 Thank you, everyone. It's theCUBE live at HPE Discover 2023 from the Venetian Expo. We have just come from Antonio Neri's keynote. You're about to have a great keynote analysis. Lisa Martin with Dave Vellante, John Furrier, Rob Stretcher going to be breaking down everything that was unpacked in the last hour or so. Dave, John, Rob, what were some of the things, announcements, a go-go today? What were some of the things that really jumped out at you? I mean, edge, AI, AI, AI, AI, cloud. Before we get into it, let me just set the tone for the audience. HPE, as you may know, is about a $30 billion company. They're growing about 4% to 6% a year and they've got a $22, $23 billion market cap so they're not even getting a dollar of market valuation on revenue, 1x revenue. And they should be. So they got to get growth up and they're moving up. But they get cash flow going. They got $2 billion in free cash flow so financially, Antonio Neri has, I think, got the company back on track. And we've got a lot of announcements that we want to unpack today. I mean, John, what's your number one announcement? First of all, the number one thing that's the 12th year we've been discovering, discover HP now, HPE, that's the top story in my mind. But watching the transformation over the decade and go back six years when Antonio Neri became CEO, I think, if I had to put the top three headlines going out here as one, Antonio Neri as CEO took over a company that was need of a leader. And he made a bet six years ago on edge, hybrid and he didn't say AI then, but it was edge. And data, he said data. And data, which was cool. Tsunami of data, we've been covering that. So a bet on that direction. It's paid off. Green Lake was the first rendition of that that came out. And the other bet he made was Aruba Networking. Dave, you tweeted, called it a grand slam. I said multiple slams. The Aruba investment combined with the North Star of the Green Lake, what ended up becoming Green Lake, which is the hybrid, edge hybrid and data was all right in line. All those things spun in the direction of the doorstep of HPE Discover. And now they're starting to harvest it. And the other top news here is that Dr. Matt Wood from AWS attended and was out there talking about the relationship with AWS. He actually headlined before Ragu from VMware, CEO and soon to be bought by Broadcom. And I think HPE learned how smart VMware was Dave in getting that acquisition that changed their cloud game. I think with the relationship with the hyperscalers and public cloud with AWS, HPE is bringing their customers world-class integrated hybrid. That's such a smart move. That's kind of a nuanced point that Dr. Matt Wood's a serious player at AWS. For him to be on stage is a huge accomplishment for HPE. That ties everything together and the edge is exploding and AI is a tailwind for HPE. And they're going to try to bring that under this thing called Journey to One, a unified thing. That's the top story in my mind. That is like a bad ass direction for HPE. They're really going to be kicking ass. They're right in line Dave. This is right on the trajectory. So a little bit more context setting and then Rob, I want to get your take on this. So Aruba, you're right, multiple grand slams is Reggie Jackson, three homers type of thing. By the way, thank goodness for Aruba. It's about a $5 billion business. It's got mid 20% operating margins. The HPC and AI business, the Cray acquisitions and now their AI business, it's a break-even business. It's about $3 billion. Storage is a $4 billion business and it's not nearly as profitable as it should be. It's got maybe high single-digit operating profits. Supercomput is a big business, about $11 billion. Mid 15% operating margins. So it's a really good business. And then they got financial services, which is also a good business. To me, they didn't bury the lead. They kind of waited till the end, but it's a big news here is AI as a service, Supercomput as a service, LLMs as a service. And they sort of said public clouds can't do this Rob. Yeah, I think it's really interesting where they're going with the public clouds can't do this. I think that's a little bit of an overstatement. I think they're playing with some of the same components that some of the clouds are doing, but they are doing it in a different way. And they do have the experience from running these supercomputers at scale for these government agencies and a number of other corporations that they're going to be able to bring things to the table to be more efficient about how they run that. That may give them a margin advantage as they move into AI clouds as they called it, which would be very fascinating to see. You think they did bury the lead? No, I think they did. I think they took a hedge on the AI washing. Okay, they brought it downstream, but their storyline in their keynote was very much a storyboard. They laid out the