 Okay we're here in Barcelona this is Dave Vellante of Wikibon.org we're here with Silicon Angles continuous coverage not live but we're here with Dave Donatelli who's the executive vice president and general manager of HP's enterprise storage server and networking division notice how I put storage first. Dave welcome. Dave great to see you guys. Good to have you here. So we're here in Barcelona you guys had a big announcement today big press conference a place was packed about 100 plus folks there so how do you feel good keynote? I feel great you know we're really excited about convergence structure and the market acceptance we've seen with that so far this year at our first week quarters our business has grown 24% we've seen higher growth in servers and higher growth in networking so you know today's announcement was really adding on to that momentum that we've already seen. Yeah we had Marius on earlier and he was talking about the networking growth that's phenomenal 198% in total that of course includes the three-comp comparison but 40% organic that was a good number so congratulations. So let's talk a little bit about what what converged infrastructure means to HP. What does it mean? Well basically you know simply put it's our vision and it's a strategy to really change the way data centers are built in the way infrastructure is deployed in design going out into the future and you know unlike some visions where it's like here's our vision wait five years it's all magically going to happen. I think the really neat thing about converged infrastructure is customers can buy it and implement it today. And each and every day similar to this announcement we made today we keep expanding the capabilities that people can deploy around converged infrastructure. Yeah so you must have talked to a lot of customers we talked to some plenty of CIOs and they always tell us that they're sick of buying in stoke pipes. I presume you're seeing the same trend right? No absolutely you know when one of the neat things about my job I get to talk to customers and partners all over the world and a key trend we see is that customers want to buy from fewer larger suppliers. They want to buy from fewer suppliers because it makes their life easier. They want to buy from larger suppliers because they want to make sure whoever they invest in it's going to be in business in the years to come. And I think that really uniquely positions HP in this marketplace going forward. The other thing that's really interesting about us is that we're the only large company out there that develops natively its own servers networking and storage and management software. So we really have the unique capability of designing these products right from the ground up. And one other thing I want to say about that is you know one of our key tenants when we design these products is we design them all to open standards. In addition to wanting to buy from fewer suppliers probably the biggest question I get from customers there are are you going to lock man? I like what you're saying is this product open? Am I not going to get locked in together? And the great thing about everything we're doing is all built around open standards. We supported open standards for years. We don't fear them. We embrace them and we think that's really a big differentiator for us in the market. So talk a little bit about that openness. I mean we love open here at the Wikibon and Silicon Angle but how do you add value in that type of open environment? Talk a little bit about that. Well you know I think you can add lots of value and it's all how you do it. If you look at the way we're developing converged infrastructure you know at the hardware level we're going for a common modular infrastructure. So what that simply means is you can share parts between areas where you never could before between storage arrays between Unix servers and industry standard servers. For instance now you can swap power supplies around. You can move servers and racks in between again industry standard servers and Unix servers. That simplifies everybody's life. Makes it easier for us to execute our factors. Makes it easier for customers to deploy things. Makes it easier for us to do maintenance. Make it easier for them to train people. So that's kind of at what most people consider kind of the commodity type level. But on top of that we had all kinds of IP that's embedded in HVND. So one of the examples that is something called CIF sensors. That's technology that we invented in HP Labs that enables us to monitor in real time the power and heat used by servers and storage. And in doing so we tie that to our management software. And by doing that you get a real time view of what's happening in your data center. You could do things like power capping so you get a real deterministic view of how much of those resources you're using. And that solves a huge customer problem. Because if you look at most data centers today since they can't get that real time view, they have no other choice than to configure the worst case scenario. And what worst case scenario means is that you're way over provisioned. So what people are doing is they're actually building whole new data centers that in many cases they don't need. And they don't need them because they really actually do have that power capability available if they only knew how to manage to get to it. So let's talk a little bit about your converged infrastructure relative to the others. You know this industry is consolidating everybody sees that you guys are one of the whales. How would you stack up HP's converged infrastructure story with the competition? Talk a little bit about that. You know, I think we can rationally say and very well defend the fact that we are by far in the lead. So why do I think I can rationally say that? Because if you look at converged infrastructure, first if you look at servers, we have a larger server market share. And this year alone, we've updated every single server that HP makes. We have all new industry standard blade servers, all new integrity servers, which is our new server line, all new rack mount servers. And with today's announcement, we announced a whole new architectural service for service providers. If you look at networking, we have networking products today that are faster, have a higher port density, use half the power and cost 35 to 40% less than what the current market share leaders and networking offers. If you look at storage, we have our very exciting