 Welcome back, this is John Furrier with SiliconANGLE.com. This is SiliconANGLE's theCUBE where we go out to the events and talk to all the thought leaders and extract the signal from the noise. I'm here with Dave Vellante, analyst for wikibond.org. We're going to dissect the EMC launch and to kick that off, we're going to meet Jeremy Burton, the CMO of EMC. And you guys are really talking of an interesting services angle here and in our coverage of services. You know, there's a lot of tech talk going on Jeremy and welcome to theCUBE, but really people want to make money. And they want to do it in a very easy, elegant way, but also solve customer problems. So here in theCUBE, we want to drill down and talk about what the event is here today with EMC. So share with us folks out there, quick overview of what you just talked about on stage and then we'll drill down into the launch and some of the benefits. It's really all about helping people move faster. I think if folks are just starting out on their journey to cloud computing, they're probably a bit late. And what we've heard at least is, hey, we want to move quickly. And in order to move more quickly, we've got to take some of the complexity out because most folks who've gone at a private cloud environment today have really gone after a strategy of building it themselves, integrating the componentry. And so really the VSpecs announcement is designed to give folks a prepackaged kind of private cloud building block for want of a better word. That's going to allow them to get their infrastructure up and running more quickly so that they can really focus on what really matters to the business, which is making the applications run better. You guys have been talking about cloud means big data for some time since you joined EMC, we've well documented on theCUBE from us. Dave's team at Wikibon is really talking about converging infrastructure lately. And obviously with services angle, we've been drilling into the services. What is the market problem out there? We've been highlighting obviously some of the obvious pivot points efficiency around cost savings, getting staff enabled, but also the new business changes going on where there's a real revenue driver. And we're seeing that in things like mobile with the advent of the iPad and analytics and big data driving real-time dashboards and business change, there's now pressure on IT to actually deliver, converge infrastructure and deliver good efficiency in the cost side and staff, but also really drive revenue at the top line. And the channel partners kind of sit in the middle of the reseller channel, system integrators, AvNet and the folks up there on stage were talking about that, but they want to turn key and solve the customer problems and also make money. So what does EMC look at when you look at this product and this launch, what are the market problems that you saw that you said, hey, an indirect channel can really fill this need? Well, you're right. I mean, IT departments are feeling this unprecedented demand. I mean, you mentioned the kind of bring your iPad to work, I mean, there's more people access in more IT systems than at any point in time. And there's more demand from business people to get more new applications than at any point in time. And the IT guys are like, hey, we've got to keep on top of this demand. And so if we can get the IT departments out of the business of kind of wrench turning and self-assembly and more in the business of building more applications and delivering more value for the business, then in general, that's going to be a good thing. And I think the reason why this hasn't happened maybe as quickly as everyone would have liked is historically, IT has, we've been hobbyists. I see we, I kind of almost think of, been in the IT business. We've provided IT with tools and technologies. And I think what's happening right now is the pressure is so great that this, the IT folks are saying, well, look, we want solutions. That's music to the channel partners here because they can assemble that solution and deliver it. And I thought Jim from Intel on our panel earlier said, it feels like virtualization has made this possible. Some of the technology innovation in the last 10 years has now made this possible because you can slot these components together. You can deliver them in a simpler, more integrated way. And I think what's got to change more than anything at this point is not the technology, it's the mindset of the buyer. We end up on these five to 10 year cycles where we've got to attune the mind of the buyer to stop buying components and start buying something that is. Has virtualization been not ready for prime time in the channel or has the channel been underserved relative to having turnkey products or both? What did you guys discover in this? No, I mean virtualization, it's certainly ready for prime time. I mean, I look at EMC, we're 90% virtualized, we're a $20 billion company, we're 50,000 employees. We don't have the biggest IT department in the world but we have one of them. And so I think the technology is there. I think part of it is that the technology providers, it's maybe our fault that we've not gotten together and proven out these designs sooner. Number one, because I think the channel has been trying to do this to a certain degree of success for a number of years. So it's probably on the vendor's kind of plate. And also I would therefore say on the IT side as well, I mean, careers have been built