 Live from Austin, Texas, it's theCUBE. Covering Dell EMC World 2016, brought to you by Dell EMC. Now, here are your hosts, Dave Vellante and Stu Miniman. Welcome back to Austin, everybody. This is theCUBE, the worldwide leader and worldwide tech coverage and live tech coverage. Excuse me, Ashley Gorwakparwala is here. He's the president of the service solutions division at Dell EMC. Ashley, good to see you again. Congratulations on the new appointment. Oh, thank you. Welcome. Thanks for having me. How's it going? I mean, wow. Big news, big day. How's it feel? Feels pretty good. So, we got to add another number one to the big board in just calendar Q2, IDC Gartner, so on. Said we are now number one globally in server shipments. So, you know, Michael's fond of saying we're number one in everything in one place. And so, we've kind of been consistent with that. And so, right before we closed, we had number one, which is a huge milestone for Dell servers now 21 years old. And the first time in history, we've hit the number one mark, so. So that's a milestone, units. Of course, the next milestone will be dollars, I presume, is that? The next milestone will be revenue and there's a few past that as well. Revenue is a little bit harder to measure. I'm not so sure it's accurate out there what everyone's reporting, but units is pretty fair way to at least look at it, so. But yeah, it's just a milestone on the journey, so. So, we were talking off camera. You guys have had a long relationship with EMC prior to the acquisition slash merger. And we learned earlier, I mean, not a super surprise, but you guys had started sort of reinvigorating your relationship, in part anyway, with by selling servers to EMC. They're a big consumer of servers, and you guys start aligning that. So now you've got this sort of other captive business that you can sell into. Talk about why that's important and how it affected sort of the groove swing, if you will. Yeah, if you think about the market, today you have to have and be relevant in the area at convergent infrastructure, hyper-convergent infrastructure. EMC is the classic version of their company, very, very storage-centric. And for V-blocks, for instance, had brought in VCE where they had done just a complete kind of OEM of Cisco gear for that V-block, very successful in that, but they were not a server company. And so, in order to make sure they had the right converged, hyper-converged portfolio, they needed the compute side. So they were already in the process bringing in compute partners. We were the preeminent compute partner out there. And so we had already begun working. So on day one, we could hit the ground running because their teams had already been engaged in, how do you take the best of our compute technology, high-performance compute, reliable, dense, and merge it into what they had in terms of software assets around VX, VxRail, VxRack, scale-ready nodes, things like that. So, you know, there's almost an instant on switch, although to your point, there's a lot of movement before that switch turned on. So. Stu, when you were at EMC, you were a server company for about a nanosecond when you bought TG, and then they killed it, but there's a real difference between server mentality and storage mentality. I mean, Dave, yeah, I remember, you know, there was like, you know, the small group of people still running the data general avion group. They were like, yeah, shut the lights off when you're done there, because I think, from day one, EMC knew when they bought data general that it was all about the clarion, not the avion. But I mean, the long partnership that EMC had with Dell, and it was interesting, even in the EMC solution portfolio, they push a lot of x86 out there, not just in the storage architecture, but all the software products that they sell, many of them go in appliances. And then of course, every customer, if they're buying a sand or a NAS, you know, are putting a lot of those solutions together. So it was always, you know, server and storage always went well together. So it was interesting. I always thought EMC always had, you know, from a field standpoint, good knowledge of that server sale. I think they were instrumental in helping Cisco grow the UCS business. So, you know, what do you see as kind of the power of the combined go-to-market of, you know, the power of two now that you're together is what that'll mean to your business. Yeah, it's great for me and for Tom Burns in networking as well in that we already were putting together converged infrastructure in Dell Classic and Dell Legacy, if you will. Now you put the number one compute platform with the number one storage platform and you have the assets around software, management, orchestration, virtualization layer. You basically have everything you need to build an engineered solution. You don't have to partner for it. You can build internally. You can optimize it, support it, and then be very confident all the way through the process of owning it, managing it, deploying it, updating it and so on that you have one company that can backstop the entire solution for you. That's pretty unusual in this industry. Actually, in the keynote this morning we heard a lot about basically the Dell PowerEdge inside all of these various solutions. I think one of the big highlights they're talking about from the storage side is the hyperkinner to the VxRail. Maybe can you give us a little bit of a just kind of quick run through as to where all of your servers are living inside of these new solutions? Sure, and we're certainly not done yet. So what we've been able to do very quickly is VxRail now on PowerEdge and that really has changed the nature of how they can operate because they can go up market because we have much more high performance capability. They can go down market with some of the capability for us to offer that performance at a value that they just couldn't operate at and really the density allows them to get into where they needed many more minimum for a cluster. Now they can get down to just three units basically for a minimum and still operate at 200 VMs. If you look at VxRack, again, if you're going to scale out on these type of architectures, don't start with a three unit, start with a hundred units and then VxRack offers you those opportunities with different software stacks. And these are now built on