 Hi, we're back. This is Dave Vellante of Wikibon.org. I'm here with Stu Miniman also of Wikibon. This is SiliconANGLE.tv's continuous coverage. We're live at HP Discover. This is day two for us, day three for HP. Yesterday we heard Meg Whitman give the big keynote. Today was Dave Donatelli. We've been covering it end to end. And we're here with Duncan Campbell, who's the Vice President of Global Marketing for Converged Infrastructure. Duncan, old friend. That's right. Good to see you again. Good to see you, likewise. Yeah, we were just sort of connecting when it was we first met. So those are some fun days, auto raid days. Remember that? Oh, man. There we go. Okay, log structured file for a free net app. See what you could have been. At any rate, we're here to talk about Converged Infrastructure, a new role. You've certainly picked a hot area within HP to get into marketing. And there's a lot of wood behind that arrow. It's a major initiative. So how's it going? So really appreciate the time here and really looking forward to having this session. So the good news is it's going great. And there's a tremendous amount of buzz here at the show. I'm really looking forward to sharing some of those best practices, some of those insights. But really, if we just put it in the proper context, turns out that in 2009 is when we first came out with the Converged Infrastructure. But since then, we've gotten a lot deeper in terms of the integration, a lot deeper in terms of how we actually have now the Converged Infrastructure touch, not just the application, but even going forward now with the Converged Cloud, how we can get to information itself. We've actually thought through that it really is relevant not just for traditional type of IT and those type of on-premise solutions, but as well as for private cloud, public cloud, and in fact, more and more for a hybrid type of delivery capability. So overall, we've been really getting out early, leading this trend. The good news is, a lot of other people think so as well. A lot of our competitors think so as well. So recently, in fact, that landscape has changed. IBM has jumped into the game with Pure System. We say, welcome to the party. You're a little late, but welcome. But as well as EMC and others and Dell, so right now, everybody is focusing in and it's up to us now to provide more leadership to raise that problem. Yeah, you know, Stu, I used to say it's a two-horse race between VCE and HP and said that for a while. And now, like you said, Duncan, everybody's jumped in. We've quantified the market. The total available market is enormous. We were actually shocked when we actually added it all up. Did some, you know, forecast. 400 billion by 2017 is what we're forecasting. I mean, that's a serious marketplace. Yeah, but I want to poke at it. You said, you know, others entering the market is it too late? And when we did our market study, we said today, if you look at the infrastructure, servers, network, storage, and services, less than 1% of that market today is really what we would kind of consider, more the converged infrastructure. We think it's still really early days. This trend's been going on for a couple of years. HP definitely was early with the messaging, strong message on pulling the compute and the storage together. But we think this is a huge trend, as Dave said, $500 billion by 2017. But it is early, so maybe you can give us a little bit of what you think. What do you see from customer adoption? What's changed in the last year other than everybody else kind of piling into this space? Right, right, fair enough, fair enough. So a couple items, so you are exactly right. So it is early on, but also I would say it is off to the races. Example is we did a recent study with over multiple hundreds of customer type of inputs and saying, what is your intentions in terms of your implementation of a converged infrastructure and when? So we're getting right now some substantial numbers in fact up to 75% out of this survey. 75% are either going to implement, expand or upgrade a converged infrastructure within the next year. That is a big increase in terms of what we had seen previously. Now to your point, yes it is early on in the evolution so it'll be very interesting. But I think what's important to understand is why. So the other thing is we have a specific, not just marking specific studies and results to show what are the specific cost savings you can get by going with a converged infrastructure in terms of shifting some of that investment from ops to innovation or pulling into the bottom line. Secondly is how to more quickly provision applications. What we're seeing is up to 75%. That's not good enough. What it is about keeping that infrastructure up and reliable and working on your availability and we're seeing also substantial numbers there. So I think the business case now is out there. There are some very compelling numbers that we're happy to share with customers and partners. And really that is really starting to get this real snowball in terms of attention. Do customers have to pay a premium for that integration? So good question. So do they have to pay additional type of premium for that integration? And if it's just the integration without any value the answer is no. But when there's actual value to be added into that integration the answer is yes. So for example? Yes, so for instance when you start to integrate some of the different software that's going to allow you for some of the rapid type of provisioning capabilities let's say between a cloud system capability in a three par array that's automatically that takes a lot of work out. There is a small fee for that. So why don't customers have to pay a value for the premium for the integration because there's value in integration. You're reducing risk. You're accelerating time to market. You're simplifying their infrastructure. Shouldn't they pay a premium? Okay, so good question. And there are different levels of integration. So that's a good question. So if you think about it there's almost customers are really now looking at a continuum of different levels of integration. One is the do-it-yourself trade-offs with that. Some people still like to do that. Some people have a scale where it's just so huge. We were just talking to a very large aerospace company who kind of blows your mind in terms of the largest of that scale. Second is more on reference configuration where we're doing the upfront work to help really give customers confidence in terms of how they're going to do that integration. Now in those areas we're not doing a lot of integration there but we're providing some help and value in differentiating ourselves. The third area is more where we do the integration at our factory in terms of, for instance, what you've heard here at the show with some of the things we're