 Okay, we're back. This is Dave Vellante. I'm with Stu Miniman with Wikibon.org, and this is The Cube, SiliconANGLE.tv's continuous coverage of Dell Storage Forum. We're live in Boston with Praveen Astana, who is the vice president of Enterprise Solutions and Strategy at Dell. Praveen, welcome to The Cube. Thanks very much for making time out of your busy schedule. Dell Storage Forum is rocking a second year in a row for us in the Converged Dell Storage Forum. I know there were some pockets previously, but I'm really starting to come together for you guys. You're mentioning off-camera that you've been with Dell for eight years and the storage group for five years, so you've seen this transformation occur first-hand. How does that feel? Can you describe what it was like five, six years ago at Dell and sort of what it's like today in storage? It feels great, first of all, to see where storage has come at Dell. When I joined Dell, we were primarily a reseller, so we basically sold other people's storage. Now we make our own storage, we have our own IP, and we're addressing customers' needs. I can tell you that when I started at Dell, storage was the last on the agenda when we did the ops reviews with Michael Dell and Kevin Rollins. Today it's first on the agenda. Really? It's really changed in terms of the importance that Dell is giving to storage. How did it change the nature of the conversations that you have with customers? Well, customers really started taking us very seriously because storage is actually probably the most, you know, addresses the most important part of their infrastructure, which is their data. It's a lifeblood of many customers right now, is data which they use to make better business decisions. So we look at, you know, a joke we have is that we look at the storage business like the bank vault and the server like the ATM. One is more important than the other. So Praveen, we're talking about convergence. If I look at from the services side, converged infrastructure has been put together by, you know, the vars, the integrators, and by the service teams for many years. So can you tell us really what's the journey been for Dell from kind of, you know, putting all the pieces together from just the services part to like what you have with the VSTART today, where you've got all the pieces and you're integrating them? Yeah. So when we talked to customers, what they told us was, look, we're tired of having to integrate and assemble the stuff that vendors make. Why don't you guys do this and give it to us? And we thought about it and said, you know, actually we have the technology, if you will. I hate that quote from the $6 million man, that TV series, right? Yeah. We can rebuild it stronger, faster, better. We have the capabilities from a supply chain perspective, manufacturing perspective as well as an optimization perspective to build what the customers want. What do customers want? Customers today more and more are buying VMs. Used to be they would buy servers and storage and networking. Today they're buying VMs. They're saying, I want 100 VMs or 1,000 VMs. Well, to create that VM and make it useful, you need to have not just a server but also the storage, networking, and the management. And we have years of experience with virtualization. We're the number one reseller. We've been the number one reseller of VMware for quite some time. And so we have looked at our hundreds of thousands of customers who have bought virtualization or millions actually who have bought virtualization from us and figured out what it is it takes to optimize. So we know how to do the optimization. And so when we create a VSTART for 100 VMs or 500 VMs, we've optimized that infrastructure for the customer. Far better than they could do themselves, save them a lot of time, a lot of money. Okay. And not just VMware, Microsoft, I believe is part of the VSTART package. Absolutely. Yeah. And that's a very important point, which is that we offer choice to our customers. So it's both Microsoft and VMware, both partners of us, and we offer VSTARTs for both. So what are those discussions with Michael Dell and Kevin Rawlins like? Obviously, you can't give us the too much inside baseball, but what are you guys talking about? Yeah, back then and now, I mean, Dell's still, I mean, Dell's a $60 billion company with a $20 billion market cap. And that's a big part of the reason for the transformation is, look, we've got to own more of our own IP. It can't happen fast enough for investors, obviously, but as I was saying at the top of the show, Dell has more cash on the balance sheet than any other storage company. I guess with the exception of Oracle, but really Oracle's not a storage company, but let's throw them in the mix. So you can virtually compete with anybody in the acquisition game. So the strategy is to increase your intellectual property ownership and increase margins and obviously cash flow and profits, right? So talk about that a little bit. What's that high-level strategy? Well, I think it's always best to start with the customer, honestly, because if you can win with the customer, you can win in the end with your financials and all that stuff. And we noticed that. I'll go back to storage again as a great example, and I'll address that point directly. But when we entered the storage business with our own IP, I actually came up with three words that I thought would really describe what we were trying to do from a philosophy perspective. It was simple, capable, affordable. When you think about that, storage at that time, storage networks were the opposite of simple, capable, affordable. They were hard, they were expensive, and they were capable, but you had to really have a lot of skills to be able to utilize that. So we said simple, capable, affordable, and we looked around and we found a company that embodied that, and that was Ecologic. And we bought Ecologic, and that product was extremely successful for us because it hit that philosophy that if you change the game for customers, change the economic to storage, make it easy, you can win. And that's