 Live from Las Vegas, Nevada, it's theCUBE at HP Discover 2014, brought to you by HP. Okay, welcome back everyone here live in Las Vegas for HP Discover. This is theCUBE, our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE. I'm joined by Coast, co-founder and chief and assistant of Wikibon.org. And our next guest is CUBE alumni Antonio Neary, senior vice president, general manager of HP servers and now HP networking. Welcome back, congratulations CUBE alumni. Always great to have you on. You got a new role, you're running the networking division. So, you know, you don't look very chill, very relaxed. Now, first of all, thank you for having me back again. It's always a pleasure to be here. So great news. So what's the challenge this year? So you got some big announcements. We had the Apollo astronaut here last night at release in the new servers. Give us a taste of the flavor of HP Discover this year from servers and networking. Well, so first of all, HP Discover is always an amazing event. As you can see, you know, the thousands, thousands of customers and partners. And every year is getting better. I mean, you are actually going to all of them. You know, where it's Vegas or Europe, location is getting better. And the customer feedback is overwhelming. The ability to really see all the solutions in one place, the partners that work with HP and get access to executives to have that conversation about the future. You know, we talk about the data center of today and tomorrow is incredible. So, it's outstanding. I was really impressed yesterday in the keynote. I actually went in because we had a break and I went in to see Megan Purse. Usually I watched on the screen and Tweet away and comment to commentating, but I was really impressed. It was a moment there. And we've been to all the HP Discover's going back four or five years now. We've seen this transformation, but there was a moment that captured it yesterday. Megan was talking about the turnaround and the tough choices that had to be made. I was referring to the layoffs, obviously. And then she made a statement of what they're here were committed for today and the future. And I feel what her exact words were, but she was interrupted by the crowd with an applause. Like not just like golf clap. It was significant. No, I think there's a sense of like commitment. Yeah, I think, you know, customers realize that HP's back is back for a long term, not for the next quarter. We continue to drive innovation that really matters. And we're really focusing on the problems that customer have today, you know, where it's security, big data, mobility, and the cloud. And, you know, it's all the tough problems between performance efficiency and space. And we talk about reducing power and reduce, you know, the space because at the pace we're moving today, this is now sustainable. And so, I mean, customer now sees HP's back, is driving meaningful innovation. We are more custom, much more customer centric. And we have solutions that they see that they really solve the problems. Where's the innovation in the servers? Okay, I got to ask, is everyone, you know, there's two religions going on, right? You have the open compute religion where, and the folks saying servers are dead, you know, they're all going to be integrated into one big God box of some sort engineered system. You see some movement of that. You see Tom Joyce do some stuff with storage. Are the old blades and that old model going away faster than you think? Are they going to stick around? What are they going to look like? Where's the innovation for the folks out there who have bought HP servers over the past decade? They know how to buy them. They're buying boxes. What's different? What's the innovation now? You're not going to buy boxes. You're going to buy compute. That's the first thing, right? So, I think you need to make sure there's a clear distinction. I mean, talk about the cloud. You need compute to run the cloud. So, it's not about the box. It's about optimizing the compute resources for the right workloads. And that's why in our HP server strategy, we have a clear strategy, which is basically to provide the right compute for the right workloads at the right economics. And that means you will employ several different architectures. So, an example of that, you know, if you think about the workloads in the traditional enterprise, where it's file, print, mail, you know, we have been leading with the right compute platform in that space with the leading brand HP alliance, you know, our, you know, rack and tower business. If you think about our mission critical type of workloads, what are the characteristics? Scalability, data integrity, and performance, right? And so, that's all about availability. And that's why we have a very broad portfolio of mission critical platforms, where is the DL580 all the way to the mission critical x86, and in between it have no stop with new innovation, by the way. Now, you know, no stop, you went from a MIPS base to a RIC space to integrity, and now with x86. So, there is constant innovation that takes place because ultimately, that matters. Density still matters too, right? You got, you have density, physical space. The ultimate density, right? We announced here on Monday, the new HP Apollo family for high performance computing and supercomputing. And we draw a tremendous amount of innovation at the rack scale, because with these new platforms, we are bringing high performance computing and supercomputing to the enterprises of any sizes. And with that platform at the rack scale, we actually provide four times the density per rack per square foot with 28% less power consumption. And in a rack like that, you can actually pack 250 teraflops of compute power. And it's water cooled. And it's water cooled. Without chillers. Without chillers, and it's our patent innovation, when we call it the server drive disconnect. And your hyperscale guys announced a deal with Foxconn. Yes. Well, I was there when Meg, it was an historic moment, I will say, because it hasn't done before where you bring the two best company in the planet when you talk about technology. Where is HP engineering heritage with our services capabilities and our server capabilities with Foxconn engineering manufacturing and