 From around the globe, it's theCUBE. Covering HPE Discover Virtual Experience. Brought to you by HPE. Hi everybody, welcome back to theCUBE's coverage of HPE Discover 2020, the virtual experience, theCUBE has been virtualized. My name is Dave Vellante, I'm here with Stu Miniman and our good friend Tim Crawford is here. He's a strategic advisor to CIOs with Avowa. Tim, great to see you, Stu. Thanks for coming on. Great to see you as well, Dave. Yeah, so let's unpack what's going on at Discover, Antonio's keynotes, maybe talk a little bit about sort of the prospects for HPE coming forward in this decade. You know, last decade was not a great one for HPE, for an HPE, I mean, there was a lot of turmoil, there was, you know, botched acquisitions, there was, you know, breaking up the company and spin merges and a lot of distractions. And so now the company is really, you heard this from Antonio, kind of positioning for innovation for the next decade. So I think there's probably a lot of excitement inside the company, but I want to touch on a couple of points and then sort of get your guys, you know, reaction. I guess, you know, to start off, obviously Antonio is talking about, you know, COVID, the role that they played in that whole, you know, pandemic and the transition to the isolation economy. But so let me start with you, Tim. I mean, what is the sort of posture amongst CIOs that you talked to? How strategic is HPE to the folks that you talked to in your community? Well, I think if you look at how CIOs are thinking, especially as we headed into COVID, into coronavirus and kind of napping through that, that crisis, it really came down to, can they get their hands on technology? Can they get people back to work, working from home? Can they do it in a secure fashion, keeping people productive? I mean, there was a lot of block and tackling and even to this day, there's still a fair amount of that that's taking place. We really haven't seen the fallout from the cybersecurity impact of expanding our footprint quite, but we'll see that probably in the coming months. There are some initial inklings there. When it comes to HPE specifically, I think it comes back to just making sure that they had the product on hand, that they understood that customers are going through dramatic change. And so all bets are off. You have to kind of step back and say, okay, those plans that I had 60, 90, 120 days ago, those strategies that I may have already started down the path with, those are up for grabs. I need to step back from those and figure out what do I do now? And I think each company, HPE included, needs to think about how do they start to meld themselves to be able to address those changing customer needs? And I think that's where this really kind of becomes the rubber that hits the road, is HPE capable of doing that? And are they making the right changes? And quite frankly, that starts with empathy. And I think we've heard pretty clearly from Antonio that he is empathetic to the plight of their customers and the world on the whole. Yeah, and I think culturally, Tim, it's do, I mean, I think HPE is kind of getting back to some of its roots. I mean, Antonio has been there for a long time. I think he's very well liked and I think he's sure he's tough, but he's also a very fair individual and he's got a vision and he's focused. And so, I think again, as I said, looking forward to this decade, I think it could be one that is one of innovation. Although, look, you look at the stock price, it's kind of peaked at November of 19. It's obviously down like many stocks. So there's a lot of work to do there. And Stu, you're certainly hearing from HPE this notion of everything is a service. We've talked about Green Lake a lot. What's your sense of their prospects going forward in this new era? Yeah, I mean, Dave, one of the biggest attacks we've heard about HPE in the last couple of years, the line Michael Dell would use is you're not going to grow by subtraction. But as a platform company, HPE is much more open from what I've seen than the HPE that I remember from five to 10 years ago. So you look at their partner ecosystem, it's robust. So years ago, it seemed to be if it didn't come out of HPE labs, if it wasn't an HPE product, that was the services arm all wanted to sell HPE here. Now in the software-defined world, working in a cloud environment, they are much more open to finding that innovation and enabling it. So we talked about Green Lake, Dave. Green Lake's got about 1,000 customers right now and a big piece of that is a partner portfolio. So whether it's VMware, Amazon, Nutanix, or HPEs, full stack themselves, they have optionality in there. And it's what we hear from users is that they want flexibility, they don't want, you look at the cloud providers, it's not, here's a solution, you look at Amazon. There's dozens of databases that you can use from Amazon or you can use on top of Amazon. So HPE, not a public cloud provider, but looking more like that cloud