 Okay, we're back here live at the Dell Storage Forum, and I'm Dave Vellante with wikibond.org. Here with Stu Miniman, also of wikibond.org, and Nick Allen, also of wikibond.org. So we've got the wikibond crew here. This is great to have you guys on. Nick Allen, for those of you who don't know, is probably one of the sharpest storage analysts in the business. My experience with the lead analyst at Gartner for a number of years has been a major contributor to the wikibond community, and is really our go-to guy on understanding technology, how it applies, how it fits, what users are doing, what's real, and what's BS. So Nick, welcome to theCUBE. Thank you. Thanks for the compliment. Yeah, it's good to see you again, Dell Storage Forum. You weren't at the last one. This is definitely a step up. Last one was good. This is better. Good customer vibe. Dell is a clearly relevant player in storage, but I wanted to ask you, what are some of the more interesting things you've seen here, and then let's get into the discussion. Yeah, well, I heard there were 1,200 attendees, so that's way up, and I would expect more next year. What I spent this afternoon doing was examining the Hermes project, which Dell has been talking about, which is to take flash memory on the server and unify it with their tiered storage, and I learned about their FlashExpress product, which is actually quite different than the Fusion IO, and similar products. The Fusion IO product, the PCI card, pretty much with storage on it. Most of the PCI SSD implementations have the storage on it, and therefore serviceability becomes a major issue. If you have to replace the drives, you've got to open up the server and those kinds of things. Earlier this year, they announced their FlashExpress product, which takes a PCI extension card and connects it up to four different drives that are externally mounted from the server. That gives them the serviceability. It also gives them a bigger choice in SSDs, and Dell has been working closely with the SSD form factor folks to define not only how you plug it in, but also to put four lanes of PCI Express as well as a SATA or SAS connector on it, which gives them the utmost flexibility. Then I did some research on RNA networks that they acquired last year, I believe, while there's a lot of information available under NDA. If you look at what RNA networks provided, which was originally, they virtualized main memory, RAM memory. You can take memory from many servers and share it together and dedicate it and so on and so forth. If you look at what they had, well, first of all, Dell is also saying that Hermes will be read-write cache, which is something the likes of EMC doesn't have. They talk about it, but they don't have it. The RNA had the pooling. They had a high-speed cache area network for one of a better term, which could either be InfiniBand or 10 gigabit Ethernet. They had this read-write cache coherency problem all worked out. One can infer, fairly easily, that Dell has the intellectual property now to possibly beat EMC in the race to a unified flash in the server, flash tier one, tier two, three on the external race. It is a race, isn't it? It's pretty clear with that function shifting back, the source of power is moving back toward the server with this new flash hierarchy and everybody's really hopping on that bandwagon. Now, Dell, I just want to clarify something you said about FusionIO, so Dell still recels FusionIO, but it sounds like it's called Express. Express Flash. Express Flash competes in a way, it doesn't obviously have the atomic rights, I presume, so those are applications that are in use cases that are unique to the FusionIO capability, in terms of supporting Dell's end-to-end vision, that's a key starting point for them, it sounds like. Well, it's an absolute starting point and they have products that's shipping and from what I understand it's doing at least as well as the FusionIO, if not better. They have a demo that they're showing of it, but you can get the spec sheets, you can download it, it's a real product, it's been shipping, I think, for a couple of weeks now. So, the RNA piece is memory pooling as well as some additional flash functionality? Well, it was just memory pooling. But you can easily extend the algorithms and the cache coherency and even with atomic rights Dell is working closely with non-volatile memory Express org to map SCSI commands simply and easily and quickly onto the PCI lanes to get the high speed going. So Dell is, as opposed to some of its competitors, I would say is very interested in standardization and more openness or more choice and they're putting their money where their mouth is. Yeah, so we've obviously seen this flash emergence in the last couple of years and you could sort of see this opportunity bubbling although a lot of people seem to be asleep but now everybody's awake to this, you're seeing big acquisitions. It seems that there's got to be software to hold it all together, that seems to be the key. And I've used the analogy of the veritas for flash as emerging. Can one of the whales do that or do you need an independent entity to do that? It sounds like Dell's really emphasizing openness so maybe that's part of the equation but what are your thoughts on that? I think choice is a better word than open as opposed to some of the other products where they don't qualify three or four or five different SSDs. Dell can do that and they've got a mechanical architecture and people forget about how important mechanics are in storage subsystems and servers and getting them cooled and powered and we saw the demos yesterday or the examples of shrinking