 Live from the Moscone Convention Center in San Francisco, California, it's the Q at Oracle Open World 2014 brought to you by headline sponsor Q-Logic with support from HGST, violin memory and MarkLogic. Now here is your host, Dave Vellante. We're back at Moscone South, we're here in the Q-Logic booth, in the back over by the Oracle demo area and so stop by and see us again Moscone South. This is the Cube, SiliconANGLE's live mobile studio, we drop into the events, we extract the signal from the noise. Year five for us inside the Q-Logic booth at Oracle Open World. It's my pleasure to have Mike Gustafson here as the Senior Vice President and General Manager of the FLASH platform group at HGST Gus. Welcome to the Cube. Thanks Dave, great to be here. So I was watching your event, you know, remotely, I didn't get a chance to attend but it looked like a really great coming out party for you guys. You've done a bunch of software acquisitions, obviously the Viridin acquisition that you helped engineer. Really as we were talking about off camera, quite a number of moves on the chessboard that have really changed the game. Talk about that a little bit. Oh it's been outstanding. I mean so from the standpoint of HGST looking at playing a more aggressive and more of a shaping the industry role, the acquisitions that we made about a year ago, this was a big event for us a couple weeks ago actually announcing many of the products and solutions that come from those acquisitions. So combination of things we announced included some specifics around the FLASH platform group with more accelerated FLASH solutions on the product side. And then up the stack, a combination of hardware and software aspects where we actually announced things like a purpose-built kind of Oracle Rack solution which was outstanding. And then more traditional for our company around the HDD world, some of the work that we're doing on helium and driving capacity leadership there with an eight and ten terabyte offering of products and a vision around an active archive platform. We're all kind of the sweet spot of the announcements that we made a couple weeks ago. Yes I see that. You mentioned the high capacity stuff, sort of extending the base indefinitely, really. But then trying to capitalize on some of the new trends that we've certainly written about at Wikibon, we talked about server sand. But you've seen function for the last couple of decades move out of the host onto the sand for good reason, but now they're moving back. You've got in-memory, you've got prices coming down, capacity is going to the roof and then FLASH really is that big disruption. I wonder if you could comment on that shift and how you guys want to take advantage of that. Yeah, I think just to kind of add around the comments you made, I think there's that combination of the FLASH, there's the convergence aspect and then there's this intelligence needed around the FLASH and the media to actually get it to the point where we can start to deliver to the enterprise, both traditional and cloud enterprises, what the sand did a decade or so ago and that's the more efficient shared storage with the attributes of protection and management and scale, but in a medium which is FLASH oriented and that's what's completely different. How do you actually drive those capabilities up the stack and do so so that you're not compromising around the performance that you're paying for but still get all the protection and the management and the scale capabilities that the sand brought us and the way we look at that, we're actually trying to package that up as a concept around fabric FLASH or a FLASH fabric. Fabric FLASH with a lot of software, I mean to go back to the 80s, I mean network appliance sort of created the appliance model and then despite a lot of friction, it's another point of management, some people don't like the concept of appliances but it's work. You look all over the oracle floor, it's all appliances. Larry talked last night about appliances. The model you're putting forth is different. I see it as the next generation of you called it fabric but I wonder if you could talk about that vision of it. Yeah, and I think it's important as you say, we participate today in the world of the appliances or in the FLASH array, whether it's hybrid or all FLASH array. We do that with our component business or our devices where we'll make those available to our partners and they package those in, whether it's a purpose-built appliance or a sand extension. But to your point on what's that next turn of the crank, we actually see for performance applications where you want to be closest to the CPU as possible, you're going to be inside the server. And so we see that as an opportunity not just with the FLASH again but as you mentioned, the intelligent devices around that. So we have a concept around device affinity where we actually, whether it's endurance or performance benefits, this device affinity allows us to extend the life of the FLASH, it allows us to be more intelligent about the firmware that's wrapped around that controller. And then ultimately, and this is the big step I think for us, is we want to get up into that application. We want to be application down versus just the storage up. And by doing so, we get greater insights on its performance, how to actually tune and optimize, again, up at that server layer without compromise on performance. And you look what's happening with mobile, you talk about device affinity, you talk about applications, everything's going mobile. Talk about how mobile is changing the business in general and specifically how HGST wants to capitalize on it. Well, it's funny, I mean, just from a FLASH perspective, it got its start in the mobile world and the consumer side. So, you know, beyond that though, I think the interesting parts are consumers