 Live from Las Vegas, Nevada, it's theCUBE at IBM Edge 2014. Brought to you by IBM. Okay, welcome back everyone here live in Las Vegas for IBM Edge, this is theCUBE, our flagship program. We go out to the events, we extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE. We are here with the Analyst Roundup segment. We are here to discuss all the action at IBM Edge and the impact of the industry, infrastructure matters. That's the slogan, of course theCUBE matters. That's why we're here. This event is really, really key. And of course I'm here joining Stu Miniman, analyst at wikibond.org and David Floyer, co-founder of wikibond. Guys, analyst segment here. Talk about, let's drill down and analyze what we heard. Okay, let's dig in a little bit. IBM, David, you've been following them. Some of the stuff that you've written actually and some of the sizing has been significant. First question to David Floyer as an analyst covering the space in flash from day one. How do you give IBM a grade at this? I mean, obviously they got it at the market. They have now to go to market going on full throttle. What's your take on their progress? You give them a good letter grade A, B, C. What's your take? Well, I'd say they were late to the class. That they got started a little bit later than other people in that area. They have one advantage, tremendous advantage is that they cover both the storage and the server side of things so that they can take a more of a systems view. And I think that's been a great help to them. They went after the all flash array with the purchase of Texas memory systems, TMS. And that's enabled them to go after a certain segment of the marketplace, the very high performance segment. In particular, that is the people in Wall Street who really have to do things extremely quickly and also the high end of the performance area. The very high end DB2, the mainframe market where all flash has been a great asset in helping those extremely critical systems get way under one millisecond response time. So that's the area that they've been very strong in. The area that they've been weaker in is getting the lower price points. And that's something they're working on now is getting lower price points into the marketplace. I asked, my cue is specifically their differentiators. I want to get your take on this. He said things like we are the only ones who have a broader approach in terms of across the portfolio and systems level integration, meaning they've built it from the ground up. That's a differentiated, no one has that speed they said that no one else has. And the ability to do additional enhancements into the software on top of their enhancements on the bottoms up kind of in the hardware. Do you agree with that? Is that a differentiator? And are they positioned well for this battle and the flash? I think it's true there's a differentiator. They've done well in those high end market places with a very low latency. They've done well on the server side in integrating some of those solutions. That's been their strength. I think the battle ahead is bringing it down into the mid range to lower ends where price is going to be much more critical in that area. We're seeing a lot of people in that hybrid storage and all flash array storage who are coming in at much, much lower price points. And I think that's an area that they're going to need to tackle if they're going to maintain that momentum. So all flash, all hot right now. We've talked to SolidFire at the OpenStack. We saw pure storage and we're at the EMC world. They had a little gorilla activity going on there. It's up to the CEO and their staff there. We've talked to a lot of industry folks who want to get your take on this. Is there a silver bullet in flash? Can you deliver massive IOPS, great throughput and cost per gigabyte? Is there a one size fits all flash solution that could address all three of those things? Or has it become kind of you pick your market and go for it, whether it's transactional, IOPS specific. Can someone deliver those three things in one product? I think like everything else, it's very difficult to do that. And you will find differentiation for certain strategic fits. Or you get a strategic fit around the particular product. And what you find is people will buy it for that particular type of application. So the TMS, for example, is at the very low latency, higher cost end of the marketplace. That's where they fit. You've got the all flash arrays, like the extreme IO and the pure, who have brought in more deduplication. That's more overhead, it's slightly slower, but it gives a lower cost per byte of storage. So that's another layer of the marketplace. And you've got the hybrid arrays who have come in with much less flash, 20% or so if you're tin tree, lower than that if you're people like Teja. But coming in at very much lower costs there. So you're seeing a very strong differentiation in the market in different places. Some of the buzz here in the show is all talking about flash. And so this, how you slice and dice flash is interesting, I want to get to the specific