 I'm John Furrier with Silicon Angle. We're here at the EMC Mega Launch Analyst Briefing with Michael Pellis with VCE. Just gave the briefing to the analysts. VCE's changed. You guys are listening to customers. Tell us what's changed. You mentioned service providers that are the new channel, that you guys are enabling that. So give us the quick update on VCE and what's the big change you were just talking about? Well, there's a couple things we've done. First place is when the big change is is that your customer acceptance has just been absolutely astounding. But we've also taken a look at our model and one of the things we feel very strongly about is we're here to actually enable our partners and our customers and so. When we first started this kind of journey, we said, well, we will have a service component and we'll be able to build order transfer to help some of our customers. And talking to our partners, it became clear that there was at least some of you that we were competing. So to be very clear, we are here to provide core technology, next generation conversion infrastructure, and not to offer service capacity, but to make that an enablement of our service provider partners and our other service partners so that we are not competing with them that we're enabling and that we are out of the service business. And since then, the results have been pretty staggering. Yeah, you know, particularly given the long and really just incredible relationship that we've had with the channel. It was really important to us to send a quite specific message that we were here to help them extend their business. And quite frankly, I think it created more confusion that was probably worse. So again, that is absolutely the message and we've had really a lot of success. We've now up to 120 plus partners and so that's gone pretty well. And create pipeline. You know the channel business, you've been there, done that. You've lived many lives in the tech business. You've seen the movies over and over again, in particular this one, the channel conflict resolved, VCE's booming, you guys are doing great. That's right. And so the Acadia name we have now retired it. VCE is the delivery of the solutions. We will provide to our partners the ability to have solution centers and help them train their people and offer expert opinion, but we will not be taking service modules directly. You mentioned also in your life, you've seen a lot of inflection points and you talk about 18 month kind of big movements. Blade you mentioned and other revolutions. Cloud people are talking about is kind of high efficient. And there are some outrageous valuations out there, some of these internet companies. Is it real? And just to share with the folks here on camera what you said in there about the 18 month surge you're gonna see. Yeah, there's a lot of question about is the cloud is real, whatever it really is. So I've always said, if I go back through time is when you see major inflection points in technology it's normally about an 18 month adoption cycle. We saw that with blades and then in 18 months it was a $10 billion business. We saw it with IP networks and one of the reasons why I sort of look and say the cloud is, the cloud really started with the adoption of IP network as I described, but you didn't have to know or care where the underlying infrastructure of the network was. We went to a network level, the customer was able to roll that out, new applications developed, didn't have to know or care where the physical infrastructure is. That moved out to the adoption of X86 architecture for superb price performance points. Networks started to merge and so then you thought you didn't have to know or care where the network was, you didn't know or care whether it was voice, data or video and what this next generation is taking that delivery model to the next place in on the compute which includes obviously storage and network performance. You don't have to know or care where the physical infrastructure is which saves customers a lot of time and really aids application to play. We're here with Michael Cappella's legend in the tech community, he's been around the block, knows the business, really, really talking about converged infrastructure, massive growth, running VCE, which is a joint mentioning Cisco, VMware, EMC and now Intel. Congratulations on all your success, thanks so much. Thank you, great to be here. I'm a political architecture using the new ecosystem of products that are available today and then we kind of move forward and pilot it and in an 8-bit scenario, we'll be standing up and it is useful to have a throwaway PRC. So kind of the business even if you don't have to, they get visibility which is kind of the type of required discipline that they could do before or we take months to ask the IT organization to develop and kind of we repeat that process so this notion of a big data solution is really something that we're kind of instilling in the client. So they work with us, we take them from prioritization to the technology to the analytics solutions and sit on top and then it's a continual process to leverage the capacity of the company. We all know and we've heard in all the case studies today in the sessions kind of originally what these clusters originally stand up to do very often the organization is buying new things to do. So once that will be we have to have all this going to be online. I can call Moria but you don't need to call Moria. It starts to really grow around the business and that's kind of where we really bring marriage to the IT organization. The USP Sports Statute. So