what propelled that growth. So now we extend that to the rest of the data center, saying, how can we make the rest of the data center simple, capable, and affordable also? And that has driven a lot of our acquisition strategy is finding the right technologies that can actually help us create a solution that will not, you know, we don't want to add another Me Too product. We want to address the fundamental need that the customer has. So if you talk about, for example, convergence in cloud, well, we know that customers, when they want to talk about convergence infrastructure, they don't want to be locked in. They still want to have choice. And so we acquired a company called Scalant, which allows management in heterogeneous fashion. That's really been very, you know, resonated with customers. When we talk about cloud, what customers want to do is connect their off-premise cloud with what's on-premise, who bought a company called Boomi that allows for applications to be connected on-premise and off-premise. So I think our strategy in terms of what we are buying, what we will buy in the future, is not driven so much by a margin profile or a financial metric like that. It's how do we win in the marketplace? And with basic philosophies like simple, capable, affordable. So if you were getting simple, capable, and affordable from your previous relationships, let's say whether they be OEM or reseller, are you suggesting that you might not have gone down this path? If we were, the answer would be yes. There would be no reason to do that if that was the only thing that we wanted to do. But if you look at the way technology is evolving, more and more, if you do not own the various parts, you're not able to engineer the best solution for the customer. So as an example, networking, why did we go into networking? We had great relationships with Brokehead and Juniper, and they have a good coverage. However, we found that unless we own the networking operating system, we are not able to create a converged infrastructure or even to create the best offering for virtualization because one part of the legs of that three-legged stool, you cannot change at all. So academically, the answer to my question would have been yes. But practically speaking, you're saying you would not have been able to accomplish simple, capable, and affordable without basically owning your own destiny and being able to do that integration. That's right. And so we've been commenting that Dell, I think uniquely when it comes to acquisitions, focuses more on integration or maybe it just succeeds more, I don't know. But can you talk about that focus on integration? Because it seems like it's unique in the industry. A lot of companies buy companies and they'll just sort of leave them alone and they'll do very well. And integration is sort of an afterthought. It's a GUI. Why is Dell so focused on that? Well, I think it starts with, if we go back to what I said, it's purposeful acquisition. It was an acquisition just to get, you know, address a new market segment or to change your financial profile. It was an acquisition to say, how can we create a better solution overall? And so clearly integration was part of the roadmap of making that happen. But, you know, this is a balancing act because you cannot buy a company and just say, okay, we're going to absorb you in a few months. You cannot also just leave them to be independent. You have to balance how you bring it in. And we have actually a pretty disciplined and balanced approach of doing that. One of the best I've seen in the industry. And I agree with you. I mean, I've been in the industry for a long time and I've seen many companies, you know, large companies, buy other companies that just disappear. You have no idea what happened to that. Dell has a couple of things going for it. First, we don't do many acquisitions. We do a few. We do ones that are absorbable. We do quite a few acquisitions, but okay. We've done quite a few lately. But in general, I think that, you know, if you count the number of acquisitions we've done, it hasn't been as many as other companies have. So Praveen, when we look at kind of the deployment. This is something that tends to not be talked about as much. If it's simple and it's automated, you know, magically it's just going to go in there. But we know that there's a lot of services. And we're here at Dell talking about the channel a lot. So can you talk to, you know, what is the balance and the touch points and the handshakes between Dell's services and the channel partners when it comes to deploying Converged Infrastructure? Sure. Well, you know, specifically about Converged Infrastructure, just about any infrastructure, there is a lot of things that have to be done to get that infrastructure optimized and useful for the customer. And what I mean by that is it's not simply a matter of plugging it in and turning the button on and saying, okay, you're ready to go. It's a question of, okay, how do we now tune it for your application? How do we build on what you have to make your whole infrastructure easier? And so what we find is that you can characterize the number of the tasks that have to happen as very mundane tasks like cabling and, you know, just hooking stuff up and making sure you allocate lones and things like that to much more sophisticated tasks where you're actually putting a lot of value at. So what we are trying to do for our channel partners is, hey, maybe we'll integrate the mundane tasks in the infrastructure so you can focus on more of the value-added tasks for the customer. Yeah, no, that's a great point because it's not just, even if customers are saying they want to deploy VMs, you know, VMs are not created equal. From a workload standpoint, things change, customer environments. Are you doing anything to kind of harvest that field expertise that you get and all the deployments that you've done to kind of help iterate and learn? Yeah, we are. We're very much trying to learn from our customer deployments and then, you know, take that knowledge base to create reference architectures, known