 Live from London, England. Extracting the signal from the noise. It's theCUBE, covering Discover 2015. Brought to you by Hewlett Packard Enterprise. Now your host, Dave Vellante. Welcome back to London, everybody. This is Dave Vellante. We're here in the Excel Event Centers. This huge location, 13,000 of HP Enterprise, Hewlett Packard Enterprise, it's biggest customers. This is theCUBE, we go out to the events. We extract the signal from the noise. Mike O'Neill and Don Jones are here. They're both vice presidents of Strategic Alliances at HPE. Mike is responsible for SIs. Don is really the ISV piece. Gentlemen, welcome to theCUBE. Good to see you again. Good to see you. All right, so, Mike, let's start with you. We're talking a little bit off camera about what is an SI, right? It's not the little guys in the channel that want to become SIs. We're talking about the big, world-class global SIs, right? Yeah, yeah, yeah. We have a set of top-tier system integrators composed of advisory firms, global system integrators, indie-based system integrators, and that collection today we see as criticals. We've talked about the transformation areas that you continue to hear about. As we look at those platforms, those enablement platforms, the outcomes they're driving are fundamentally vertically or industry-focused, and we need and rely upon our system integrators to close that mile, align with their practices, and deliver on those transformation areas. All right, so we're talking about a dozen multi-billion-dollar global companies with huge presence in various industries, world-class capabilities. Don, on the ISV side, HP, you know, Classic has always had an affinity with ISVs. I mean, HP Oracle was famous in the 90s. HPE now, what do you see happening in the ISV world? What does this HP enterprise mean to the ISV world? Yeah, it's been an amazing ride. If you think about it, HP's always had partnering in our DNA. We recently broke out both the ISVs and the ISVs from the business units themselves and created one consolidated team to focus on this effort under John Hinshaw's customer success organization. So when I think about the ISV space, really there's kind of two types. There's the mega ISVs, so Microsoft, SAP, VMware, and Citrix, and then a whole portfolio of incubation partners. So the likes of Google or Amazon or Hortonworks or Docker, we've really got to spend much more time and pay more attention to to understand how that's going to impact the broad HPE ecosystem from HP itself to our channel partners going forward. And what about, you know, this whole sacification of applications? How is that affecting partnerships? Is that a play for you or is that? Yeah, it's both a play and a partnering model, right? If you think about what a lot of these ISVs are doing, it's adopting very much a hybrid approach to how they're thinking about IT in general. So when we think about those specifications of solutions, some of those are going to be done on premises in a managed cloud, in a virtual private cloud, or in a public cloud. We've got to map all of those to the right place. And there's a huge intersection point between the SI work and the ISV work, because quite often the solutions that the ISVs do with HP land through the SI channel is to go to market. Okay, so let's talk about that intersection. So Mike, traditionally the big integrators, and it's still today, they go after what's hot, right? Whether it was BPO, ERP, what's hot today, and what's the intersection with the ISV community? Big data, is it digitization? It's really digital transformation. It's really a driver for most all we're doing. You have digital transformation, you got SAP work, but still as we go into HANA and we go into S4, you see the whole second generation of that large SAP opportunity. So in both cases, well aligned, we were talking about the hybrid cloud and the movement to the hybrid cloud, and its piece in that digital transformation. We've got a very large SAP partnership that we manage that intersects very well with the practices, the SAP practices across the system integrator community. One of the things you, Dave, you were asking about SAS, and we'll talk about it, but we launched a new partner program here today, and one of the elements of that partner program is specifically here in Europe. We launched an ISV service provider linkage, and the idea behind that is this program's enabling ISVs as they take traditional on-premise apps and look for SAS based solutions to intersect and align with service providers that utilize and are building up businesses around that particular application, application, or market. And so this brokering, this marriage piece seems to be catching on very quickly for us to enable our partner community to move in that SAS direction, supported by us, both on the service provider side and what is the ISV side. And what's HP's play there? I mean, it's great that you're doing that, but how do you profit from that? Selling infrastructure? Well, services, there's services, there's infrastructure for the SPs, and they're still supporting, as we see this hybrid cloud, there's still a presence for those applications on-premise or in the data center. So you see SAS as an opportunity, not as vaporizing your business. No, and the ISV is looking at us, and how can we better leverage enterprise services at enterprise services and technology services as an asset inside of HP to take those SAS solutions to the market and drive deployment, integration, and