I have a question about the value of EMC. I wonder if you could just make an observation you can comment on it. I'm going to have my numbers exactly right. But roughly speaking on January 1st I looked at the value of EMC compared to a year ago and I assumed that they could send a valuation to join the ownership of VMware and the core value of EMC actually dropped in a year. It's not going to value. It brought on tons of cash flow, great revenues. So do you feel like you can see it's undervalued as a result of that or it's a fairly value because of the VMware ownership and you get the up-to-date from that? I wonder if you could just talk about that dynamic? Does it matter? I know you think it's undervalued but just if you could talk a little bit about the dynamic and does that matter and is there anything you can add to that? There's shareholders that own VMware because of EMC and the equation. There's shareholders that own VMware and for the year last year they got 110% return on their investment. There's shareholders that own EMC and they got about a 33% and then we certainly right return on their investment. So 110% up, 33% up. These are both far in excess. So customers are liking both sides. Now your point that you took VMware's value and I don't know if it is anymore but it's approaching let's call it 40 billion because it's close. So if you took 80% or 81% of 40 billion is that reflected in EMC's 50 billion? And yes, we probably would not. No. We'd be like, why is that? It's a lot of things and there's a lot of ways ARB is going to give two ways to play something. You get ARB charge and then of course EMC at a company of close to 17 billion dollars in revenue. Can you afford to give that? You kind of got a bit of a sanity coming in too, right? In terms of what am I going to give EMC this big company, forget about VMware a second. What am I going to give just that consolidated P and L? What P am I going to give that relative to its peers? So if you look at the big peers you look at an Oracle you look at a Microsoft look at an Intel you look at Cisco, et cetera, et cetera. They are giving us a higher P in all of those companies. I make a statement that of the really big companies in IT were the smallest of the big. So we didn't announce this quarter but last quarter we had 50 billion in market cap and last quarter we had 10 and a half billion in cash. That's a lot. In any other industry be a giant. But in our industry there's companies that are way bigger and way more cash. So again, not all the bigger ones have more cash but if you look at it in kind of a macro. So we're kind of the smallest of the big, which is okay. We have a lot to run. But if you look at all the ones that are above us we have a higher P in all of them. So I think there's two ways to look at it. One way is you look at a consolidator and that's what we're telling the world. We're telling the world hey VMware is part of the family yes we shared it with employees and we shared it with public but we're holding our stake and it's a consolidated company part of our financials. So they believe us and they're looking at EMC as a whole. And they're saying what do I want to get EMC as a whole? What P do I want to give that company? What's their growth? What's their prospect? And I'm not going to argue with the market. So it's just cheap. We just got to continue to upperform and things tend to take care of themselves. So that's I think what's happening with EMC they're looking at it as a whole because they're now believing us. There's a lot of fodder for a while that you're going to split them off you're going to do additional that I could say no we're not no we're not. This strategy together makes a lot of sense. And if you look at the cloud do you need what VMware's doing? Absolutely. Do you need information? You need information storage? Information management? Information protection? Information security? Information intelligence? Yes you do. Those are pieces. So we got all of that in one company. Now we partner very closely with Cisco and get some of the pieces that we don't have. What's it namely? Networking? And we use there you see a service right? So again I like what we have. But I do think what's happening is customer they're not customers investors are looking at us and they're believing us. You're saying okay let's look at this as a consolidated entity. And in VMware you know it's just got an opportunity to go to a really unique place in life and you're treating that more as a you know it's got great momentum it's got great place in the cloud it's believes it'll grow into its P over time so they're willing to give that more of an advanced P.E. Which you know multiples of EMCs and that's kind of the way they're playing it and a lot of investors play both sides. So it is what it is. Across the globe in Karaptisan Village Djibouti an ecodome is rising out of the desert. Local villagers work side by side with coalition members from 84 nations as well as soldiers, sailors, airmen, and Marines from the U.S. Africa Command's combined joint task force Horn of Africa. The goal is twofold to create a permanent resource that will be used as a school or health clinic while at the same time teaching villagers building techniques they can use to expand their community. The U.S. military has a long history of building infrastructure in Africa just asked retired general John Custer on his watch the U.S. Central Command built roads, schools, and wells in addition to assisting the United Nations and many nonprofit organizations in humanitarian relief and nation-building efforts across the region.