 From London, England, extracting the signal from the noise, it's theCUBE covered Discover 2015. Brought to you by Hewlett Packard Enterprise. Now your hosts, John Furrier and Dave Vellante. Hey, welcome back everyone. We are here live in London. This is theCUBE's coverage of HPE Enterprise, HPE Discover SiliconANGLES flagship program theCUBE, where we go out to the events and extract the signal from the noise. I'm John Furrier. With my co-host Dave Vellante, our next guest is Yogesh Agarwal, Vice President of Strategy, sluice at Technical Market and HPE Enterprise Storage. Welcome back to theCUBE. Good to see you. Good to see you too, John, and Dave. Good to see you, Yogesh. Thanks for coming on. So let's go down into the weeds here. We just had Manishan. He said it's the end of the era, as we know it, for disk-based systems. Kind of paraphrasing, maybe checking himself against the comment of, that I kind of put the word in his mouth, monolithic. But composable is the big hot thing. Again, another buzzword, hyper-converged, software-defined, all object store, you name it, it's all out there. But composable brings a DevOps mindset and really highlights this integration of storage for application developers, infrastructure as code, which we love. We talked about this last time. What does that mean? What does it actually mean for the customer who's out there in the front lines managing the LUNs, managing all their storage? What does it mean for them? Yeah, so you really have to look at the shifts that are happening in the storage market, which we can talk about, but one of the biggest shifts that are happening, not just in storage and infrastructure in general, is customers want to consume the infrastructure differently. What customers are saying is, I like what's happening in the public cloud, but I don't want to send my data into the public cloud. I want things to be secure, but wouldn't it be nice if I had the same thing in my world? So what that means in different terms is they don't want to be dealing with the complexities of storage anymore. They don't want to know how storage achieves something. It's what the application needs with the speed and agility that it desires. That's at the crux of the DevOps revolution. And what Composable essentially is saying is, why should you have to worry about the details of that infrastructure? It's all about what your application needs. It has some service levels. It needs some performance, some availability, some security, some protection. Not magic, nothing gets configured on the fly, but there are some policies you have to set. But there's some automation going on, right? There is automation going on. And Composable, what we are saying is, whether it's direct attached or SAN or NAS, you shouldn't have to care about it. Just give us the service levels. We can compose that to make sure that the service level is met, right? And there is management infrastructure that goes on top of it, which exposes the right API so that applications can consume it. This, like in my own world, it's a big deal right now, not just in a product-centric view, right? Even when we look at enablement and how we want to engage with customers, with our field, it's all about this application-centered work. It's a big deal. Give us an example of how that renders itself into value for the customer. What's the big deal for that quantifiable benefit? Can you share some commentating on that? Is it revenue, more cash, better applications? The quantifiable benefit for customers, ultimately, is in the overall TCO because what DevOps is going to do is it's going to bring their overall operational cost down, right? Because I met with a customer yesterday, I had dinner with him. He said, I used to spend time managing the infrastructure and now he's at a higher level. He said, I don't want to deal with that complexity anymore, right? So he wants to be more effective in what he does, right? And that ultimately reflects in operational savings and the overall TCO in the environment. So Yogesh, when we first spoke was last summer, you've been here for about 180 days now. You came in from outside world. What's your impressions? You've had six months now to think through things. How are you looking at what's going on at HPE? If you're settling in, what are your thoughts? Yeah, so first of all, it's been a great six months for me, right? I'm very impressed with the leadership team at HPE Enterprise in general, but within the storage. Manish is a terrific leader to work with. You could probably tell from the last interview. But if I look below that, if you look at the rest of the leadership team, Rilaan, our CTO, he came from Ibrics, great guy, Bill Philbin, he was the NAS guy at NetApp, Philip Tamer, he was the sand guy at EMC. So it's a great leadership team. And when you look at the level below that, it's a very much of an innovation mindset, right? I mean, I came from EMC and I have to say the innovation mindset is very high here. That's number one. Number two, with the split of HPE Enterprise, I think there is a clear focus on the enterprise. There is a desire to go win in the enterprise space, right, and that's pretty exciting. It shows up in the show floor here. You don't see product-wise demonstrations. It's one HPE being spread out. My team has demonstrations on that side of the booth and they have demonstrations on the other corner, depending on whether it's more relevant to a big data solution or relevant to a hybrid infrastructure. So that's pretty exciting. But what is most exciting to me about my six months is the growth and excitement about our business. Like the progress that we have seen in our business. Like if I look at the sand market overall, that's flat to declining, but three power has grown 30% year over year for us. If you look at flash, flash growth is 93% right now year over year. We grew 400% on flash. We grew 5.9 times the size of the market growth. We had 10 percentage points share gains in the last quarter. So Antonio, in fact, joked to us. I thought startups had that kind of a growth, right? So that's why it's exciting. It's about the- How do you explain that? I mean, I'll see three part, explain why that's happening. I mean, is it because the customers were in desperate need? Finally, the magic appeared or it's just that the product market fit? Is it the pricing? What's the, why are you winning so much? I think the crux of it is the following. When customers are looking at storage solutions, they're trusting