around assembling component A and component B. And if component A and B come assembled, then hey, what's in it for me? And so IT has got to go through a cultural change. There's plenty of work to do in IT, right? We just need to get out of the wrench turning and... While you're on stage, Dave was holding court on Twitter so the folks watching, Dave Vellante's trending on Twitter but because he was a lot of engagement around this conversation. So Dave, what's your angle on what you saw on Twitter and how would you assess the messaging and the positioning of what Jeremy's talking about? Well, Jeremy, my angle on this is this is a labor problem. I mean, the labor content of IT spending has increased about two and a half times in the past 10 or 15 years. Hey, that's the problem that you're trying to attack here. I mean, you made another point, which is that smaller companies are getting to the cloud faster than larger companies. And a lot of that is the processes and the labor that it takes for large companies to get there. Yeah, they don't have the money of the people so they have to, you know? Right, and or they can outsource more freely. And so my question to you is, do you see with the data growth that we see, do you see that balance shifting? You know, we always talk about 70% goes into maintenance and 30% goes into innovation. I just mentioned the labor cost. Do you see it changing or is data growth just so large that we need to do this just to keep pace? No, I do, the balance has to shift. I think if you look at any kind of CEO or business executive looking at IT, they're asking one question. Hey, what have you done for me today? Or what have you done for me lately? So there's a lot of pressure on IT to deliver business value, which means that they're going to have less inclination to do the self assembly. And I think because the technology is now there we've got VSpec, Cisco's got CVD, Microsoft's got their private cloud fast track. I think the vendors have now figured out like, okay, we've got to get together and we've got to provide our channel partners with the architecture that they can then package a solution around and then IT can simply consume that as a building block of their cloud infrastructure and hopefully then free up a bunch of IT time and money to go do the things that the business guys care about which is those analytic apps to produce new insight or the e-commerce system or the systems that the business want which are really going to differentiate themselves in the marketplace. So I think that 70-30 split it has to change and I think both the technology and the pressure from the business is at a point where that's going to make it reach the tipping point. Yeah, the business wants speed and simplicity and most people would not consider traditional IT shops as fast and simple. And so that's another tension point that has to change. I'd like your thoughts on that a little bit in terms of particularly the channel discussion that you were having. It was interesting to note the channel partners talking about the cloud. Cloud's hot, it's a major trend for those guys but at the same time it's a threat, isn't it? I mean, if everybody buys from a cloud service provider that disintermediate mediates the channel. So what's your take on that? You're right. I mean, public cloud and private cloud are both opportunities and threats to vendors like EMC but also to channel partners as well. Our view is that cloud computing, there are certainly going to be hundreds of public clouds. It is quick, it is, certainly for getting started, it is cheap. Over the long run it's kind of questionable whether the economics play out but. This is rental. Well, for every public cloud that's built, we think there's probably going to be a thousand private clouds and so as much as there is a threat on the horizon, I think the opportunity really outstrips it. And from an IT perspective as well, I mean, there's folks sitting in IT departments, they don't want their business owners to go to public cloud and bypass them. So again, I talked about this pressure earlier. There is pressure for the internal IT department to offer some of the same tenants as a public cloud. It's got to be quick, it's got to be cost effective, it's got to be transparent and the technology is there for IT departments to make that transformation but they've got to get themselves set up and organized to make it happen. Chairman, I want to ask you about your analogy used on stage about the Apple and the iPad, kind of making that reference because it's a nice frame to simplify what is kind of a complex area in IT. But first, I want to ask you a question around the same kind of thing where Apple has created a whole new ecosystem of little guys and one of them just sold for a billion dollars here and it's looking at Valley Instagram this week and so that just goes to show that Apple had enabled through the App Store and the iPhone, a startup less than two years old to create massive value very fast. So is that part of the program you're seeing with the channel that there's now a new enablement from a solution standpoint where they can take something that was once a direct sale of a big EMC product to much more of an enabling strategy? Can you just kind of vet that out, tell us about the analogy and then talk about the enablement piece of the channel? Yeah, I mean, we want our channel partners to sell these cloud building blocks so that IT has a very, very reliable, kind of solid platform