 is the executive vice president and it really runs all strategy and business development M&A I'll call it okay right did the archivist acquisition right wasn't that you and really responsible for the day today right and that was sort of your you kicked it off and and you sort of had the team really execute on this congratulations really great great announcement get nice and close to the mic have how much coverage I mean did you guys get into the 3d scaling and yeah it's been great and we had a lot of analysts on so ESG was on IDC Ray Lucchese David floor talking about 3d scaling and the differentiation there and then go over 5,000 views in here so it's over our normal benchmark of 10x of the physical event size so the content cloud got a lot of play yeah you know real different people I mean were people able to link that together in terms of the foundation elements of the infrastructure and infrastructure cloud and virtualization today that's one of the key ones that sometimes I mean some people may or may not understand is if you don't have the virtualization layer for the infrastructure not just at the server side but down at the stores layer you can't really do a lot of these other things and so if you can't heterogeneously virtualize down below and I think hopefully you heard it from our customers today that data migrations being able to dynamically move data around without interrupting application that's where it's at I heard that siloed message to the application siloed data siloed that was loud and clear the software was a very interesting stat I think you had it up on stage you said that your business has changed yep can you talk more about that because we want we drilled in with Jack a bit on that he elaborate but I wanted to get your opinion on that since you quoted it the thing was over 50% was your revenue number or right yes yeah so seven years ago our software and services percent of our total company revenue was 20 probably 23% of our revenue and so that's pretty low and you know if you think about it right the heritage in terms of the lighting product and the high-end hardware selling gear sound gear right and that's what a lot of people are doing say seven to ten years ago today it's 45% of our revenue 46% of revenue depending on how you look at it and we're looking to get over 50% here very quickly and it's more matter of the software is changing and leading and kind of changing the dynamics in terms of what people want to buy and so it's the command suite is just as important today as the virtual storage platform that we're talking about today so it's kind of the the combination here and that's really you've seen it in terms of our mix of business just because we're really focusing on that customer problem and if you could simplify the the pricing model a little bit get to more of an on-demand model that number should explode correct correct and we are we're actually simplifying that quite a bit here going forward yeah good that's great so I mean the other big message that we heard was the the content cloud you know and and that comes back from the archivist acquisition as well as the some of the partnerships you have with guys like blue arc that's different right I mean especially at this scale right you know you really don't don't hear that you used your thinking about Hitachi is OLTP right right so talk a little bit about that because you were heavily involved in that strategy sure working on it just didn't fall out of the sky yeah no so we've been working on that for years if you look at it you know the we work in the I mean we talk about petabytes today which is not a funny word and exabytes is not as funny a word as it was before and zettabytes is now not as funny a word as it was a few years ago you know what a zettabyte is he explains this is the UNC world a thousand yeah a thousand billion yeah right but um so I the big premise that we have and we actually have some very leading edge customers that are deploying this today is in the future everything's going to be looked at as an object everything and even over time you think maybe even a row in a database will be looked at as an object how many objects is it going to have to manage that's a lot of lobs it is I mean if you start looking at it so if you start talking about kind of the unstructured data world the semi-structured and even some of the structured over time you're going to have to have a common kind of normalization layer on how do you actually manage those objects and so what I find most customers kind of the the the phases that they're in right now is most customers either own the unstructured data problem or are about to own the unstructured data problem like so all the file servers are owned by the business units and so either they don't care about it now or pretty soon they actually care a lot about it and so the the content cloud is a whole idea how do you actually manage at the core and do all the services there and you kind of have to so we have some customers we have a leading edge healthcare company in in Europe and actually they have their billing systems so structured stuff as well as all their unstructured all the radiologies pack systems etc all normalized at our layer and then they can actually do all the contextual stuff down there because the amount of objects you need to manage are so huge and this is where you start changing from the petabytes and exabytes language to how many billions of objects you have to manage I think I was I mean I think I was really impressed how you guys positioned the content cloud because it it was good marketing in the sense that content cloud takes away the structured feel of content being everything right so the content is content right so it's like it kind of gives me this Facebook image like I know there's everything's in there yep but it's not like oh I did my email right is my where's all my email content so it just gives me that in that feeling of of transparency to the data and I think no one's ever done that I'm not I'm not seeing anyone actually put a stake around saying hey content cloud it's just everything yeah now don't worry about it yeah which kind of brings up the whole siloed app problem which is a huge issue right now well it's it's a siloed infrastructure like silos of storage and you have silos of apps and so how do you kind of help bridge those two worlds together the other thing I was really impressed with is the 3d scaling because you know scaling up everyone knows that you just throw stuff at but the scaling out no one's been talking about scaling out even some of the best research is working on that distributed mindset and the scaling deep great tie-in