 One, this is theCUBE, this is SiliconANGLE and Wikibon's flagship program. We go out to the events and extract the ceiling from the noise. I'm John Furrier, the founder of SiliconANGLE. And I'm joined by my co-host Dave Vellante, co-founder of wikibon.org. And our next guest is Seamus Dunn, who's the vice president of cloud and data center. Hybrid cloud, you're the guy, you're in Ireland. We're just talking about Ireland. You do a lot of traveling. Welcome to theCUBE. Thank you, John. So I'm actually writing a blog post here. I just posted one earlier. But the title of this blog post that's about to go out is called Hybrid Cloud as a Way of Life. And that's sourced from Scott Weller, Craig Nunez, David Scott so far, just our Antonio Neary in the hall as well. Just chatting with him from the server group. It's all coming together in the cloud. Big data and the cloud of the two big exhibits, the showpieces up there, it's where all the action is. So tell us, what's going on with you and the hybrid cloud? Tell us what your role is and what you're up to. So we're doing a number of things that largely in our services business we've been focused in the data center, capturing that data center. We have pretty well known, pretty high enterprise grade support experience in the data center. And in fact, you'll hear today we're doing a lot of stuff, a lot of flexible capacity service where we're taking public cloud agility or flexibility and we're using some financial instruments and some service capabilities to give you that flexibility in your own data center. But we're also then thinking about and hearing a lot from customers about why is it so difficult to go to the public cloud? A lot of people are doing it, but there's a hesitancy particularly for enterprises because it's a little tricky to get set up. But even when you do get set up, it's pretty easy to consume it. So it's a good experience. You get all the agility, all the business benefits, the lower cost. But it's not so easy to manage. That's not easy to govern. What is the biggest, what are the biggest issues you hear with customers? Because there's no debate cloud is here way beyond the hype cycle. We're into real architecture, no more POCs, no more tire kicking, real deals are going down on-prem and then hybrid and then obviously public, whoever knows, kind of segmentation by now. But what are the real issues that you're finding with customers? And what specifically makes hybrid cloud different from some of the things that say Amazon Web Services is dominating the field on on the infrastructure as a service market, which is a completely different use case. So compare and contrast and talk about the differentiation between a public cloud and then the hybrid and private. So the thing that most customers say to us is, help me, you know, that really there's, it's early stage, it's, I can put some workloads out on a public cloud and it's a great thing. I love the public cloud vendor you just mentioned and a number of others like around. That's a good thing. What they're saying is, I got to use that sometimes. I got to stay on premises sometimes. Sometimes I really want to take it off premises, but there's latency and security. I don't want to put that workload off. So help me manage and figure out what my strategy is first of all, but even when I've put it in place, help me if something's going to go wrong. If it actually stopped things from going wrong, would you stay with me? That's the sort of help they're looking for. When we say hybrid cloud support, to us that's, we're going to help you with your public cloud. We already are leaders in helping you in your data center. And really what we're doing is we're putting that whole known enterprise grade help and support for you together into one package, right across every deployment in a hybrid cloud. So Meg Whitman said, we build it, we back it, and we service it. Okay, so take us through that. I see you make clouds. So now you guys are cobbling together, so I don't say cobbling together. Sounds like it's like, you know, you put this stuff together, you can, you can modularize it, very much multi-vendor. And unlike Amazon, you can, although you can cobble that together, you bat, you make the cloud for the people, okay? And you back it with service and support, and you service it when they need help. So take me through the help me in each phase, making it, backing it, and servicing it. Yeah, so if we take on premise where, you know, we've come a long way with that and you'll probably see from some analysts that in the private lab space on your premises, HP is in a leadership position. We've a long-standing support capability to help you with your strategy right to the life cycle. Deploying it, develop your strategy, putting it in place, supporting it. And we've built up centers of excellence and experts around our on-premise cloud system. We also have our public cloud team who are developing an enterprise-grade public cloud. And what we're really doing as a next step is unifying that help and support experience. We're going to take what our public cloud team do and we're going to look at the tools and instrumentation they use, and then we're going to integrate that with our current centers of excellence for on-premise cloud support. And we're going to make that feel like one experience for you. And even though it's different deployments and different hybrid IT, we're going to be able to help you manage it, govern it, support it, prevent it from falling, knowing which workloads to put on the cloud, knowing when to take them back, knowing how to manage that whole thing. So we have a known on-premise data center, enterprise-level support capability. And really what we're doing here as a next step is taking that known experience for our enterprise