PowerEdge combined with the EMC capability. And just to clarify, I understand that's like a ready node which is more like a reference architecture, kind of not a fully put together solution. Now these can be fully put together systems as well. And then scale IO really, really is taking off and has enormous momentum in the marketplace as fairly much a software application on top of a hardware infrastructure that is somewhat agnostic of. Put it together though with PowerEdge and you have the ability to have a reference architecture to really say, this is pre-validated, we stand behind it, we know it, you don't have to do the work behind it. It comes together, scale ready nodes if you will, not PowerEdge. I was getting my VxRail flex and scale IO ready nodes which are same software, similar configuration. Which are part of it, yes. You know, in that continuum as Chad always talks about. That's right. That's one of the keys is if you want to build your infrastructure and about 80% of customers still want to build their infrastructure, they've invested, they know how, they know their business better than most and they want to be able to build out exactly for what they have, what they need, what they already have from an acquisition, whatever the reason. And so as you go through that somebody then wants, I have to know it works at least, help me out, give me a starting point, reference architecture. I'd rather just buy this piece, put together for me, give me an engineered solution. Give me something that's already been pre-tested, pre-validated. You know what? I'm going to turn my infrastructure over to a turnkey approach, back the truck up, put the thing down. I don't really want to know how to update it or optimize it. I want to run the application. And so who else can offer from that build to buy continuum? Every click stop, we have the best of the capabilities of this combined infrastructure company coming together. So actually the business still drives the need for applications, which drives the need for compute. And that leads to a discussion of workloads. And historically you'd look at workloads as you had OLTP, you got decision support and data warehouse, you got web, maybe you got some file and print, HPC. How have workloads changed? Are we just renaming those names? I mean there are some differences. You got analytics and transactions coming together. You got HPC and big data are sort of coming together. You've got this Hadoop thing that came in and sort of changed the whole discussion around data from an asset or from a liability to an asset. How are workloads changing and how does that affect how you deliver solutions to the marketplace? Yeah, you named quite a few. So it's really hard to look at an HPC workload and what's underneath the infrastructure and say that also would apply to big data and data analytics today. And not be saying the same thing. To your point, the workloads especially around big data, BI are really advancing in the enterprise. We're fond of asking people how much data do you think you have? They always under call it. How much data do you think you use? They always under call it. Then God forbid if you get to the question of how much of your data that you actually know you have that you're using, do you make a decision on in real time? And it's so small that that is really where the growth is because if you can get there faster and quicker, we've seen the digital disruption where people can do this, you're probably going to beat your competition in your peer set in your segment. So everyone wants to get there. And I think that's really been a focus that's changed. So perhaps a unified communications and collaboration workload maybe just isn't the important thing for the IT department anymore. That's something they can offload into a buy mentality whether it's a SaaS cloud, infrastructure that's turnkey because you're just worried about the application and they're putting their sophistication on BI, on data analytics, on search. These are really becoming the more interesting ones. Software defined storage, software defined infrastructure, software defined data centers, still incredibly important because it's somewhat independent of the workload where you can lay down a very flexible infrastructure and you don't have to think about workload first, you can think about infrastructure, then workload and not be suboptimal in that. You can still deliver each of those workloads on the infrastructure, scale it out. So just pick those to stop there and think about the infrastructure underneath. Well, if you're going to be in any of these infrastructures, you better have responsiveness at the node. So our investment R&D is going into driving in VME faster, tiers of storage class memory faster than anyone else can get there because you've got to have responsiveness next to the application, next to the CPU. You've got to be able to have connectivity. So you've seen us come out, be first to mark with 25 gig eCopper, we'll be right there with 32 gig fiber channel and so on down and already working on some newer fabrics that can live in the rack. And we want to be there because you can't scale out if you can't connect these nodes together. It just doesn't work. Modular, if you don't have a modular infrastructure, it can either be nodes that are modular or within the node modular that you can then optimize. But once you do, you want to build them out very quickly for each workload. You've got to have a little bit of locality. It still matters. I hope when I'm in a autonomous driving car one day that it doesn't have to go over the network to a data center to say, should I break and then come back? Because that's not the latency I think I want to afford. So that locality of compute and capability is going to matter a lot to people. Not everything's at one end and the other end. Sensors in a data center. And then I think one of more exciting workloads you didn't mention, heterogeneous computing, GPUs, FPGAs converted in. Think of it as standard processor with optimized processing capability around it, acceleration and machine learning, machine to machine learning, AI, AR, VR, all these aspects are really moving it forward. And the connection point between those nodes is Ethernet? Is that what I'm hearing? Or is it Ethernet and Infiniband or? From node to node, a lot of people have lost a lot of money betting