acquisition minutes closed last week at three par. And three par we believe is the storage architecture for the next generation the next 10 years. And as all the features customers want around private files, things like multi tendency, the ability to low balance very well, as well as the ability to automatically move data non disruptively amongst tiers of storage, whether it's flash drives or AT address. So if you look at all that together, day, I don't think anybody can put that much new technology with all the latest features into the marketplace like HP already has. And then we top that off with our blade system matrix that enables you to manage that as a cloud all 100% non disruptive. That's a good story. You've been busy. Very busy year. So okay, let's let's talk a little bit more about that. You said that you've completely filled out your converged infrastructure portfolio. That's what you said in the press conference. So does that mean you're done acquiring companies? Well, what I like to say is this, we're never done, right? Because if I tell you we're done, then we might as well all go home. You know, the neat thing about information technology business is it's always evolving. There's always more features and functions you can do. And if you look at our philosophy at HP, it's that we always want to do both. We want to do organic development. And we want to do acquisitions. Because we think, you know, we're not arrogant enough to think that we have every great idea in the world. And that's where acquisitions come in to help fill out parts in your portfolio. At the same time, we have an incredibly rich history of doing our own development. And we always want to continue that. If you look at our business particular ESSN, we have over 10,000 engineers, we grew that engineering population more than double digits this year. We announced last week at our annual state meeting that we're going to grow engineering faster than we grow revenue. So a huge investment you see us in our own organic development. In addition to that, though, we've also said that we will continue to look at acquisitions as they present themselves. So let's talk a little bit about the R&D side. Sam Tomasano recently said, he said it. He said, I don't worry about HP because they stopped investing. Has HP stopped investing? Okay, well, you just heard me talk about all new servers, all new networking, all new storage. So I will put up, and I mean this sincerely, I will put our technology up against anybody's feature function comparison right down the line. And it's kind of ironic to me that after Sam made that comment, they went out and bought a small networking company in order to try and catch up to organic development we did around our virtual connect technology, which is really innovative, convergent for structure technology. We've already shipped 3 million ports of it that connects servers to storage and servers out to IP networks. That's interesting. I mean, R&D obviously doesn't always pay off, right? I mean, it's a you're seeing a lot of large companies now really have a healthy mix of R&D and acquisition. I mean, personally, I think it's a pretty viable approach to go into market. Let's talk a little bit more about 3PAR. We didn't hear much about storage today because I know tomorrow is all about 3PAR drill down. So the 3PAR acquisition was obviously phenomenal. The Pell Ping Pong match was sort of interesting. But 3PAR, you talked about earlier, brings a cloud dimension. So how much of the 3PAR acquisition was cloud related and future growth versus trying to fill out the portfolio? Well, here's what's interesting about 3PAR. And I'm going to say the same thing about our store once technology. We have two new technologies that cover multiple market segments with one product. And no one else in storage can say that. So if you look at 3PAR technology, and if you look at the traditional storage pyramid of low-end, mid-tier, high-end storage, 3PAR covers mid-tier storage, covers high-end storage. And as you know, most companies have separate architectures and separate products for mid-tier and high-end, most developers of that technology. With 3PAR, customers can start small and grow large. Again, very unique. No one else can do that. In addition to that, it covers the cloud and has all that software out there that people want in clouds, multi-tenancy for security, the ability to have mixed workloads and still meet SLA performance. All those features 3PAR has natively. So what's cool about it again is one product, multiple use cases out there. The second thing, StoreOnce is a data duplication software that we introduced. Which came out of HP Labs. HP Labs, back to native innovation that we're speaking about. And with that, you know, DDoop is one of the fastest growing spaces in storage. People do client-side DDoop, they do in-line DDoop, they do primary stores DDoop. In today's world, prior to StoreOnce, you had to buy three separate products to do those jobs. The StoreOnce architecture is one architecture that does all three. So we're seeing huge customer uptake of that because again, one product that meets multiple demands, simplifies their life, simplifies their environment, and gives them more innovation faster. So that's potentially, and this doesn't exist in the marketplace today, a technology that you could put across the portfolio in different use cases and not have to rehydrate when you're moving data around. Is that correct? That is correct. That's sort of the vision of that, if I understood it correctly. How about one of the things you didn't talk about today, maybe you're going to talk about tomorrow, and you kind of alluded to it, not this specifically, but your answer, you may have answered this question, but what about big data? You hear a lot about big data in the industry. You saw Oracle's announcements, Oracle Open World, EMC by Screen Pump. What's your angle on big data? That's actually a different part of HP. Okay, so big data itself in the management of big data happens out of our software division. And so we already have technologies in that space, and I think you'll hear more from them coming up about what we're doing there. So from a storage standpoint, this is where I think you did answer it. You basically said, hey, we want to be the best infrastructure for Microsoft, the best infrastructure for VMware, the best infrastructure for big data. Right, well yeah, it's not just big data, it is all those major applications. And I think what's different