 Hello everyone, I'm John Furrier, the founder of SiliconANGLE, and this is theCUBE, our flagship program. We go out to the events, extract a signal from the noise. We are here live in Barcelona, Spain, for HP Discover Europe. Again, I'm John Furrier, the founder of SiliconANGLE. I'm Joe Michael, Dave Vellante, co-founder of Wikibon.org, and our next guest here, Scott Weller, VP General Manager, HP Technology Services, CUBE alumni, I've been on many times. Scott, great to have you here, kicking off HP Discover Europe. Welcome back to theCUBE. Thank you, John, appreciate it. Europe is a big part of the business of HP, obviously the presence here is pretty fantastic. Barcelona is a great city, a lot of action. You know, we're kicking off day one of the show here. So first tell the folks out there kind of, what's the spirit here? What is the vibe and in Europe, what's the action like from a content standpoint, from a technology standpoint, and what are customers here interested in? Yeah, so first of all, this event gets better and better every time. And the footprint of the event, the venue itself, the kind of content that HP shows up with is just better every time. And I hope if there are people local to Barcelona, they'll make time to come out here. Yeah, I would say that in Europe, the kind of people, the kind of customers that show up at these events tend to be more senior. They are more in the sea level ranks and of course there's always technical people as well. And you know, this year we've got so many announcements. It's almost hard to count them. And one of the things that I'm really proud about is some of the things that we've announced in particular our HP flexible capacity that I think is going to be a real game changer in the market. Dave and I have always loved to talk about what's kind of trending, what's emerging and what's relevant in terms of the minds of the customer. We walked into this, the pavilion here, kind of where we have the cube. And you know, front and center is cloud on the right and big data when you walk in and then inside it's kind of like under the hood. It's almost like as you explore the car, if you will, you use the car metaphor, you can see under the hood, storage virtualization, three-par storage, conversion infrastructure, all those great stuff. So I got to ask you, you know, cloud is obviously hot. We were just at Amazon re-invent conference. And the number one thing that we hear from customers and from people in the industry is cloud has now crossed over the chasm. Okay, we've talked about this before. And now it's mainstream worse, moving beyond tire kicking to full deployment architectures. So again, services is a sweet spot. So how is that impacting? Give us a quick update from your standpoint before we jump into the announcements. What's some of the high level things going on in the market that's relative to your organization on the technical services side? Well, you're absolutely right. This idea that cloud is interesting, but not for me, we're well past that. So the big question for all of our customers that the ones I speak to is, how do I get the right balance of workloads, both inside and outside the firewall? And how do I make that a mainstream piece of my operation? And so what you see here at this event is all of these technologies and services that enable that, that's what we call hybrid cloud or hybrid delivery, where you don't walk away from your traditional IT where that makes sense, but you do adopt into either private cloud or public cloud and you get the workloads in the right place on the right kind of compute, the right kind of storage. And then all the services that, you know, customers are all in different places on this journey, so it can be everything from advice to actually doing the implementation and then to the runtime support, which is my business. Now, Scott, we've talked about this again, but I want to bring back the subject of the hybrid cloud. When we talk to customers in the Wikibon community, the vast majority say they're pursuing a hybrid cloud strategy. Or I mean, if you look at it, it's got to be 75 to 80% say it's either a hybrid or primarily a private cloud strategy. Only about 10% say they're pursuing a public cloud strategy. So first of all, is that what you see? And then I want you to help us square this circle because as John said, we were just at re-invent and the head of Amazon re-invent, Andy Jassy, he's got a great story, but he puts up this pie chart and he says, here's, he calls you guys the old guard, you and all your competitors in the traditional enterprise. He says, here's their view of the world. They think that most customers are going to stay with, you know, hybrid or private. Here's our view of the world. We see the world as mostly a public cloud. It's a completely different pie chart, different ends of the spectrum. Help us square that circle. What do you see and what gives you confidence that your view of the world is the one that's going to predominate? Well, I mean, I think it's almost self-evident. I mean, it's easy enough if you've got no presence in the data center to be talking about how everything is public cloud or will be there in the very near term. And it's simply not true. I mean, any real business with real workloads that have been built out over the years have got to have a cogent, well thought