the server components down. And you asked that very good question today of Pete Kors in terms of how you deal with shock and vibration and hot power and cooling. And he was like, well, that wasn't easy. And people forget about that and that's the kind of the groundwork that Dell's, part of the groundwork that Dell's been doing is just mechanical piece that gives more choice and more serviceability because if the SSD fails you just go to the outside of the unit and unscrew it and pull it out as opposed to having to open up the server. Right. I wanted to talk, I want to ask you your opinion on integration. We've commented here all week that Dell seems to be emphasizing integration, what I'm calling integration, more so. So they acquire all these companies in there. Even Darren Thomas said, you know, they acquire capabilities from Appashore on things like compression and dedupe and eventually they'll jam the Ocarina stuff in there and they'll jettison some of the other IP in favor of that end-to-end approach. So it seems like they're emphasizing integration more so than some of the other companies that we talked to. What's your take on that? Is that an illusion or is that real? Well, let's put it in context. There's not a lot of old legacy storage subsystems that they have to continue to maintain and integrate into whatever their new architecture is. There are, however, a lot of recent acquisitions, all of disparate companies, from Compellant to Equalogic to Appashore to Ocarina and Exanet. The message that I'm hearing is, number one, we have a vision. Number two, we have a commitment and number three, we're executing on it. Well, it never particularly executes real quickly but I think the roadmaps that they've painted for us are very cogent and they understand the customer wants simplicity and that's one of their messages here at the conference is simplicity and they're marching towards it and in fact, the message that we're listening to the customer is coming through loud and clear but I don't know that I heard that message three, four years ago. No, I think you're right. We heard low margin, assemble business, things like that. Yeah, yeah, price value. There's a completely different tone coming out of Dell versus a couple of years ago, I think. Well, it's interesting, I asked the question of one of the executives specifically about the impact of being in the storage business, owning your own IP and delivering higher margins and his response was, look, it's all about us, it's all about the customer. I mean, it's definitely very much on message. Now, we know at the back end and Wall Street knows a lot of it is about the margins and being able to control your own destiny and I think Dell is dangerous because Dell lives off of PC margins and now they're selling their own storage. They don't have to split the profits with EMC anymore so anything north of whatever gross margins are on PCs which are pretty slim, I don't know, 20%, low 20s or maybe even less. 17 million. Yeah, right. North of that, now here you got EMC living off of 50, 60% gross margins, EMC, NetApp, others. Dell could be very happy at high 20s. Yeah, but the model is different, EMC, percent of R&D, 10%, 15%, and they probably committed to that. Yeah. They can afford that at 50% margins. Dell historically has run R&D at 2% and 3%, but they've used the cash that they've generated to make the acquisitions and now they use that same 2% to 3% to do the integration. Yeah, if I can expound on that a little bit, I look at the big guys out there having come from EMC, look at HP, look at IBM, there's that tension between the invented here, we're going to do the internal innovation, we want to incent our engineers to be able to grow versus... There's no tension here. There's no tension here. It's a small group, management is all on the same page, we heard Darren say he gets three guys together once a month with the 24 architects, pull them from all the GEOs together and work on it. You just don't have that happen at the big companies, they've got big engineering teams, all marching towards their pieces, strategically they try to pull them all together, but there's lots of different playbooks that they're playing off of, there's different schedules, there's different development cycles. As you said Nick, Dell's percentage of R&D, a lot of it's relatively new to Dell and these are the entrepreneurial spirits here, they've got a good team atmosphere if you talk to the guys in Austin, and they seem to work together pretty well as opposed to we've seen lots of tensions in the converged space as to who owns that at some of the bigger companies. Yeah, he showed that slide today where he had this virtuous circle, number one was a choir, number two was integrate, and number three was innovate, and what they meant by innovate was innovate with the customer user experience, you know, how they service things, you know, how they fulfill. I also recall years ago when I was at Gartner, when Dell's model was no longer working and Michael Dell came in and presented some grand plan, and the Gartner analyst just totally beat him up, and he basically left with his tail between his legs, but about a year later he came back with this bill to order low cost, so on and so forth, and grew the Dell back up, and then of course he left, and now he's back, so I wonder whether, I've got to believe there's some Michael Dell in here too. Yeah, I think you're right. I think I was commenting earlier that, Nick, you remember the east coast mini computer companies that got left in the wake of the PC era, DG Prime, Wang, Deck, Apollo, they all got crushed because they missed the