today are creating more data than frankly the traditional enterprise had ever before. And we have a concept we talk about where the world was accelerated by IT. And now really the, sorry, IT accelerated the world. And now really the world or the consumer data being created is actually accelerating IT. So we have no choice but to deal with this. And so one of the interesting things that we're seeing right now is this raw data creation. And then how do we actually take advantage of that? And the promise of being able to capture it in an active archive platform is one example. But then ultimately how do I put that into real-time decision-making and analytics? So that's another area that's a huge driver of FLASH adoption and the analytics to actually drive the correlations across that data. That's interesting, you're talking about, you know, the world accelerating, you know, the IT, the IT department always viewed as so slow. I saw Kim Stevenson in the show floor earlier and she was up at the keynote this morning with Mark Hurd and she was saying, you know, we're kind of slow in IT and we need to keep moving. And so there's attention there, you know, you're seeing, you know, cloud, people swiping credit card, you're seeing big data, the marketing guys are hiring all these analytics folks and the pendulum has always swung. Is this a permanent swing, do you think, in terms of the dynamic of the IT group really getting pushed? Are they remaking themselves? What are you seeing in the customer business? You know, I thought this morning was really, you know, spot on in terms of the not only the messaging around partnering with the business, you know, that theme is throughout everybody that presented this morning, including Kim. Also, I think this, the pace of change is one where I don't know if it's a pendulum swinging just in a binary A or B. I think we have a third dimension here and I think it's going to take a new shape. I think that dimension is going to be one that's more market driven, more business driven and trying to really understand what is the question that we're trying to solve for and then how do we look back at IT and infrastructure to help us solve that. And, you know, those that spoke this morning talked a lot about not just the desire but the clear priority that we must do this and I think the request from the industry to make sure that we come at them with more simplified solutions and everybody, I think, to a person mentioned this word solution. How do we package this up? Not just so it's simple on deployment but flexibility around whether on-prem or off-prem. So, all these things are causing the, you know, the IT industry and the infrastructure providers to really put themselves in the chair of the customer. I like the way you phrase that because a lot of people do think it's, oh, it's just cyclical, oh, cloud is just IT. I agree with you, it's different. This is a new dimension and I always say if you're an IT practitioner, you got to think about re-skilling it. It's not just sit back and wait for the world to blow up and then come back to you because it may not blow up this time. I think this is where you get the real innovators. I think this most exciting time we've had in IT because you've got now the, it's not just viewed as a cost center. It is, without question, an area where you can drive differentiation in the business where if you understand what the consumers are doing and how to drive your product or solution strategies, you can be a major, not only business partner, but an innovator and a value creator to your business. That's something that, frankly, IT industry, we've been wanting to get to this point for a long time. So, very exciting opportunities. Yeah, I think it was over a decade ago that Nick Carr wrote that book, This IT Matter, and although everybody in the CIO world, you know, they got angry, there was a backlash. In retrospect, he was wrong, but he was right in that the traditional IT world is changing. I don't think it's ever going to come back to you, right? I mean, it's permanently changed to one where technology's going to lead these transitions. And if you're not part of that leadership, you're going to be gone. Yeah, I absolutely agree with you. And I think, you know, you can see that. I think the words where I'm trying to remember exactly how Mark structured it this morning, but we're in a deconstruction. And I thought that was about as pure as I've heard it. We're all being deconstructed in terms of our businesses and business models and those that can actually reorient and come out of that with trying to take advantage of this new dimension you talked about, I think are going to be the winners going forward. So what about cloud? It was interesting to hear Larry yesterday say, we had a commitment to our customers 30 years ago. We had to do infrastructure as a service, platform as a service and software as a service. But the infrastructure as a service is obviously highly relevant to you. It's all relevant to you, because applications drive everything. But in terms of the distribution channel, how is cloud affecting your business? I mean, obviously you can't name names, but I would presume the big cloud service providers are all calling you saying, hey, we need help with this. We're trying to do custom things and sign the NDA. And yeah, yeah, so I won't, I won't name all this speak and all that stuff. But you're at the heart of all that. So what do you, what can you share with us in terms of the trends there? Yeah, it's outstanding from our perspective. I won't name specific names, a lot of them, but I'll name a few. And I think, you know, when you look at great example, this is with Netflix, the business models that are becoming more pervasive in the marketplace today in terms of not only acquiring and managing that data, but distributing