ultimately, consolidation would make sense. And then, we're talking about, like I said, a dozen SIs or so, many more ISVs, obviously, and you guys can get pretty specialized with your ISV community. I mean, whether it's legal compliance and governance and really healthcare. Can you talk about how you segment the ISV community, or are you really going after the horizontal guys? No, no, it's actually pretty straightforward. So when we think about it, there are ISVs who have broad implications across all our business units, from HP software to enterprise services to enterprise group. Those are the ones that we pull out and manage at a global level. Again, with the four magas, Microsoft, SAP, VMware, and Citrix, a big portfolio of partners behind that, called incubation partners. But if you were, say, Siemens doing PLM, they're very applicable to really only one business unit at HP that's enterprise services where they're doing horizontal kind of work. That relationship is still managed by enterprise services and not part of our team. What it does let us do, though, is make some pretty specific bets. We used to historically take SaaS solutions as an example and peanut butter them across the SIs and say, we hope somebody catches this and runs with it. Now, Mike and I can collaborate, so we're going to make a bet with Wipro in this space with this ISV solution. So it's something we can do now that we really didn't have the ability to think through and map out what that play would look like. So let me understand that. So you're finding that certain SIs have an affinity for certain capabilities that you can marry with the ISV to provide infrastructure for, because you're a horizontal infrastructure player. Am I getting that right? Yeah, well, we are, we're a horizontal infrastructure play, but what, a couple of things. We just saw, again, kind of this is the first event where HPE is out as a public company. And what we spoke about, what we've done with alliances, we've been able to, as Don spoke about, where we sit within the organization, HP organization, we sit right up in the, below the EC level, you see the MEG staff level. And the thinking behind that is, as I talked about, it enables us to be able to drive and complete solutions, both from a workload and delivery perspective. But further to that, we were organized BU to BU for just about every service and every support piece fryer. EG did their piece, ES did their piece, software did their piece. Now our charter, Don and I's Charter is HP, broadly HPE. So we're responsible for the services piece, the software piece, and the infrastructure piece as well. So as we think about these solution sets, we can marry them together, because we have single conversation from the company to be able to figure out how we enable, if it's a, you know, if we talk the same scenario, we're talking about move to SAS, we talk from a services perspective, we talk from an infrastructure perspective, or it's delivering solutions, infrastructure, software, and services. So it's a change in the way we've gone about partnering that we're bullish on, I think it gets us right in the wheelhouse of what we keep talking about, responsiveness, simplicity, and speed. And the change is, there's an organizational change, so you've got senior level attention now, and the leverage between ISV and SI, is the two big vectors. Yeah, yeah, we've, in the past, we've been able to enable initiatives. We really see an opportunity as we continue to evolve this partnering model to go from initiatives to practices to actually businesses we're building with partners. You know, the scale of the herd around the Microsoft announcement today, that's really the type of alliances and partnerships and businesses we can believe we can build in market. So that's the big news today, let's talk about that. I mean, it sort of trickled up before the show, obviously, but we had Satya coming in, he took time off from his board meeting to beam in, right? So how did that deal come about, was it sort of enabled by HP's announcement that you're sort of exiting the public cloud, that sort of clear the path? Let me talk about that a little bit. Yeah, so basically three things happened all at the same time, really. We started doing a lot of work with them closely on cloud productivity and mobility. So Office 365 and Windows 10, what we're doing in that space. And the more that we talk with them, the more we realize our visions for hybrid cloud are ultimately super aligned. They certainly view infrastructure as the edge of their public cloud. And we view it the same way. So that is point one. Point two, Microsoft is a huge customer of HP's. The vast majority of Azure is powered by HP infrastructure, I'm not sure if you're aware of that or not. So there was a natural synergy there. And then finally, when we step back and look at what partner we could do the most with from a breadth perspective, it wound up being pretty clearly Microsoft. That announcement today, if you noticed, included HP software assets on Azure, enterprise services, delivery assets who can go to integration and system configuration for Azure, as well as the infrastructure side with the CS250. So it really was a draw from the complete buffet table that is HP Enterprise. Right, so yes, I was aware, actually, I didn't, somebody whispered to me sort of the rough size of the business, which is enormous. So it's not a Barney deal. It's like, okay, we're going to do a deal, but you got to buy some of our