supply chain in a unique partnership to address a big problem which is scalability at the cost that matters for those large service providers. And it was really a business model innovation because ultimately we have the technology. So you were kind of joking before a little tongue in cheek about the future of cloud is compute, but really not. Did you see what Martin Fink put up today? I mean, essentially you got the persistent storage layer moving to the compute. Exactly. Coming together. And so in the first instantiation of that, believe it or not, was moonshot because moonshot was the first instance where we brought that concept into the architecture. Now the next step is SOC, system on a chip. And then you're going to have the universal memory and then you have the photonics, right? And then that's how the architecture is going to evolve over time. And I think HP is very well positioned, right? To deliver against the vision. We have some questions from the crowd and the crowd chat. Go to our new crowd chat.net slash HP Discover announced today. Picked up on RICO.net, Karris, which I wrote a post about it. And also on Forbes carried the big launch of our new venture. It says, at the Vellante and Atforia, ask Antonio, let's say, I added that in there. Ask about Cisco Tata and their market share from IDC. Are blades dead? No, blades are not dead at all. And you think about it, right? Blades is great for enterprise virtualized environments, right? And so just to put it in perspective, HP has a significant commanding presence around the globe. We are 43% market share with Cisco in the very, very low 20s. That's global, not North America. That's global North America. If you look at North America, we still are the number one vendor in units market share, even in North America. And so what's going on here is that when you look at the Cisco numbers, you have many things included in that market share revenue, which is a U.P., which is much higher compared to the traditional blades. Because in those numbers, it includes the problems. I think they also include VCE and other VMAX kind of deals. Or VCE is legit to include that. Well, I mean, it's not about legit on all legit. I'm just saying it's a converse system driven architecture that drives that U.P. much higher. And that's the reason why the revenue looks what it is. Oh, you're saying the counting the whole thing? This is where... Oh, that's the methodology? Oh, okay, well that's, I didn't understand that. That's... I used to be at IDC for a long time. That wouldn't happen if I were still there. We'd call that out. The takeaway is that we are still in the number one blade unit market share. And honestly, I think, you know, when we look at it, you know, the past few quarters, we have to really refocus on that category. But on the other hand, you know, we have gained share in all the aspects of the business. And when you look at the blade share around the globe, there is no question, right? The HP blade system is still, is the leading, you know, infrastructure. So you have that interesting, competitive dynamic. And frankly, I think what Cisco did is good for the marketplace. It, you know, it... Competition is over. Yeah, it's always good, right? But I wanted to ask you about another competitor, which is IBM exiting the X86 business, selling that business to Lenovo. What do you make of that? IBM's devil, you know, Lenovo, more like a Dell competitor potentially, what do you think about that? Well, I mean, listen, I respect all the decisions, right? I mean, everybody looks at their own strategy. I truly believe to be in the new style of IT, you have to be in the infrastructure. You have to participate in the infrastructure. Obviously, we are pursuing that opportunity very aggressively because you don't want to have customers in the situation they are today. IBM customers now have to make a tough choice. Who is going to be my partner going forward? And we believe HP is the right partner for them because when you look at the IBM portfolio and HP portfolio, a lot of, you know, good overlap. And if you look at the comprehensive approach we take between services and infrastructure of the cloud, which we can provide the best, you know, best to breathe and as well as customers. Let me edit your statement, if I may, John. Let me edit your statement and see if you can say, you know, to be, to participate in the new style of IT, you must be in infrastructure. That's what you said. You have to be a relevant player in the infrastructure. Relevant player in infrastructure. Do you have to be a relevant player in x86 infrastructure? Is that implied in your statement? I think you have to, like you will have to be in three years from now in ARM-based infrastructure. Absolutely. Okay. So you're picking up share from IBM on there. We've talked to some customers, there's been some confusion certainly around, you know, because there are high ends not coming in fast enough. Are customers moving to HP? Are you guys winning business because of that move? We have signed many, many IBM customers and many, many IBM partners. And as part of that, where is the, you know, mission critical customers, where is x86 customers absolutely, we have gained, you know, those are customers to HP. And in fact, at these events, we actually brought IBM customers and partners to a specific set of sessions to show them that HP can be their partner going forward. What's the biggest surprise to you this year? Obviously besides getting the networking division and running new responsibility, that's a big surprise, an opportunity as well. Outside of the networking division which you're now running, what is the big surprise that you've had this year in the business within HP? Could be outside HP, what surprised you this year? I don't think a surprise because listen, you know, we have been very clear in the many years we have been here with you telling the story, right? What is our strategy and how are we going to pursue it? So, but it's a pleasant surprise per se that we, all of this is coming together. You know, we were here last year with you and we talked about the story around the cloud. We were together in Barcelona, right? And we talk about the story around, you know, service provided, exploding and the amount of data