question. Some are saying, honestly, the leaderboard will come out, IBM, Pure, Violin, EMC, and pretty much everyone else doesn't also ran. So do you want to agree with that approach? And there's a lot of names missing, you mentioned a few of them. And two, I want to get your take on pure storage, is if that's kind of the segmentation of the leaderboard, Pure has certainly risen from low in the top 10 to up in the top three. And number two, if that's the case, does Pure have legs or it's just the shiny new toy, the new kid on the block? Do they get that kind of attention? What's your take on pure storage? Well, pure storage has certainly accelerated dramatically over the last couple of years. Very, very dramatic. And they've gotten serious money from the angels out there to help them on their way. So they're going to be putting a lot of money. It's still not a lot of money in the storage landscape, less than a half a billion dollars in cash, still, I mean, still a lot of cash, but it's not like the big war chest. No, but it will fund a significant improvement in their marketing, which is the area that they need to get into. Because obviously it's much, much easier for EMC and IBM to get into marketplaces, they already have sales people in. And they have a worldwide distribution. So Pure's challenge is how to get marketplace, how to get feet on the street. Do they have a good product? Absolutely. Are they a flash in the pan? Well, time will tell. Time will tell. Most of these people get bought one way or another and then absorbed into a larger company. So we'll see what happens to them and whether they can break through. The odds are against them, but they have got a very aggressive schedule. I asked the CTO of Data Direct Networks, who you know, John Luke Chatelain, if they have any chance, Stu and I were asking him at the Opus Dectos, does Pure have any chance to be the next EMC? And he said, quote, not a chance. Do you agree? Do they have a chance? I mean, right now they're nippling away at the croissant at breakfast, nippling away soon as lunch and then it's dinner. That's how you win. Can they eat the dinner and lunch of EMC? Yeah, when that's happened is when the giants have been totally asleep. Those EMC has put a lot of effort into flash, understands it, has made, I think, a great acquisition with the DSSD. They understand that they need to be present in this marketplace. They are the sitting tenant. It's going to be very hard indeed for somebody to come in and make the same sort of play on a market in the same way as, for example, EMC did originally. When IBM was completely oblivious of this marketplace. So they're late to the party. Can they win back their presence in storage? Can IBM do that? Can IBM do that? Yes, I mean, IBM has sufficient funds, people on the street, services to cover that sort of area. And it is the time to do it. And I think the area, though, that the most interesting thing in the show so far for me from IBM was the announcement of elastic storage because that really is server sand, it's a global server sand. It's reaching for the trees or reaching for the stars in the breadth of it with both the ability to spread things over different localities, different geographies, the ability to include tape in it, the ability to have server sand, storage and servers together, closely in it. There's a very broad range of investment required to carry that off. That, to me, is the one area where they could bring their technologies into one place and actually make a difference. Before we get to Stu, while you got your oxygen here, violin, I mean, obviously Eric Herzog moved over as a big move, ex-EMC executive. He was really coveted over there. Certainly when Brian Gallagher took over, it was kind of some shifts in terms of the opportunity, a lot of stock to help turn around violin, certainly, really never bounced back from their IPO which kind of went sideways. Still a player. What's your take on violin right now? Well, violin has got a had early mojo and went very hard after the marketplace. My concern about violin is actually a business concern more than it is a technical concern. They've got good products. They work. They've put some good innovation into those products. They are still, in my view, two issues, one of which is they're still stuck in the way of doing things which is the traditional storage way. So they still talk about RAID. They've embedded RAID. They've kept the existing infrastructure of storage. And that's going to hold them back long-term. And the second is they've got a lot of debt. So it's going to be tough for them to get another round of funding. I'm bullish on violin. I think the stock price is very low. Good bargain. I'm advising all my friends. I don't own any stock. That would be against our disclosure policy here at SiliconANGLE. But I like where... I'm not a liar. I like Herzog. He's a good guy. And I think you see some interesting action. Let's bring in Stu Miniman. Stu's the analyst. He's been on the ground here. Co-hosting guests. They cover for me while I had a personal day. Stu, great to see