experience. They've done so many acquisitions over the years. Many of them were troubled. They got rid of some of the pieces that they might have overpaid for. But you look at something like, CTP helped them in this multi-cloud world in the networking space. They bought a really cool open source company, the company that's behind Spiffy Inspire. And companies that are looking at containers and Kubernetes really respond to say, hey, these are projects that we're interested in. Oh, who's the company that's driving that? It's HPE. So more open, more of a partner ecosystem, definitely feels that there's a lot there that I respect and like that HPE is doing. Well, I mean, the intent of splitting the company was so that HPE could be more focused and focused on innovation. The intent was to be the growth company. It hasn't fully played out yet. But Tim, when you think about the conversations that CIOs are having with HPE today versus what they were having with HPE, the conglomerate that comprised EDS and PCs, I guess, I don't know, in a way more Dell-like. So I mean, certainly Michael Dell's having strategic conversations with CIOs, but you got to believe, Tim, that the conversations are more focused today. Is that a good thing or the jury's still out? No, it absolutely is a good thing. And I think one of the things that you have to look at is we're getting back to brass tacks. We're getting back to that focus around business objectives. So no longer is it, hey, who has the coolest tech and how can we implement that tech kind of looking from a tech to business spectrum? You're now focused squarely as a CIO. You have to be squarely focused on what are the business objectives that you are teeing up for. And if you're not, you're on a very short leash and that doesn't end well. And I think the great thing about the split HPE split, and I think you almost have to kind of step back for a second, let's talk about leadership there, because leadership plays a very significant role, especially for CIOs that are thinking about long-term decisions and strategic partners. I don't think that HPE necessarily had the right leadership in place to carry them into that strategic world. I think Antonio really makes a change there. I mean, they made some really poor decisions post-split that really didn't bode well for HPE. And frankly, I talked a bit about that. I know it wasn't really popular with an HPE, but quite frankly, they needed to hear it. And I think that actually has been heard, and I think they are listening to their customers. And one of the big changes is they're getting back into the software business. And when you talk about strategic initiatives, you have to get beyond just the hardware and start moving up the proverbial stack, getting closer to those business initiatives. And that is software. Yeah, well, Antonio talked about sort of the insights. I mean, it's something that I've said a lot. He kind of borrowed from some of the Mary Meeker conversations that data is plentiful. Something I've always said, insights aren't. And so you're right. You've seen a couple of acquisitions. MapBAR, they picked up, I think, pretty inexpensively, kind of interesting. Because remember, HPE, or HPE, had an investment in Hortonworks, which, of course, is now cloud air. And BlueData, Kumar, Srikanti's company, kind of focusing on maybe automating data. He talked about edge-centric, cloud-enabled, data-driven. Nobody's going to argue with those things. But you're right, Tim. I mean, you're talking more software. They kind of jettisoned the software business and now sort of have to rebuild it. And then, of course, do this cloud. What do you make of HPE's cloud play? Yeah, well, I mean, Dave, the pieces you were just talking about, MapBAR and BlueData, where HPE connects it together, is AI ops. So where are we going with infrastructure? There needs to be a lot more automation. Her great quote I love from automation anywhere, Dave, was if you talk about digital transformation without automation, it's hallucination. So HPE is baking that into what they're doing. So fully agree with Tim. Software, software, software is where the innovation is. So it can't just be the infrastructure. How do you have ties and hooks into the applications? How are you helping customers build those new pieces? And what's the software that you build around that? So absolutely, it's an interesting piece. And HPE's got a lot of interesting pieces. You talk about the edge, Aruba is a great asset for that kind of environment. And from a partnership, Dave, they have, John Chambers was in the keynote. John, of course, long time partner of HPEs with Cisco for many years, until Cisco started meeting with HPE on the server business. But now he's also the chairman of Pensando. HPE is an investor in Pensando, general availability this month of that solution. And that's going to really help build out that next generation edge. So a chip set that HPE can offer similar to what we see how Amazon builds outposts. So that is a