we need to go manage. If you think about this event, right? And announcements we made in the last four to six weeks. A very clear strategy around the HP cloud, a clear strategy around our compute strategy, a clear strategy around networking. We're soft to define networking and the announcement we made this week as a part of the HP Helium with the virtual cloud network and SDN applications. So, and a broader set of things we bring to the market and the innovation you see here, right, is to your point is something that happened many years back. It's not like something we did in the last six months. So it's a clear agenda and a clear direction. How about services? You're sort of former business. You were there when services and the enterprise group came together. And aligned, you made a lot of services. How was that all affected your activity? Well, actually it's a great compliment, right? Because you think about it, you know, in that when I was running technology service we made a clear decision to transform our portfolio. And what we did over a period of time is introduce new services for the new style of IT. So whether it's foundation care, proactive care, data center care, all the transformation services around professional services and consulting, all gear around big data cloud mobility and security. And we see tremendous traction. And in fact, in many cases you have to lead with services to really drive a customer in their journey to the cloud. It's not just selling, you know, the solutions. You have to lead with services and then the solution comes next. So as a head now of networking and servers, that is services is part of my core agenda. How we enable services to be essential in that journey with the customers. And obviously it's making a difference for us. You know, we were joking last time we talked when I worked at HP back in the 80s and you've been around a long time HP or customer satisfaction and services was really paramount to HP. It's really the core of the company, the soul of HP. One of the things we like about talking to you is you have that mindset and you think about the customer perspective. So I got to ask you the question. And this is a question that shouldn't get any core messaging to come out, but more of a personal perspective around this. From a customer's perspective, what does the word hybrid mean to you? Not from HP, from the customer. If you're out on the customer, what does the word hybrid mean to you? That's a big trend right now. I mean it's flexibility. In my head it's flexibility. Flexibility to adopt different architectures, different business models, but yet be able to integrate those choices in a cohesive way. So hybrid to me is all about flexibility. So if you talk about a hybrid cloud, now we call it an HP cloud, right? Where you host the workload on premise, or you do it in a virtual private cloud, or you do it in a public cloud, it gives you the flexibility to manage those workloads in the place you think is most appropriate based on the economics, but also be able to manage that data and that experience in a seamless, integrated way. So to me, hybrid is basically flexibility. We're talking to Sargalai really about OpenStack and the variety of things with Helion and things like that, that grew organically out of the industry. So being a high quality kind of person in the U.R. with HP, everything's about high quality, he made a comment and he said, oh, what's broken in OpenStack? What needs to get fixed? Networking. And he's got scar tissue to prove it, he said. So I got to ask you, what are you guys doing with networking and to speed up the marketplace because the open source is a driver right now and the innovation. So you got a lot of stuff in the kitchen, in the back closet, possibly. Got NFV now, you got Bethany working on the telco side, clean sheet of paper, billion dollar opportunity with the telcos. But for existing customers who are looking at the hybrid cloud as a bridge to the future, they need quality. So what are you guys doing on the networking front? Can you comment on that? Well, listen, the announcement we made this week is kind of interesting because we announced the virtual cloud networking based on OpenStack. So our strategy around there is the end, it's all based on open source. So I think that's more than that, it's difficult to explain. I mean, it's based on open standard. If you start at the bottom with infrastructure layer, we adopt open standards, right? Seven years ago with our, you have the fire alarm by the way. With the open flow, right? And then, you know, with that. So he just heard the alert because open source, when you said your open source business model, your tires, your bells went off. Hey, this is only a test. But if you think about it, right, we adopted open, open, open standards many years ago. And, you know, and that's why, you know, started with open flow, now with open source, around helium stack with the networking. And we have been very consistent in our strategy. So we obviously want to drive the open source approach. And today, even Martin, think about it right where he announced, you know, the concept of the machine. And he said, now we're going to drive a new operating system based on open source. And we want to roll people from the community. I mean, I love that announcement, right? That to me is innovation. It's invention. It's, John, I've said how many times that HP's got to get back to its roots and invent. And I think Martin's presentation was a good example of HP's invention ethos. I'm going to ask you a question specifically about the hyperscale market. I ask this a lot. I want to get your opinion, Antonio. The hyperscale is bleeding into the enterprise in some regards. And you guys are participating now in that in a fairly big way. Whether it's moonshot, you've got a dedicated density server hyperscale group with the Foxconn deal. How much of that existing market is right for those types of systems, the hyperscale-like systems that you're pursuing, and others are pursuing, by the way, whether they're ODMs or et cetera. How much of the market do you think that they can grab? Is it a, you know, is it a big, large chunk? Is it a third, a half, more? Well, I think, listen, that's a market you have to participate. Again, going