doing on our app systems. And yes, we do charge for that. That is correct. So customers, I think, by the way, the scenario we have is that the world is going to converged infrastructure so we really do believe that. I think you're in the right spot. When you talk to customers about, well, why wouldn't you use a converged infrastructure? The number one reason they give us is because they're concerned about pricing power shifting to the supplier. So what do you tell, first of all, do you hear that from customers? Is that really the primary reason why they're not doing converged infrastructure? Especially considering they're not paying a big premium for that value. And second is, what do you tell those customers that are concerned about you getting all the pricing power down the road? Actually, you know, it's interesting. I'm not getting that pushback in terms of the pricing type of challenge because we're providing what we feel is just some superior pricing benefits on going this direction and customers get that. But I think the challenge more is in some of the resistance has been in terms of thinking through some of the, how does this affect their processes, their organization, and their teamwork? And I'll give you some great examples that we're finding here at the show. We're seeing some great examples of centers of expertise. We're seeing some customers even starting a converged infrastructure practice. We're seeing, customers saying now the way to justify this is you get a stakeholder that actually is, let's say reports to the CIO who actually is basically your evangelist, your sponsor, and actually can actually take that to the different lines of business to get that type of approval. So our view is that this has not been so much, we feel like our pricing is very aggressive. Think about the things we're doing that are very innovative on the network. It's not very aggressive. So I think it's more that the challenges that people need to think through in terms of how that flows into their organization. And Stu, you've written about that a lot, the whole organization is a server storage network. Today they report to different people. Yeah. You mentioned operations and innovation, and these are the challenges that customers have. We're always quoting over at least 70%, sometimes 80% of our budget is spent on keeping life's on, keeping operations going. VMware didn't really, in virtualization on the server side, help with consolidation, but didn't move the needle on where we're spending our money. So does converged infrastructure move the needle, and how far we, HP originally said, let's flip that from 70, 30 to 30, 70. That seems overly aggressive from our analysis, but what can we expect from converged infrastructure from HP? Well, and I think you make a good point. So when we think through the natural journey that a customer goes through, and this is an important concept where a lot of customers saying, do I have to jump to this end state? Good news is there's a lot of entry points based on your level of maturity to get going with the converged infrastructure. And you can see some very different levels of rates of return as you go along that, and speed of success. So to your point, when I think about even, like say virtualizing an environment, one of the things that we've thought through with the converged infrastructure is seeing that performance all the way through, including storage. As you know, I'm not probably, I'm sure you know better than I do. So the point is how we've done some different things with three parts. When you virtualize a server, thinking through the impact on networking in storage is a big deal to see the benefit. To answer your question on cost though, where we see that you're right, that there's a huge opportunity in shifting how much is being spent on keeping the lights on to shifting that innovation. Our specific white paper shows that we can actually achieve a 50% type of benefit. And for a lot of customers they say yes. No, that's great. People don't like the term reference architecture. The vendor community doesn't like that term, but when we quantified the market, we put it into three camps. Legacy, which of course vendors also hate, reference architecture and single skew. And it suggested our analysis was that the quote unquote reference architecture was a much, much larger business, i.e. people wanted choice and wanted options. They didn't want one color as long as it's black. At the same time, there's some value to single skew. It simplifies things. It's easier, right? So it's homogeneous. So what is HP's philosophy on that whole, I'll call it reference architecture. I think you know what I mean. And I know you go beyond reference architectures. Because a lot of people reference architecture is a white paper. So we're talking about more than a white paper here. So what's your philosophy there? What are you seeing in your business? Because you offer both. And talk about that a little bit if you could, Dr. So we have seen a real uptick in the interest. And even at the show, and I would say over the past three months, in terms of conversations that are actually now starting to shift more towards integrated systems. Why? People are saying, I don't want to invest all my precious resources necessarily in just, in all the, all the bits and bytes. It's getting my people just consumed by the plumbing. They say, I want to take those precious resources, do more on the analytics, on the insights. I want to integrate your app system, let's say to get analytics to act and analyze that data and really see the benefit. So we're seeing a lot more attention on that. But I got to tell you that we feel that we need to provide a lot of different choices. But the one thing that's new about HP, we're not going to just say, we can just do it all. We're saying, yes, we can do it all. But after listening to you and listening carefully, we will have an opinion and we will offer that opinion to you. You mentioned IBM came to the party. Let's see, three years later. And essentially from my mind, it essentially replaced, obsolete it if you will, the blade system with the new announcement. I don't think IBM said that, Stu, but essentially they've done that. Yeah, I think it's pretty clear. So my question is, I wonder if we can have a conversation about that because while they're late, the offering was pretty impressive. They had all their execs come out. So of course the messaging was really good. It's a new architecture. And they started from scratch. So but the thing that I want to ask you about Duncan is, and I'm trying to, we're trying to squint through it. How much is this is real? How much do others have of this? This being the ability to codify knowledge of workloads and applications into the system. You guys have cloud maps, for example. How much of that do you already do? Are