 in Massachusetts. It's theCUBE covering HPE Big Data Conference 2016. Now, here are your hosts, Dave Vellante and Paul Gillan. Welcome back to Beantown, everybody. This is theCUBE, the worldwide leader in live tech coverage. Mike Schuetz is here, he's the general manager for cloud and enterprise of product marketing at Microsoft. Mike, good to see you again. Thanks for coming on. So good to be here. Thank you for having me. Yeah, so good show, you know, intimate, small new chapter in the partnership, the long partnership between HPE, now HPE and Microsoft. Talk a little bit about your presence here and we'll get into it. Well, it's great to be here at this HPE event. It's a real milestone in the partnership that we have. Last year we announced a partnership across hybrid cloud. We really share the vision that customers are going to be in this hybrid cloud world for a very long time to come. Customers are betting with their feet and moving to the cloud really rapidly. But they've got a lot of existing investments and applications and data and their existing environment on premises. And we really are interested in helping customers harness all of that. And so that was the foundation of the deal that we and the partnership we created with HPE about a year ago. And now this event is specifically focused on some of the things that we've done since then. And HPE has brought Vertica and Haven on Demand onto the Azure platform, which is really, really exciting. So I got to ask you, don't hate me for saying this, but Microsoft has completely changed it, at least from an outside observer's standpoint. We used to talk about how Microsoft was kind of protecting the past from the future. And, you know, Satya has injected a whole new, and I'm sure that it's not just him alone, but a whole new sort of energy into the company. And suddenly, Microsoft is highly relevant. Of course, Microsoft's always been relevant for the developer community, but now it's where the action is. You've got real tailwinds taking advantage of all the industry trends. What's that been like from an outsider looking in? That's my description. Is it at all accurate? Is it reasonable, what I'm saying? It's a fantastic time to be at the company. Our interactions with customers are unlike they've ever been in my 14 years that I've been at the company. It's the engineers at the company and people who work there are now, we're able to work on anything that they want and really just serve the needs of their customers and it's just a tremendous, and we're building a great business around it too. And so it's not, we didn't have to sacrifice anything along the way. And we do get a lot of surprises when we tell people that, you know, almost a third of all the virtual machines running in Azure are running Linux. And we do a deal with Red Hat. We're really treating Red Hat Linux as a first class citizen on our Azure platform or we open source PowerShell for IT pros, you know, really powerful scripting language that's been at the heart of Windows Server for a very long time and now it can run on Linux and help Linux IT pros as well. And so .NET on Linux. And so we've just done a lot of things. The heart of that is really and really what Satya has instilled in our culture is to just meet customers where they are, customers and businesses as individuals. And if they have a particular set of tools that they want to use, well let's go make our technology work really great with those tools and technologies and it's very empowering for engineers to be able to do that. And the reception that we've received from our customers and the new customers that hadn't seen us for a while, really, really energetic to see. So we're very excited about it. So I'm glad you talked in your discussion today about scale. I think scale's really important. You guys obviously do. Although it's kind of under the, it's plumbing, right? People generally don't like to talk about that but it's important because, I mean the winners are going to have scale in this cloud business. You gave a stat that you've got more data centers than X and X combined. What's the statistic there? Well, we've been really investing heavily in building out this global scale cloud infrastructure for customers to bring and run their applications and bring their data and analyze across it. And so right now we operate in what we call data center regions. These are clusters of data centers. And we now are operating in 26 of these data center regions and we've announced a total of 34. And so we've got eight more that haven't yet opened and we're building them out rapidly. And this 26 number is the stat that I cited. It's more than Google and AWS combined. And what's important about that for customers isn't the number necessarily. It's really that their applications and their data is closer to them. They don't have the speed of light problem. And whether it be geopolitical or data sovereignty reasons or just end user experience reasons, they want to have those applications close. And so we're really reaching out and investing to be close to our customers. And we've invested on the order of $15 to $20 billion in building out this global scale infrastructure to provide a foundation for customers. And at the end of the day, it's plentiful. We want it to be invisible. We just want it to be there just like electricity's there. And so we're investing heavily in that. That's kind of the foundation of a lot of our investments. And then really building this world scale set of comprehensive services on top of it, infrastructure as a service, platform as a service and software as a service. And we're really the only vendor today that is a leader in both infrastructure as a service and platform as a service. If you look at Gartner's Magic Quadrant, we're the only global cloud provider of this in both. And so customers like that comprehensiveness of offering that we have built on this global scale infrastructure. You said, I believe I'm putting 40% of the cloud infrastructure's Linux now. About one in three virtual machines are running Linux today. And in our Azure marketplace, which is a place where customers can go to look at partner solutions that are built on the Azure platform. This is for an example where Vertica shows up today. Vertica 8 is available on the Azure marketplace. It can go there and very quickly spin up a pre-provision virtual machine. About 80, sorry, about 60% of all of the 3,800 solutions in the Azure marketplace are running Linux. And so very much an open platform today, whether it not just the OS, but do you think about databases? It's not just SQL Server. Obviously we've got Oracle and DB2 as well, Hadoop on up the stack, Java, Node.js. And so we're really making sure that whatever customers want to use, whether you're an IT pro, DBA or data scientist or a developer, all