 Nick Vanders, oh that's right, you were on the sheet here, good, cloud bursting. Yes. So you were on the keynote yesterday. Yesterday, it seems like a blur, things are going crazy around here, that's for sure. So VMware, I mean we just had them on here, let's talk about VMware for a minute, so we just an opening question. I mean, the server business, you know, Palmer has put up a slide. Is that scare HP or not? I mean, because you have a lot of virtualization going on within HP. Yeah, we're the number one partner with VMware, there's more VMware that lands on HP servers than any other server in the marketplace. So, very good relationship, and does it scare us? You know, I've heard this question multiple times, is consolidation, does that scare you? No, because we actually broke through a lot of backlogs for IT organizations as they solve consolidation problems. Does virtualization scare us because we'll sell less servers? No, we're actually selling more servers now than we ever did before, and lots of them running VMware. And there's, while there's a lot of virtual machines going out there, there's still a lot of physical machines going out there as well, you know. So, it's a combination. It's more efficient, still complexity that needs to be kind of abstracted away. I mean, Intel did not lose steam by cloud. I mean, they're growing because of cloud, so. Yeah, I think to a large extent, when I talk to businesses, they have so many projects that are on the back burner because they don't have enough infrastructure or manpower people in order to implement the ideas. There is no shortage of ideas. And if we can break through some of those backlogs by making infrastructure more efficient, making people more efficient, and that's where cloud comes into play, and you know, push button, deploy an application, well, let's get our customers, our clients, focused on their business instead of, you know, worrying about the infrastructure. We just want to deploy it. Right, so virtualization is the first stage in that journey. It's an on-premise dynamic, and customers are battling that at different phases. Now we get to cloud. Yeah, takes it to a whole new level. Yeah, take me through that progression, right? Because virtualization is predominantly a VMware, you know, dominated world, right? But HP can infuse themselves in the discussion to kind of enable customers from virtualization to cloud. So, when I think about cloud and what customers really want, is they want to deploy a service, an entire service immediately now, and businesses say, you know, I want to deploy a service, and it might be a multi-tier, multi-node application, so it's server storage, infrastructure, VMs, physical machines, and they want to deploy it because they want to get their service out into the market and collect checks, right? And VMware produces VMs, it's great and we leverage those, but what we do with HP, we have an offering called HP Cloud System, and it is the most integrated, complete solution for building a private cloud or for a service provider, building a public cloud, and then even working across a hybrid cloud environment, and it does exactly that, you know, that the IT organization, the IT resources just turns into a pool of resources, and we expose, IT exposes a service catalog to the business, and they can deploy a Microsoft Exchange system, they can deploy a invoicing system, they can deploy an ad campaign, just pick it for service, hit go, and it reaches in and powers on infrastructure and deploys it. And when it hits threshold X, Y, or Z, it bursts over into the public cloud, right? Yeah, and that's what I demonstrated yesterday, is we now, with Cloud System, have the capability to automatically, when you run out of resources to be able to reach out to a service provider, in the case of the demonstration I did yesterday, we reached out and grabbed resources from a service provider by the name of Savis, and pulled in virtual machines from Savis into that service. So, and again, the business wasn't looking for the customers that I'm working with wasn't looking for a VM, they were looking for their advertising campaign, which needs two VMs for a web tier and two physical machines for a database tier, we hit go while I was on stage, and it deployed two VMs from Savis, two physical machines from the local resource pool, knitted them together, installed the software, and brought it up. So, we did a case study on Zynga, and the a-ha moment for those guys was the ability for right scale to help them kind of have a cohesive hold between on-premise and cloud, right? So, you guys have the orchestration, the automation, the framework to kind of bridge those two together, right? Right, so what we do with Cloud System is we've even integrated a policy engine so that when you define your application, you might define attributes for it, like the, you know, it's a medical system, the database, do not allow it go on to the public cloud, or inside of that policy engine, you've got rules based on cost, based on locality to customers, based on compliance and, you know, HIPAA rules and such like that. So then when you deploy a service, it can look at all the resource pools available, be they service provider or private, and pull together those resources and then hand it back to the customer as a running service. So, I'm a retailer, and I want to run my web tier, I can put that up in the cloud, but I keep my database tier on-premise. Sure, you can do that, absolutely. And another use case that I actually ran into with one of our POC customers is they expanded into a new market, just use an example, Singapore, and they don't have a data center in Singapore, but so they wanted to deploy their services into Singapore for the clientele that they have there. Well, click, go, you're done, right? You're paying for it as you use it, and that's, you know, the power that you get with a hybrid cloud environment where you've got intelligence across all of this as well is get the resources where you need them, when you need them, and both private and public. So, Patrick Har yesterday on stage at one of his keynotes talked about HP building their own public cloud by the summer, does that, so then the option becomes, I can burst over to Amazon to Savis, or by the way, burst over to HP, and it has levels of performance and availability that maybe differentiates it versus the existing public cloud. Yeah, we already out in the marketplace with HP Enterprise Compute Service as a cloud offering that you can pay for by the drink. And Patrick's probably alluding