 Live from London, England, it's theCUBE. Covering Discover 2016 London, brought to you by Hewlett Packard Enterprise. Now, here's your host, Dave Vellante and Paul Gillis. Welcome back to HPE Discover 2016 in London, everybody. This is theCUBE, the worldwide leader in live tech coverage. John Knightley is here as the Vice President of Industry Solutions and Alliance Marketing at Hewlett Packard Enterprise. John, welcome to theCUBE, good to see you. Thank you for having me. You're welcome, long trip from San Francisco for you. It was, but we're happy to be here. It's beautiful weather here in London. Oh, it's great, isn't it? It's clear skies and big crowd, 10,000 plus here. I could see the audience is engaged and people are excited about the new Hewlett Packard Enterprise. One of the themes that you guys, of course, are hitting on is digital transformation. Everybody's hitting on that, but what does digital transformation mean to Hewlett Packard Enterprise? So we really see the world that we're living in as a world where everything increasingly computes. If you think about it, whether it's your car, your home, the cities you drive through, the factories, hospitals increasingly compute and software is embedded in just about everything we see and everything we touch. And that is enabling industries to move at a speed that they haven't moved before to understand their customers better than they've ever understood their customers, but increasingly also putting strains on the IT infrastructure that supports the enterprise. And so in a world where everything computes, we see digital transformation as happening. It's happening in every industry. It's happening at different speeds. So you think about things like music. It's already happened there the way we consume and purchase music. You think about industries like automotive where people are talking today about connected cars and five, 10 years down the road about autonomous vehicles. If you're an automobile manufacturer, there's a lot to grapple with in terms of what does that digital experience look like for your customers? How do you prepare for that? How do you take advantage of internet of things and digital to transform your whole manufacturing process? And then connected to that, if you're in the insurance industry, I was talking to a chief technologist of one of the major insurers, they're grappling with what is ensuring people for auto insurance mean in a world where you're moving to autonomous vehicles? Are you insuring the passengers? Are you insuring the car owner? Is the car owner a consumer? Is the car owner a company that's going to have a fleet of vehicles that are sort of available on demand? So regardless of what industry you're in, there's disruption happening and as a result, enterprises need to take advantage of the latest technologies to transform themselves. Well now when you talk about transformation, digital transformation is on the verge of becoming a buzzword. I think if you do a search on Google Trends, you see the spikes up like this. Can you make this real? I mean, are there examples of customers whether named or unnamed that you can cite that really have transformed themselves and tell us what they did? Yeah, so it's a great question. We did a survey actually and if you go to hpe.com slash nxt, you can read the results and actually take a benchmark yourself. It's called our digital transformation index. And in the survey we found that about 80% of companies see digital transformation as a reality for them today. And of that 26% basically see it as a competitive weapon and then the other 54% see it as doing what they do better. How do they digitize to improve their existing processes? There's about 20% that are still on the sidelines with their arms crossed waiting to see what happens. And by industry you're going to see varying results. So forward thinking industries like financial services, telecom, retail, they're above 85%. The ones that are leaning back are ones like public sector at 63% or transportation. So what does it really mean in those industries and what are they doing? Really we see it bucketing into three areas. So one is how do I take digital technologies and my understanding of my customers to improve customer experience. So a great example of that, one of our customers is Levi Stadium which hosted last year Super Bowl in the US. 80,000 fans, we helped Levi Stadium, Wi-Fi enabled that whole experience together with a mobile application that will allow you to buy your beer and hot dog from your seats and get it delivered to you in your seat, taking advantage of location-based services, as well as be able to navigate and find the right merchants, let's say, for your souvenirs through location-based services on your mobile device. So that's an example of customer experience. Second bucket around digital transformation is really around how you digitize existing products and services and wrap are those physical products and services with a digital experience or if you're in an industry like financial services, it's really about just enhancing the digital services that you already provide. So take an example, one of the customers we work with is a theme park operator and basically what they were able to do is transform the whole experience of families visiting the theme park with a device that the families could wear that would basically, they could wave as they go into a restaurant, they would know who the family is, what their preferences are and that they already have a reservation on tap, things like that. The third area is really around taking digital into improving your core business operations, whether it be manufacturing or supply chain or logistics. So a great example there is really what's happening around industrial internet of things. So how we're partnering with companies like GE Digital and national instruments to be able to bring intelligent computing to the edge of the enterprise and do things like predictive maintenance of equipment failure on the shop floor or an oil field or things like that where downtime can cost millions and millions of dollars. I saw a Gartner survey, I want to say yesterday on Twitter and it looked like it was a survey of IT professionals, CIOs and the IT function. And the question posed was how much are you spending of your budget on digital transformation initiatives this year and two years out? And it was relatively low because you go to conferences like this, hearing conversations like we're having here, it seems like everybody is looking at digital transformation and the figures were like maybe 20% of the budget, maybe grow into 28%. I was shocked at how low that was. So I was struck and said, well, every organization I talked to was spending money on this. So is it just that the IT function is not in charge of that initiative or am I missing something? Is it just all hype? It's a great question. I mean, the way we see it is that most of our traditional enterprise customers are dealing with decades of legacy technology that they've built up over the years or technical debt as we sometimes like to call it in the industry. And so if you think about it, most enterprises are stuck in this traditional pattern of 80% of