whole business model shift, and it seems, and guys like Michael Dell destroyed them, and it seems like people like Michael Dell and I guess Steve Bomber to a great extent have seen that movie before, and I think take great pride in not becoming remnants of the past, I mean Data General, they had tons of cash in the balance sheet, they own all this real estate, I mean even Sun Microsystems, you know, the once great Sun couldn't figure out how to remain independent, and so I think you're right, I think a lot of that credit goes to Michael Dell orchestrating this transformation, and storage has been a big part of that, what in your opinion though does Dell need to do better to become more relevant and more dominant in storage? Well I'm a big iron guy, and so you know, I want to see all of these products be truly enterprise class, and be sold to the big enterprises, and yeah they're going in there, but their focus is still SMB in below, so one of the things to take on the EMCs of the world so on and so forth, I think they've got to continue what they're doing, but be able to leverage that upwards as well. Yeah well, and of course interestingly that's maybe in part by design, maybe in wholly by design, we asked Darren Thomas last year, you know, what's different about Dell, and what do you want to be known for, because we're number one in small and mid-sized enterprise storage, period, you know, and so almost, and I asked him, I mean you give it up at the high end, but with the cloud, and with moving applications everywhere, what is SMB, I mean does it exist anymore, does it just live in the cloud, and SMB, you can sell SMB storage to large companies and within divisions, yeah so I'm not sure I buy into that one, and you know, Dell's bought a lot of software pieces and they're trying to mature their software strategy, and we think that's where the differentiation is in the marketplace. If you talk about kind of all the hardware pieces, you've got to be able to orchestrate it, you've got to be able to automate it, and Dell's still maturing that model, so. Although, you know, they are now, I think all of their storage servers using Dell hardware, which is a shift. Right, and so their attach rates should be very good. It's interesting, I mean. No, I mean the processors that they use in their storage boxes. Right, or? Because of the acquisitions, they weren't necessarily Dell built, but now they are. Common hardware, common storage. Okay, well, you know, and Dell's really smart about its supply chain, no doubt. It's interesting, you look back, I don't know, three, four years ago, EMC and Dell had this great relationship, it was great for EMC, Stu, I mean, you were there at the time, and EMC was making a lot of money through the Dell channel, and Dell, you know, got into storage conveniently, didn't have to spend money on R&D, but that, you know, just to shift gears a second, I think the aperture, you know, we've been saying backup is broken, who's going to fix it, and Dell has just been a partner and a reseller of existing data protection applications, and they finally bit the bullet, and they finally took one, a very advanced one, looks pretty good. Yeah, it does. And they got something they can put into their channel that is, or will be, absolutely Dell. Yeah, I mean, the whole backup is broken, and data protection as a service is a fix, that's what the aperture is all about, but interestingly, somebody was citing some ESG data that suggested a very large proportion of customers are doing snapshots as part of the backup. I was actually surprised that how many of the customers we talked to here, Stu, are doing that. I mean, I love it, you know, I think it's the right approach, and Dell seems to be leaning there, I know NetApp with Syncsword and Commvault is doing some interesting things. EMC, at EMC World, Nick, Stephen Manley stood up, and that was EMC's whole vision, and of course, Stephen Manley used to be the CTO over at NetApp, and so, one of their data protection group, so he's brought that vision to EMC, which, of course, you know EMC, they're going to freeze the market, and they're going to do a really good job of transitioning from the sort of Avamar data domain legato stovepipes into this data protection as a service, and I think they'll do very well with it. But it looks like Dell is there today. Unfortunately, for the company where I first started hearing about this Falcon Store, they run the risk of getting, you know, buried by the big guys, you know, because once the big guys start talking about it, haven't heard HP talk about it much, not sure IBM's talking about it much, but certainly Dell, NetApp, EMC are all putting forth now that vision of using snapshots and continuous data protection as a way to eliminate the backup window and provide data protection as a service across the application portfolio where you can dial down or dial up the RPO based on requirements. So, another observation on Dell, five years ago, were they painting a vision? In storage, no. Anything. Yeah, consumer. Well, I mean, our consumer and we're going to lower the prices and so on and so forth, but in terms of listening to the customers, turning that into a vision and turning it into a product plan, they didn't have that. Out of this conference, they certainly have. Oh, and that's right, and I think that goes back to your point about leadership. I mean, you know, his name is on the box and Michael Dell's, you know, always been very customer focused. So, yeah, I think it's a good vision. Actually, you know, it was interesting, Terry McClure from ESG was digging him a little bit on the vision in terms of not laying