their data with it, which means three things have to come together for them. It has to meet their TCO needs. It has to meet their performance needs. And it has to have the data services maturity. What has gone on in this industry is if you look at several startups in the flash space, violin came at it from a performance standpoint, saying, hey, I'll give you wire speed for your applications. Look at what happened to violin because that vector by itself is not good enough. You look at pure, they came at it from the perspective of, hey, with deduplication, I'm going to reduce the price per gigabyte for your usable storage. It's a great thing. But that thing by itself doesn't cut it because the maturity of the data services is another big deal to customers, right? So with 3Power, what we have done is we have innovated at the intersection of these three vectors, right? So just to talk about data services a little bit, we can give you, we can start with $19,000 system, but go all the way to 15 petabytes in a single system. And with pure motion, weave it together into a 60 petabyte system. I mean, I can talk about snapshots and replications and many other things, right? And the reason we are able to do that is because it's one architecture. We are leaders in Magic Quadrant of Gartner for hybrid, but we are leaders in flash. It's the same architecture. On the TCO front, it's $1.50 per gig is what we are delivering. On performance, we can give you 3.2 million IOPS at sub millisecond latency. Like that's the kind of performance we are delivering. So when customers are getting all three in the same system, that's nirvana to them. So what are you sort of tracking? Big trends, tectonic shifts that you're looking at that are notable? Yeah, so I would say the big things from a storage standpoint that are top of mind for us. Number one, there is absolutely a shift happening towards flash, like flash. I mentioned like it's 93% year over year growth. So that's top of mind for us. Second one is in the data protection space. I see the data protection space getting redefined as well. I can go into the details with you, but let me just leave it at that for now. The third one is I see the rise of internal storage and the rise of software defined. What software defined is doing is decoupling the storage intelligence. So now you can basically take that intelligence on a server and take advantage of internal disk. Servers are getting denser and you can get lot more disks on servers. So everything is leading to a rise of internal storage. Hyperconvergence is a reflection of that. And then I would say the fourth thing that is top of mind for us, which we talked about a little bit is the overall consumption model, right? Customers are basically saying, look, I want to consume storage in a more application centric way. Not everybody's there yet, but customers are clearly saying that, hey, I want you to manage to my application service levels. Well, that's what Minish was just talking about. He's talking about the industry forces as well and around the consumption. Yeah. What's going to happen with the customers who all have that EMC? EMC Dell, obviously merging together. What are you hearing from customers? Are they holding off purchases? Are they saying, hey, we're cool? Storage is kind of like it's there. I mean, are they in migration? You guys are kind of winning. Are you getting any share on that deal or what's happening with that? Yeah. So the Dell EMC merger, first of all, it's a validation of the strategy that HP Enterprise was on, right? When I joined HP, I shared this with Dave in my last interview that one of the reason I joined HP is because it was the company that had server storage, networking assets, right? And if you look at the shifts that are happening towards internal storage, that all the wayward to go about it. So I think companies like EMC and Dell realize that hey, they cannot stay component companies anymore and so I see that as a validation of our strategy. From a customer standpoint, and even from an employee standpoint, I think there is confusion out there because Dell is a private company now and so there is, if you look at product lines like VMAX and VNX, they're declining because of the overall sand market decline, but also because products like FreePower are doing well. So Dell will have to figure out, okay, what do they do about these product lines? Where do they invest and what does it, so, and customers get worried from that standpoint. I say, what does that mean for my future? Where do I bet on? At this conference, we had invited 50 customers who are using EMC products and we introduced them to customers who are using FreePower and I can see the excitement in them and the questions they're asking. They're eyes light up. They're eyes light up on the possibilities. One of the solutions we built with some of your help, in fact, was to bring in a FreePower next to a VMAX, right? Because what happens with VMAX customers is at some point the VMAX runs out of steam. The workload continues to grow and the front end can get bottlenecked and so at that point, what are your choices? You can bring another VMAX into it but the latency issues that you had will just replicate themselves on the problem. We'll just continue for you. What we are able to do is using Oracle ASM preferred reads. We are able to bring in a FreePower next to it at 50% the cost of a VMAX upgrade and it gives you 75% improvement in IOPS and the latency is six times better. Like, that's the kind of impact that FreePower is able to drive in an EMC contract. You guys, Dave and I always love to talk about sports analogies and in ESPN, you see the commentators, you know, when someone wins the big title or the big match, the coaches that gets all the props but sometimes it's the previous coach who would dress all the players. And you mentioned about the strategy, we got to go back to ESPN, the old acronym with Dave Donatelli and the team there. I mean, that was a bet back then. It's paid off, huge. That whole idea and the server stuff, they were all talking back then back in HP Discover 2011. I remember having those conversations and so congratulations to that and you guys are winning. So that's kind of good. So I got to ask you guys a question with Manish now, the new coach. What bets are you guys making? And collectively, is that composable? What's the big bet that people squinting through and saying it's going to pay off huge downstream? So the bets that we are making are very