against Ethernet over the years. So I think Ethernet still has a ways to go from node to node. But Photonics will be there one day and there's a crossover point where it will get there. And actually, I think there's other fabric protocols on top where it won't look like Ethernet, but it won't look like Infiniband or it won't look like some of these other things. There's a future way that we've got to get to the point where we can share capability. So just a bunch of- Some of the Gen Z stuff and things like that, yeah. Gen Z is the one we're supporting today. One of my architects is the president of Gen Z, the first president, we want to drive that forward. It's a great, I think, way to build a physical layer. The protocol may be different for different people and how they use it. And so that's one that we really think is important. Ashley, two biggest growth areas, we had Matt Eastwood on yesterday, said the two biggest areas, hyperscale in China, give us the update as to the Delta position there. I agree, yeah, I agree with Matt. I think Intel just had their earnings yesterday and if you read through some of the public information they had cloud for them in a data center sense, growing at 32%. But their data center group grew at about nine, which is under what they had called beginning of the year. So that means the rest of the enterprises did not grow. For us, hyperscale is still a massive business for us for a few reasons. One, it doesn't have the same level perhaps profitability for our business as others on a per unit basis, but it's a very big business. Second, if you wander around here, you can see some really interesting things. So we're showing off a miniature modular data center off to the side and we're really the leaders of modular data centers and that's come from our work with the hyperscale. If we had come up from kind of the enterprise and said I wonder if we can get to hyperscale now and we can take some of our solutions and just slightly tweak them to be hyperscale ready, never were to work. And we would have never gotten into MDCs and now be able to help many other customers, financial services companies, research on and on with kind of coming to the realization that maybe a modular data center is the way to approach it today. Why not optimize the entire environment? So we're going to keep pushing into hyperscale. We love the customer engagement we have there. On China, we've done very well in China. China is a great market for us. We have a great field team, great relationships with customers there. It's a very different dynamic though than the rest of the world because you have a different set of server and infrastructure competitors there and we love to compete. So we have no problem being in that different competitive environment. As a matter of fact, a lot of the products we sell globally do quite well in China. We also will do some things for China specific to that marketplace. But I think that's the way that everyone's going to have to approach that marketplace. And one of your big hyperscale customers is Microsoft. Companies like that, they buy a little bit lumpier. So somebody I heard said, oh, you know, you got number one in units because some big Microsoft offers. Do you think you keep that number one position? I don't know. Because like you said, the server market's pretty lumpy and a arbitrary 13 week period during the year is not the great measurement. As a matter of fact, as a private entity, I could kind of care less about a 13 week arbitrary period. We still have numbers and we still have plans and we want to hit them on a measured basis. But we're really about the long term. So that's why for us, we've never seen number one as a destination but just a milestone on the journey. We'll soon be number one with a lot of separation and won't be an issue. But if you look through the last couple of years, we've taken so much share out of, for instance, HP Enterprise that it was just a matter of time to get to the crosspoint. Next quarter or the quarter after that, who knows? So last question I have for you. Microsoft actually was Dell customer for years, tried ODM and came back as kind of my understanding. We looked at the VMware on Amazon announcement there. It's going to be new bare metal, be a new configuration. Is there any reason why Dell couldn't be, I'm sure you guys must have a configuration at a price point and can customize to fit something like that is my... Yeah, without, we need to bring you on for our strategy sessions, Stu. You know, without getting into specific customers, what we do for our hyperscale customers can apply across the set of hyperscale customers, social media, search, infrastructure as a service. We think you are the best technology to offer. And so someone like AWS who now has announced a new deal with VMware, one of the Dell technology companies, they'd be a perfect customer of ours. But there was no deal made that you were involved with. There was no deal made that I was involved in, that's true. All right, we have to go. But I'll give you the last word, private company, but what should we be looking for in terms of progress points, milestones, areas of success actually that you're focused on with your group? If you don't see us next year, being able to deliver on the promise of that continuum of however you want to consume your IT, whatever workloads you're trying to optimize, what's your business problems? If we're not bringing the best of our IT, our compute, our storage, our networking together with the software assets that we have today, then shame on us, because we've got all the assets, guys, we've got everything. Now it's a matter of, it's almost kiddin' a candy store sometimes, you get sugared up and you need to know and focus. So I think our biggest challenge, and if you want to watch us for progress, is are we, do we have the right priorities or are we bringing out to the marketplace the type of solutions first that matter to people? Because we've got almost a matrix of unlimited capability today to offer our customers. All right, best of breed, the way you want it, Ashley, thanks very much for coming to theCUBE. Good to see you again. Good to see you again. You're welcome. Great to see you guys. All right, keep it right there, everybody. Stu and I will be back with our next guest. We're live from Dell EMC World 2016 in Austin. Right back.