out there is, you know, you'll hear talk in the industry today on appliances. And believe it, we're a believer in appliances, we'll be shipping appliances, but we do it differently than other people do it. And the whole concept that we do different is this, our view is horizontal. Don't just by specialized appliance for one application. Converge infrastructure, we designed to be the best at running Oracle, the best at running Microsoft Exchange, the best at running SQL Server, so that people can make that decision once and then have their choice of applications. Because as you know, everybody runs a mixed environment. They have homegrown apps, they have packaged apps, and what we want to do is provide that one infrastructure that they can manage non-destructively for all. Technologies we talked about earlier, Virtual Connect, Sea of Sensors, all run horizontally across that infrastructure, versus trying to solve it all one app at a time. The appliance market is cool, I mean it's simple and easy to plug in, but a lot of the customers that I talked to complain that they can't scale independently with appliances. I got to buy servers and storage together. So I think that's a need that maybe that horizontal structure, if I understand it correctly, can address. The horizontal structure is meant to solve that problem. So that you can scale those elements independently, but again get a unified way of doing it to simplify the environment. Can we talk a little bit about, I've heard you in the past, you didn't talk about it today, but talk about the supply chain. You've got a more than 50 billion dollar supply chain. Sixty now. Sixty, okay. How do you leverage that for competitive advantage? Well I think it's huge. You know at the end of the day, customers want great IP, but at the same time I like to say I have not met a customer yet who wants to pay more money next year for what they bought this year. So that puts pressure on everybody in our industry and that you always have to become increasingly efficient. At the same time you always have to be providing that great IP. And that's why I think HP's got such a great combination. You already heard me talk about our thousands of engineers who are developing native technologies, but we run those native technologies on industry standard products and simply put it's just like in your own personal life, you know volume begets better pricing. So when you're buying 60 billion dollars worth of components and you're the largest buyer of disc drives in the world, the largest buyer of memory in the world, the largest buyer of Intel processors in the world, chances are you're going to get the best prices. And the bigger our company gets and we keep growing, the larger that advantage becomes. One of the things that I feel like HP could always have done a better job, and I wonder if you've brought this ethos to the company, because if you perform a company there's a really good job, but there's this notion of reference architectures. IBM has red books and just proving to customers that you know the solutions that they're going to deploy are actually going to work in the field, you know customer oriented configurations. Are you investing more in that area? Yeah, we are very heavily and we're not only doing it just with HP equipment, and I'll give you an HP example. We talked about our cloud program, our CloudStar program, where you can start up your own private cloud and 30 days are under using the reference architecture that we developed. Yeah, we had Carnegie Mellon on the Cube at VMware, it's phenomenal. Okay, that's great. Isn't that amazing? And that is a reference architecture like you spoke about. The other thing there is our vision extends beyond just the architecture into these primary applications. So you've seen us announce public deals with Microsoft around Azure, around SQL Server, around Exchange. We're doing the same thing with SAP about large memory servers to make SAP run more efficient. So you'll see us do more of like you saw with the CloudStar program, but all the way up to the customer's most popular applications. And again, the whole idea is to simplify the environment and make it easier for people to get things up and running faster and deploy to production like that one. So what's your take on the cloud? Do you think it's as big as everybody thinks it's going to be? Well, I think it first depends on what your definition of the cloud. So I think the big thing is everybody defines cloud differently. But I will say this, and in my conversations with customers around the world, there is clearly more momentum around customers deploying private clients. So that market is definitely there. We see demand for it today and that demand is growing. I think that's going to be involved to where our market is. In addition to that, we have a bunch of new wave service providers out there. Think of the folks who host, you know, gamers or different applications out there or the social media applications that by my definition are clearly cloud applications that five years ago we weren't talking about. And the amount of infrastructure those people consume is massive. We gave an example of our press conference say of one of the social players that was buying 40,000 servers at a time. You go to most large businesses, they probably don't have 40,000 servers in total. So yeah, I think it's a big and growing opportunity. Yeah, so you've announced this big part of the announcement today was the PodWorks factory, right? Now, you use the analogy of Henry Ford. Can I get a pod in another color besides blue? So talk a little bit about PodWorks. Why is that unique? And what does it what does it bring to customers in terms of value? Well, again, what we see, you know, back to our discussion around cloud, what we see is people are consuming infrastructure very differently. And there's actually multiple ways people want to consume infrastructure. So if you're a big business out there today, one of the challenges they face is that we've been going through a building boom like crazy of next generation data centers. And depending on your size of company, you're spending hundreds of millions of dollars to, in some cases, billions just on data centers. And as you know, as I'd like to say, if you've ever built anything in your life, as soon as you're done, you always have regrets. Maybe I should have built it this way. Maybe we made a mistake here. The ideas behind positive for that use case is to solve that problem. Make it so