you. You're out hunting stories. You're out last night talking to all the people, getting all the whisper rumors and stats. You're also moderated a panel, obviously IBM with their server division. We talked to Steve Mills. That's very clear from IBM Impact and IBM Pulse. Obviously the technology tax from Intel, they're passing off and letting Lenovo run that. You had heard of rumor and obviously Pat Gelsinger at VMware and also John Chambers, kind of at a war with each other at this point. What's your report on this? Because this is really fascinating. Because this is an interesting dynamic in the landscape. So share what you've learned with the folks out there. Sure, John. Thanks, you actually got my voice rest a little bit. I think that's the longest I've gone without talking this week. Always busy in Vegas all day, all night, the cube covering the action. So yeah, interesting scoop, John. When David Floyer, Dave Vellante and I sat down and looked at the Lenovo IBM deal, there was concern about what does this mean to the whole system sale from an IBM side? But really the big opportunity here is while IBM has a broad portfolio, it does limit some of their partnership. So especially, you say IBM, great partnership with SAP, but with Microsoft, with VMware, and with Oracle, there are some limits as to how much IBM can really partner there. So John, the scoop that we got is five days ago, John Chambers kind of made an accusation about it. He declared war against VMware. He said VMware is enemy number one to Cisco. And what I hear from the IBM guys that are going to be moving to Lenovo is the phones ringing. So people that want infrastructure for VMware have been buying a lot of Cisco UCS, and now Lenovo doesn't have the, once the acquisition, the deal is done, will not be attached to IBM, will not be attached to the AIX and DB2 and all of those pieces. So they are unfettered and a good partner for VMware to go on the offensive to try to take back some of that share that they've lost over the last few years, especially at the higher end of the market. So it's really interesting from the Lenovo guys, when they go over there from an IBM standpoint, they've just been losing market share and said they never had a goal to be number one in server. Now that is their stated goal to win back leadership in the x86 market share and do what Lenovo did in the PCR, which was to take them from a kind of a number two, number three player back up to number one. So let's break this down because obviously we were talking on theCUBE, Dave and I and X2, you were talking about that we were talking about this open stack, a cold war going on in the cloud and certainly on-prem, it's been going on for a while. It's just a Berlin wall moment where you start to see the swim lanes, starting to develop, you start to see the horses on the track, as Dave would say develop. I mean, this is clearly an opportunity. VMware can now move with IBM in the commodity scale out open source communities where people are building large scale systems with server sands, detached storage, new architectures. This is an opportunity for VMware. What's your take on that? What does VMware need to do and why is it an opportunity for IBM? I suppose a great partnership with Microsoft and other vendors and VMware, they have VMware. We heard on theCUBE today, VMware and virtualization is a big part of a lot of the benefits that IBM partners have. What's the opportunity for IBM and VMware? Sure, and just to clarify, from the compute standpoint now, it's going to be Lenovo. So it's Lenovo's opportunity to become a major player in data center infrastructure. So, everybody has said for the last few years, compute is commoditizing and if you look at where the trends have been, there's been two big moves. One is Cisco has been eating the higher end of the market and Quanta has been eating the entire market. So those ODMs have been going out there and now Lenovo's a player that to kind of go in between there and be able to attack Cisco with lower price solutions and go to those customers that aren't the biggest five data centers in the world that aren't going to buy Quanta. So, big opportunity kind of in the fat middle market for Lenovo and the compute and absolutely it gives IBM a little bit more flexibility on things like storage to be able to have both what they do in-house in the partnership with Lenovo to attack the whole stack. David, what's your take on this? Because obviously this is a game changer. You're seeing the big whales and VMware is dominant, they're growing, Pat Gelsinger. You don't mess with Pat G as we saw the crowd father talking on CrowdChat. Pat's competitive. He's had really interesting opportunities in the past. Certainly at Intel and then EMC now at VMware we sat at the helm there. Is this an opportunity for VMware and how do you think IBM takes advantage of it? Is it the middlewares, the analytics? Is it all the above and Lenovo? IBM has the most amazing software portfolio, the best in the world. It owns big data, for example. It has all of the most, the biggest names in big data, the