hardware. You guys are already doing some substantial business and not just sort of one-offs, really powering a lot of the Azure infrastructure. Is that right? So that's exciting. This is, Don can speak to as well. This is a progression of announcements with Microsoft as well. As what Antonio and Satya alluded to, the Office 365, the Windows 10 announcement, this is kind of the third in the progression. And we continue to see success in market, working with Satya and the team and how we can evolve this business with Microsoft. Yeah, we did the O365 deal with them. It was code named Golden Spike, oddly enough. And we are launching the first customer, the UK Ministry of Defense. So that customer needed a very unique set of requirements, as you can imagine, right, UKMOD. And Mike Stone said, what I need is like five nines. Microsoft only provides three nines through the vanilla delivery service. He needed some extra security features. So the partnership was just beautiful. So out of that deal with the Ministry of Defense, we wound up putting an Azure footprint and HP's data center in the UK. To my knowledge, we're the only company outside of Microsoft itself running a pure version of Azure in our data center. So let's talk about Hewlett Packard Enterprise. Your guys tell, I like that each of you sort of comment. It's been coming for a while. We've obviously known about it, but now it's here. How has the discussion changed from a partner standpoint? Mike, maybe we can start with you. Yeah, well, as I spoke to a few minutes ago, Dave, we're advantaged by the fact that our charter along, so as HP Enterprise was formed, the charter for our businesses and our responsibility changed from business unit orientation to full Hewlett Packard Enterprise. So in working with partners, it's significantly enabled us to be able to have a full scale discussion. We disadvantaged ourselves having a software discussion, services discussion, infrastructure discussion with partners in the past. Being able to bring that together, it aligns with the transformation area discussion, that transformation areas and enablement platform that includes all of them. So us being able to represent that whole platform, we've been able to advance initiative and business discussions significantly quicker from a system integrator perspective than we did before. And I think the same as... And I would think that the end to end strategy from sort of printers all the way through probably didn't resonate much with the SI's. I mean, they're looking for hardcore capabilities. Is that fair to say? It didn't manage print services from time to time, but not, but it really wasn't to your point. It wasn't the core of what we're driving. So the focus message presumably resonates with them. Now, what about the ISVs? Same as true. If you think about even Microsoft managing HP, right? There was a totally separate team that managed our PC OEM attached business that managed what we're doing with cloud and enterprise and that side of the house. So it was a very natural separation segmentation for the likes of Microsoft or an SAP. So it's worked well for those guys. Okay, and then of course the other thing I have been talking about all day is the balance sheet. There's no debt on the balance sheet now. It's the HPE balance sheet anyway. So what does that mean to you all? I guess you're not into M&A, but you know, I guess you are in the sense that you find opportunities and you can feed them to the M&A team. What is the whole new structure of the balance sheet mean if anything, to the ISVs and to the ISVs and to your businesses in general? Yeah, from my perspective, I don't think our partners per se, they're looking for us to determine through part, inorganic or organic, figure out how to fill the holes and make sure that we can deliver and we've talked about a partner ecosystem. I think what they're looking for us to deliver on versus the balance sheet expectation and opportunity is really the promises around predictability, speed and focus. And in order for us to deliver on it and our piece of the business, we've got to be responsive, we've got to be easy to work with, we've got to continue to be innovative, we've got to continue to be collaborative and predictable. And these are fundamentals that now that we have really pervade over the whole domain, we can drive and set the bar for. Yeah, so I guess I'm asking, are you guys at the top of the funnel for deal flow? Do you get a lot of, hey, HP should think about buying this company or maybe you should. If you think about, if you think about build, partner or buy, we're certainly in the partner part of that. We do work closely with HP Ventures on where they see opportunities that should be going one way or the other. And should we be looking at a similar asset that we can partner on as opposed to an equity? We called on Hortonworks before, you've obviously got a board seat on Hortonworks, you've made a $50 million investment in the company. So things like that, obviously. Yeah, same sort of, yeah. Yeah, yeah, we don't want to exclude any, right? No, no, it's all public stuff. No, no, we don't exclude any of the players in the cloud area, Hortonworks and others. Yeah, others, yeah. All right, good gentlemen, we're out of time, but so thanks very much for coming by the Cube. Thank you, God, Dave, always a pleasure. Appreciate it. Appreciate it. All right, keep right there, buddy. We'll be back from HPE Discover in London. This is the Cube, right back. Thank you.