those technologies are there that you can use your existing technologies, but do it in a first class way in our cloud. So maybe this is kind of a tail wagging the dog question, but did the new embrace of open source of Microsoft, our customers was the cloud sort of driving that because customers were saying, I want to be able to use Linux in the cloud. And it wasn't really an option anymore not to respond to that need. Well, a little bit of both. We certainly, we look at your enterprises today it's a mix of Windows Server and Linux. The platform for us is less about whether it's Windows or not, it's the cloud is the platform. And so it required a mind shift for us to saying whatever your application is running, whatever it requires, we want to be able to offer those rich services underneath it. Do you see any trends or any patterns in what when customers are choosing a Linux platform in the cloud versus a Windows platform, what do they use Windows for in the cloud? Well, we're seeing a lot of enterprise workloads are very, very strong with Linux and we're seeing .NET new applications being built with both Windows and Linux. One of the things we see with new application development particularly in the startup world is around containers. And so we've got a great relationship with Docker and that ecosystem and we're building container support into the next version of Windows Server that will be released here in a few weeks at the Ignite conference for us. And so customers who are using Docker and containers can now build those not only on Linux but can do it on Windows Server as well. So we're kind of merging the Linux and Windows development community with a common language of containers. And those could be used .NET or open source. You talk Mike about your big part of your job is helping customers run into the cloud. What does that mean? What does it entail? Well, I talked about earlier today that kind of every customer has their own journey to the cloud. They've got their own set of applications and needs and they're in different industries. And so a big part of what we do is one, we want to make sure that we have a great destination for them with Azure. And so that's a lot what we've talked about up until this point. Then we have a really great set of people that are Microsoft employees as well as our partners who can help have a dialogue with an architect at an enterprise customer and talk to them about what are their business challenges? What are the things they'd like to do? And what are some low hanging fruit applications that they could move to the cloud? And then where do they go from there? And so a lot of the work that we do is talk about what's their first cloud app? What's the next one? And then when they really start to think about data center migration, how that might work over time. Bob Young-Johns was on with us earlier and he was talking about HP's cloud strategy being sort of a distant intermediation. They want to be a layer underneath the cloud and make it transparent to their customers which cloud they're using. Is that a problem for your relationship in the long run when they are kind of disintermediating you out of the equation? Well, there's clearly choices in cloud platforms customers can use. We believe that what we have a really deep shared vision with HP is that customers are going to have this on-premises infrastructure and their cloud infrastructure. And they do want to hide some of that from their end users. And so we believe that the things we're doing with HP they can run Azure technologies in their data center. They can also run their existing technologies in the Azure data center. And so it's less about this remediation and more around helping customers not have to think about an either or an or. But just in terms of it's, they can use to the cloud and use it on the terms that make sense for them in their environment or in the public cloud. So let's talk more about that sort of hybrid vision. So I live in a very old home and they'll make them that old in Seattle, I don't think Mike. And so when you do something to an old home you got to connect new to old and it's really complicated and it takes a long time. And that's kind of what you guys are going through now. Amazon and Google have the benefit of clean sheet of paper, homogeneity. And I presume a lot of Azure was starting from scratch and saying, okay, we got to get scale, we got to get automation because you understand the marginal economics of volume. You invented the concept for the IT business and software. So talk about the challenges of connecting sort of the old to the new and how you're working through that to get to that. You know, Oracle calls it same, same. It says, we're the only ones. I was like, what about Microsoft? Well, you know, but so everybody has that challenge. Anybody with an existing install base. How do you work through that? Yeah, it's not a reality to take an enterprise IT infrastructure and turn the entirety of it into a cloud. So you're not going to, you can't rebuild that from the inside out. There is some fundamental differences in architecture of what a cloud is and what it isn't. So our approach is less trying to turn a virtualized environment into a cloud and call it a cloud. Some of the vendors out there call a virtualized infrastructure a cloud. That's not what, we know different. We call that cloud washing. That's cloud washing. What we do believe is that organizations, many enterprise organizations want to run a cloud themselves and they also want to use the public cloud. And so what we've done, instead of trying to cloud wash their virtualized environment is we've taken Azure technologies and releasing a product called the Azure Stack. That's basically Azure that a customer can run in their data center. That's not going to run all their workloads, right? It's going to run their, a lot of the workloads that they think are cloud ready and they're going to grow that over time. And you can think of it as a springboard to the public cloud or you could think of it as a release valve from the public cloud. So it can go both ways. Now they've also got this existing traditional IT infrastructure, the virtualized infrastructure of today. And we're going to help them over time modernize that. But that's going to shrink over time. We think the real opportunity is to embrace cloud. And we talk about it in terms of, for us, cloud is not just a location, that it's a model. It's a way of doing computing. And we believe that that can be a location independent. It can be in the public cloud and they can run Azure in their own data center. And so that's our strategy, as opposed to trying to remodel that old house to the point where we try to make it look like a new one. So it's the operational model that defines cloud, not the location. That's right. We totally