 Live from Las Vegas, Nevada, it's the Cube at HP Discover 2014, brought to you by HP. Now here are your hosts, John Furrier and Dave Vellante. Okay, welcome back everyone. We are live in Las Vegas for HP Discover 2014. This is the Cube, our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, joined by my co-host, Dave. Dave Vellante and our next guest is Cube alumni, Scott Weller, senior vice president, GM of HP's technology and support group. Welcome back. Thank you. Congratulations on the SVP promotion, doing a great job. Thank you. Obviously putting a dent into the equation with the kind of services you guys have done. I go back to our first interview when we were talking and it seems to be the same record with different kind of beats to it. But every year it gets a little bit more comprehensive, much more integrated going back to the early days. We talked about cloud mobile and social, we talked about the journey back then. Now it's full-on execution. So quick update. On the execution side of the support around the cloud and integrating this modern infrastructure, consumerization, whatever you want to call it, where are we today? How far deep are we into the game? Are we still integrating? What's your take? You know, one of the things that's so obvious now, and I think it's just taken some time, is that the pace of change in this industry is accelerating. And you know, I think we've talked about hybrid being a way of life in our last meeting. And I think more and more our customers are saying, you know, we've got an IT footprint that needs to evolve, but also no matter what we do, we'll always want and need more than what we can do on site. And so how do I have workloads on and off-premise and how do I govern all that and how do I enforce policies and compliance and so on? You know, we talked about DevOps before. The whole way we write apps has changed and the way we broker for services has changed. So, you know, it's just, you know, we're at a really interesting time in the industry. And in fact, what's great is HP has not only got a point of view on all this, but we've got a fully integrated story now where in the past we had some of the enabling pieces. But right now I think we've got the full story. So obviously, cloud has been big. We were at the OpenStack summit. Obviously, HP crew was record numbers. I mean, I've seen HP involved in OpenStack. We, I mean, HP is so involved in OpenStack. It's pretty, pretty impressive, actually. And we've had a great time talking to your associate general counsel's and been involved in the formation. She sits on the board of both Linux and OpenStack. So big presence. Other companies like Pivotal announcing news today, oh, integrates parade services. So they're new to all this game. I mean, you guys are not new to the professional services business. What's different about what you guys are doing relative to these upstarts like Pivotal, who are trying to nibble into the market and try to pedal in enterprise-grade services? What's the difference? Is it just more focus, is it size, scale, capabilities? How do you compete against these guys? Well, I can't really speak with any authority to what the others do. But what I can tell you is our customers really value the fact that we've been here. We've been in this industry a long time. We know what enterprise-grade means. And so when we launch something like our OpenStack, Helion OpenStack, it means that it's not just a piece of software that's, you know, this refined from open source. It means it's fully supported like any other product that we would bring to market. So, Scott, I wonder if you could talk about, I can't recall ever seeing so many disruptions in the business. I've been in the business a while. The disruptions used to be sort of mono, you know, like the PC attack, the microprocessor revolution attacking the mainframe, etc. But today we have cloud, mobile, social, big data. Underneath that, you've got flash. You've got converged infrastructure. You've got OpenStack. You've got open source as a phenomenon. Docker now coming out as the hottest thing in the world. All these disruptions. How does an IT organization deal with that? There's technology. There's people. There's process. And how does HP services help them? You know, it's, I think you're really on a key point, which is you have all this great technology and all the disruptions. The real question is, is there an uptake? Is there a way to digest all of this within running business? And so that's why within technology services we have a consulting arm that's all about helping customers, first of all, understand these new technologies. But how do they fit? What makes sense in their business? And then once they've made some technology decisions and so on, how do they on-ramp to that? And also, you know, once that technology is in place, oftentimes it means new people, new skills, new processes. And so we're able to come in and assist across that journey. And that's really what customers look to us for. Yeah, and of course, it's hard for a customer because on the one hand they can't rip and replace. They've got so many assets on the books and they're under pressure to do more with less. But at the same time, I'll give you an example. We just did a survey in the Wikibon community, 300 respondents, 100% of the 300. 66% said that they're shifting resources away from the enterprise data warehouse toward Hadoop. And 33% said they will do it before the end of the year. So it's effectively 100% of the survey said, we are going to disrupt our traditional enterprise data warehouse. But I worry for those guys. So there's opportunity at the chasing, but so what happens to all that infrastructure? Can HP help the customer get from point A to point B without ripping and replacing and what role the services play? Well, you know, some technology just is, you know, pass A and customers simply make the choice that now or another time is going to be the time that I absolutely have to move off that technology. What we see oftentimes is that there's a delay where companies get more comfortable with the new technology. They do some trials and so on. Ultimately, a decision is made. In some cases, it's a fast break. It's a complete break from the past. And then I see this in data warehousing and other kinds of technologies. But, you know, we've never been about having to rip and replace as the way to evolve to the future. Now there are other companies, frankly, that have made a business of that. But what we're trying to do is say, look, there is a path for you. And in fact, you