customers and then bringing it to the public cloud team. I mean, you're essentially describing what a lot of people talk about as the cloud broker model, right? Should you talk about, first of all, confirm or deny that? What does that sort of cloud broker concept mean to HP and specifically, what does it mean for a customer? Yeah, I would say a cloud broker is like one little element of what I'm trying to describe. It is certainly an element of cloud brokering. Broker by its nature is saying, I'm kind of an aggregator, I'll give you the different options and I'll recommend one for you. And there's an element of that. And then I'll get out of the way. And then I'll get out of the way. No, we're talking about a relationship, we're going to stay with you. What we're finding a lot of customers say is that I can get to that, I can find a broker, I can make my choices, I'd like help with my strategy. But what a lot of people are saying to us is I would move faster in the cloud if I had somebody with me for when something happens or that would give me some advice before it happens. I need- So that it doesn't happen. So that it doesn't, yeah, preventive, you know, prevent problems. But it's basically exactly what we do in our data center, in the data center for customers today. This is exactly what we do. And they're saying, we don't have anybody that does that for us with a public cloud experience. Yet it's a hybrid world. Why is that different? I need somebody that's going to give me a support, be there for help, have the expertise, be able to understand each of the different deployments in a hybrid model, and be able to help me in a way I know. Plus, you'd be one person. You know, I don't want to have to- We've already found in a data center the way it's scaled out, but up the stack and across with different vendors that they had so many people they wanted to call in the data center. I got to call my software guy, my hardware guy, my other hardware guy. It's like, we've already found with data center care for the last two years, we've almost 2,000 customers that are really just love the service. And it's really saying we have the expertise right across the data center, not just with our converged infrastructure, not just with our software. We're really saying we're going to do that for you and include all of the hybrid elements. We're going to help you in the same way with the public cloud. That doesn't have to be a separate thing where you go and do that separately. We're going to bring our expertise to bear for that. What kind of skill sets are you bringing to bear to help customers solve this problem that perhaps you didn't have in your portfolio five years ago? That's a great question, because that's the nob of the matter. The first thing we're doing is working with our public cloud team. They have their support centers and when you go to them and they speak with their customers, the ecosystem that they interact with, what their customer systems admins do, is very different to a private cloud or an on-premise cloud. They monitor the knock and they provision and move workloads in a different way. They need to talk with different partners in the whole cloud ecosystem in a different way. There's certain instrumentation that we're working on now with our public cloud team and that's where we want to make sure the experience is best with HP's public cloud. Later we'll move on to the other service providers besides HP. But the different capabilities are really around the type of help that the systems administrators and IT managers, our customers have need. They're saying, I'm an expert in my data center but I don't know how to administer this public cloud. I don't know how to even monitor the performance of my application. If I don't think it's right, I don't even know how to monitor it and see it. I'm not sure who to call. I'm not even sure if it is a public cloud thing. Maybe I should move that workload back in. If I do, what'll happen? So we're bringing both test and instrumentation to bear on that and also training and expertise. So we're taking our private cloud experts, we're sending them down in Austin and with our public cloud team and we're co-mingling them so they can develop that set of expertise when they get a first call and then we route it in the right way. So was that? Yes, absolutely. And then a similar question for the customer. So you got cloud which is more agile and theory simpler. You got all this converged infrastructure coming in so you're reducing the amount of hard core heavy lifting that IT people have to do. So how are their skill sets changing? And it sounds like you're doing some knowledge transfer. Are you seeing customer skill sets changing or is there explicit training and deliberate training going on? Are they moving fast enough in your opinion? They're moving but they're not moving fast enough but it's more because whereas the consumption of your cloud services is easy and simple and it gives you the flexibility and agility you want. The manager name. Yeah and it's not unlike what we saw when virtualization really took off a decade ago. How to manage that? You got the great benefits. You got flexibility, agility, you got all the total cost of ownership benefits but you also got a gift of complexity and people said help me. And we did see a lot of those smaller organizations set up as like kind of managed services guys who've died off and we're seeing a sort of a same trend here with the public cloud. It's like wow the benefits are superb but there's all this sort of complexity stuff I didn't expect and it worries me and it's causing me to move slower because I want to be cautious and mostly if you're going to move a critical app to your enterprise, to the public cloud, even if it's looking good and you