that with a business advantage of their own content. Netflix is a big customer and one of the things they're always going to have pressure on is driving cost down. So we're a major partner to many of those cloud providers today in terms of our device business, whether that's on the HDD or the solid state storage space with driving better and better capacity and higher utilizations with different packaging solutions. And people like Netflix actually just launched in Europe. It was just there last week and it was amazing at the impact that they're having in Europe in terms of bringing that service to the consumer. So the other part of that I think there's two other key areas. One is an at scale challenge for us. And so when you think about how that drives our product development and choices that we make, it's driving the helium strategy for us. It's driving that very, very large capacity and low cost solution for us. And then the second one is you still have to be very, very intelligent about what you bring them because it's not just enough to drive cost down on the device. We actually look at that entire stack. So again, the combination of hardware, device affinity and unique and differentiated software on top of that so that we bring more to the party as a building block than we had before. And let's talk about the software a little bit. That's really where the differentiation is. I mean, I remember we were talking about server sand off camera. We were calling it server sand then, but I was asked to go speak to a strategic planning meeting, you know, these Woods meetings you go off and think, right? And it was, I won't name the company, but it was a large established whale and it had a big install base of product. And I came in and I put forth this notion of, you know, this distributed resource that's tied together with how are you going to protect it? You know, how are you going to manage it? How are we going to connect all these things that I didn't have the answer to it. I said, well, I don't know, but the industry has to figure that out. You have to figure that out. It was a lot of tension. It was very negative. And now you're seeing, maybe it's not having a meaningful impact on revenues, but you can see the architecture start to come forward in it, underlying that is software. You guys have made some software acquisitions there. So I wonder if you could talk about the role of software to HGST specifically and generally you're part of the industry going forward. Yeah, and I mean, the questions that you're hearing there and as opposed to reacting with a negative way, we love this because it really allows us to think about what we can bring to the party, more value, more differentiation from HGST than we've ever had before. And so it's a combination of complimenting our core device business, but on top of that, we're really driving to, I'd say our strategy is this, continue to lead with the best in class devices and the most broad portfolios of devices in the marketplace, whether that's HDD or solid state storage, and do that end to end, including the opportunity to actually start to package that in more of a subsystem approach. That's what we announced a couple of weeks ago. Secondly, we've got to drive this device affinity and that's all software. How do we drive more intelligence around that device to make it more effective, drive better utilization, et cetera, and that can be done in performance, that can be done in capacity, it can be done in endurance. And then this next major step is kind of more to your point here, Dave, which is how do I actually think about an infrastructure of shared and mixed workloads, not just in the highest levels of performance, but also across tiering and data movement and such. All the things that we optimized and built in the storage area networking world a decade or so ago, those need to be rebuilt. They need to be built in the model of today's flash. They need to be done at the absolute highest performance with the lowest latency and they need to be done across the tiers of storage too. So these are areas where we're investing aggressively, the acquisitions we made a year ago have now been completely integrated and we've got just one example, a major announcement a couple of weeks ago on a combination of an Oracle RAC initiative where we can actually take that device leadership, package that with affinity and with some specific HGST variant share where we can scale that out and provide a all-flash environment for Oracle RAC. Perfect example of bringing all those pieces together. We live in kind of a crazy world these days. We had VMworld a few weeks ago and you have Pat Gelsinger up there who's got partnerships with Cisco and then of course he's depositioning Cisco in the next statement saying we love their gear and the positioning was a gear company and of course Cisco's saying bring it on and so we have this world of co-operation. What is the conversation like with your customers? When you talk about these visions, these changes, the white space is shifting. You guys can't sit still. They can't sit still. You use terms like subsystem. Oh, that's my domain but the dividing lines are shifting and changing. What are those conversations like? Well, they start with a core competency of our company's always been partnering. So it starts with a very transparent open discussion with those partners and what's unique and I frankly, I was a little more nervous when I joined the company a year ago about this. It's very natural and the reason is the marketplace is driving this change. So you don't need to look beyond any of these large system companies whether storage or server or network and ask them are you fundamentally changing your business and your business model? The answer is yes. So for us, when we say we're doing the same how can we do that