know, some of the services we have, like Flex Capacity, where we variableize the IT, we can actually buy back older gear or even competitive gear to give that customer a chance to break through to that new set of technology if it's the right time for them to do it. Okay, Scott, so I gotta ask you. So now that you have a senior vice president in your title, I get to ask a wider scope of questions. I won't ask you about margins and, you know, cash flow and stuff like that. But I will ask you about a comment that I've made in the past couple of years that HP's got to get back to its roots of invent. Now you happen to sit on, I think the software and services representative for HP Labs. So is that the key, or a key for HP is getting back to its roots of invent, put Martin Fink in charge of labs, somebody who's come out of the product division. So that's a big part of it, is commercializing the inventions. So can you talk about HP getting back to its roots and can it do it? We know, I've known Martin literally from the day I joined HP and he is such an innovator and he's one of these guys that's so entrepreneurial and so it was a great choice to put him in charge of the labs and he's doing amazing things over there and if you get a chance to bring him on, you should do that. But I think that you're absolutely right. It's the innovation that sets HP apart. It's the technology disruption. It's the invention that really sets us apart. In fact, customers, when they think of HP, we used to have invent in our logo and they really look to us for that. When we're not innovating, they're sort of wondering, well, what are we about? So absolutely, and in fact, you'll appear all through the week that innovation and invent has always been key in our agenda. We're investing more than ever before and I'll tell you, my business, we're investing a lot of money at a time where there's all kinds of market pressures but we've made some tough choices and said, look, if we don't keep inventing and innovating, we're going to be, and also ran in the market and people think of support services, for example, as break fix or what have you. It's so much more and so much more to our customers. We have to keep innovating, we've been doing it, we've been talking about it for years and we're doing more and more all the time. So give me some examples of innovations and services because you're right, people don't think of the services business as innovative, they think of break fix but there are a lot of, whether it's communications technologies, customer interaction technologies, predictive analytics technologies, talk about some examples. Well, ultimately, there are less and less physical moving parts in compute. Eventually drives will go away, we'll be into flash and so if you think about break fix, it's really going to become a small part of what any of us do. What people are going to be most concerned about is number one, prevent issues. I don't want to wait for it to break, do everything you can to prevent an issue and if you can preempt issues by using big data analytics, we want that but more than that, there's all of these journeys around technology transitions. We expect the people that are walking in and out of our business every day to know about these technologies to help us get on the journey. So it's all about helping to operate but also getting them on the journey and customers are, we've talked for years about the cloud and now cloud is, everyone accepts that and then people are doing it and really doing it and now it's like customers are expecting that a company that is in the service business is going to be there as a partner to help them on the journey, that's what we do. What does the data tell you in terms of where customer problems occur? If it's not the disk drive breaking as much maybe it's the fans, I mean they still break but where are the problems occurring? Is it software error, is it human error? Give us some insight there. It's all of the above and in fact, a lot of times in the old days we would get drives back and they'd be perfectly fine because there are errors up and down the stack and I'll tell you, the stack is getting more and more layered. There's more and more complexity in there and that's the other thing is a company like HP needs to hide the seeds with all this stuff we've got OpenStack, we've got all these virtual machine products, we've got all of these different operating systems. So in the end, customers don't want to care about that, they want to buy technology, they want to buy infrastructure, they'd like to have it on demand if they can get that. So the point is that they're not interested in understanding all the complexity or mitigating it, that's on us. I wonder if I could go a couple ticks back on your resume because you ran strategy for a while. I did, I did, yeah. Take us back to, because you obviously saw some of these trends coming, how did you and your colleagues affect the strategy that you're taking today? What was the sort of kernel of that strategy? Can you sort of summarize it for us and how are you bringing it to market today? Well, I mean, so what I've just talked about is really part of the strategy of understanding that break fix is going to be a smaller part of business. In fact, last year was the crossing point where break fix was half of our business, now it's a smaller and smaller part of what we do, all these other activities, prevention and so on is more what we do, the proactive services. So seeing that trend, simplifying what we did, it's all about understanding, from the customer's perspective, is it easy to buy it? Is it easy to own the technology? So again, simplification, understanding the trends for the tech industry and also understanding what services are going to be in demand. And you know, I'll tell you, the industry is more and more interesting. When you get hybrid, try to support hybrid where you've got workloads all over the place, how do you support that? How do you get an integrated service experience when you've got distributed workloads? So we figured that out, we're doing that now. So the strategy was laid three years ago, frankly, and we're playing it out. I wonder if we could talk about automation a little bit. When you look at, observe the hyperscale guys, very highly automated, their break fixes, you know, they have an automated way of doing break fix and eventually the components get the shredder. Talk about whether or not that's, I mean it is, but how fast it's bleeding into the enterprise and what that means to the services business. So