solution both for the enterprise and beyond as HPE looks to partner. Yeah, of course, HPE bought three comms to add more fuel to that tension. Go ahead, Tim. Well, I was going to pick apart some of those pieces because an edge is not an edge is not an edge. And I think it's important to highlight some of the advantages that HPE is bringing to the table, where Pensando comes in, where Aruba comes in, and also where GreenLake comes in. I think there are a number of these components that I want to make sure that we don't necessarily gloss over that are really key for HPE in terms of the future. And that is when you step back and you look at how customers are going to have to consume services, how they're going to have to engage with both the edge and the cloud and everything in between, HPE has a great portfolio of hardware. What they haven't necessarily had was the glue, that connective tissue to bring all of that together. And I think that's where things like GreenLake and GreenLake Central really are going to play a role. And even their newer cloud services are going to play a role. And unlike outposts and unlike some of the other private cloud services that are on the market today, they're looking to extend a cloud-like experience all the way to the edge. And that continuity, creating that simplicity is going to be key for enterprises. And I think that's something that shouldn't be understated. It's going to be really important because when I look at in the conversations I'm having, when we're looking at edge to cloud and everything in between, oh my gosh, that's really complicated. And you have to figure out how to simplify that. And the only way you're going to do that is if you take it up a layer and start thinking about management tools, you start thinking about automation. And as companies start to take data from the edge, they start analyzing it at the edge and at intermediate points on the way to cloud, it's going to be even more important to bring continuity across this entire spectrum. And so that's one of the things that I'm really excited about that I'm hearing from Antonio's keynote and others here at HPE Discover. Let's stay on that, Stu, let's stay on that for a second. Yeah, I wanted to say I'm interested, Tim, because it's funny to think back, HPE at one point in time was a leader in management solutions. HPE OneView in the early days was really well respected. I think what I'm hearing from you, I think about Outposts is Amazon hasn't really put management for the edge. All they're doing is extending the cloud piece and putting a piece out at the edge. It feels like we need a management solution that's built from the ground up for this kind of solution. And do I hear you right? You believe that HPE has some of those pieces today? Well, let's compare and contrast briefly on that. I think Amazon and the way Amazon, as well as Google and Microsoft for that matter, the way that they are encompassing the edge into their portfolio is interesting. But it's an extension of their core business, their core public cloud services business. Most of the enterprise footprint is not in public cloud. It's at the other end of that spectrum. And so being able to take not just what's happening at the edge, but what about in your corporate data center? In your corporate data center, you still have to manage that. And that doesn't fall under the purview of cloud. And so that's why I'm looking at HPE as a way to create that connection tissue between what companies are doing within their corporate data center today, what they're doing at the edge, as well as what they're doing maybe in private cloud and an extension public cloud. But let's also remember something else. Most of these enterprises, they're also in a multi-cloud environment. So they're touching into different public cloud providers for different services. And so now you talk about how do I manage this across the spectrum of edge to cloud, but then across different public cloud providers, things get really complicated really fast. And I think the hints of what I'm seeing in software and the new software branding, give me a moment of pause to say, wait a second, is HPE really going to head down that path? And if so, that's great because it is of high demand in the enterprise. Well, let's talk about that some more because I think this really is the big opportunity in where potentially innovation is. So my question is how much of GreenLake and GreenLake services are really designed for sort of on-prem to make that edge to on-prem? You know, I want to ask about cloud, how much of that is actually delivering cloud native services on AWS, on Google, on Azure, on Ali cloud, et cetera versus kind of creating a cloud-like experience for on-prem and eventually the edge? I'm not clear on that. Do you guys have insight on how much effort is going into that cloud native component in the public cloud? Well, I would say that the first thing is you have to go back to the applications to truly get that cloud