 Live from the Moscone Convention Center in San Francisco, California, it's The Cube at Oracle Open World 2014. Brought to you by headline sponsor Cisco Systems with support from NetApp. And now here are your hosts, John Furrier and Jeff Frick. Okay welcome back everyone. We are live in San Francisco for Oracle Open World 2014. This is The Cube. Live at the Cisco booth on the floor, this is The Cube where we try to sit with the noise. I'm John Furrier. I'm joined with two amazing guests here from Cisco, Jim McHugh, who's the Vice President of UCS Marketing in Shannon, Fulin, VP, and General Manager of the Data Center Marketing IT Enterprise at Intel, Intel and Cisco. Welcome to The Cube. Thank you. Thanks for having us. We're going to be all inside everything these days. So like obviously PC's now the cloud, obviously the data center. Should I talk about the Intel situation? We just talked to Kim Stevenson earlier today. She's up on stage, big fan of her Cube alumni as well. But Cisco made a big bet on the cloud. Obviously you own the data center, been in servers, going back to, you know, pre-dating servers. Intel inside is taking on a whole other meaning. Could you give a quick insight into what this is today? What's the Intel inside story today? Sure. Yeah. I think for us, the technology, the beautiful thing you hear, I mean you go all around this show, the beautiful thing, humanity is consuming more and more technology every day, right? Every device we have is getting more mobile. All the connected devices to the internet are getting smarter and now exchanging more and more data. I think for us as technology providers, it's just a great thing because it's causing us to say, how do you invest more and more in making it simple to consume all that data, right? And what we're doing is on the server side of course, we're investing a lot in increasing the performance of our Xeon products and the things that we believe are at the heart of the data center. We've done a really good job of winning in compute, but we're also now starting to see our devices get picked up a lot more in network and storage and some of the other areas where we're seeing those Xeon processors go. So I think you're seeing a ton of data. You're seeing those mobile devices drive that and that's putting a lot of demands on our compute infrastructure. Certainly Intel has been good at playing with multiple vendors over the years. Now you have a lot of different market spaces, right? Internet of things now connected to the data center. So Jim McHugh, I got to go to you and talk to you about what's going on at Cisco because there are different bets on the future, right? So UCS is a big bet that Cisco has made. I'll see it's not that complicated to understand, but for the average person in IT, they know Cisco. Cisco is a trusted brand in IT. Everyone has Cisco routers and they know what that means, servers and the gear. What is the UCS vision? What is the vision? What is the 101 for the folks about what you guys are doing with UCS? Yeah, well I think if you were listening to Shannon when he was talking about where everything is going, he brought in compute, storage and networking. And when you think of UCS, don't think of server alone. I mean yes, we are big fans of the Intel components and we really work with that and drive it, but really UCS was about bringing together compute, storage and networking. I mean it is really an integrated infrastructure enabling it. So if you take UCS plus our Nexus components that are inside of it and then the storage access, what that gives you is UCS integrated infrastructure plus NetApp is a flex spot. UCS integrated infrastructure plus EMC is a VBlock. So if you take that philosophy that started five years ago really, because we are just at our fifth birthday a little bit, we went from zero to number one in America in x86 blades in five years or number two worldwide and just growing fantastic. And the reason why that is is because we caught the market at a transition, we did things slightly different and we really disrupted and are helping grow this space. What I find interesting, and I like to get your perspective on this, is I was talking with Dave Vellante we've had Pauline Niston many times talk about Intel compute but there's different approaches. The word purpose built server or appliance was a dirty word like four years ago, like oh, purpose built us, not open. But if you look at what all the innovation is now today, you're seeing a variety of innovations on top of this abstraction layer with software where people are adding value, call it purpose built, call it engineered systems like Oracle does you're seeing what EMC is doing with Vblock for instance has been successful. You're seeing these really integrated high-end solutions happening. Is that the trend and then Larry yesterday said on the keynote kind of like bringing up the Steve Jobs thing like oh, Steve, I used to take walks and talk about how software and hardware works together to bring up this image of consistency around hardware software. Can you guys talk about this trend, what does it mean for people, is engineered systems better than non-engineered systems? Is there a non-engineered system? Help us make sense of this. We've tried to hire fairies to actually create a sprinkled dust and you don't need engineers because that would cut costs in the bill of materials but you know that's not working so we're sticking with the engineering approach as well. I think also Jim it comes down to you mentioned innovation. I think it does come down to some of the things you guys are doing with UCS. If you're innovating on different levels then you're going to capture more customers. So the reality of it is what you're seeing with cloud and the way that people are consuming those resources has changed pretty dramatically. It used to be, I remember the days, great business days of one app per server. And then we went to multiple apps in a virtualized environment on a given set of infrastructure. Now you're to the point where it's obviously multiple apps, maybe a multi-tenant environment on infrastructure that has the capability to accelerate different types of work loads, compute network storage or anything, you heard Larry talk last night about all the different things that they're doing around some of the things with their CRM solution, their ERP