much aligned with the market shifts that I talked about. So let me take them one at a time, right? So the first shift that I talked about is flash. And I said we are winning in flash, but it's not good enough to just win today. We have to continue to win and extend our leadership. So on that vector, the way we are thinking about it is to win in flash, we have to extend our leadership in all three vectors. If I take the TCO vector, that means how do we continue to take advantage of newer media, for example, denser media, so that we can continue to write that curve is important to us, right? On the performance curve, if you look at things like NVDEMs, NVME, memory store, 3D cross point, we are already talking about it. How are we going to adopt that in the three-part system and also in the internal storage context that will come to it? And then we continue to raise the bar on the data services front, right? So that's our path to kind of continue to extend that leadership. What is top of mind for us is this whole shift to internal storage. I mentioned that HP Enterprise is trying to be more nimble and collaboration across the various divisions, right? And going with one solution is important. We just launched our solution with scality at this conference. Jerome was on the stage with Manish. So, object storage was important to us. But we said, look, this is the future. Unstructured data and object storage are about the future. Let's attack that using the software-defined world. Scality is a software-defined solution. We looked at the market. They are very, very scalable. One of the issues with object storage has been integrated file system capabilities have been lacking. Scality has had that in their solution. And I personally spoke to many customers who gave very positive feedback on them. So that's an example of a new bet that we are making software-defined in collaboration with our server team because it drives a ton of Apollo server business for us. Same thing if I stick to the software-defined internal storage team. What we want to do is whether it's synergy, composable, whether it's a hyper-converse system, whether it's a VSA on a server, we want the same data fabric to be there. So that's a bet that we are making on store virtual. And we are saying it's a common fabric. So customers are not going to have an island. It's one thing that extends all the way on top of which you can have multiple hypervisor support and workload mobility. And that takes advantage of the three vectors you were talking about. Performance, cost per gigabyte, norterabyte or petabyte, and data services. Right. That's on the three part. That's on the three part. Very interesting. And then I have to ask you, I know we're on a time, but I've been asking everybody about this new balance sheet that HPE has. So you're somewhere in there as your shopping list. As part of your job as strategy, you've got to be out looking scouring the beaches for opportunities. What are your thoughts on the state of M&A? Obviously you're not going to talk about specifics, but. So first of all, what I would say is we are very clear on our top priorities and I'm going to repeat them again, which is flash, internal storage, software defined, data protection redefined and transforming the consumption model. Across that, we are very clear that there is only so much IP we can build. At some point, you have to have a willingness to partner. The pace of innovation right now is so high that you would actually lose out if you try to do everything yourself. Right. That's definitely a mindset we are in. The example of scalability that I shared is the perfect example where we said we could build object storage, right? We have the capability in the team to go do that. But we said, scalability has already built a great capability. Why not just take that and go to market with it? Right. Exactly. So, in a similar way, what I would say is the answer to your question is we are going to let the market and customer drive us, right? Where we see strong customer validation of a certain technology and we feel that this allows us to meet our strategic direction and get to the market quickly. We are absolutely going to be open-minded. So how many companies are on the list? Just tell us. How many companies are on the list? How many pages? How big is the page? Okay, by six months? Is it bigger than one page? In my six months, I must have spoken to greater than 20 companies because it's in the spirit of keeping an open mind. Just to understand what's happening. I think it should be a big M&A markup with the cycle we're in now. A lot of innovation in the enterprise, but a lot of overfunded, not a lot of runway, but good, good acquisition hires, if you will, large teams. One thing I want to clarify though is I know you use the word acquisition. The mindset we are in is it's a whole continuum. We can build, we can partner, we can buy. And you get the organic with Composable. It's an organic versus inorganic discussion for us. We are very much willing to partner, resell, OEM, and acquisition. You're not betting on M&A. You're doing the organic work you need to do. But what Dave's asking is, it's going to be a good M&A market. You must have your eyes on people. Well, HP's been out, I guess my point is HP, prior to HP, he's been out of the M&A market since the Autonomy acquisition. They're handcuffed. I asked Meg at one of the analysts. I mean a couple years ago even. What about acquisitions? There's no acquisitions until we de-lever. We got to get the balance sheet right. HP's got a good-looking balance sheet. Yeah. But what I'm telling you is we need to let our strategy and our market need drive it. And we are not going to operate with the mindset that it's all internal IP alone. Where needed, we want to win. It's HP enterprise and HP storage. We are serious about winning. And if that requires us to go external, we will. Like, that's my view. Well, Manish kind of laid it out. Two factors, right? You got to have a technology that you can bring in and scale. And you have to have something, and or, but it's really an and, something that makes your existing technologies better. So, those are good ROI. You guys, thanks for coming on theCUBE. Appreciate the insight. As always, really detailed, fast paced. Thanks for coming on and sharing. This is theCUBE here. Day two, coming down to a close soon. A couple more interviews left. This is theCUBE powering here in London. We'll be right back with more after this short break.