through planned approach moving workloads outside the firewall. And that's not to say that, you know, there's anything, you know, magical about doing that. I think everyone understands that there's sort of the mystery of cloud is gone. It's really about how do I use all of these tools and the right balance and use them effectively? And the reality is that there's a migration that's happening right now and there's a very long tail on this because in the end businesses have to both be agile. There's no question but you've got to keep what you've got going running. It's got, you know, your business has to continue while you make these transitions. So I'm not a believer in that view. I would say clearly hybrid is there and this is not a symptom in any way of the business that we happen to be in. This is the reality of our customers every day. So Scott, last week I was in New York City hosting a customer around table and there were a lot of folks in the session that were doing capacity planning and their big frustration was that they had to buy ahead of demand. They bought too much. But they had no choice because they had to, especially this time of year, the holiday season, they have to worry about peak demand and they get this asset that is underutilized sitting on the floor except for a couple of months during the session. So how do you guys as an IT organization, IT supplier, address that problem? Right, so this is the classic problem of having to build the cathedral for the big holidays, right? And but in the end, so this is really fundamental now. So customers really want a lot of elasticity and they want the economics that the public cloud can offer. But for a lot of reasons, they need to keep their IT on premise. And there's a lot of reasons for that. Security concerns, latency concerns, workloads that are simply aren't ready and also a lot of customers have their own practices and policies that make a wholesale move to the cloud very difficult. And so this is where the service that we've announced, HP Flexible Capacity, is designed to offer that kind of economic model and elasticity, but allow you to address all those concerns because the gear is on your site. So what is that? Describe that in a little bit more detail. So it's a service that we offer that essentially variableizes literally any of the gear that HP offers and we can also do this with competitive gear. And it essentially turns it into a pay-as-you-go model with a single monthly invoice and no capital outlays. Okay, so that sounds good. I like that. Sign me up. How does that work? Do you over-install assets? And then you take that risk away from me? Essentially, that's right. I mean, again, customers want that elasticity, but they don't want to overpay for it. They don't want to take on a lot of complexity. They don't want lock-in and they don't want to take on a risk that can't be mitigated. And so that's where we essentially take that into the equation and we turn it into an economic model that looks very much like public cloud with all of the benefits, what I call the on-premise advantage. Scott, talk about the, obviously the economic benefits of the cloud has been over-hyped and realized with some of the things you mentioned the last test of the year around the benefits there. But can you share with the folks out there what enterprise grade means? Because we talk about that all the time, big data, events we've talked about, big data, the big theme at Hadoop World and big data NYC this year is what is enterprise grade? So up the stack, the application model around DevOps and around Agile are talking about what's enterprise grade, enterprise grade meaning what? I mean, you guys obviously have a huge enterprise. Please share with the folks what enterprise grade means. So there is, that is an elusive term for sure and it's band-heated around. Look, enterprise grade really boils down to do I have any consistency and certainty into the equation, right? That's sort of at the highest level and when you have a provider who can't tell you what they're going to do when they go down or they have kind of like a laissez-faire attitude if there's an outage, right? That is not the kind of confidence that goes with the agility that we provide in our solution, right? So it's about knowing what's going to happen, who does what, how does it occur and so on and also having some sense of the architectural resilience. Like how is this thing laid out in a way that gives me some confidence that there won't be an outage and if there is one, I know exactly what's going to happen under what timeframe. So on the customer side, give us a taste of the flexible capacity. It's very back to the future kind of thing. Not the flux capacitor that jumps into my head but it really is the future. So I mean, is this the throttle up as you go kind of thing? I mean, obviously that's pay as you go has been something that's been obviously paid by the drink, however you want to call it but in reality that sounds simple. Okay, to deploy. Talk about some of the nuances around what does that mean in terms of a customer-specific use case, what, take us through kind of the day in the life of someone that is leveraging this and what would they, what do they look like and what's their environment look like? Well so one example is you've got a customer who's trying to replace all the