 From London, England, extracting the signal from the noise. It's theCUBE, Cover, Discover 2015, brought to you by Hewlett Packard Enterprise. Now your hosts, John Furrier and Dave Vellante. Okay, welcome back everyone. We are here live in London, England for HP Enterprise, HPE, the new enterprise group at Hewlett Packard, HPE.com, for HPE Discover 2015. I'm John Furrier, my co-host Dave Vellante. This is theCUBE, it's our flagship program. We go out to the events and extract the signal from the noise. Our next guest is Alan Andreoli, SVP, a general manager of HP Enterprise servers. Welcome back to theCUBE. Have been seeing you in Vegas. Yes. You were there the year before with John Vermole. Welcome back. Thank you, nice to see you, Dave. Good to see you. So I love the convergence going on, the convergence infrastructure stuff's now hot. Servers, bread and butter for HP. We love talking about it. What's new because with the cloud, you have a lot of customers now you're selling servers to. You have enterprise customers, you got cloud customers, you got Microsoft now as the Alliance partner. A lot of stuff going on with servers, which some might think it's messy because it's all over the place. How are you continuing to serve the market as it gets so specialized and so focused? You just said it, we specialize. So we, you know, once upon a time, everything was in the data center and you had very unique, very high-end mission critical servers and then everything else was generic. This is five years ago. And then the business started to go to places, different places, high-performance computing, convergence, internet of the things, clouds and so we decided to specialize lines of servers and software and integrated solutions for each of these markets. So we have an organization. We have a dedicated brand, dedicated product line, dedicated engineering team that serve each of these market segments, each of them with different dynamics. For instance, what used to be the core business, the enterprise, is basically a stable market. On the other hand, the cloud is growing 20 plus percent, HPC is growing in the teams. So you have very different dynamics and we are able to capture the customer needs, the different business outcomes that they're trying to achieve with this type of approach. So if I hear you correctly, the mature market has managed differently, the server is reliant, bread and butter, that's a mature market, solid. Very versatile, highest market share, super quality, going very, very well. And frankly, for most common mortals, that's the best thing they can use because it does everything, is the workforce. However, some people are compute-centric, they are IT-centric in the type of business that they have and they want super performance for the very specific workload that they run. Is it proprietary focused or is it more just engineered for that use case? That domain? It's engineered for that use case and it's another good question you're asking, is it open or is it semi-open? Well, people can misinterpret vertically targeted with- Right, well it's predominantly x86-based. It depends because the market has turned, you said earlier, complex, it is complex. It has different dimensions. So for instance, some people want very open architecture, totally open. As open software happened 10 years ago, now people want open compute. We are a member of open compute. We launch Cloudline at open compute. Cloudline is open. So anyone can access it and so that's a segment of the market that we have also captured that way. What are you guys doing with open compute? Have you donated anything? Are you guys contributing to the community? Reference architectures? Yeah, we are a gold member so we give a little bit of money. But are you guys contributing technology as part of that? Because you get a lot of pod stuff, a lot of stuff around servers. Right, right, right. And so a lot of what we do is available to open compute and we support very strongly some key members of open compute. I mean, I'm not doing their names because they usually don't want their names to be. Facebook. But we work with the key players who are the board of open compute. So Converged is a use case within the umbrella, is that right? Converged, really the case for Converged is the hybrid cloud. So you really want to have a convergence of your architecture, where it comes to be able to be a service providers to your own clients inside of the enterprise and you may decide to burst some workloads on Azure, Amazon, Rackspace or at least you want to be able to behave internally as if you were them. And frankly, the game ahead is the following. The CIO will want to have its internal architecture to be at least as efficient as a public cloud. And so Converged allows the infrastructure to model itself to the different workloads that the CIO will have. And it's one way to do it. Another way is to say I'm going to have some architecture and I will have software doing it for me. But what we launched with Composable is the capability to have the architecture organizing itself to be the most efficient for the workloads that are being used at the moment. I don't know if you saw the demo from Rick, he just did it in the program. We were watching it. But you know, it's just, it's amazing. It's a revolution. It allows infrastructure to become at the centerpiece again of the IT revolution because the infrastructure is becoming intelligent. The software is the key to actually making it work. But the hardware is obviously tightly integrated. So we have OneView on the top. OneView, which is managing all our architecture. And if you want to manage the hybrid cloud, you have Helion on top of OneView. And then you have pure infrastructure management. So in any of our hardware, we have embedded intelligence like ILO in the servers, for instance. So all these clicks