native experience. I think HPE is putting the components together to a lot of enterprises to be able to capitalize on that cloud-like experience with cloud native apps, but the vast majority of enterprise apps are not cloud native. And so I think the way that I'm interpreting GreenLake, and I think there are a lot of questions GreenLake and how it gets consumed by enterprises, there was some initial questions around the branding when it first came out. And so, you know, it's not perfect. I think HPE definitely has some work to do to clarify what it is and what it isn't in a way that enterprises can understand. But from what I'm seeing, it looks to be creating a cloud-like experience for enterprises from edge to cloud, but also providing the components so that if you do have applications that are shovel-ready for cloud or are cloud native, you can embrace public cloud as well as private cloud and pull them under the GreenLake umbrella. Yeah, ostensibly, Stu, you know, Kubernetes is part of the answer to that, although, you know, as we've talked about, Kubernetes is necessary, containers are necessary, but not necessarily sufficient for that experience. I guess the point I'm getting to is, you know, and we've talked about this with Red Hat, certainly with VMware and others, the opportunity to have that experience across clouds, at the edge, on-prem, that's expensive from an R&D standpoint. And so I want to kind of bring that into the discussion. HPE last year spent about 1.8 billion in R&D. Sounds like a lot of money. It's about 6% of its revenues, but it's spread thin. Now it does R&D through investments, for instance, like Pensando or other acquisitions, but in terms of organic R&D, you know, it's not at the top of the heap. I mean, obviously guys like Amazon and Google have surpassed them. I've written about this with regard to IBM because they, like HPE, spend a lot on dividends, on share buybacks, which they have to do to prop up the stock price and play Kate Wall Street, but it detracts from their ability to fund R&D. Stu, your take on that sort of innovation roadmap for the next decade. Yeah, I mean, one of the things we've looked at is in the last year or so, there's been what we were talking about earlier, that management across these environments and Kubernetes is a piece of it. So, you know, Google laid down Anthos, you have got Microsoft with Azure R, VMware with Hamzoo, and to Tim's point, you know, it feels like GreenLake, it's kind of in that category, but there's pieces that fall outside of it. So, you know, when I first thought of GreenLake, it was, oh, well, I've got a private cloud stack, like an Azure stack is one of the solutions that they have there. How does that then tie into that full solution? So extending that out, moving that brand, I do hear good things from the field when I talked to partners and customers, GreenLake is well respected, and it feels like that is a big growth. So as HPE shifts from being more thought of as, you know, a box seller to more of that, you know, solution and subscription model, you know, GreenLake is a vehicle for that. And as Tim pointed out, you know, rightfully so, software is so important. And, you know, I feel one thing I'd say, HPE feels to have more embracing of software than say they're closest competitor, which is Dell, which, you know, Dell's statement is always to be a leading infrastructure provider. And the arm of VMware is their software. So, you know, just Dell alone without VMware, HPE has to be that full solution of what Dell and VMware do together. Yeah, and VMware is the crown jewel. And of course, HPE doesn't have a VMware, but it does have over 8,000 software engineers. Now I want to ask you about open source. I mean, I would hope that they're allocating a large portion of those software engineers to open source development, developing tooling at the edge, developing tooling from multicloud, certainly building hooks in from their hardware. But is HPE, Tim, doing enough in open source? Well, I don't want to get on the open source bandwagon and I don't necessarily want to jump off it. I think the important thing here is that there are places where open source makes sense and places where it doesn't. And you have to look at each particular scenario and really kind of ask yourself, does it make sense to address it here? I mean, it's a way to engage your developers and engage your customers in a different mode. What I see from HPE is more of a focus around trying to determine where can we provide the greatest value for our customers? Which frankly is where their focus should be. Whether that shows up in open source for software, whether that shows up in commercial products, we'll see how that plays out. But I think the one thing that I give HPE props on, one of several things I would say is that they are kind of getting back to their roots and saying, look, we're an infrastructure company. That is what we do really well. We're not trying to be everything to everyone. And so let's