that we can have a mobile, frankly, recyclable piece of a data center that gives people ultimate flexibility. They can put them in warehouses, they can have them outside, they can park them in the parking lot if they need to. They give them a data center without having to go through the years of design, years of building next generation data center for themselves. For service providers who are scaling incredibly rapidly, they don't even have time to go build this next generation data center. So for them, the pot is a perfect solution, again, to get a very highly dense environment of servers networking stores all together. So I think it's a really unique alternative for people to buy. What we announced today, and we use the analogy, which I thought was appropriate about Henry Ford, right? Henry Ford bought the car to the masses through having an automated assembly line. And pods need that as well. And so what we've done is through PodWorks, we built the first automated factory to build pods. And we can build these things at 15,000 servers at a time. And we can configure them to the needs of whatever people want to do back to that flexibility I spoke about. And you have a situation, we talk about this a lot, Wikibon and SiliconANGLE, where the IT data center, the private cloud data centers, if you will, are starting to benchmark themselves against the cloud service providers. And they probably won't get 100% of the way there, but they've got to get close enough in terms of self service and on demand pricing and things like that. That's correct. The pod is a real innovation that's going to help them get there. The pods the way to get there, and I'll tell you also, are automation software playing system matrix, where I've seen our customers benchmark versus outside, just as you said, they're being forced to do that. And through a combination of converged infrastructure and some of the other technologies we talk about today, they can meet or beat those prices. Yeah, and Mark Parto will have him on later. He's talking about the PUE coming out of the pod of 1.2, which is astounding. It's amazing. And it's in the box and you just get that benefit. All right, my last question for you is, what's on your to-do list? What are the objectives in your term, midterm? Well, you know, we have actually very ambitious objectives. And simply put, we want to change the entire enterprise infrastructure marketplace. And I say that very seriously. And if you look at the work we've done in the last year, compared to what we even just a year ago, we believe we've changed the dialogue in the marketplace. We've certainly changed buying behavior. And you've seen that in the financial results we've posted. And we've changed the direction of technology. And I know that's a very ambitious goal. But if you look at Hewlett-Packard, we have the heritage, we have the scale to things like our supply chain, we have the engineers, and we have the market presence to make that truly happen. And so what we're doing is really driving that visual forward. You've seen us be very aggressive this year and what our offer is. We're very excited about what we have. But I can tell you Dave, we are not standing still. And we have even more exciting things coming and you'll hear more and more from us next year as well in this space. Dave Donatelli, thanks for coming on theCUBE. You've put together a great team and it continues to grow. And we wish you the best of luck and thanks for having us here in Barcelona. Thanks, Dave. Great to be with you. Thanks. The question's always because we got cut there. So Dave, the personal computer and then client-server create huge productivity booms for the worker, the enterprise worker, then transcend it to the home. But actually the enterprise was the most productive. Now we're seeing Apple and apps such as that they're driving faster innovation on the consumer side. And some say enterprises are lagging behind. Talk about the vision of how converged infrastructure fills that gap for enterprises to catch up, if you will, to what the productivity we're seeing on the consumer side. Yeah, so the real challenge that many, many enterprises face is that their infrastructures grew so rigid and so diverse that they got very, very slow in their time to mark in order to adapt to change. And, you know, it's really not uncommon that if you were to call an enterprise today within any large company around the world and say, I need new infrastructure provision, the answer you're going to get back is typically weeks to months. And as you know, in the consumer world, you can get that in hours to minutes. So a lot of the technology we bought out, for instance, the system matrix is all designed around taking what was weeks to months and doing it in minutes to hours. And I'm really pleased to say we have real world customers who are doing this today who have been able to make that conversion. And I think there's going to be continued pressure on enterprises to speed up and also to consumerize over time. Employees want to bring in their own devices. They want to have that flexibility in infrastructure. They want to provision their own infrastructure, which again we allow the capability provisioning today as well. And I think that trend is going to only accelerate from here. How has the culture changed within the enterprise from an IT perspective in the old days yet, silos, networking guys, app guys, what are you seeing with your customers and how is HP looking at this new culture within the enterprise? Well, I think customers around the world have been, as you can imagine over the last two years, really under tremendous strength. And the strength has been due to the global economy and due to the fact that because of the global economy, budgets might not be what they wanted to be. And with that, it's really forced creativity around how they organize and how they prioritize what they want to do in their environments. And that has, I think, led to positive change in that the silos which have been in place for decades are starting to break down out of necessity. And people are looking to manage more IT as a shared resource versus separate victims and silos. Thanks. OK, we're here in Barcelona. This is Dave Vellante of Wikibon.org. We're here with Silicon Mango's continuous coverage, not live. But we're here with Dave Donatelli, who's the executive vice president and general manager of HP's Enterprise Storage Server and Networking Division. Notice how I put storage first. Dave, welcome.