that they can build on top of. They may well be migrating existing applications, the Oracles, the SAPs of this world, but look, for every one of those apps, there's going to be 10 new ones and you really do want IT getting back into that business of innovating. I think in the 90s, IT was looked at as kind of the great hope and the great innovator and the driver in the O's, I guess we'd call it. People looked at IT and it was all about cost cutting and in fact, CIOs got moved under CFOs and I think IT kind of lost its innovation mojo. I think if we can solve this cloud infrastructure problem and give IT a platform that just works, then they can focus their efforts on innovation and there's absolutely no reason why internal IT teams shouldn't be a hive of innovation within a business. They're just spending so much time keeping the lights on, they don't have the time to do it and so the initiative today, VSpecs, it's about saying, hey look, we can solve a bunch of the problem before it even goes inside your shop. Let us do that and then get more of your resources focused on keeping the business guys happy, which is all about innovation. So we can learn a lot from that. So you'd agree then that one, it's a thousand flower bloom strategy but you're in an initiative to the choice message you guys were saying is bigger than that. You're saying that the enterprises can then build on their terms new apps. Is that what you're saying? Yeah, yeah, let's solve the infrastructure problem as quickly as we can so that we've got more resources in IT adding more value to the business and adding value, that means building apps. And as I said, I would love, I mean I love the, we bought a company recently called Pivotal Labs. These guys are agile ninjas, right? They build software in a radical new way. There's no reason why we can't have agile software development inside IT departments building a whole host of applications for the iPad, for the iPhone to serve that kind of corporate customers so that those customers have better information. I mean, my hope if you like is that cloud can solve the infrastructure problem so that we can get focused on big data which is going to get really, you know, kind of insightful and game changing for a lot of organizations. Jim, I wonder if we could talk a little bit about branding. When John and I first met you at EMC World in 2010 you told us, hey, I'm big on branding and we've been impressed with the simplicity and power of your messages. Cloud meets big data, social meets big data. I specifically want to ask you about the branding around VSpecs. I was at the IBM launch yesterday and I asked Steve Mills, what's your strategy with the branding for the channel? And he said, the branding is the branding. And he pointed at it, that's the box, it's IBM branding. Smart on a planet, you know. You've got a different philosophy and I wanted you to talk about that a little bit where you're embracing the channel's brand. Talk about that a little bit. Yeah, I mean, my view on this, and this is a topic of debate inside EMC because the boxes that you see up there look like EMC boxes, but they're going to be channel partner boxes. And I think, you know, if you're going to make, if you're going to say to the channel, oh, we view your salespeople as extensions of our sales force and we view you as an extension of EMC, you've got to make them part of the family and you've got to give them the option. If you want Mr. Channel Partner, you can look and feel like part of the EMC family. You can leverage our industrial design. You can leverage our brand. And because it follows these specifications, we know it works. And then we've got the support agreements in place. So, and it's almost like, why wouldn't we do that? Because my goal, if you like, if people walk into data centers all over the world and they see that like EMC like row of blue lights, or in this case, white lights, then I think that's a win. And for the channel partner, you know, it's air cover for them. It helps them fit in. It's, oh, it's EMC. We've got a great reputation in the data center that I think the channel can now draft off. So my view on it was, we've got a great industrial design. It looks great. We want to have our channel partners draft off that. And so having them share in the EMC look and feel, a feel like is kind of a natural thing to go do. So on that point, I'm asking channel partners are indirect channels. So they're not actually working for EMC, but they're in the family, as you said. So what's your strategy from a tactical standpoint? Obviously having all the channel programs, soft dollars, et cetera, they still have to satisfy the customer, which is you guys have been very strong customer satisfaction as a company. So you have this new relationship. What's your marketing strategy there to give them that EMC brand, but also they have to execute. And then if you can talk about some economics around how they make more money. Yeah, I think, you know, first of all, you know, what we're trying to do with, and I think VSpecs is one of the first programs where we've done this is that there's a bit of work we've done on our technology. That's the reference architecture. We also go and produce a whole bunch of enablement materials that we're aligned on distribution to get their partners up to speed with. We then said, look, you know, leverage our branding. And also we've got a marketing campaign that you can tie into that will help you generate demand for this new