break paradise. We're able to propose an entirely new infrastructure for our customers. We're trying to wake people up that if they don't start making the change now, they're going to be left behind. These days, your competitive advantage is your digital footprint, and your data center cannot continue to deliver on the customer experience that your end users are expecting. And so without that change, you're going to lose customers, you're going to lose your competitive advantage. Okay, but customers must resonate with customers that message, and then they say, okay, so what, how can you help me? Yes. What, how do you answer that? So we asked them to take a look at a chronology, starting as I said in the beginning of the interview with considering their underlying infrastructure and reforming their underlying infrastructure to create a platform, a mesh, a fabric platform. Then we suggest that that will leverage the investment they've already made in virtualized servers and in virtualized data environments. Next we would ask them to consider network function virtualization. First as a virtual analog for a physical device and then leveraging the power of making those services mobile. Then move up into the orchestration, both as an SDN controller, as I said, driving their infrastructure against the business rule for the first time, and then orchestration as they create a persistent cloud environment there. So it's an evolution, and we have to give customers the opportunity to make those choices at their own pace. Phil, what are the biggest misconceptions for Brocade out there that you hear, that you say, no, that's not true. A lot of fun in the market right now. A lot of confusion at many levels, not just fun, but the complete architectural rehaul of a lot of things you mentioned, the new paradigm. If you not move to the new paradigm, you're wasting your money. So you guys are in that emerging growth area. What are some of the misconceptions from customers that you hear, that you'd like to clear up to them right now? Everybody thinks Brocade is a sand company, and we are. We dominate that market, but we're a lot more than a sand company. We're an infrastructure company. Probably the most common misconception is, I don't know, one in a hundred customers that knows we're number two in data center infrastructure, according to the reports. We are relevant in your data center, not just on the sand side, but in the IP side. And as data, applications, and network collapse into a single entity, Brocade is the right partner. Customers don't understand that. What are the biggest pain points on the network side and in the data center that you see with customers? What are the top three pain points? I would say that customers are beginning to wake up to the fact that their data center cannot deliver this energy to experience that keeps them competitive. Because they can't predict scale or utilization, where the kinds of applications that their customers are consuming. So that's kind of the first pain point that people have. The second is the realization that they can't get there from here with the infrastructure that they currently have. They simply would have to scale up that. And as a capital point of view, it's just not efficient. How do they know? Do alarms go off? Is it like the network crashes? What are some of the symptoms of that breakage, if you will? They smoke, flames, people get fired. I mean, the target CIO just got fired. We heard from Praveen for the whole data breach. I mean, is it data leakage? I mean, what kind of examples can you share? Well, I think that's exactly what happens. Applications fail and they have to add capability to drive a larger scale, for example, in applications. And when they add that capability in their old infrastructure, unexpected things happen. They have broadcast norms. They get a 10% return for what they expected to be a 10 times return. Because they just can't continue to scale this infrastructure up. The interconnect between their data environments and their application environments get more and more complicated, more difficult to manage so they have to stop and say, this is the best I can offer. And that's when CIOs get far. You said it before, flexibility, real automation, scale economics, and the future of that flexibility piece is your business, the Ethernet business. I mean, it's interesting, right? You think about the sand. You don't necessarily think of it as flexible, right? Because it's like, don't touch my sand, right? It's working. It's data. You lose it, you're dead. But you're talking about a new world. And it's an Ethernet world. But it's interesting too, even data. You know, I've been in the business a long time, like you guys, data used to be archival, right? Then it became dynamic. I analyzed it a little bit. Now it's become hyper-dynamic. So as my customers interacting with me, I'm analyzing that data and I'm changing his experience. So even your data environment is now part and parcel of the network experience. You can't just consider your data as something at rest. It's something that's really in flight. The network needs to not only look up at the applications, it needs to look down at the data as well. And that's what most of our competitors don't understand. But we've lived in the data world for nearly 20 years. So we understand the need to integrate those two layers in the data center. Real-time analytics, John. Phil, thanks for coming on theCUBE. Really appreciate it. Great to get the support from Broke. We know you guys have been a big support of theCUBE. We want to thank you guys a lot. Again, we had a technology day. Back in the day, a couple of years ago at your place and been great to get to know you guys. So I'll give you the final word here. So explain to the folks in your own words, why is 2014 EMC World, this point in history, such a game changer? Why is so much buzz? Why is all the hype? Why is it so important right now? Why is all this action going on? Well, I mean, if you believe in crossing the chasm, we're on this side. There's no doubt. The analysts, our competitors, and the customers have all realized that they need to do something. What that is, is what they're trying to figure out. And I have a ready to go proven solution to offer to the customers. All I need is the opportunity to show them. Phil arrived at Broke. This is theCUBE, live at EMC World. We're in Las Vegas with John Furrier and Dave Vellante. We'll be right back with our next guest after this short break.