to other things that's not in my department, the public cloud services that HP has. I'm developing a solution that allows our customers or service providers to build a public cloud, but yes, we tap into HP as a public cloud with this. It's agnostic, it will be agnostic. And to service providers, and those service providers can use HP cloud system or use their own homegrown technology, maybe using operations orchestration and server automation, we'll tap into those because we've got a connector that'll be available later on this year, a connector where you just translate between cloud system and whatever service provider API that is out there in the marketplace. Right, and then you can manage that from a single pane of glass? Single pane of glass, and that's nice, because now you're deploying a service, I can deploy it and it'll land on top of Hyper-V, VMware, physical machines, or virtual machines from a cloud provider. And HP as a service provider, we just introduced local bursting yesterday as well. And what that means is I can burst, but I'm not going to actually go out to a service provider. You burst locally? Locally, HP's going to have extra capacity on site at the customer site and burst into that and you pay for it as you use it, and that helps out those customers that say, and there's a few of them that come to me and say, I cannot put anything in the cloud based on my regulations, based on the industry that I'm in. So the best definition I've heard of for cloud is it's a cloud if you don't have to pay for it upfront. And that could be the business unit. You know, think of the consumer, right? The business unit doesn't have to pay for it, they pay for it as they consume it, right? Now the IT department obviously has to make some investment, but you guys are saying we're going to put equipment on site and you pay for it as you use it. Yes, and so we'll put equipment on site and the customer would put a fixed amount of equipment on site and we'll add, let's say, 20% extra to that and they can tap into that as needed and they pay for it as they use it. And so that's a good definition for cloud. When IT presents a private cloud to their end users, they're charging for it as they use it. So it's kind of an internal cloud, pay for it as you use it as well. Yeah, yeah. So you just look at the customer as the business unit that way, right? Yeah, yeah. It still tries to hold. You always just kind of put a circle around a different organization as the quote unquote service provider. So, you know, customer profile wise, where do you see your customers today as they're kind of adopting cloud? Is it, they're really kind of getting to this hybrid cloud model first and then over time they figure out to the extent they want to move to cloud. It's kind of a let's date before we get married type situation from an adoptions profile standpoint. Well, I believe and we believe at HP that there isn't an endpoint of everybody going to public cloud or everybody going to private cloud or IT, traditional IT infrastructure disappearing. We think it's going to be a balance across those because there's pluses and minuses for each of those. And we're going to see customers invest in private cloud and be able to invest in getting resources from the public cloud as well. And the scary thing that people have run into that prevent them from doing this is each come with their own management system. Each come with their own, you know, you'd have an army of people taking care of traditional IT, your private cloud and your public cloud. That's where we've simplified things and we're investing on management across all of that, transparent bursting across all of that. You just say, give me an app and it'll grab it from the right resource pool based on the service levels and the attributes that you need so that you can get best of all of those. Now, where are customers in adoption? Well, everybody has traditional IT, I would say. I'd say about 70, 80% of people of the activity is in actually private cloud arena. People are trying to, the IT organizations are trying to turn themselves into a private cloud in the infrastructure space qualification there. And then there's a good uptake of infrastructure as a service public cloud. In the software as a service space, I'd say there's a lot more going on in the public cloud software as a service space. So, you know, we can slice and dice the cloud market quite granular here if you wanted to. And so does cloud burst, do I need to be an HP customer today or can I slide this in as a module or a solution that kind of enabled me to get to cloud over time? So what you can do today is connect up with HP or our partners and get a cloud system inside of your data center and that gives you a private cloud in your data center and it can be Greenfield, new system or we can pull in existing equipment, pull in your equipment that you bought from us in the past and build out a private cloud. And then when you're ready, you can flip the switch and just start reaching out. That cloud system will automatically reach out and grab resources from service providers. I did the demonstration that I've done, for instance, to burst out to a service provider is in a technical preview today where we have certain customers in POC environments today using it and that'll go general availability later on this year. So it'll be just part and parcel general availability for the product and then you just sign up with the service provider, register with them and then it appears in cloud system and you burst away. I want to ask you a couple of questions about one strategy and then what your goals are for this year. I'll say it's a growing market, it's good to see the cloud thing fully come into pick it up or HP, have that come together. So what's the strategy and then what's your goal for the next year just on the business side? So strategy, I think kind of describe that a little bit is we're trying to provide our customers with a simplified view to IT across traditional private and public environments and drive it to make it dead easy, really simple to tap into any of those options in the marketplace. That's absolutely strategy and we're doing that by implementing cloud system offerings like cloud system into the marketplace and we're fueling that with converged infrastructure, the best servers, the best storage and the best networking in industry. Our strategy includes being very heterogeneous at the same time because we know every customer that we talk to has got a heterogeneous environment so we want to tap into that. Now