good states that we can, you know, have a customer start with. What we have found in many cases is that the customer does not want a fixed configuration. They want to have some flexibility. But they want to start with their reference point or a known good state. Yeah, so do you have any data point for us? You know, NetApp just put out a press release saying they've got 1,000 customers and then they've got over 20 kind of templated, really well understood, you know, applications that they can use. And obviously NetApp's pitching that this is a flexible environment. So, you know, they've got 20 applications. EMC, when they launched their VSpecs, kind of had five initial use cases. You know, how many different environments is Dell pushing conversion to? I don't know the answer to actually that question. But I think we can, you know, we're building up our database on that. But I think that the key thing here is that we look at major applications like VDI, or workloads, or big, small, medium, large configurations. So there's like an infinite number of configurations that you can have. I think the key point is for us is just to, you know, for the mid-market to start with something that is optimized for them. Right. Yeah, it's always that balance between you want to have it as homogeneous as possible because that simplifies and I can do automation around it. And, but I still want to have flexibility. So how do you, you know, do you say yes to every customer environment? Or how do you keep that balance so that you understand what a customer has? Because, you know, to be honest, I think about from a services standpoint, so much time is wasted to try to figure out, okay, what does this customer really have? And convergence is supposed to simplify that. Yeah. You know, I think that in many ways, all of us in the industry are early in the convergence game. And so we're figuring out exactly what the boundaries are between what's acceptable as a fixed configuration and what is a, you know, completely variable configuration. We're just sorting out the boundaries. When we first came out with VSTARTS, for example, a lot of customers said, you know, I really like that idea. I really like it at all, but can I just have this tweak to it? I just want these CNAs and not those CNAs. I want this different. And, you know, we would accommodate that because we have the right kind of manufacturing infrastructure that can enable that to happen. But now some customers are saying, you know, I don't really want to mess with that. If it's going to give me 100 BMS, I'll just take that. So part of it is an education on the customer that a fixed config is okay. And so I think that we're in this journey. I wouldn't say that we fully understand what the parameters are in the whole industry. Sorry, it's interrupt. So, Praveen, I wanted to ask you, I saw an interesting note next to your name and the schedule. And it was HTML5. And I said, hmm, interesting. You know, usually storage guys don't talk about that. Was that a typo on our guys? Or do you have something to say about HTML5? I mean, we got the Apple Worldwide Developer Conferences going on this week. And are you guys doing stuff in next-generation languages and interfaces? Well, yeah, I mean, so I'm not an expert in HTML5, so I'm not sure why that was there next to my name. But I can tell you that obviously we have a very, you know, strong client business. And we're doing a number of things to make that end-user productivity better. So HTML5 is one of the languages that clearly, you know, can help with some of this whole idea of device independence. And, you know, being able to do applications in different ways. So there's a number of things we're doing there. In general, if you think about end-user computing and end-user virtualization, we're doing a lot. Recently, we bought a company called Wise, which puts us now as number one in really end-user virtual computing. Tarkin Maynard here? See, he might be here, yeah. He's been on theCUBE a number of times. He's quite a character. He is. So we, you know, we understand quite well that the endpoint can be nice and sexy, but the real action is in the backend. The real action is with the service, storage, networking, management, security, and services. And so that's the sort of infrastructure we're putting in so that even if you were misguided enough to buy an Apple tablet, we would be the backend for it. It's a gift. So, okay, and then the other, so this is, HTML5 was a list of topics that, you know, there were sort of things that, you know, we might want to think about. The other was IT strategic value. Now, that's something that five or eight years ago, if I were a CIO, I probably wouldn't be having a discussion with Dell about my strategic value. Are you having those discussions today? About Dell strategic value or IT strategic value? Well, IT strategic value and with Dell fix. Yeah, we're absolutely having that discussion today. So the CIO has, you know, it's transforming themselves from being, let's say, the chief infrastructure officer, which is what they've been for many years, to actually being the chief innovation or chief information officer. They want to, the CIO really wants to be part of the group of executives in the company that's helping drive the business forward, not just the manager, like the facilities manager. They really want to change and that's all over the world. I was in Japan last year in December in Korea and I was getting the same feedback for a lot of CIOs, which is that we don't want to just be handling plumbing. We want to help increase revenues. How can you help us do that? And, you know, we understand that there's a couple of ways you can do that. One is that you actually reduce the amount of time and effort that the IT departments are spending on maintenance because they spend 75% of the time on keeping the lights on. And so that leaves very little time to develop new applications that can help drive the business forward. So, by making infrastructure more efficient, easier to manage, you can shift the balance of effort towards...