you working towards? How much of that do you feel that, I mean, IBM made it sound like that's there today? What do you say? Yeah, so again, welcome to the party, but as my parents said, if you're late to the party, you better be well dressed. So I'm not sure they had all the bells and whistles on at least not for Vegas, but it's not enough just to integrate some of the hardware. And yes, they've introduced some patterns of recognition. And quite frankly, we're still looking for those and we haven't really seen a lot. So I think maybe a little bit over their ski tips in terms of what was announced versus what is delivered. But I think strategically, they are helping validate that this path of convergence is the right path. I think it makes a lot of sense for the customer base, but at this point it's- Well, I think you're right. I think it was good, strong validation. Now, also bringing another one of your competitors. We'd love to do that in theCUBE, sorry, but that's what your customers are doing. So we want to have a public discussion about it. Prasad Rampali runs the solutions group at EMC, works very closely with the VC guys. I asked him if you can codify that information and he said, we're just starting to do it, which I thought was, and Prasad, you know him, he's a very candid, honest guy. He's not a marketing person. He said, we're just starting to do that. Looking into that, bringing that into a single database to allow us to recognize those patterns. So where is HP with regard to that capability? Well, how important is that capability and where are you with regard to that? Well, yeah, so on a couple different fronts. So number one, with our former EDS business, they are experts in doing application transformation. So this is not new to us and they have a real competency on that. They have some amazing tools to actually look at threading of the application. So that is an existence within the HP Corporation. Now, the thing that's more germane to our conversation is what we've done on cloud maps. And that is a big investment. We've been doing that now for literally two years and we will continue to do that. And so we have an overall Alliance One program with over 4,000 different ISVs in there. And this is part of one of the benefits and assets that we will actually work with our community, create these cloud maps, because it really does help to characterize, to look at best practices, to look at different type of technical type of tools for how more quickly to get these applications up and running quickly. Okay, so Duncan, two areas I wonder if you could give us a little bit of HP's color on. One is the partner ecosystem. Thought one of the things IBM did quite well is they had over 85 solutions that they kind of marched out with their partners when they launched the pure system, which is nice. Not just here's a VM and here's an SAP, but 85 of those they mapped out. We want to dig into a little bit of detail and see how much of that is real and gets deployed. And secondly, we think the channel is where the battle for convergence happens. And NetApp's done a really good job with FlexPod. VCE went through a little bit of bumps along the road. But can you give us the colors to how each piece sees those two pieces? Sure, sure, excellent question. So our view on this is when you think about this area of convergence, I think there is kind of a lack of skills both within the customer and as well as with the partner community. That is where we have this incredible program called Expert One. So we make a commitment in terms of the training and certification for our partner community. So we are inclusive with our partners from day one with the converged infrastructure. And that's important because it actually allows a channel partner to tier their skills and their capabilities versus their competition. And yes, that level of training and certification also is available for customers. Now we go one step further. We have something called Service One. That allows our partners to be able to both to sell HP services under an HP brand and then we can deliver it. Or they can actually, they can sell it and then they can actually deliver it themselves. Or they can brand it with their own partner label with the right level of training and deliver it themselves. So Service One, in combination with Expert One, I believe shows our commitment to the channel in terms of how critical they are to roll it out. Now, to your question as far as is it just in market S and B, I think it goes well beyond that. Certainly in that case, I agree with you that that is almost characterizes that marketplace that there's a lack of headcount expertise to actually handle that. So yeah, it's an immediate benefit but I think it goes well beyond that. And as we think through how to provide some of these integrations into, take it up, not just to the converged infrastructure but actually to the application and to the cloud, I think it goes well beyond that. So what is the future hold? What's this whole business look like? I mean, today it's early days. You're seeing a variety of different solutions out there. Obviously you've got, you know, you guys are making this a key marketing and engineering and business model tenant of what you're doing. It's a fundamental to your strategy in the enterprise group. Where do we go from here? What's it going to look like in five years? So I think this is really where HP stands apart. So our view is that we're really taking the converged infrastructure going forward. Our vision is to take it even beyond where the converged infrastructure touches the app. As I mentioned, it'll actually then reach into information. So it really talks about how we can go more higher up vertically to get more meaningful based information that customers can see immediate value on. We are looking upon how this can be delivered both in terms of traditional cloud, both private public and in fact in a hybrid environment. So our view is that the opportunity is really to take it on up to the application, the information across those different environments. In overall, it is a cohesive strategy and a singular architecture really across the company where we can have that level of confidence and the level of capabilities that I believe will be industry best bar now. We've said by 2017 more than 70% of the infrastructure is going to be of some kind of converged variety, whether it's single skew or some kind of reference architecture, so we think you're in the right place. Duncan, congratulations on your new position and good luck with everything. We really appreciate you taking time out and coming in theCUBE. Okay, my pleasure. Thank you very much for your time. All right, we're live from HP Discover. This is theCUBE, siliconangle.com's live wall-to-wall coverage of the event. Keep it right there. We'll be right back.