solution, some of the things that they are offering. Really big difference in how you optimize the underlying infrastructure to make it more usable. There's a trade-off still between being agile enough with your infrastructure and being able to repurpose it as your business needs change and having something that's actually driven to what the needs of the applications are. Larry actually made some pretty good points last night where the application tied to the platform, tied to the infrastructure underneath makes sense. You can do that without over-appliantizing things in my opinion anyway. Well I think you're part of the engineering approach. I know you were kind of tongue-in-cheek, but the reality is engineering is the thing that's driving a lot of the DevOps for instance. And not just applications, there's a lot of engineering going on in architecture. You're seeing a lot of engineering going on where people are creating these hardened tops, which is a concept Intel has had for many years. You create a processor, abstract away the complexities and let standards run on top of it. I want you guys to talk about standards and specifically the UCS story with Xeon. What is that story and how is that a standard approach and what do customers need to be aware of? Obviously it's standard base. What can they do on top of it? UCS Xeon story and that's what customers do with it. When we started UCS we looked at Intel as our sole partner in that space. We saw the roadmap they had, the technologies they were doing, the vision they went with and it just fit to what UCS. We knew where our innovation was and we saw that by working with Intel and cooperating that way it was going to be one plus one equals three approach. So we didn't need to go out and multi-source and confuse the market and do all that. By focusing we actually got more value for our customers. How about the Xeon approach? Why is the Xeon such a big part of this? Yeah, I think what we're doing is we're trying to enable a bunch of solutions that can sit on top of our products. Like Jim said, you sit there and say how am I going to deploy this technology? I might need to now increasingly go beyond the hypervisor. I need to now go to the point where I think about the orchestration solution whether that's a VMware or whether that's an open stack or a Microsoft or whatever I have to think about how I'm going to deploy an orchestration solution on top of the product. And we need to make sure for a Xeon that we run best in any one of those environments. So we're making a bunch of enhancements to the architecture itself to be able to run the absolute fastest, the best acceleration and have the most flexibility so we can support all those solutions that run on top of it. Alright, so I've got to tell this to the customer. So from a customer environment statement, what's the biggest trend that you guys see in the data center? Obviously cloud is on top of everyone's agenda and Larry oversimplifies it with a push button. Everything goes to the cloud. His cloud obviously. But clouds are complicated. So is the data center. We're still seeing a lot of on-premise design native applications in the cloud and the SaaS environment. It's essentially, I mean it's a data center in the sky or on cloud if you will. So what is the customer story on the data center? Share with us. We're seeing on-prem private cloud or private clouds grow tremendously. We saw it over the last couple quarters and we're probably seeing that trend pick up even a little bit more now. You have IT. You heard from Kim earlier. You heard from multiple folks when Mark did the keynote this morning. You heard him say, our budget's not growing but we need to do more. We need to be more efficient. And guess what? They're looking at everything as a service off-premise or as a service on-premise and they're saying how do I support the workloads that I have the most cost effectively. So to us, you mentioned mobile development. That's driving a lot of those demands. But you're also seeing the legacy run the business and the business units now have a lot more say in what technology gets deployed. And what they're saying is I want more flexibility. I want an infrastructure that can help me and can handle my needs. So that's probably one of the biggest disruptive factors. Kind of like virtualization was seven, eight years ago. You're seeing that with orchestrated cloud environments today. And I think we're seeing and rewriting what a data center is. There's been several definitions of what a hybrid cloud is depending on who's carrying their agenda. But honestly, a hybrid cloud the core component of that is still a private cloud. Actually Shannon had a great quote a couple weeks ago where he pointed out that Siri does not live on your phone. Siri, we figured out she lives in Portland, Oregon. And so basically when all that is going back to the data center. That's where all the mobile apps are going. Some guys coming through the baseball area and Chelsea market a couple weeks ago and they were just blown away about how much that is actually driven from the data center right from that component. So the data center is changing, right? You need the power of a data center on an oil rig. You need the power of a data center target it beyond that and scaled out cloud scale for Hadoop type deployments more and more. So I see it more of a spread out of the data center as opposed to like defending the data center. So let's chill down on that because obviously everyone has a data center that they kind of know it's coming or it's hitting them over the head right now. But it's mobile infrastructure. At the end of the day you mentioned mobile, call Internet of Things I'll put that in the mobile category. So there's an oil rig, great example of Internet of Things devices, remote, mobile infrastructure. Huge demand. So with that comes new apps, security holes and it's just security issues. I mean Renee James was on stage yesterday. She alluded to the fact that Renee James, Senior Vice President of Intel of the Kino yesterday, kind of teased out that this is security issues this week. We all kind of know what's happening. So security is a huge issue. Mobile infrastructure is great for consumers, ancient of IT, right? Yeah, check the box. But opens up API economy APIs into the data center. Potential security. So this notion of perimeterless security