solution. Oh, and by the way, when you've got demand and when you're gonna have to fulfill, we can work with you on the financing side as well. So we've typically tended in the past to say, hey, channel, here's a product. You know, here's some co-op dollars or MDF dollars. You know, good luck. My view of this has been that's not enough, right? We sure will give them a product, but we've got to be able to wrap around that. Hey, and here's some dollars that we want you to spend generating demand for that. And by the way, here's a set of materials that we've used. You can draft off the work that we've done. And I think VSpecs is one of the first, what I'd call more kind of end-to-end programs that we've given to the channel, which goes right from an offer, right the way through to kind of finance it. And I'd love to see us doing more of that kind of thing. And from the channel's perspective, the bigger part of the customer's infrastructure that they can serve, the more money that they're going to make. They love services. I mean, channel partners love, I mean, it's a lot of gross profit for those guys. Wrapping services around is pure gross profit for them. Yeah, you had Pete from Arrow earlier today when he was saying that, look, a lot of customers are still like, hey, which direction should I go? I mean, talk about a channel partner becoming a trusted advisor to a customer. I can help advise you on your cloud strategy. I could build it for you if you want to go best of three components. We've got this VSpecs thing. A lot of the channel partners that we've got out there will sell V-Plug and they will sell VSpecs. We talked at the mega launch way back when, it seemed like a decade ago, a London and a New York age. A year ago. We feel part of the family too. Thank you, by the way, for helping us to cover your events. But you talked about the VNX was the first foray, really, from your vision into the channel. Take us through, how would you look at what's happened in a year and given this launch, what's next on your journey in having this mix of direct and indirect business? Well, so the channel, you can't make commitments that you don't follow through in. Otherwise, they feel burned. And I think, historically, I mean, EMC, we had a very direct culture within the company and we'd made promises in the past and we'd not followed through on them. And I think what you've seen over the last couple of years and certainly with the VNX rollout is we made commitments to the channel and we stayed the course. We said, we're going to build a product for you. We're going to brand it. We're going to make it channel only. And I think what they've seen over the last year is, hey, we made the commitments and we followed through. And I think VSpecs, it's kind of taken it from, hey, we built a product for you to now we've got a solution for you. And it's a bigger commitment on our behalf. But what we see is as we make bigger commitments, the channel partners will make big commitments back to us. And as long as we keep kind of delivering on our commitments, I think that there is a long kind of road ahead for EMC and the channel partners. So we're here at Silicon Angles, the queue with wikibond.org, Dave Vellante, my co-host. And this is the queue. We go to all the events. We got a lot of events coming up. NAB, SAP Sapphire, EMC world and a slew of others throughout the year. O'Reilly's events. We're going to be doing all the O'Reilly events coming up, although we did miss the WARE conference due to the conflict. But there's a lot of events going on and conversion pressure is hot. Can you share with us, Jeremy, what's a teaser on EMC world? Obviously last year it gets bigger and bigger. EMC TV's out in droves. We're contributing content from every angle. We put up an interview on Silicon Angles. I just tweeted our interview here, the VX launch, your view about social marketing. But a lot going on around EMC world and obviously the VM world as well. What's the teaser for EMC world for you guys? All right, so EMC world's, it's always a rallying point for the company. Although last year was maybe a little bit unusual in that we did the mega launch back in January. Refreshed our entire product line. But without giving too much away, I mean we're about what, 15 months post mega launch and if I look at the impact that that made, I mean we took a lot of market share. And all I'll say is EMC world, we were so successful with the last mega launch, we think it's time for another one. Mega launch too. So it's mega launch at EMC world? We'll be the one in between? You know, we've got a lot of, I mean the amazing thing about EMC for a company our size is the, I think the pace of innovation and the technology that we have within the company. And I have arguably one of the best jobs which is just trying to explain the technology to the customer base. I mean it's fun when you've got a rich kind of treasure trove of things to pick from. And I thought the planets on all the products only aligned once, it turns out I might have been wrong on that and we're looking at EMC world is a really big deal. You guys are pushing in the 52 week high. Obviously the business performance has been great and you guys up just a little bit under the 52 week high right now at 29.11. So. And a lot of upside, I've said John, how many times have I said EMC's undervalued because it doesn't get the credit for its core business, it's getting the credit for owning VMware. And Joe Jucci smirked, I was at that. Well