desktops in their enterprise and what they want to do is they either clear out an existing data center or build a new one and they've got a certain schedule on which they want to replace all these desktops and could be thousands, right? And so they've got to put in servers, install VDI software and so on and the thing is that they know that they've got a range of usage within that but it's not anything like 100% on day one as they begin to deploy and what we do is we essentially send in a pallet of gear as a way to think about it and the gear goes in, it gets installed and there is in fact a buffer in there and we take in the risk in that equation and let them pay by the drink. So the models typically are, I'm going to commit to use so much and then I'll grow beyond that. So how does HP manage its risk? So you're essentially, if I'm the customer, you're saying, hey, I'm HP, I'm going to take the risk on and take it away from you. That's really appealing to me. Sure. How do you manage your own risk? Do you go in and do capacity planning with a customer? Is that something that's a collaborative part of the agreement? Can you talk about that a little bit? I mean, these solutions, if you will, that are HP flexible capacity are everything from a pre-built sort of blueprint approach where a customer says, yeah, that's what I want exactly. But almost in every case, we've got to go in and collaborate on how to tune that model because otherwise one side takes on too much risk, the other side's paying too much. So it is a very collaborative activity that builds this solution for the customer. And, but we have these sort of blueprint-ized versions that customers can choose from, but reality is those need to be tuned to get the most out of them. So Scott, the other question I would have as a customer is can I get, when I want a provision capacity, I want it in an instant. So talk to me about how that process occurs. Is it as facile as what I would imagine the swipe credit card public cloud? Talk about that a little bit. Yeah, I mean, so absolutely the capacity is there. So it's available immediately, but the thing is if the workload is, let's say a bare metal traditional monolithic workload, the immediacy is different than if they've got a true full service sort of cloud system approach where they've got a self-service provisioning and pools of resources. So that is the most instantaneous, but the capacity is there for the customer to use immediately. So it's really up to the customer how they want to deploy that. So what are you seeing in the field? All of the above. I mean, that's that again is the reality back to your prior comment is the reality is that there are all of these different workloads and that is the whole reason behind our strategy for hybrid. That is what happens. That's the reality in the market. So essentially you're recreating the perception, if you will, the actual experience of what we perceive to be a public cloud in a private environment. Okay, now talk about the hybrid piece. How does that fit in what you're seeing? Well, so three years ago I would have said that most customers are just dabbling and the real use of the cloud for these established companies is in the developer community. And now the CIOs are saying, look, your competitor, the CIO is saying to the IT department, your competitor is the public cloud. You guys have got to get to the same economics. You've got to get to the same agility and flexibility. And I'll pay a small premium for on-premise, right? But it can't be a significant. It can be double or triple. Exactly, so when you're faced with that kind of, it's not, you know, the old world of IT was you got too many apps, I need less. Just cut the number down, right? I've got too many data centers, you need less. That is the old style of IT. The new style of IT is I need fast and flexible, I need on-demand, I need to pay as I go, and I need to have the peace of mind that I get on-premise. You said something that I agree with, that the public cloud is essentially a competitor to internal IT in the standpoint you've got to model yourself and benchmark yourself after that capability. Do you think that the majority of IT practitioners and organizations accept that premise? Well, I think it's undeniable, right? I think nobody likes it, right? Because it's even the best-run IT shop in the old style of IT, that's a very difficult transition. That means thinking very differently about your procurement cycles, how do you even match demand to your costs, right? How do you get your workforce able to do that? How do you get your practices able to do that? So it's a huge lift, and that's why this thing is so important for the market. We think it's a game changer because it lets these IT departments really adopt in and address that need that they're getting to remember the heartbeat of the IT to the heartbeat of the business. Scott, where do you see enterprises progressing their cloud strategy this year? And then what's different? What do you see out on the horizon? Because obviously we do engine hybrid cloud, you guys are announcing the flexible capacity, things here. What is the, where do you see the enterprises progressing their cloud strategy right now? And what's changing? Every customer that I talk to now is saying, if I haven't built a private cloud yet, I'm building it this year. That's