can use it well, you kind of have in the back of your mind what if something goes wrong? Is my service provider going to help me in the right way? And the answer is not most of them don't. And the fact is it's a hybrid cloud. I'm not really managing it separately. I'm managing my IT as one as a hybrid model and I'm trying to deliver the same service level to my business. And I think there's that hesitancy moving to the public cloud. I think it would move faster if they had a trusted partner with them that would say that's the one guy I'm going to call. If I get into trouble it's them and they're advising me all the way. People will move faster. We're convinced of that and that's what people tell us. So, James, where are you having success? Maybe give some examples, maybe specific types of customers or if you name customers, that's fine. I understand if you can't. But share with us some sort of proof points. We talked about this a number of months ago and we said we'll run a pilot, maybe you could call it with some customers. The first thing we did is we said, let's make this work well where HP is successful today with our private cloud offering. So we took the thousand or more customers we had with cloud system who are using it successfully and we looked at them. Then we looked at our HP public cloud customers and we've been doing some pilots with a select group of customers in a few different segments. I can't really name customers in there because that- You blow the deal. But what's been interesting is a number of those customers from financial services to manufacturing and news media, they've wanted to be engaged with this because they recognize that if HP could do this, this would really help me. And they know that because we're already delivering an on-premise solution and experience and relationship with them through data center care and cloud system and we see what they're doing with a public cloud where it's the public cloud for the enterprise. So if they can marry all that together, we'd love to see how that works. It'll give us confidence to move forward. That's the real proof point that we're seeing. And it's great when you have customers that really want to test it out with you. So we're seeing a few things, mostly on the skills and tools instrumentation that we're refining. And we're pretty happy with where we are right now. I mean, we're ready to go out with this. Right now it'll really just be with HP's public cloud customers. And then we're, you know, the next number of months going to expand our partnerships with some of the other biggest service providers. What's the biggest mistake you see people making when they start embarking down a cloud journey? Well, I think it's classic. You probably know the answer. It's like taking the time to have the right strategy in the first place. Which workloads, when, for what reasons, which service provider, it's a fire ready aim. You know, that's the key mistake. I think there's also many who are like pressured into moving along with the cloud, go for some big names, move workloads out and then really haven't thought it through and discover what was the problem. It didn't quite work and discover I really don't have the relationship. I don't have the partnership. So when it goes wrong, it's, you know, even if it's a small problem, but there's been some bigger outage type problems and I think the mistake we see is really, you didn't really think through the strategy in the first place of taking the time to have the right strategy in the first place and then who's going to help you as you implement and deploy on that journey. We see quite a number of customers who really regret some of the moves they've made, which is causing hesitancy for them, of course. You know, those experiences make you think twice. Well, you've got the advantage of a full value chain. You've got the infrastructure. You've got the cloud. You've got the services. You can sort of package that all up and mix it and match it. It's early days for the cloud, particularly the public cloud. So there's a big gap between sort of going from test and dev where you're a developer and you can provision infrastructure to actually putting mission critical apps in the cloud. But do you think over time, I mean it seemed that market forces would dictate that an ecosystem would develop whereby third party providers are sort of mimicking what you're doing for the public cloud. Do you see that emerging yet? Will you actually affect that outside of sort of HP's own sandbox? Have you thought about that and what's that? Yeah, we've thought about that a lot and it's a great question. There's a couple of things. You're right. We have the full value chain. We've got assets and industry leading assets right across that value chain. On premise, we can give you public cloud dynamics, which are private cloud because of our financial services teams. We really have it all and we're in a lucky position. And we're going to take advantage of that because that is a huge benefit to customers. But there are players already who are taking one aspect of hybrid cloud deployments and they're building expertise and partnerships around either the public cloud that you mentioned brokers earlier. There's also managed service providers and consultancies that are being built up and there's a large ecosystems being built up around that, especially on the public cloud, also in a private cloud, but they only address pieces. Now we'll partner with some of them. HP is nothing if we're not a partnering company. It's like it's in our DNA. So we'll be selective about who we partner with, both service providers, instrumentation and tooling to generate our IP. Our channel is key to us. So there's partners that we will work through and with to deliver our services. So