agree with that. And so, so is it over time you will be able to mimic that cloud-like operating model on-prem? It's just going to take some time? Yeah, that's exactly the Azure Stack model. Is it takes the Azure portal that was born in the public cloud and it brings that down for them to run in their own environment. It takes the Azure infrastructure as a service provisioning engine to provision virtual machines on demand and brings that on-premises for the customer's run. And we're partnering with HP to deliver the hardware in a converged system underneath that. And so therefore it takes the operational model on the software of the public cloud and then brings that in an approachable size for customers to run in their own environment. We deploy 20 or 30 racks of servers as a cluster that's not approachable for most enterprises. So we're bringing it down to a scale that makes sense. So is that on-prem infrastructure gets depreciated and off the books through attrition? You'll bring in that sort of cloud-like capability on-prem. That's where the operating model starts to change. Do you see a perpetual dissonance there? Because when you talk to people about what's going on inside the deep dark data centers, they're, years ago, they were throwing away a MapReduce. They're probably doing, well, beyond Spark now. So Microsoft, Google, Amazon, the gold standards are much more Facebook, more advanced than what you see in the, and what I sometimes, I don't mean it as a pejorative, but the fat middle is where the most IT folks are. So do you see a perpetual dissonance there or are you going to bring those two worlds together? What we believe is that over time we want to make, we'll battle test these technologies in the public cloud. And a lot of times those are for cutting-edge things that we want to do to offer new services. And as they mature, then we can bring some of those things to run on-premises. But in most cases, what you won't find is the, where the startups of the world and in the cloud providers, we're really trying to break new ground in computing in the public cloud. But there's a maturity curve for all those technologies. And when they become mainstream, or we think there's really use cases in the private cloud, that's where we can bring them in to run in our environment. The reality today is most customers just want to run their applications in an infrastructure as a service model really efficiently. And they want to build new applications that are cloud native on a platform as a service. So that's kind of what we're focused on to start. And then the science projects that we run in the public cloud, as they mature, we'll figure out which ones make sense. Well, it's working. Go ahead, please. Well, you announced last month that Azure Stack is going to be delayed almost a year. What's the reason for the delay? And I mean, what's customer reaction been to that? Well, so what we talked about back in July is a focus on integrated systems for Azure Stack. And that's basically making sure that we're helping ensure successful deployments. And so we've found that the private cloud deployments that have failed have all, because they're really complex. And so trying to take some of that complexity in by focusing on integrated systems from companies like HPE to really take the complexity out of that. And what that requires is that we do some work to marry the software with the hardware to make sure it's optimized for it. And so that was one of the reasons. And then the other one is just to make sure that we had the right set of capabilities inside Azure Stack before we went generally available. And we'll have a set of previews. We'll have another preview here in the fall. And so customers are really excited about it. And so we're continuing to march down that path of Azure consistency and delivering Azure in our customer's data center. And then we also want to be able to connect a set of services to that existing infrastructure. The thing about backing up your servers. We've got a service called Azure Backup. It's part of our operations management suite of products for hybrid cloud that allow any server to be backed up to the cloud. It doesn't have to be in a cloud model. It just thinks about backing up that instance. And so it's not just delivering an Azure consistency in the cloud, but also how do we bring the cloud to add value to that existing infrastructure. So I'm personally super excited, Mike, for Microsoft's future. It's like you're really getting back to your roots. I mean, not withstanding your dominance through an operating system. The real roots of Microsoft, in my opinion, you're real easy to do business with. You've got super cost effective software products. You've got a partnership mentality and a really clean business model. And you're super developer friendly. And those things are all now coming together in the cloud. Is that a fair summary? Am I missing anything? It's a great summary. I think we're absolutely, we're in this mobile and cloud era. We had to go back to the DNA that made us successful in the first place. And ecosystem and developers and making sure that we're easy to do business with. And particularly with the enterprise customers we're talking with today. Super important. We're very excited about what HPE has done in bringing Vertica to Azure and building Haven on Demand on Azure. And it's an example of how customers can take their enterprise grade software and bring it to this global scale public cloud. Just real quickly. SQL Server 2016 is out. It has analytics built in for the first time. Kind of a HANA like architecture. How are you recommending customers, how does that fit in the stack with Vertica? Well, one of the things that we've found throughout the years is that there's no one size fits all solution out there. And so we're recommending, we've got a lot of customer choice. We have some first party offerings but then we've got a huge set of partners and the Vertica solution is no different. They've got a great footprint in our enterprise customer base. They do great things with respect to analytics. And so we're really focused from an Azure perspective on enabling both. And we kind of do the same thing from an OS perspective. You think about Windows Server and Linux. We've got SAP on Azure as well. And so our job is to make sure that customers can run the things that they choose in our cloud. And there's another example of that. All right, new era of IT and you're seeing Microsoft a great example of jumping S curves, if you will, right? I mean, the greatness of companies sort of defined by their longevity and really say really excited to see the future of Microsoft. So thanks very much for coming on, Mike. Thank you so much. Great to be here again. All right, keep right there, everybody. We'll be back right after this short break.