is a big thing. So what's your take on this? How is UCS and Intel positioned to make the customers going, okay we got this? Or do you got it? We approach it right from the beginning. So it's a policy based approach to the infrastructure. So you call what you want, software defined or whatever. But we've been doing that with UCS for five years. So it's basically you actually put in the policies. Here's what the compute guys need. Here's what the server guy needs. Here's what the networking guy and here's what the security guy needs. So which bios do I need to be running? What are the different requirements that I have? And you actually replicate that across your infrastructure. Then you actually take that and say okay we're going to have an infrastructure platform based approach to security. And it's not just saying whether the attack will happen. You're going to know it's going to happen and you count on it happening. And it's what you do when it does come. That you prepare for that. And then you actually say okay when it does come, here's the way we're going to survive it. Here's the actions we're going to take. We saw a demo you guys were doing a little bit of that last night. More and more the approach. Denial service is coming your way. And we see it all the time. And so we keep going that way. But I think if you take the policy based approach, it's not just a pure hardware approach anymore. And you have the flexibility and drive what are the requirements. Then you can start talking about okay, let's talk about the applications. Let's talk about the data driving the applications and how we're going to secure this across everything. Yeah the attack surface also changes, right? I mean if you think about it, you talked about the mobile environments and where people are going. And some of those breaches that you've heard about that came out through I'm going to go in and access this system through the HVAC system is the password that I'm going to get into. Then I'm going to then get admin access. And then I'm going to take that. So you have to think about it holistically like Jim was saying a little bit. And then the idea that you would want the ability to isolate. So you would want smaller pockets of potential attack surface. The ability to isolate. So some of the things that I know our companies are working on together is figuring out how do I virtualize a network such that I can then contain that traffic or my possible attack surface such that if I do get some kind of breach it is isolated to one particular pocket. We need to then go in and say from an engineering perspective, we need to go in and enable all those virtualization capabilities to happen to be able to virtualize your network to be able to minimize that attack surface. So it's a stack issue. It's up and down the stack. It's not one layer of the stack. It's all the way down to the bottom of the stack up and down. So nothing is one element anymore. It's not just about the hypervisor. Those days are long gone. It's application to what is the right platform for that application to what is the right configuration infrastructure underneath of it which is the right security process with that. You've got to bring it all together. And at Testation, right? I want to be able to move a virtual machine to a trusted server. How am I able to do that? It's everything from the software to the hardware. Well you guys are both pros. We're excited to have you on the Cube here. I also want to thank Jim for allowing us to come in the Cisco booth. Really appreciate it. So let's kind of change gears a little bit. Since you guys are pros I've got to bring up and get your perspective on this whole software eating the world theme that's going around. Mark Andreessen wrote this article months ago about software eating the world. It's getting a lot of traction. So I want you guys to answer the following question. What is software eating IT mean? So if software is eating the world, I want you guys to talk about software eating IT. If you could write that blog post what would be the content? What does software eating IT mean? Not that we ever wrote that. But if it's eating the world, what's the IT piece? Well software eating the world actually think data is eating software because data is the lifeblood of software so it's not going anywhere. The purpose of the application is actually to put the right data and decisions and the information in front of people. So if you want to go with that software eating the world I think people believe it is a hardware alone is not enough. You need the flexibility of software but software alone is not enough. I come from an application standpoint to software standpoint. If you do something where you have to manage everything separately, have an overlay and underlay and all this kind of component you're creating more headaches for your customer. So it is literally the idea that software plus hardware as an integrated and understanding the trade-offs and where one leads and one doesn't is what's going to drive the world. And data key is the key part there. Without data I mean it's all just a bunch of blinking lights and applications sitting there. I mean. Software eating IT. Is it the analytics? Is it just automation? I haven't seen a lot of software that runs without hardware. But I do believe that there's a concept of innovation and where people are innovating and I do believe you're seeing a lot of innovation happen at the software level. I think it comes in concert with innovations that you make on the hardware side. So for us you think about how you could potentially use software to change a business and you are seeing, you saw some of it last night with Larry you saw some of it in discussion with all the IT CIOs today that Mark had on stage. They need to innovate and find new ways to get revenue from customers and to harvest that. They're looking at all the data that gets produced. What do I do with all that data? So from a software perspective they're sitting there saying how do I modify maybe some of the systems that I had some of the procedures, some of the processes that they had within IT to capitalize on being flexible, rapid changes and deploying software on a more frequent turn. So I think we're seeing some of that. Okay so then I got to ask you the Nick Carr questions. Dave Vellante and I always like to beat on Nick Carr. He