first of all, you know, the very large scale tier one service providers are definitely in the lead of that hunt in terms of these massive scale out and a very different philosophy on what it means to do support. For everybody else, that means tier two below, and below service providers and pretty much the rest of the commercial industry are still looking at technologies, not just in terms of how much scale can I get, but the discrete technologies like, should I have rack, should I have blade, should I have Apollo, should we have, what kind of services do I need in my environment all up and down the, you know, the market stack. So essentially, I would say that the market is expanding, it's not so much cannibalizing into the traditional market, it's the fact that these new era, new style of IT companies are just expanding very quickly, and that is a very different business model and the services that we sell there are completely different than what we do everywhere else. Scott, one of the things I want to ask you is obviously the whole support break fix business has changed because of the whole commodity hardware piece, obviously scale out open source, you see what Intel has done with Cloud Air and the big data space, it's telegraphs that gets more and more commodity, Cisco's claiming, market share leader, but how you slice in numbers, blades versus, I mean, it's different, the definition of the server is changing, I'll see, and with Moonshot there around the corner of the high end, and then on top of that, the market forces up like open compute. So hardware business, some say it's going away, but others say it's only getting better because you're seeing some innovation, we're seeing Fusion IO pivot to more hardware, less software, so how do you look at that from a strategy standpoint, now as the SVP, let's shoot the arrow forward a little bit and let's connect the dots, where is this leading for your customers and how do you organize your business to handle this new environment, the old days was easy, do a hot swap program, take a server out, get rid of it, is it that easy now or what's the challenge? Well, you know, if you're a tier one service provider, it's still a pain when a product fails, right, you still have to go deal with that, so ultimately people want products that don't fail and they want us to be proactive about that, so to a certain degree, even if hardware commoditization was a fact and I would challenge that a bit, then the fact is that there's all of the layers of stuff on top of the gear itself that comprises a system and it's that entirety that customers really want to think of as a system, they want us to make sure that that's aligned and up to date through the stack so that it doesn't ever fail. On the commoditization, if you look around here, you'll see all kinds of products that are so far from commodity, we've got Apollo with really innovation around cooling technologies, even in the most simple products, there's so much IP that's in there, so I'm not so worried about that, I do think that the white box challenge or threat is out there, but HP in particular has been very innovative and I'm not so worried about that, but on the service side, for sure, the hyperscale environment needs different services, they don't buy traditional break fix, they do things in a very different way, have different policies and processes, but we've been able to innovate and have services that are actually targeted to that market. On the customer side, what is the biggest challenge you see right now for your customers, because right now the challenges and opportunities are great, you have a hybrid cloud really hitting mainstream now, the worry open stack now is certainly on everyone's agenda, we were just at the Duke Summit last week, covering the whole big data space on the tooling side. There are big data challenges for everyone, that's going to put more pressure on the storage. How do you look at your customers from your customer by your perspective? What are their challenges and what are you guys doing that's new and innovative that you can share with the folks out there? Yeah, so it all comes down to business agility, and that really starts with having agile IT and the ability to better match and align costs to revenue for any business. And so behind that, it's about how do I source and how do I consume IT and who's going to help me with those options? And then how do I place workloads optimally? Because in the end, I've got all these workloads, some will always stay on-premise, some should never leave the cloud, and everything in between, and how do I orchestrate all of that? So that's fundamentally the challenge. So if you look at HP, we've got now all the pieces. We've got the ability to variableize and create a public cloud experience on-premise with a lot of the same benefits, no upfront costs, variable-ized and so on. Then with Helian, OpenStack, you've got workload portability, you've got HP's public cloud, Helian public cloud, we've got partners who are using OpenStack. So it creates an ecosystem that our customers can then land workloads and think about how much IT am I going to own? How much am I going to leverage off-premise? Ultimately, every customer's faced with the same decisions around how much data center am I going to have? How do I refresh the data center? How do I get past the capital acquisition phase that I can get into the new sets of technology? So I feel better than I've ever felt about HP having all of the pieces to help customers get there. We've had peace parts, we've had a lot of enablement, but now we've got the full story. It's really exciting. And what would you say for the folks out there on the final question I'm going to let you to share? Meg Whitman's vision of a new style of IT, what does that mean to your organization as it trickles down and you have to put your battle plans together for your team and to serve your customers? Well, new style of IT means to me hybrid and I've got to support customers that are living and breathing hybrid every day. I can't just say and show up and say, look, I'll take care of the gear that you have in your data center and you're on your own for everything else. So we need to be present. We need to do what we've always done but in a bigger context and we're there. Scott Welles, Senior Vice President General Manager at HP Support Technology. Great to have you back on theCUBE again. Appreciate your time. We'll be right back from live in Las Vegas for HP to discover this to CUBE. I'm John Furrier with Dave Vellante. We'll be right back.