the IT budget going to kind of maintain that existing technology and try to keep it up to date and only 20% going innovation. So probably hidden in that survey that you saw from Gartner's is some of that traditional challenge that money's locked into those existing systems. And so one of the things that we're really focusing on with the new Hewlett-Packard enterprise is making hybrid IT simple, helping the CIO and the central IT organizations dramatically modernize and streamline their traditional IT private clouds and even their use of public clouds and be able to expand those three kind of compute platforms to provide a much more agile infrastructure to deliver all these new apps and services that are going to power digital transformation. So really hopefully start to take the numbers down of the budget that has to be put aside for keeping the lights on and free up more for innovation dollars to transform. This digital transformation theme has been picked up. I mean, Boston Consulting Group has got it. McKinsey, Accenture, all of these big consulting firms are saying that they're going to accomplish this. Why would a company go to HPE for that goal? It's a great question. So first of all, let me make a point and with the new Hewlett-Packard enterprise we're much more focused, we're leaner than we've ever been before and we are really an ecosystem play. And so what we see our part in the ecosystem is really being really great at three things that are going to be sort of, if you will, powering the digital transformation. One is simplifying hybrid IT. So really helping deliver that platform across your traditional IT, your private cloud, your public cloud environment to power your apps and data workloads. The second area is really around powering the intelligent edge. What we mean by that is really outside the data center, outside your cloud environment, where you're interacting with customers, where you're making things, right? So your shop floor, your retail environment, where you're interacting with customers, bringing together the things that are there, the internet of things, the people on their mobile devices and the applications that are there to power new experiences. And then the last is really the expertise to bring this together to make it all happen. And that's really through our traditional services organization that has been doing this in different industries around the world. Where we see kind of an ecosystem play happening is partnering with those, some of the system integrator and advisory firms that you mentioned that are really good at business process. So they might know within financial services or within telecommunications or within retail, here are the core processes. They can bring the advisory capabilities to advise those end clients on process optimization and process change and business model change. We will help actually deliver the platform to speed that up and make it more agile for the end customer. To me, the partnering piece is so critical now for HPE, especially given the two major spin merges that you've done with the EDS component, and now going to CSC, and the software business going to MicroFocus, those are two capabilities that when you think about digital transformation, you think about large systems integration complexities that you could handle with that capability, and things in software, making SDKs available, reaching out to the developer community. Those two major components are now becoming largely partners and not your only partners. But at the same time, you don't have that vertical integration capability. So what specifically has, I know it's early days, but what has HPE done or will it do to facilitate those types of partnerships? Sure, so I'm very bullish actually on the new platform that we've got. We still have a software development team, 3,000 developers strong, and what we're doing there is really delivering on our vision of hybrid IT with our HPE OneView platform, our Helion cloud platform, and basically that's an API-driven set of platforms that allow you to plug and play in the latest, greatest stack elements, whether it be Chef and Puppet for DevOps, things like that, whether it be Docker for containers or Mesosphere and those sort of new stack players. We've got a very open stack now for being able to integrate best of breed players into the environment, as well as then services expertise to make that all work together. So, you know, that's number one. The API, open API is to be able to take the software layers from our partners and then integrate it seamlessly into our stack to be able to power the right mix of infrastructure to power that application or data workload. Then the other one is really partnering with services firms who can do the advisory work. And so, of course, ESCSC will remain a very important partner for us, but we're also playing very nicely with a lot of the big name integrators and advisory firms out there as they have deep industry expertise that they can bring to bear on some of our clients' deepest needs. Our previous guest was Alistair Winner of VP of Technology Services for Computer at HPE. Where does, who leads the project? Do you typically come in after Alistair has been engaged or do you lead that sale? So, Alistair, technical services is our main services arm. So, we would work, you know, in a case where we're working with partners, it really depends. So, there may be cases where we're leading and the client, because of our expertise, the client is entrusting the project entirely to technical services. There are other cases where maybe an advisory or SI is already working with a customer, maybe on business process design, and then brings us in to help finish that out and build, let's say, a private cloud environment to deliver on the applications that have to be delivered for that product. So, who drives digital transformation these days? Do you see it as a C-suite thing? Is it line of business? Do you see it as a C-suite initiative? So, you know, really starting with a CEO who's mandating, you know, we have to change. And, you know, Jamie Dimon, CEO of JPMorgan Chase, wrote a letter a year or two ago to shareholders about Wall Street is, sorry, Silicon Valley is coming. Really around the rise of fintechs and how fintech startups are potentially going to eat banks lunch if they don't, if banks don't sort of transform digitally. And so, we see that happening in just about every industry. And so, it's really a CEO-driven initiative with Chief Digital Officer, Chief Marketing Officer, CIL, all at the table to help make these projects come to life. And I love the conversation about the new stack. I mean, you need a new stack in order to service these new customers. I think Bobby Patrick is coming on later. He tweeted yesterday this compendium of logos of the new stack. And I was trying to pick them, okay, there's Docker, so we're going to unpack that with him. But, I really appreciate you coming on theCUBE and sharing your perspective. So, congratulations. It's a pleasure to be here with you. I like the deal. Okay, keep it right there, everybody. Paul and I will be back with our next guests. theCUBE, we're live from HPE Discover 2016. We'll be right back.