the first part. Second part is everyone's interested in understanding how and what and when they can get some of the workloads on the public cloud. And it's interesting because there's a life cycle that occurs and in fact, there are customers who've been doing this and they're actually looking at bringing workloads back as the economic shift, as they realize that, wow, some of these on-premise benefits are necessary for me or my practices are telling me I've got to have some of this back in. So it's, again, there's a maturity curve out there, but I would say wherever, however you would draw it, private cloud is here for sure. Everyone is either building one or will build one this year. And again, it's about where can we move certain workloads to the public cloud and how can I get that done? Where does hybrid fit into that? Because obviously, hybrid's been all the rage we heard from the CEO of VMware. He says it's not a halfway house between getting to a private cloud. Is it real? I mean, is it? Absolutely. I say hybrid is a way of life. It's not a halfway house. It's really become a way of life. Yeah, I mean, I use the term halfway house because people felt like that was a strategy to get to the public cloud when reality, public cloud is the halfway house in a way. It, yeah, I would agree, yeah. I would agree. I wanted to ask you that similar question in the context of OpenStack. So strategically, HP has said, hey, we're putting our muscle behind OpenStack, which OpenStack needs. We've observed here in theCUBE that OpenStack needs are steward. And certainly HP, IBM, Dell, Rackspace, others, but HP is the biggest company on the planet in IT. So strategically, you've got to make that move. But in the development community is picking up on it. What are you seeing within the IT practitioner community? I mean, my sense is the uptake is obviously less. It's still early days, but are people planning to build their private cloud and hybrid cloud strategies around OpenStack? Is it still sort of uncertain? What are you seeing there? So we wouldn't want to be thought of as maybe the stewards of OpenStack because we believe that this is a truly open, participative activity, right? But we are a strong believer and therefore we're a very strong contributor. The stewards are wrong with it. How about muscle? Yeah, I mean, we are absolutely putting muscle in a lot of investment into it. But the point is that OpenStack is really, it's in the vein, it's in the spirit of everything HP has done through its entire history where we're vehemently opposed to the lock-in equation because we believe the competition really has to go into where the IP creation is rather than the lock-in. And you can see that through history. So this is completely consistent with what we've always done. And we believe that this is what the industry needs because workload portability ultimately is what's going to unlock the value for these customers where they don't have to worry, well, gee, today I really would love to move this workload but I just can't because of all these reasons that we all know about, right? So OpenStack we think is the great leveler in the market and let's then the value, the IP roll into all the pieces that it should be like the gear itself, like the services, like the apps and so on. Yeah. So I got to wrap this up here. Thanks for coming on theCUBE. I want to get you the final words. God, share with the folks quickly. What's going on in your world? What are some of the announcements? Obviously just tease out. We talked a little bit about the flexible capacity. What else are you guys doing here in Europe? Talk about the outlook of the business and we'll end on that note. So there are pockets of real economic strength in Europe and there's some places, there's some challenges, of course, and that's going to true everywhere. What we're seeing is our business is very strong here and in terms of other announcements, one of the things that you'll hear about, I think later this week is something we call hybrid cloud support. So how can you have a hybrid cloud if you don't know who to call when something goes down? And so this is a very big deal for us and it goes hand in hand with flexible capacity and some of these other cloud announcements that you hear about. So anyway, we just think it's a great continent, it's a great market and we're really excited about FY14. Hybrid cloud is a way of life. I just wrote that down. I'm going to make sure that gets into my blog post. We totally agree with you. I do feel that you're going to see the confluence of private hybrid in public, all working together. And again, it's all about enterprise grade. So again, thanks for the comments. Scott Weller, VP and General Manager of HP Technology Services Consulting here, live at HP Discover in Barcelona, Spain. This is theCUBE. We're on the ground all three days live, wall-to-wall coverage here, documenting HP's, fantastic turnaround, great financial performance. Congratulations to you guys. Chipping away at the momentum there, certainly knocking down some of the success on the financial side. And again, you guys have great cloud strategy and I love the big data momentum. Can't wait to talk more about that. This is theCUBE. We'll be right back with our next guest here live in Barcelona, here live with Scott Weller. We'll be right back with our next guest.