back to the infrastructure comment I made before, that market is going to double over the next five years and meaning the town, the addressable town. If you look at the growth today, that market is growing between 20 and 35%, depending on the quarter. Some is driven because these large service providers do big buys, depending on the seasonality of the business. Also, it's tied to their services in the cloud. So, definitely it's a different type of economics, but ultimately you have to be able to provide a comprehensive set of solutions, and you have to be able to customize those solutions because ultimately it's all about, you know, adapted infrastructure to the app. And most of these apps, right, are designed with new architectures, which means, you know, you can drive the economy between management, the app, and infrastructure to a level that wasn't known before. And that's why I said, we are moving away from a server era to a computer era, and that computer era is going to be dominated by warlord-centric approach. And the hyperscale will be dominated really by those apps who are going around the cloud, and those service providers are going to optimize that app to the infrastructure to drive the maximum possible performance, power, efficiency, and space. And Tony, what's your objective this year? We're going to close out the segment. Let's go into your plan. What's your top three objectives per group, server, and networking? Can you talk high level without giving me the secret sauce? Yeah, no, but listen, you know, first of all is to continue to be very customer-centric in everything we do. You're going to continue to see tremendous amount of innovation whether it's server or networking. And you're going to see more integrated architectures as you go forward. I think, you know, the fabrics with the compute integration is going to happen. It's just, you know, the way things are going to work. But customers will continue to see that we will continue to lead the transformation above the networking industry with our approach in industry standards whether it's infrastructure or software-defined networking all the way to the cloud or whether it's, you know, the right compute for the right workloads. We are very excited to cover the Moonshot launch. So I got to ask you the status of Moonshot. Obviously, Calzé, that kind of went away. What's the update there? Who's the involved? What's the roadmap look like? Well, the Moonshot booth is hidden behind so you can see how much activity you see. I mean, we love the product. I mean, does it have a big future there? Has it been pivoted? It has a tremendous future. Tremendous future. In fact, we already have many, many, many customers that already have done deployments on Moonshot. Some of them even scale in it and some of them, you know, continue to optimize their workloads to Moonshot. And the good news with Moonshot because it's such a flexible architecture, you can optimize not just the cartridge, the server, but also the solution that goes around it. And so this week we announced a new cartridge, right, for the video transcoding. And you're going to see more and more solutions coming down the road. I think, you know, now is an acceleration you're going to see over the next 12 months. Very cool. Final words, share with the folks out there from your industry perspective. You can take your HP hat off if you want, but I want to get your personal perspective. Why is this moment in time so important in this inflection point? You look at all the major inflection points, different ways of innovation, different platforms, one, two, three, four, whatever lingo you want to use, but we are at a really interesting point in time. Why is this moment in history for the world, for technology, so important? Well, first of all, it is almost a privilege to be at this point in time in this industry. It doesn't happen that often. You know, the cycles before were kind of 20 years of the time. Now we're talking about five to seven years of the time. We had Thomas Freeman here. He said, you know, very nice things. He said, listen, when I wrote The World Is Flat, and I look all my appendix there, and I look all the letters, Facebook was not there. Seven years later. Skype was a spelling error. Yeah, Skype was a spelling error. So the speed of change is so impressive, right? And so. The world is flat now. Yeah, exactly. The world is flat now. But the point is that you've got to move fast. And this is why it really speed matters. But matters in the context of a strategy, you want to go drive and make the right investments going forward. And I think, you know, for us, I think we are very well positioned as HP to drive that new style of IT and be able to deliver the innovation that's required to deliver at the speed a customer needs. Because as I said before, to out-compete, you have to out-compute. Which means that you have to be ahead of the time, at least one or two steps ahead all the time. I think HP's holding back some cards. You know, Dave always likes me when I come in. Well, the good news is you're going to be here again. You know, because I have the history of HP, I can see the smoke signals. I see people working in the back room. I can't put their faces on them yet. But I know you guys are holding some cards. I'm trying to get the data. I just feel like it's a really serious. The good news is you're going to be here again. I think you kind of, Meg's walking the line. You know, we're moving away from the icebergs. There's a little Caribbean water, nice warm waters with no icebergs. But I think you guys have some rabbits you're going to pull out of your hat. I mean, it's too fast. It's too much action. You got way too much IP here in the company. And then you got the money to do M&A. So I just have the feeling. So we'll continue to speculate. Time will tell. Time will tell. And we'll be covering it. This is theCUBE. Antonio Neary, great guest. Thanks for being candid. Thank you. And taking the time to meet with us. This is theCUBE. I'm John Furrier with Dave Vellante, Extracting the Safety and Noise. Antonio Neary, Senior Vice President. Two divisions now, servers and networking. Soon to be one probably because it's all coming together anyway. We'll be right back after this short break.