it's true, it's a great way to own VMware if you want to own VMware. But there's a lot of upside in my view. And so talk about the VMware dynamic now with EMC, so you know, obviously Joe was very proud at that question Dave asked me, he had a little smirk on his face when he asked about, you know, being undervalued, we talked about $100 stock, Dave's. $100 billion valuation. $100 billion valuation. And how's VMware doing and how's Joe Jucci doing? Yeah, I mean, look, VMware has been on a tear. It's, I think when EMC acquired VMware it was sub 100 million, I think it rough and tough. And the plan today I think is to be north of four billion. First software company, pure software company. That's quite a- It's an amazing business. And I think what it says though is that this cloud thing's got legs, right? I mean, VMware, I believe at the tip of the spear if you like on this move towards cloud computing they're in the sweet spot. They've got a great team over there. I actually think as much as we have let VMware go and be an ecosystem player which was necessary for the success, the relationship with EMC I think has never been better. And Joe, I think, you guys might- Will he retire eventually? I mean, he's like not retiring, he's retiring, he's hanging on, he doesn't want to leave, it's too much fun. Joe's having a good time or what? He's having a good time. And you know, he's, I think, quite rightly put a lot of hard work in over the last decade. He's seeing some of it pay off and who wouldn't want to stick around for a bit longer? As Dave and I said, never give up the microphone, right? So Joe's obviously on a high right now, you guys are doing great, congratulations. Any other surprises? All right, sorry. As I was saying, it's interesting, we're talking about VMware and Vblock was all about VMware and Vblock any way you want it as long as it's black, sort of thing. Today's announcement is much more choice. You're talking about other hypervisors, Zen desktop, you're talking about Hyper-V, et cetera. You've unveiled, you and Pat, I guess a number of products, right? This product I see is more innovation and packaging as opposed to invention. That's right. Where does it sit? I mean, how big is it in terms of the products that you've announced and unveiled? You know, it's a great question because it's just, it's different, right? You can't, you know, it's not even comparing an apple in an orange, it's like comparing an apple in a goat or something, I don't know. It's just, it's like, well, that's a different thing. The technology that is in VSpecs, we've all talked about, there's VNXEs in there, there's VNXs in there, there's VMAXs in there, there's VMware in there. So that's not new. I think what the innovation here is the hard work behind the scenes, which often doesn't see the light of day. I mean, IT departments are very familiar with it because they grapple with this day in, day out and we've dedicated, I mean, Prasad's organization towards these reference designs. You're doing some of that hard work so the customer doesn't have to do it. So it's funny, it's one of these announcements that internally, we've obviously been planning for about six months and a lot of background work involved. Internally, we were like, well, isn't this just specifications and white papers? And it was funny as we went through the entire process. I think probably about two months ago and we were testing out with channel partners, I remember going down to Ingram Micro and the entire three hour QBR that we did with Ingram, this was the biggest topic of conversation and it almost surprised us a little bit that it was like, wow, this is like a big deal. And the more, as I said, the last couple of months as we've kind of been kind of sharpening the pencil, I think everybody on the team's gotten pretty excited about just how the receptivity in the partner community. So it's not like a new product per se, but I was very keen to make VSpec's B more than a white paper, which is why I think you've got the incarnation of a product up on the stage there. I think if it's perceived as a product, we've been a product company and we treat it like a product, then I think it's going to have longevity, which is- Customers will vote with their wallet, so we were just at the SAP event this week where they unveiled HANA and really coming out as the database company and really touting the database in mobile as they're kind of the front messaging. And the uptake on that has been phenomenal. They're just getting huge traction, proven track record and customer wins in a very accelerated basis. What are you seeing that could talk to that kind of reference point? You mentioned reference architectures or proven track record and some of these products from VNX to here. What gave you guys the, wow, this has got uptake, obviously the partners are on stage with you, validating it and we'll be interviewing them throughout the day here. Where's that proven track record that you're seeing that you can point to tell the folks about? Well, the interesting thing here is we've been doing like EMC proven technologies for years. I mean, I think Prasad said earlier, for the best part of 10 or 15 years, we've had interoperability labs and anyone who's been in the business of storage knows that the nightmare is you've got to make your storage work with every switch and every HBA and- Demops. It's complex, right? I mean, it's really, really- So we've had this massive investment and again, one of the great