vision six years ago and they rolled right into AI. The age of insight was the big message. He said, we're data rich, insight poor, that's our industry kind of new term. I like that we're insight poor, which age of insight, that's kind of the AI. Bob Picciano. Data is plentiful, insights are not. The idea that the private cloud's going to be better at AI is to me nonsense in the short term. Amazon's going to clearly have the advantage. I think you'll see people provision GPUs if they can get them in data centers like Equinix, whatever, but Amazon has the advantage. So I think that's kind of there. I mean, Dave, we speak Amazonian, we speak HPE. You see Antonio and Matt Wood on stage, that was a seminal moment because he's speaking Amazonian, we scale for our customers, he's speaking HPE. No, we're hybrid. And so like that exchange encapsulates why HPE strategy is a good one. They're yielding the victory to Amazon and they're going to wipe up the hybrid on the enterprise with all their customers who are going to roll with green legs. Do you remember the movie Bridesmaids? When the two best friends are up and they're competing? So I tweeted that picture of that out. Basically, Matt Wood stood up and said, well, in the fullness of time, we believe all workloads will be in the cloud. And Antonio goes, yep, the world is hybrid. But I think what's interesting about that and Matt Wood being there and talking about EKS and EKS anywhere really kind of shows that Amazon is expanding out past outposts. And I think that was huge. And I think that announcement now is showing that Amazon is knowing that a 42U, a 1U, and a 2U rack of stuff is not going to win for EKS anywhere. And I think they kind of buried the whole open shift that Red Hat open shift announcement as a one liner. Which is very interesting. I don't think that was just such a small piece of the overall message here, because they really wanted to lay down that we're nailing cloud, right? So I think the cloud-enabled piece was a weak part of their story. They were good on-premise, they had their action going, green legs now getting going. They didn't really have a lot. But they've made that case before. You even said it. You said green leg is what outposts should have been. Green leg and Apex, right? That's what outposts are. Amazon's enterprise challenges, Dave, we've always speculated Amazon needs to have an enterprise sales force. I've always said Google should buy a big enterprise like HPE if they could afford them. But because these hyperscalers that aren't like Microsoft, they don't have enterprise chops and they don't have the field as good as HPE or channels as good as HPE. And so Google and Amazon are exposed on the go-to-market because they're trying to build ISV relationships which we know we don't like that word. But this is what HPE does. But HPE does. I want to make two other points. So first of all, LLMs as a service inside a green lake, that's something we didn't see at Dell Tech World. So that props to HPE they're having that fun. The second thing is Antonio Neary, I don't think is going to give his super computer technology to the cloud. He's not, he's going to keep that for himself. So the big question is, is that an advantage that's differentiable? I would say in the near term, it is. I don't know what you guys think. I think the answer is it's differentiable. I'll tell you why. The LLMs will get proprietary and that's where the data value is going to be talked about this on our podcast. That the data, whoever has the data has the value. And as enterprises have that proprietary data, they're going to keep it on within either VPCs on AWS. Bedrock has support for VPCs, virtual private clouds to keep that in there. And they match that, designed in with hybrid. That's a play for HPE. HPE also gives Amazon all their customers by putting everything in the marketplace. So one announcement that kind of was overlooked is the marketplace deal for Amazon and HPE makes it so that every customer of HPE could be provisioned and deployed in the marketplace. That means Amazon will have procurement rights, if you will, not no rights, but like motions for their customers. So huge win for AWS to get those customers and- I think it's also huge for HPE and the fact that it gives them another route to share of wallet that they didn't have before for certain of their private business clouds and that type of thing. I think, but to the LLM and supercomputer stuff, I think it definitely does. And I think there's some software in there, in the Cray stack that gives them an advantage, definitely in the short term. And I think the way that they approached it being single tenant per node versus shared tenants is definitely a differentiator. I don't know how big a differentiator that is in the long term, but. Speaking of differentiators, one of the things, sorry, one of the things that you just brought up Dell and we were