try and figure out what are customers asking for? How do we step through that? I think this is actually one of the challenges that Antonio's predecessors had was that they tried to jump into all the different areas, cloud, software, and they were really overextending themselves in ways that they probably should, but they were doing it in ways that really didn't speak to their core. And they weren't connecting those dots. They weren't connecting that connective tissue they needed to do. So I do think that whether it's open source or commercial software, we'll see how that plays out. But I'm glad to see that they are stepping back and saying, okay, let's be mindful about how we ease into this. Well, so the reason I bring up open sources because I think it's the main spring of innovation in the industry, and of course it's very tough to make money, but we've talked a lot about HP's, you know, strengths, its breadth is obviously we haven't talked much about servers, but they're strong at servers, that's fine. We don't need to spend time there. It's culture, it seems to be getting back to some of its roots. We've touched on some of its weaknesses and maybe gaps, but I want to talk about the opportunities. There's a huge opportunity at the edge. David Flor is quantified. He says the TAM is four trillion, it's enormous. But here's my question. Is the edge, right now what we're seeing from companies like HPE and Dell is they're largely taking, you know, Intel-based servers kind of making a new sort of form factor and putting them out in the edge. Is that the right approach? Will there be an emergence of alternative processors, whether it's, you know, ARM, maybe there's some NVIDIA in there, and just a whole new architecture for the edge. Stu, I'll throw it out to you first and then they get Tim Scott thoughts. Yeah, so one thing, Dave, you know, HPE does have a long history of partnering with a lot of those solutions. So you see NVIDIA up on stage when you think about Moonshot and the machine and some of the other platforms that they've built, they've looked at alternative options. So, you know, I know from Wikibon's standpoint, David Fleuer wrote the piece that ARM is a huge opportunity at the edge there and you would think that HPE would be one of the companies that would be fast to embrace that. Well, that's why I like Moonshot. I think that was probably ahead of its time. But the whole notion of, you know, a very slim form factor that can pop in and pop out, you know, different alternative processor architectures, very efficient potentially at the edge. Maybe that's got potential. But Tim, do you have any thoughts on this? I mean, I know it's kind of a little wonky hardware-ish, but... Well, it is a little hardware-ish, but I think you have to come back to the applicability of it. I mean, if you're taking a slimmed down ruggedized server and trying to essentially take off all the fancy pieces and just get to the core of it and call that your edge, I think you've missed a huge opportunity beyond that. So what happens with the processing that might be in camera or in a robot or in an edge device? These are custom silicon, custom processors, custom demand that you can't pull back to a server for everything. You have to be able to extend it even further. And you know, if I compare and contrast for a minute, I think some of the vendors that are looking at, hey, our definition of edge is the laptop or it is the smaller form factor server. I think they are incredibly limiting themselves. I think there is a great opportunity beyond that and we'll see more of those kind of crop up because the reality is the applicability of how edge gets used is we do data collection and data analysis in the device, at the device. So whether it's a camera, whether it's a robot, there is processing that happens within that device. Now, some of that might come back to an intermediate area and that intermediate area might be one of these smaller form factor devices like a server, for example, but it might not be. It might be a custom type of device that's needed in a remote location. And then from there, you might get back to that smaller form factor. So you have all of these stages and data and processing is getting done at each of these stages as more and more resources are made available because there are things around AI and ML that you could only do in cloud. You would not be able to do even in a smaller form factor at the edge, but there are some that you can do at the edge and you need to do at the edge either for latency reasons or just response time. And so that's important to understand is the applicability of this. It's not just as simple as saying, hey, we've got this edge to cloud portfolio and it's great and we've got these smaller servers. You have to kind of change the vernacular a little bit and look at the applicability of it and what people are actually doing with it. I think those are great points. I think you're 100% right on. I mean, you are going to be doing