yeah, there's different elements of an ecosystem being built up. We're selective about who we want to engage with us on that, but we want to leverage our broad asset base. It really isn't anybody that has the assets that Hewlett-Parkwood has right across every element of a hybrid cloud, a set of hybrid cloud deployments. And when we add in our services divisions and our services capabilities, both consulting and support, the managed services really, yes. HP software is asset. There's nobody that really has that breadth and we need to put that together because that's really what people want. That's really what customers are demanding from us. Somebody to help us with every aspect of this in some consistent way. So when you sell an engagement, who are you typically talking to? Are you going at the CIO level? Is it the head of infrastructure? Is it the head of applications, combination? That's another great question. And obviously, what we're finding is, and again to our advantages, you have to deal with all of the above. So we're in a number of deals right now about what our flexible capacity service, our data candor secure service and our hybrid cloud support service. And we have to talk to the technical, the VP of IT. The technical solution has to be right. But we're also talking to CFO because this is very much about the financial model. He wants agility. The CIO is also, he wants agility. He wants to be able to service his business. The CFO is looking at total cost of ownership. A lot of people want to attract it to the OPEX model versus CAPEX and the big investments. So we really can't close the deals we're talking about unless we have a conversation with the technical resources, with the CFO and his team, with the CIO and his team or her team and then the purchasing guy that closed the deal he has his tasks about what the contract should be because we're talking about engagements over a life cycle. So the answer is all of the above. Yeah, so I'm going to come back to the CFO. So the interesting thing you mentioned, I think you call it your flexible capacity service. Yeah, so that's interesting to me because in theory, on paper, you would always say, think anyway that renting is more expensive than owning. But the one gotcha is the fact that when I own, I have to over provision to worry about peak. What did somebody say, Scott Wellard said? I got to build the cathedral for the holiday or for Christmas or something. He uses that analogy. So that was good. But your flexible capacity service knocks that delta down. So basically essentially what you do is say that owning is ultimately going to be cheaper than renting is what that does. Is that right? Am I understanding that right? No, I don't think it's as simple as that. And it's interesting because when we're having the conversations about public cloud or public cloud dynamics and financials, but on premise, depending on the folks I just talked to, they don't get the nuances or not. Most of the CFOs we talk to get it pretty fast. It's not just, is that cheaper and this cheaper? Because first of all, it's cheaper right now, but it depends on what you do next. How clear are you and what you're going to do six months from now? Because if you're really making a CapEx investment, it may feel cheaper now, but not so much in six months. You're making a, and with FCS, it's not just a rental decision. It's like it's a service. We're supporting, managing, guiding for years. We're making each decision as a investment. Sorry, I'm saying renting is the public cloud. Oh yeah, yeah, yeah. That's the rental model. Right, owning would be the on premise or hybrid model. But the gotcha in the on premise model is that capacity delta, my over provisioning. Oh yeah, if I have to over provision by two X, then my owning savings, if you will, goes out the window. It's not worth the CapEx, so the FCS allows you to say, we're going to match demand with supply to the extent that you can provision and charge back or charge and manage. You should, in theory, be compressing that gap with FCS, almost always be less expensive than a rental option, i.e., public cloud option, I mean, unless you're just gouging customers. Yeah, over a term, over a certain term, that's for sure. But you just described one of the keys to FCS. There's others. The speed of acquisition that you can add, capacity, we've got a contract. By joint agreement, we monitor the performance and utilization, and then trigger capacity adds. The whole procurement cycle's changed. It's a joint decision making in a contract at the service arrangement. So you've changed your whole procurement cycle, too. The assets can be flexed down, too. So it's a hard concept for people to understand. So I can have assets owned by somebody else. On my premise, I'm going to not utilize, I don't pay for them. That's like, wow, that's cool. That's not, it's not as flex directional. It's not just once you add, you're stuck with adding. You can subtract. Exactly, and we refresh it. You've always got the latest gear. You've always got the best gear. It's been managed and designed to go together. There's multitude of advantages to FCS. When you want those dynamics that you get with a public cloud, but I really can't take it off my premise, it's industry leading to us. Excellent. All right, James, we've got to go. Thanks very much for coming on the queue. Thank you, Dave. Keep it right there, everybody. We'll be back with our next guest right after this. We're live from HP Discover. This is day one. I'm Dave Vellante with John Furrier. This is theCUBE. theCUBE is a live mobile studio. When you bring it to events, and we say we extract the signal from the noise, what we do is we get the absolute best guests that are at those events. 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