into each other, but we have APIs. So with RESTful APIs, you go into anything else that is open on the market. So you have access to the endless ecosystem of the industry. And in that instance, it's all HP equipment. So I don't care, because I just want something that I can install and not mess with. And in the channel, you've got other options, right? So the channel likes choice. So can you talk about that a little bit, specifically as it relates to your business? So we have 100,000 partners around the world. Almost 70% of our business goes to channel partners. And this number keeps increasing. It varies by region. But basically, if it can be done through a partner, we don't have to do it alone. We support the partners. You know, a channel partners to roles. One is kind of fulfillment. The other one is demand generation. For fulfillment, anything that can go through a partner we're happy because they can provide a customer with a type of flexibility that sometimes we cannot offer given how flexible the customer wants us to be. But for the demand generation, we work hand in hand together. And we have a multitude of ways to generate leads directly. So I want to tie back to something you said before about specialization. Most of those, you said 100,000 channel partners. The vast majority of the revenue today for most channel partners, I'm not sure if yours are different, but I doubt they are, is moving boxes, moving tin. But they're all trying to shift to solutions. So how is that trend occurring in your base and how are you supporting those solutions through specialization? We have a number of, they're looking at solutions and then they're looking at how to cope with the cloud as well. And so they're trying to become kind of cloud providers or cloud enablers. They're hybrids. Everything is turning a little bit hybrid, but there are three horizons. There is a horizon of the data center, which we have been familiar with for 30, 40 years. Then there is a horizon we're discussing right now, the cloud, which is morphing into actually a hybrid of the two. So first horizon data center hybridizes with a second horizon, which is the cloud. And there is a third horizon, which is the devices. So compute moves from the traditional, you know, dungeon of the CIO to the cloud, which is like a hybrid, right? So you have the possibility to move in and out of the castle. And then you have it everywhere. You have it everywhere. And so it's an all new beginning. And we're going to play big. There will be a lot of announcements on this tomorrow. We just announced a partnership with, I don't know if you saw the press release with Intel. So we did the first alliance with Intel on HPC, which is going very well. And we just did a second alliance with Intel on the internet of the things. First being Apollo. First being Apollo and everything. I mean, so basically everything Intel does, we put it together as a solution and we together target some vertical markets. And now we're going the same for IoT. So it's a different group in Intel. And we are launching a new family of devices and there are two categories. The category is more standard, like low-end. I don't know what you know about IoT, but it's kind of first level of aggregations. You have all the analog sensors and they aggregate at the first level. But at the first level, small devices, edge devices with a little bit of compute, a few hundred dollars. This would go into first level of aggregation. But then you may want something a little bit bigger with much more power. And we are using the capabilities- Power as in like power, compute. Power or- Performance. Performance, okay. A little bit more power, but much more performance than power. That's a good correction. Hopefully less power, but more power. And here comes Moonshot. Remember Moonshot? Yes. Moonshot is very successful in some segments of the market, like video encoding and VDI. Then we start, but what is really Moonshot? Moonshot is smaller, very high performance, the highest performance for the form factor, instead of putting many Moonshots in a chassis. Why don't we take one, or maybe four of them, in a very small chassis and we put it everywhere. And that's- And you backhaul through the internet. Of the IoT. You backhaul through the internet. There will be some very small, ruggedized, you know. And so it can connect to the internet. It can connect to your industrial data center. It can be embedded in a robot, in a car. In the future, it will be everywhere. And so suddenly we have new layers of compute that are outside of the data center. That's why I believe it's an all new beginning. And it plays on the strengths of Udett-Packard Enterprise because it's software. It's hardware, the hardware I just described. Also is a lot of networking. And it's a humongous amount of solution building and services. So that's a, the horizons are great. So we're in the cloud. Right now we are in the middle of Horizon 2. Yeah, which is about a decade horizon, but then the overlay is IoT. Overlay. And none is going away. What you were talking about complexity. The complexity is that we will continue to our data centers. Yeah. And we will continue to have public clouds for the long term and private cloud within the data center. And then you will have compute at the edge. And this is becoming an all new world as we know. You sell IoT. The word Clujie comes to mind. Clujie complexity can be both in there as the data center becomes kind of bloated. It gets broken out. So from IoT, where do you see the overlay? I want to talk about the horizon. Many have been saying that the cloud is a 10 year cycle, the hybrid. I don't think the cloud is a cycle. I think the cloud will stay. It's forever. We'd stick forever because it just makes sense. Right? It's developing to a mature... It's getting there. Not yet. What we have observed is