biggest revenue in big data is with IBM. It has a similarly very good set of products in the development area with WebSphere and the follow-ons to WebSphere. So IBM can partner with VMware and it can partner with Lenovo to produce some very, very effective systems, total systems. They have their own set of technologies and IP and they can partner as well with Lenovo and with VMware. So Lenovo is a dark horse in this whole deal. Yes. And if you look at IBM with the whole federation, the other partnership opportunity, of course, John, that you've talked about a lot, is Bluemix uses Cloud Foundry. So Bluemix is the follow-on to WebSphere, yeah. Yeah, well, it's early on Bluemix, certainly Cloud Foundry, doing a ton of biz dev, getting a lot of momentum. We're waiting to see the meat on the bone. Final take guys, quick around the horn here. Stu, we'll start with you. Your summary of this event, from an analyst perspective, what you're finding, what are the big top three things that folks should walk away with in terms of what they need to know about what's happening at IBM Edge? Yeah, so at Wikibon, we've been saying for the last, at least four years that I've been on board, that is the sleeping giant IBM going to awaken in storage? And they've got a lot of good pieces that are here. To be honest, I was shocked at how much x86 got a real discussion point here. The comment Dave Vlante and I were making is we've never seen IBM spend so much time on that. And I'm not sure if IBM is fully awoken in storage, but Lenovo is one to watch in this space. David, your take, top three things you've walked away with here at IBM Edge and shared with the audience. Yes, so the top three things. Well, the first thing is elastic storage. And I think that is going to be very big. If they execute on that. Why? Why do you think it's going to be big? Well, we've done a recent forecast on this. And over a 15 year period, we believe that the traditional sand and mass market will actually migrate into server sand over that period of time. So it's a very big change in the marketplace. The leaders at the moment are very small in that marketplace. EMC has got scale IO, there's Nutanix and a lot of other players in the marketplace. But if a systems vendor can pull that together, then that's what's required. Either HP or IBM are in the best position. So that's the first most important thing I thought was announced today. The second is the release of the server division. If Lenovo can do what they did with the PCs and get the economies of scale from their excellent supply chain management that they have put in place and get hold of memory costs in particular and get solutions for flash and for storage, that's the second very interesting thing that CIOs should be looking at very hard. I think the third thing is that there are some very specific areas that CIOs should be focusing on. One of those is private cloud. And I just released some work on that which shows that the most important thing you need to do if you're going to have a low cost private cloud to compete with the Amazons of this world is to take out all, literally nearly all of the people cost. And the XIV actually fits into that category very well. It's designed in a way that really does fit into that cloud service provider marketplace and private cloud marketplace. So I think that's the third interesting thing that for people who really do need to get down to low cost, eliminate people, that's a great opportunity. Dude, do you want to make a comment? Yeah, I did. So the two pieces I'd be remiss if I didn't cover is from a pure system standpoint, we've been tracking at Wikibon, the convergence is just growing very rapidly. The pure flex on the X86 actually goes to Lenovo. And that could be interesting to drive that forward. I know we've been watching what the convergent infrastructure just can be X86, what goes on power. IBM maintains the pure application and the pure data. And David Floyd has written a lot about how the further up the stack we go, the more value that's there. And IBM and Oracle really own those complete stacks. So big weapons that IBM could wield. And the other piece that of course permeates all the shows is from a cloud standpoint, IBM's got the software acquisition and they've got their hybrid offering to try to really make it similar for customers to be able to create that on-prem or off-prem solution and provide that flexibility. Soft layer is a very important asset. Guys, the cold war is still going on. We've got some skirmishes. We have Pat Gelsinger and John Chambers. This could be very interesting to see. Obviously great for the industry. I think at the end of the day we learned open stack was, even though the Kool-Aid injection is happening on the open standard sides, emerging technology bridged in with open source and extending out the old technologies into the new market is really the key. I think you guys nailed it. Thanks for your analyst summary. This is theCUBE on the ground live in Las Vegas for IBM Edge. I'm John Furrier. This is theCUBE right back with our wrap up after the short break.