wrote the book in 2004. IT doesn't matter. Right. Okay that again that's 2004 so clearly he's wrong on this but we're now 10 years later IT does matter. His entire thesis was wrong. Will IT break through from being that department to being negative throughout the company? Or is it going to look like something different? What do you guys think? I don't think it's a will. I think it already has. I mean you have entire companies that are being spawned startup or otherwise that are being spawned with an IT forward model. You think about I take an app, I click, I get a car that comes to pick me up and drop me off somewhere. I pick an app and I click and I get a room to stay somewhere in this city. Those are IT companies that deliver a service. Also we're seeing it on our company. The way that we interact with customers, you heard from Kim earlier, the way that we start to develop some of the new products that we have, IT is central to that. Without IT we'd be nowhere. So for us it's already happening. So I think really what's happened is you're starting to see it already. Baseball becoming an IT company. You guys gave the example last night of WestJet being an IT company. So you can say, and I think in 2004 you had to make the shock, pull out the defibrillator, say the world's changing, scare us all, IT's going away. That was 2004, 10 years ago. I mean look at what's happened since then. You two wasn't around then. We need a cycle to go through. So we have to scare things. Shadow IT coming. It's going to change everything. We don't need a line of business that's going to run everything. I think IT is permeating out to everything. And I think you're seeing the smart IT guys are the benevolent brokers guiding the rest of the organization guiding it down into it. Those are the guys that are actually leading and becoming the example. And the ones that are successful are moving fast, adding value. Exactly. So last question for you guys. I know you've got to go over to the inside here. The next one is, okay, if IT will be around for a while, what does it take for a company to be successful to shift the cultural game for hiring new types of people, the young kids. What's that profile? The young guns coming. I say young guns. I mean anyone under 30 basically. That's the young guns bar. Under 25. They walk in and say, DBA for Oracle? I don't want that job. I mean it's the worst job on the planet. I think it depends on how they where they came up and how they deploy services. You're now starting to see people say, I'm going to do, I'm going to call and as a service capability, I'm going to program thinking cloud like. You think about all the scripting languages. You think about, they don't necessarily grow up writing C++ code. They're certainly not doing Fortune anymore like we might have done in the past. I think the way that people are programming and deploying services is just changing dramatically. So I think what we need to do is we need to go into the universities. We need to have education programs around what's possible. How might we be able to take advantage of this cloud revolution that's happening because we do believe it's going to change the way that people deploy every service. Now, a company that's more IT centric or focused, you're going to spend more time putting more capability into your data. There's your data scientists harvesting some of your social data. Maybe some of the companies aren't so IT focused and maybe they aren't as in tune with some of those deployment models. So we think you're going to have a little bit of both. I do believe it's a revolution. You've built a lot of your training. You've built the industry. You've made people's careers. In 2004, when IT doesn't matter if a book was released, you had a curriculum up and running. So what's the new refresh Francisco? Completely refreshing all that curriculum. Taking people to the next level. Taking all our network engineers and helping them go to the next level of skill. But what we have is several generations to deal with that. We're re-skilling the guys that are out there, the guys that are mid-flight and then also actually bringing in the new ones. I think what's going to be the difference there is they have a more business sense. It's easier to use a lot of things. I mean think what it used to take up infrastructure during the dot-com days. I mean you'd have to set up all these big things and get it going. Now it's much easier for a lot of these people to do it. Applications are easier. Policy-based approach makes it easier. And frankly, a business sense and being able to work with a data scientist or actually help you find those insights is the new skill. Jim from Cisco, Shannon from Intel. Final word. I'll give you guys a quick bumper sticker. Share with the folks out there real quickly. Why has this show so important this year? What's the big disruption happening this year at Oracle Open World? I think for me, Cloud has been the big disruptor for the last couple years. I think it's becoming more real. I think what you're seeing out of Oracle is you see a combination approach. Some call it hybrid, right? But what am I doing for software as a service? What do I do on-premise? And how do I get from where I am to where I want to go? Flexibility-wise, you look at this show, there's so many developers and there's so many people that are thinking about that model. For me, that's why it's important to be at a show like this. I think it's good to see Oracle's continued the Java 1 down the street so you've got their developer base there. A lot of the exciting stuff is going on stage. I sit back and I think Larry even called out Cisco as a competitor to his ex-align. But what people have to remember is I think it's only about 30% of Oracle runs on Oracle or old-sign hardware. It runs mostly on UCS and some of the other guys. So, all that discussion about the platform being important about how the platform and the application go together, we're right underneath that sitting world benchmark records and we're just happy to see the focus. And I think Larry said they're just getting started on Cloud. We're happy to join him on that journey and help him build it out. Jim McHugh with Cisco, Shannon Poland VP of Jada Center, GM at Intel. Guys, Intel and Cisco, here inside the Cube, we're live in San Francisco. We'll be right back after this short break.