together? So our vision is pretty simple. You can call us a gear company, call us what you like, but we're a device leading, device affinity and software and solution centered businesses we grow with a pretty simple message and that's that we want to bring more value to the party. We want to create larger and more valuable building blocks. And in some cases we will sell those on a direct basis but in most cases we're taking all that back to our strength through the channels and the partners of choice to bring those to market. But it would be easy for a lot of your customers easy and deathly for a lot of your customers just to milk the base. And there's a desire I'm sure an intrinsic desire to do that. So but yet you're going to simplify a lot of what today or last decades they've charged many dollars and got huge margin for what should they be doing to move their business models forward? What are you seeing in your customer base? Yeah well I think first and foremost you have to, I mean again I'll go back to this more I thought they did a great job of asking the questions. You know what is really driving my business and my business model? What are the economic engines of my company? What are my consumers both current and future want? How is the, you know, how are those consumers and or business to business folks creating data that can become an advantage for me? And I think what's there today that wasn't before is you know we always used to talk about marketing and segmentation around this broad base whether it was Budweiser, Budlight, Miklo, don't know why that's on my mind, but you know and then the ultra drive, I know sub segments and such, but now you really do have the opportunity to start to understand what's going on with the individual and more smaller groups whether that's in personalized medicine or in segmentation of customers and this is where I think the magic's going to happen. How do you actually start to adjust and drive your business models? Either one with that information in mind to drive your product and solutions and then secondly how do you reach those folks in a new and unique way? The walls have come down in terms of what was there before and so I think that's why we're seeing such innovation. So that's interesting, so now you're touching on some of the, we talk about big data, but bringing that into some of the traditional storage world even. And you're seeing some of that, I mean, you know you saw that with, you're seeing that with Data Gravity, Paula Long's company, bringing metadata and analytics, that's a huge opportunity, you know, presumably, I mean you, I'm impressed with you, you nailed the scale out NAS, you know, business, you nailed Flash and have had, you know, two really successful examples there. Do you see that big data analytics as an opportunity for your customers, you know, generally? Yeah, without question, and I always was smart enough to be around smart people and have some passion for what I'm doing, so it's not, I've been lucky in that regard, but I think that- A little luck helps, but, you know, it does. You've got to have some chops too. Yeah, I think the big data in analytics world is one that we're really just beginning to scratch the surface around. There's no question there's going to be people continuing to innovate like the ones you mentioned, and what's unique I think for us is people are starting to think about whether it's data that's created in a structured way or in an unstructured way, whether it's older data or newer data, people are really starting to figure out that I really want all of that, if I can, and it makes sense, can I get all of that in a centralized place where I can start to do the magic around it? And again, kind of going back to the whole point of IT. If we take IT with the business people and we start to ask those smart questions, whether it's business driven at a function level or data scientists, we're going to find some incredible opportunities. And we're seeing those today with, you know, again, I just, you know, business models that are emerging around this, and I'll go back to Netflix as an example. LinkedIn's another one where, you know, just some of the things that they do, they're a great customer of ours today around analyzing and correlating, and then if you use it, you sign on, say you might be interested in, all that correlation in the what-if analysis comes from basically that big data and pulling all that stuff together, and it's real time. And that's a lot of fun. Well, see, again, you're in an interesting spot because you mentioned LinkedIn, you mentioned Netflix, there's a number of companies you can't mention that go right to you and say, hey, we're trying to solve this problem. And then as well, you're selling to a big base of traditional customers, but to me, you get a little visibility, a lot of visibility on what's coming out, we said, you want to know what's happening in the enterprise? Go look at what Amazon and Google are doing five years ago, six years ago, it's coming to the enterprise. So my question is, what happens to that stack that we know, some people love it, some people hate it, where you've got your devices, you've got storage protocols which are pretty chatty, you got a lot of, got a controller, you got software built up around that controller, you're getting hooks into applications, it's a pretty robust stack that's been built up over a decade plus, two decades, really. What happens to that stack? Does it get flattened like a pancake? Do parts of it exist for special purposes? Does it all get disrupted? What do you think? Well, I mean, you hit a good point, I want to reiterate there, we have a, it's a wonderful opportunity to be able to talk to and listen to those largest customers in the world, whether they're a traditional enterprise or whether they're cloud. And I think the