out what the future of the data center looks like. So, maybe there could be a little bit more of that, but I think the message is really simple and clear that, you know, old legacy stuff is hard and complex to use. We're jettisoning that and we're going, you know, whole hog on simple, easy, integrated and we've got all the piece parts and we're going to make it work. So, we don't have to look at the kind of the big trends we've been talking about, you know, on the infrastructure side, you know, virtualization, Dell's got a great story. There's scale out architectures, the recent acquisitions, the two big mega trends that we've talked about about cloud and big data. I think Dell's got a decent story on the cloud side. Definitely, they've got kind of the private cloud infrastructure put together, have some solutions that kind of get to the hybrid cloud and they're even building public clouds. Big data, though, it seems Dell's a little bit late to the market, you know, probably because of where their sweet spot is is the kind of the mid and low range. It's not hitting them yet, but, you know, what's your take on that? I mean, my take is big data is a software challenge and I think that it's going to probably come out of a different part of the leadership for big data is going to come out of a different part of Dell. It's very clear to me in just observing the discourse around big data here that they've not figured that out yet. And I think that's okay. I think, you know, EMC started all off with, you know, big data, big data. We asked Dave Donatelli at the end of, I think it was 2010, you know, what's your big data strategy? He goes, oh, that's the different part of the company. So there, you know, HP took a while to figure it out. So I think Dell needs to sort out the software side of that first. And I think, you know, storage will follow. But I will tell you this. Dell for a long time has had a high performance computing center. Interesting. And they would basically talk to their customers, customers would want to prove a concept. They'd put it together in big quantities in this high performance center, bring the customer in and they generated lots of sales with that. And that was a massive investment in hardware and software, especially hardware. So my point being is I think they can take infrastructure like that and leverage it when the time is right. Yeah, absolutely. And that's that tends to be a services driven solution from Dell. That's what they do for the massive hyper scale environments. So it's just not necessarily trickling down to these infrastructure guys. But architecturally scale out architecture, you know, matches well with what we're talking about for big data. When we talked to Dario yesterday, you know, the network of both virtualization and big data kind of line up well with where Dell's going. Well, and Dell is on a lot of trends. Dell's reaching out to the developer community. They're really doing a lot in the area of DevOps. You know, they're big in OpenStack. You can say what you want about OpenStack. I said a lot about OpenStack. I don't think it's really ready for prime time. But the developer community is behind it. And Dell is, you know, very much committed, it seems to that initiative. So they're doing to your point, Nick, a lot more interesting things today than they were five years ago. Five years ago, Dell was losing its relevance. And I would even argue Dell wasn't relevant. Five years ago, they certainly weren't part of the discussion. And now they're a major player, you know, competing at virtually every level, they've got kind of one of everything and they're trying to bring it all together. Absolutely. All right, good. We're here live. This is day two. Stu, any closing thoughts on the second day here? So, you know, going to Fenway tonight, good to kind of talk about that that moonshot, not moonshot, I think was HP's term, but the Ted Williams, you know, trying to hit the longest home run. So, you know, Dell kind of has a vision. They've got the red chair sitting out in the bleachers. And, you know, I told Darren Thomas, there's no actual video footage of that shot. And people around here actually don't believe he really hit it that far. It's kind of, you know, urban legend. But I have my my chip here, thanks to Stu. And I'm going to be trying to hit a home over the monster tonight at Fenway Park. So I'm looking forward to that. So we're here, you know, Dell has been great. You know, we really couldn't be here without the generous support of Dell and our other underwriters, including legal seafood, you know, shop dot legal seafoods.com. It's Father's Day. They ship all over the world. So you know, check that out. So appreciate their support. And this is the cube, we'll be here tomorrow, day three, Silicon angle.com, Silicon angle TV, cloud angle, social angle, mobile angle, DevOps angle, services angle check out all those publications. Check out wikibon.org. Everything is free. It's open. And just trying to, you know, help answer questions and promote great information to the practitioner community. We also have the Hadoop Summit, which will be broadcasting from San Francisco, actually, San Jose. My colleague John Furrier is out there. And we got a big crew going there. So, you know, we're all over that big data trend. And that's the place to be we just did the H base summit. So lots of good things going on. So keep it right here tomorrow. We start at 10am east coast time. I'll be back with stew. And that wraps it up for today. So thanks for watching everybody. This is Dave Vellante, and we're live from the Dell Storage Forum in Boston. We'll see you tomorrow.