just there and they talk about multi-cloud by default last year to multi-cloud by design. Well, of course today we're hearing Antonio say hybrid by design, not by accident. Yes, I wanted to get you guys's take on, obviously Apex versus GreenLake, the differences that we're seeing with them, but what do you think about that? Where are they and from a competitive perspective, you did a great job laying out the financials? Well, I mean GreenLake started before Dell did Apex. Dell announced Apex and it was sort of a catch up to HPE. HPE's ahead, I mean they're integrating more services, they've got all that wood behind one arrow and Dell, Dell's smart, Dell's saying, well hey, we're going to give customer choice. By the way, HPE will give customer choice too, but when they do a partnership, they force that partnership to get into GreenLake. It's like GreenLake APIs first. I think you got to give them props for that. I mean, by the way, this is all seven, eight years too late. I wish they had done this seven or eight years ago, but they are ahead in my view and LLMs as a service is an example. Yeah, I mean back to the LLMs for a second day because I wanted to make that point. The compute side of the supercomputing is not relevant for LLMs right now. I know it will be very quickly, but the number one thing coming out of our research in your report is that the developer how to build AI apps is the first priority right now, not how to run them at scale. So I think that's going to come fast on. You're going to see all the developer and I think the interesting thing that was missing in the keynote, if I was going to be critical, is the fact that they didn't talk a lot of cloud native. Your point about OpenShift, that's a cloud native bullet point. They didn't talk as much about OpsRamp, which is the unification single pane of glass, much they just kind of laid it out there because they had so much news. If they want to win the hybrid game, they mentioned they want to be the cloud native platform, they got to do more cloud native. So what I didn't see was enough proof points that GreenLake is cloud native. So if you look at all the AI work going on right now on LLMs and foundational models, it's multimodal and it's developer focused. It's not yet clear which platform developers are going to build on, okay? And that's an opportunity, but also a pacing item for the infrastructure piece, whether it's compute and cloud. So Amazon's fighting that battle, Harvard, Ben Rock. On your point about OpsRamp, I was talking to Joe Peterson this morning, I know you were talking to her too and she was like, Dave, I don't really fully understand, you might have had this conversation too with her, Rob, what they're going to do with OpsRamp, how they're going to monetize it. We're like, well, they're going to bundle it in. He goes, yeah, I know we're going to bundle it in, but this is super cloud. This is enabling cross cloud services. I was like, bingo. And they don't really hammer that message home. I mean, the VM there obviously does. And this is new, this is different. This is a real, again, differentiator for HPE. So I think they're actually underselling the OpsRamp acquisition. I mean, AWS, when Matt was on stage, I was hearing him speak, you know what was going in my head? True private cloud, true hybrid cloud. You guys did a report on true private cloud almost a decade ago playing out. I would call it true hybrid cloud, because I think Amazon, if they do this right, now has end-to-end in the enterprise, and the super cloud, which is going to be the path to multi-cloud. If Amazon plays this right with some of these vendors, they could lock spec against multi-clouds. In other words, take Microsoft, Dave, for a second. If Amazon locks in with HPE, and there's some Azure announcements in there with the database stuff, but if they do this right with Amazon, that's a preferred path to public cloud, and the Microsoft dynamic could shift. So four things they announced. The HPE non-stop development environment now available on AWS, I think it's in the marketplace. Amazon, EKS, anywhere on GreenLake, so that's cool. GreenLake backup and recovery to support AWS RDS. Okay, fine, check. And then HPE fraud detection, fraud detection services is now also available on AWS. So at least they've got some meat on the bone there. It's not just a little barney. It's just, to me, it was just great to see Antonio Neary celebrating, not too much bragging up there, but he was definitely celebrating the accomplishments. We've seen it, Dave, over the past six years. Please remember, go back six years when we first started. It was seriously like, okay, how is this going to play out? We were talking about the split and everything was going on, but he actually has delivered. He's doing a great job as a CEO. The bets are paying off and it's yielding fruit. Now GreenLake's got momentum. The question is, can