that the public cloud was had a slow takeoff. And it's now accelerating. You have seen the results of Amazon. Microsoft doesn't publish the results of Azure. But they're doing good too. So you know, it's going well. But it's not going well because it's moving away from the data center. It's gross. It's moving well because a lot of new work clothes and companies base their business on that while most of the traditional companies continue to have their business in their private data center. We're certainly back down to my other question, which was, okay, mature the servers. That's done. Certain management styles, certain product mix. Now you're into these emerging specialized high performance to unique use cases. This is a growth market. So these are new opportunities. How do you manage it all? So that comes back down to the single pane of glass. That's why we segmented because John, it is the complexity is not developing the right solution for the right market. The complexity is when it comes in front of the customer, I am dealing with HP. They have one server out of three comes from HP, blah, blah, blah, small commercial. But they give me so many choices right now. What is right for me? And so the most important part for us is to put these into end-to-end solutions that come to the customer as part of it. So that the customer doesn't have to ask all these questions. And that's why we have these four transformation areas in which basically all these very sophisticated and fragmented solution play, they come together at the level of these transformation areas and they are part of the play of the Chinese menu that we can use to help customers to transform their organization. So you're across all areas, all the transformation areas you're playing. We're a big company. We're a big company and that's all we do. We help customers to transform themselves. We just separated ourselves. We learned a lot in doing that. Imagine the amount of transformation that took place in going to that. Do that, you know, change. So we can also share our experience with our customers. So Elan, your business is humming right now. We're talking high single digits for certain segments of your business like ISS. The BCS business seems to have sort of begun to moderate. You know, it's declines. Talk about just the business update overall. What can you share with us? Maybe the news, the novelties, because we could be talking for a long time. So by market segment, in the SMB space, we are launching a new cloud appliance. So you know, we're a bit paranoid. Some people say it's a good thing. Depends when you go to bed at night, you don't think it's a good thing, but you know. So in each of the segments, we're thinking, what could go different? And so for the small offices branch office, we felt why would people continue to buy a tower? Why wouldn't they want something that is all they need, which is including wireless, the subscription to their clouds, whether they have Azure, Amazon, whatever, Dropbox, whatever they want to use, some compute. They want some storage also in-house. Click, you have an option for that. And so this is a cloud appliance that we are launching right now for the SMB market. The big news for the classic enterprise, obviously is Synergy. So you know, we have other news, but that's the one. We shouldn't put any shade behind this one. That's a very good one. A little shade could come from a new technology in memories that we have invented called persistent memories. You know, there are a lot of memory options in the servers. We have invented one which is a mix of DRAMs and Flash. It's the speed of the DRAM, but you have the persistence of the Flash. It's called NV-Dim, non-volatile. And that's in memory. Yeah, non-volatile, non-volatile DIM that you can put on any HP server as an option. Mission critical, going very well. SQL, Microsoft, SAP HANA, and on Oracle. In each case, you save like 40, 45% against what you would say from other platform. It's really going very well and we will have some more announcements to come very soon. We couldn't announce them today. In HPC, it's an old new line. We started, remember, with the Watercool, Apollo 8000. Then the 6000 went well. 8000 took a while to take off because the technology was so disruptive with dry disconnect technology. Now it's really taking off. We launched the 4000, which is all object storage. So now a big part of storage is in a server rack, so it becomes a rack, which includes everything from the fabrics to compute and to storage. And we have a lot of business taking off in particular with the service providers with that. Then we're launching the IoT. And the IoT is also interesting for another reason is that more and more people will integrate computes in their own solutions. Not only traditional players, but it can be Philips, it can be GE, it can be Tesla, it can be Renault, it can be anyone. And therefore, we are beefing up our OAM business. And OAM means we are providing also, we are the arms dealer, the technology dealer, for all the people who want to integrate compute and storage and whatever in their solution because with the internet, the thing is going to go everywhere. So this is becoming another business. They're building clouds as well. So a lot of good opportunities there. All right, thanks for coming on theCUBE. Really appreciate seeing you again. Thanks for the insight. Thanks for your interest. It's always great to be with you. Love talking servers, servers with the action as that's the engine of innovation. Always follow the servers. As I always say, you'll know where the action is. It's a compute world. It's theCUBE getting, we're serving up more content than we could possibly dream up here. Interviews, go to 630. Dave and I will be here every day through Thursday. Stay tuned, we'll be right back with more after this short break.