answer is very a little bit, depending upon where you are. If you've got an existing business and you need to continue to run that business without disruption, your level of creativity, flexibility and the constraints are a little tighter than if you're a new business in a green field world with the opportunity to build a brand new application. But in both cases, we've got to simplify that stack. We have to look at it in all of its layers and ask ourselves, is there value there or not? It is that value worth the complexity and if not, get rid of it. And you know, on a very small level in the flash world, what we're doing in terms of NVMe as a protocol and a standard is one way to help in that regard and continue to look at on the open source and open stack world, you know, where can we actually contribute? How do we actually simplify? Because the change that's happening at the end user level needs to have the same pace and openness and flexibility inside the infrastructure providers. And so I think that's one thing. I think it's going to change dramatically. Well NVMe is interesting and you talked, you alluded to the application before and you think about the potential to totally transform applications, application performance. We talked about mobile a little bit. That's really where the dramatic value is going to, and Kim Stephenson talked about business productivity as opposed to cutting costs. I see flash as playing a fundamental component of that because it's the last mechanical movement now disappears, you know, that, I'm going to say disappears. It changes roles. It's like, tape changed role, but in a way bigger manner. And it's going to have a bigger impact on application performance. I wonder if you could talk about that a little bit. Yeah, and you know, we see kind of a one-two punch here. We see the continuing business around rotating media and hard disk drives. They're going to be there. They'll be probably more capacity oriented over time. And we see this flash world where you've got the highest possible performance and lowest latency, you know, which is really around the application. So, you know, what we see happening there is as number one, the performance benefit that we won't even talk about on the application is obvious. But the other one is we're reducing the amount of rotating media there. We're driving a better TCO. In a lot of ways, a flash solution can help reduce the amount of space that's required for those performance applications. You can really consolidate to a much smaller environment. You can drive better TCO through power and cooling capabilities. And then ultimately, if you can truly do more with less and it's an application that's screaming for IO or that throughput capability, you're going to reduce the amount of, you know, capacity that you might need on the rack and be able to consolidate. And all of those things are driving, you know, significant benefits, including some that have actually gone to, I'll say, a pervasive flash deployment. Yeah, because companies like HGST have had to do a lot of unnatural acts and spent a lot of money on doing unnatural acts to drive system performance where at Oracle Open World and the consumers of, you know, your products within Oracle's world, whether it's, you know, short stroking or spinning it faster or more heads or whatever technology is used. All great things to move the needle a little bit, but now that investment can go elsewhere and really toward the application is where it's going. Yeah, and you know, and I don't want to run past this point. I think the market still needs innovation on the capacity side. So whether that's helium or more density around that, that drives cost. And so we're actually in a great position as a company because we can do both. We can drive the performance aspect of the flash world. We can drive the capacity aspect and some of the higher performing HDD world as well. In both cases to your point, up at the application. So we really want to be, you know, device leading in both of these and then understand more and more of the stack on the application. So should we expect an innovation renaissance with that traditional business? I mean, it was clear that these unnatural acts making mechanics move faster and to try to deal with performance is sort of a, almost a negative ROI at some point in time. Now with flash, you don't have to worry so much. You don't really have to worry at all about that. Now you can say, okay, this is a bit bucket technology. Let's pour investment and innovation into that. Will we see a renaissance there? I think if you categorize it and look at just the performance side of very high end, let's say in-server flash, I think you're going to see an absolute rebuilding of an architecture and we view that as over time, over a long period of time, we think there's going to be the concept of a flash fabric where you can actually share at the highest level in all flash environment with, again, highest performance, lowest latency and assuming that you have the software capabilities to provide high availability, the mirroring aspects, the sharing capabilities that you expect for mixed workloads. And as soon as you start to say mixed workloads or data over time, you have to, as a partner in the industry, you have to bring both the performance aspect and the capacity aspect. I think that's one of the things that makes us unique. And there's a huge metadata opportunity there. We were talking about big data analytics before. Someday we'll have more metadata than data. Had to talk to the NSA, they probably already do. Gus, really great segment. Thanks so much for coming back in the queue. It was really fun to have you. Thank you very much for having me. All right, keep it right there, buddy. We'll be back. We're live from Oracle Open World 2014. This is theCUBE, right back.