AI inferencing at the edge. The data, a lot of data is going to stay at the edge. And I personally think, and again, David Floyer has written about this, that it's going to require different architectures. It's not going to be the data center products thrown over to the edge or shrunk down, as you're saying. That's maybe not the right approach, but something that's very efficient, very low cost. I mean, you think about autonomous vehicles, they could have quote unquote servers in there. They'll certainly have compute in there that could be two, three, four, $5,000 worth of value. And I think that's an opportunity. I'd love to see HPE, Dell, others really invest some R&D in this new architecture and kind of build that out, really infuse AI at the edge. Last question, guys, we're running out of time. What are the things, I'll start with you, Stu, what are the things you're going to watch for HPE as indicators of success, of innovation in the coming decade? As we said, last decade, kind of painful for HPE and HPE. This decade holds a lot of promise. What are the things you're going to be watching in terms of success indicators? So something we talked about earlier is, how are they helping customers build new things? So AWS always focuses on builders, Microsoft talks a lot. I've heard Satya and Dell the last few years talk about building those new applications. So infrastructure is only there for the data and the applications that live on top of it. And as you mentioned, Dave, there's a number of these acquisitions. HPE has moved up the stack sum. So those proof points on new ways of doing business, new ways of building new applications are what I'm looking for from HPE. And it's robust ecosystem. Tim? Yeah. Yeah, and I would just piggyback right on what Stu was saying is that this is going back to moonshot goals. I mean, it's about as far away as HPEs and HPEs roots used to be in that hardware space, but it's really changing business outcomes, changing business experiences and experiences for the customers of their customers. And so as far toward that that HPE can get, I wouldn't expect them to get all the way there. Although in conversations I am having with HPE and with others that it seems like they are thinking about that, but they have to start moving in that direction. And that's actually something that when you start with the builder conversation like Microsoft has had and Amazon has had, Google's had and even Dell to some degree has had, I think you missed the bigger picture. And so I'm not saying exclude the builder conversation, but you have to put it in the right context because otherwise you get into this siloed mentality of, great, we have solved one problem, one unique problem and built this one unique solution. And we've got bigger issues to be able to address as enterprises. And that's gonna involve a lot of different moving parts and you need to know if you're a builder, you've got it or even a hardware manufacturer, you've got to figure out how does your piece fit into that bigger picture and you've got to connect those dots very, very quickly. And that's one of the things I'll be looking for HPE as well as how they take this new software initiative and really carry it forward. I'm really encouraged by what I'm seeing, but of course the future could hold something completely different. We thought 2020 would look very different six months ago or a year ago than it does today. Well, I want to pick up on that. I think I would add and I agree with you. I'm really going to be looking for innovation. Can HPE get back to kind of its roots? Remember HPE's Routre Invent, it was in the logo. Can it translate its R and D into innovation? And to me, it's all about innovation. And I think CEOs like Antonio Neary, Michael Dell, Arvind Krishna, they have a tough position because on the one hand, they're throwing off cash and they can continue to bump along and play Kate Wall Street, give back dividends and share buybacks and that's fine and everybody will be kind of happy. But I'll point out that Amazon in 2007 spent less than a billion dollars in R and D. Google spent back then about the same amount as HPE spends today. So the point is if the edge is really such a huge opportunity, this $4 trillion TAM as David Boyer points out, there's a way in which some of these infrastructure companies could actually pull a kind of mini Microsoft and reinvent themselves in a way that could lead to massive shareholder returns but it really will take bold vision and a brave leader to actually make that happen. So that's one of the things that we're going to be watching very closely is can HPE kind of invent, turn R and D into dollars? And so guys, really appreciate you coming to theCUBE and breaking down the segment for the future of HPE. Be well and thanks very much. All right, and thank you for watching everybody. This is Dave Vellante for Tim Crawford and Stu Miniman. Our coverage of HPE's 2020 virtual experience will be right back right after this short break.