things about my job and been at EMC is you discover this kind of thing which if directed in the right way, we can get tremendous leverage out of and I would say maybe in the past we've underplayed what we've done in that area. I think with these specs we've found the right face to put on that investment behind the scenes and also as well, the DNA within the company is much more channel centric now than it's ever been and we went to the channel partners and said, what do you want? And some of them came back and said, hey, we've been trying to do this for years. Where have you guys been? So I'm trying to do it on their own. Right, and so now I think they're feeling like, all right, you guys are getting it. You're on the same page and the thing is the infrastructure behind the scenes we've had. We just maybe haven't cast it in the right light or given the partners access to it. I get asked the question all the time about what's the right approach and wrong approach and I got to say that what I'm seeing right now in the marketplace is exactly what you guys are saying and SAP, I brought that up because there's all these debates, where's the database to sit in the application but I think your comment about Pivotal Labs is interesting as you guys look at how the programming environment's changing. You're seeing much more agile programming. You're seeing HTML5 toolkits frameworks come out. I mean, we just covered one, yes it called Meteors, kick gas framework. So you have this agile program environment so hardening the infrastructure and putting your brand out there for channel partners takes a lot of pressure off them. At least to go execute and pitch a proven solution like EMC at the same time differentiating on top of it. So it's interesting to see different vendors take different approaches and one of open kind of choice but yet hardening some infrastructure seems to be working for what we're looking for, the proof points. Yeah, it's open in meaning that we could produce a reference design for almost anything but we've obviously chosen to pick a handful to get going that we think of the most common use cases because you mentioned right at the beginning of this interview we're in the business of making money and our channel partners, they're in the business of making money too and so we want to try and have the initial reference architectures target the areas where we see the kind of most demand. Okay, we got two minutes and I guess the final kind of ending questions are always on a light note. What are you excited about these days obviously and give us an update on some of the cool things you've done, obviously EMC TV, which we've been promoting. We ran an interesting program on silkangle.tv. We took one of your playlists off YouTube, went really well. You guys are producing a lot of content. So give us the update on what Greg Gottson and Maggie are doing with EMC TV and what do you see and what are you getting excited about from a marketing toolkit standpoint? I had this great guy, came out of salesforce.com called Todd Forsythe. I don't know whether you've met Todd, but Todd's doing two things. He's building my marketing data science lab and in fact down in Santa Clara at our executive briefing center when it reopens because we're remodeling it right now. When it reopens in a couple of months we're going to have a showcase data science lab within there. Todd's a marketing guy but he's kind of a weird marketing guy because in that he's a bit of a nerd and he does everything kind of by the data. And so he's sitting in the middle of this kind of data analytics and social world right now trying to understand not just the conversation, not just what people are talking about but trying to correlate that with the effectiveness of some of the marketing tactics that we've been using. So he's kind of a data geek who was an old school direct marketer that now believes direct marketing is dead and is going social. But at the same time, he's not just social on an emotional level, he's social on a let's see the data level. So that's one of the coolest things that I think we've spooled up in the last six months and Todd's a pretty awesome guy. That is cool. Kind of going beyond just the sentiment, the thumbs up, the thumbs down. It's like, okay, what does it really mean? How's it tied to revenue generation? Yeah, well, because you know marketing, it's always, you know, they let me, oh yeah, it helps the brand and like no, no, we want to see the data. Like social is hard, but like hey, let's take a look at cause and effect here and there can be a science behind it. I was just talking to one of the developers that we're hiring and he's 26 years old and I said, you know, me being the older guy said, you know, when I graduated from college, we didn't have cell phones. Pages was a big innovation. I go, I go, what's going on with big data right now is that you can actually instrument your entire business end to end completely, everything. So, and because we were trying to talk about this big data, what big data means and we're so excited and we think you guys are on the right track and congratulations Jeremy. You're putting on a high tech marketing clinic and we love working with you. Jeremy Burden here at the EMC VPEX Launch Channel Friendly changing the game on services. Go to servicesangle.com and wikibon.org. We're covering services like a blanket and we'll be right back with our next guest. All right. 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