for goals. Say tactics, we'll just go down the kind of the hoshin planning of HP, that's a strategy with some of the tactics that you got to do to make that happen because it's complicated. It's complicated so a lot of it is, well some of it is education there's, well you tell me, is there a, when you talk to a customer or clients in the industry, is there a common definition of what cloud is? I was just in a session. Yeah, lower costs. Yeah, lower costs. Lower labor, lower costs. Faster agility, yesterday I was in a group and there was disparate opinions as to what cloud is. Is it software as a service, infrastructure as a service? Is it private cloud? Is it public cloud? Many people actually just lock into cloud equals public cloud. And, There's an on-premise component. I mean I was thinking public cloud has been out there and it's different. You know, VMware wasn't really involved much in that and all the Citrix has been, but the private is where the action is, hybrid is where the action is. So what we're interested in knowing is where you see the customers, they got to have some on-premise. Obviously they will always have on-prem stuff. So what is the, how do they get to that middle ground? Is it because they have partnerships? Is that why hybrids so? Well definitely partnerships. We announced a cloud agile program for instance, yesterday as well, where we're partnering up with many service providers in the industry, so HP as a service provider, but also we're open. Many other service providers, I think we announced a partnership with Verizon and others in the cloud space, their cloud providers, their private cloud hosters, public cloud providers. So we're working with them to enhance their market reach through our- But your cloud out there only has a shingle because it's still unknown and people are preferring online providers for cloud, which is the multi-tenancy issues we've solved, but ultimately the channel will be both direct cloud for HP and partnership, right? Absolutely. So that's kind of out there, indirect, indirect if you will. The question that I want to ask is, how are you looking at, as a utility standpoint, the security side? Obviously we ask this question all the time around security with the hacks that RSA was just compromised at the token stuff and PlayStation House has been documented for months now. That's a concern. So how is the utility of the cloud dealing with the security? Is it a do-over? Dave Vellante and I always talk about that. You know, what's the paradigm there? So you need to, when we put in a private cloud solution, for instance, we don't much think about mission-critical security, absolute multi-tenancy, keeping applications separated from the cells and data separated from one app status, separated from the other apps data. For instance, with our three-par storage, and I think we just had David Scott previously talking here, we can take a, down at an infrastructure level, we can take a three-par storage array and divide it up and make it a multi-tenant environment with multiple customers running on the same device and you have complete separation between those. Now we have to do that with every aspect of infrastructure and then bring that up to the cloud level so that the entire service is multi-tenant. And that's, so we're investing on the component levels and at the cloud level as well. And when do we get multi-cloud? Multi-cloud, right? So that if I need to, well, you have everyone kind of runs out and builds their cloud, but federation is always going to be better. Cloud providers getting bursting to other cloud providers for additional capacity. Yeah, whether it be dual rights or just, I mean, to hedge your bets, right? And no one, you can get data in the cloud, but you can't always get it out, right? It's the Hotel California problem, right? We heard that yesterday. Yeah, and so how does that, cloud is not magic. It doesn't allow you to just ignore IT best practices, right? You need HA, you need no single point of failure, right? So ideally you can spread it across and federate it. And that's a multi-cloud story. How far off are we from that? Obviously got to walk before you run. Obviously got to walk before you run, right? But how far, is that years, days, weeks, months? Well. By summer? With what I talked about and what I demonstrated to be able to burst out to a service provider, you know, we'll put a single service provider into our catalog and then shortly thereafter we'll be two, three, four, five different service providers and you'd be able to burst from a single system to be able to burst some of your resources to one service provider, another set of your resource to another service provider so you're not putting all your eggs in one basket, per se. And actually I've worked with one of the customers that I was dealing with is that was their policy. They worked and said, we want to be a POC customer on your bursting and here's my list of service providers I want to burst to because I want to have, if something goes wrong here, I've got a backup plan to go there. I want to ask you one final question before we wrap up to kind of close out. Share with the folks out there your vision of the next five years. Obviously, this is kind of a utility step. We're kind of in the weeds of some, you know, cloud, because you have to deal with the day to day. But step back, look at the 20 mile stair and say, you know, where are we in five years? Right now, commonly we talk about internally within HP, we're actually at like stage zero of the cloud. Everybody's talking about cloud and cloud infrastructure and cloud capabilities. And we're putting a lot of great stuff in the marketplace, but there's a lot of evolution that needs to come, a lot of investment that has to come, especially in the software space to glue this together, to manage this holistically as a single unit to tie back into traditional IT processes, to evolve traditional IT processes into, you know, cloud compatible IT processes. So I think it's technology is one piece of it. Processes really, really, really, really need to change over the next two, three, four, five years in order for cloud to really break free and take off. Okay, Nick Vanderspiep, director of IIS Strategy at DHP. Thanks for joining us on theCUBE and joining us. Appreciate the knowledge. Cloud is at the beginning stage zero and it will grow. Great opportunity for everybody involved, developers, companies, the big companies and also the white spaces that are available. And that's exciting time. Thanks so much, appreciate it. Thank you.