that wire in with AWS and be a true hybrid platform? And then ultimately the super cloud question comes in, how do they increase their TAM when customers want to run across other hyperscalers? So that's going to be very interesting to see. The other thing was Raghu on stage. So look, when VMware was owned by Dell, HPE kind of backed off a little bit. I mean, they're obviously a huge partner with VMware always have been, but they backed off a little bit. And now with Dell doing the spin out and Broadcom acquiring, that changes the dynamic of that partnership. They can lean in much more heavily. Now, of course, OpsRAM and the relationship there and the relationship, as you mentioned this morning at breakfast with the partner ecosystem gets a little funky, but hey, Antonio's clearly wants to have IP that differentiates so they can get gross margins up and operating margins up and throw more profit on. Yeah, and I think it was a bonus for VMware as well. I think when you look at it, they kind of get the glow of now we're actually in GreenLake and we're actually as a service in there. And I think that was the piece that they kind of buried is that it's really about paying as you go for their customers. And they kind of buried the fact that their SimpliVity and HCI strategy is now just private business enterprise cloud. Rebranded. Yeah, it's a rebranded thing. Which is a really long name, by the way. It's just the marketing, it's like unbelievable. Well, one of the things that I, you know, with VMware and Stages you mentioned, Equinix, AWS, they all talk about the same thing of customers want twice when you go where the customers are. And they're doing that. They're opening up the doors for many more opportunities. It's going to be interesting to see, especially AI as a service, in what industries we see leading edge early adopters. There any, I think like financial services, healthcare manufacturing, what do you guys think? I think with AI every vertical is up for grabs because you got the cloud is horizontally scalable and you got vertical specialization in the app. That's domain data, that's specific. AI plays great in every vertical. I think the ones that take the best of the generative AI piece that's hyped up right now that's coming fast is FinTech, Insurance. These kinds of verticals have a lot of creative processes. Matt Wood actually has a great thing on LinkedIn around his field notes, identifying the areas that are going to be impacted. Some of these creative works, a lot of paper, a lot of differentiated heavy lifting, not undifferentiated heavy lifting. And then I think the customer angle is interesting because what are they choosing? They're choosing who their vendor's going to be for the next 10 to 20 years. I think what we've noticed with VMware customers, with VMware Explorer coming up, Dave, that with VMware and the Broadcom dynamic, the virtual machine, that was a 10-year, 15-year, 20-year career for IT people. Eulah Packard's got a huge install base of operators, Rob, that are trying to get cloud-needed, but they're IT guys, right, and gals, so their career for the next 10 years is going to be who am I going to be putting on my badge, on my jersey? What jersey am I wearing? Am I an HP person? HPE, am I an Amazon? This is up for grabs, that whole community is shifting. I think it's super cloud, personally. And I think back to sort of what Dave was saying and what you were saying, and again, to answer kind of that, is that HPE is bringing out and really focusing on, with the LLMs, is really focusing on three really verticals. One of them was climatology, so they brought up, you know, in a briefing about this, they were talking about how they're going to, you know, next hurricane. Okay, you need to go and do this, and you're a weather center or something like that. They also looked at healthcare, and they also looked at a lot of life sciences, life sciences as well. Climate modeling, healthcare, life sciences, and their messaging is privately trained and deployed on-premises, large language models, and then they partner with this company called Aleph Alpha, which is a German startup who's coming on theCUBE. I didn't know anything about him before I heard this announcement, and it's going to be available not until year-end 2023, so that's the other thing. Well guys, we have so much to unpack in the next three days. Rob, John, Dave, thank you so much for kicking off the 12, keeps 12, as John pointed out, 12th year covering HPE Discover. Up next, we've got a whole great day of HPE executives, customers, partners. They're going to be talking about AI, the challenges HPE and its partner ecosystem is helping customers solve the business outcomes those customers, some of them on stage. We're talking about AI, AI, AI, and Edge. Up next, Pradeep Kumar is a CUBE alum. He's going to be sitting down with theCUBE talking about the new HPE services. Stick around.