scaling out how real is that right now and where are you on the roadmap to scaling out what do you mean well most people I talked to about scaling up they get that scaling out it's like okay the more distributed content I have everywhere yep and not knowing who caring what partition I send it to are you thinking geographic distribution geographic data centers geographic servers I've got a piece of content we'll get in 1080p video yep just throw it out so it just goes somewhere in some tier right now it's just out there but I gotta discover it got it so that's distributed it's round trip times involve all this yeah okay it's math yeah it is it's not easy yeah yeah no no no and a lot of people to figure that out right so tell us about that well so when you look at the virtual storage platform when we talk about 3d scaling we're talking about kind of more of just how do you scale at more the block level okay and then how do you then link to the content level over time so what we have today is actually all of that stuff on the truck at the block level we need to take it to the next level in terms of the content for the content we have a lot of and that's a big growth part of our overall business but we have a lot of use cases for that the thing that we're actually working on more now around the content cloud and Jack didn't have a chance to get into a lot of detail but the analogies around old TP transaction systems and data warehouses actually exist now for the content world as well I don't know if Jack talked about this or not he didn't he didn't but I've heard him talk about it before yeah previous snw he talked about it yeah but it's a you know if you take that analogy old TP transaction systems you need to keep fast and what you fast and lean and mean and then you think about reserve for the most high cost performance mission critical whatever you need to do for processing right and you need to keep it fast so what did you do okay well you strip out a record put it in a data warehouse it's your immutable record you want to keep things fast and then you want your your warehouse to actually then feed your data martin your bi and your analytics take that analogy to filing content you want file or nas or whatever the heck you want to call up file protocols just go do what it does is file processing right so if you want high file processing scale out imaging whatever you need it to do that's that your oil TP your content cloud is your data warehouse for unstructured data yeah so this is why I like your vision because you're not saying you have to own the database yeah you're saying let's let's manage it let's manage that information and that's again unique everybody's trying to own everything he's doing out of the stack and yeah oracle open world last week and you know serious owner we own everything closed our chips our servers our storage our database and say look let's just manage the head customer to manage it and some products to manage it and let's be inclusive let's be able to plug in there's no openness at oracle open world there's actually closed world or closed world you know so that's what people are saying it's openness is a big message you guys have that you mentioned that again so tell us more about that where's that going in terms of the development cycles and are there any entrepreneur opportunities out there that in your perspective you see any white spaces for entrepreneurs sure yeah I mean so that's been our heritage around openness right you think about standards even back to smis or any of the older standards as well we've always been embracing those so um I think you'll continue to see this be open I think that's really if you look at it you have to be horizontal and you know if you think it's interesting um some people still don't believe that we virtualize heterogeneous storage environments today which I find very funny we've been doing it for years but you can imagine the tough strategic discussions we had say seven or eight years ago around we're a storage company so we're gonna lose business if we do this so like we're a storage company so how do you get good decision well it ended up being a great decision but if you think about it's almost like the two decisions that were made say seven eight years ago that were really critical that was one the other one is where should storage virtualization live you guys remember the whole yeah it should be the network of the controller and the network and the controller and we really thought back to what's the key customer challenge in the in the network it causes more complexity right more points more all of that if you put it in control it can be very simple you can turn it on do whatever you want to do with it and then the other one was more matter of we would love for everybody just to only buy from us we know that's not reality right you have m&a's even if they love what we do you go out and you know um Lloyd's buys h boss okay well we're it's just it's life right so I think those things those things are actually um have been a key part of even oracle won't own all the world it will want to but the question is is how much will customers really want to give how much of their it budget whether they be willing to give to an IBM or an or I don't know the question of this but you know I hear these from customers and it's not just a support and maintenance and pricing issue I think it's just more matter of share wallet yeah and it is the mother of all lock-in I mean I mean at at VM world you heard Oracle customers complaining that they would basically charge that when they virtualize Oracle they would charge them licenses on a on a VM basis you can't do that and we're oracle we're going to do it and the VMware executives on earlier uh prog tell you know talks about transparency living in a day now where it wasn't like Microsoft in the old days it's a lot more vendors involved and what we talked about was is that openness is ultimately where the people are innovating so when you see openness they're not afraid to say hey we're open right so normally when you see open you see innovation and when you see clothes you see protecting track the rents out of my position yeah and those kinds of good margins for a while so so you know sure to me when someone says I'm open actually opens the covers right they're actually not afraid and they actually are doing innovation yeah that's kind of one of our little acid tests we talked about how open are you yeah well we're open well show us open and I think our partners probably did a very good job today yeah talking about kind of how open we are and I think it's really around the respective ecosystems right it's not just our ecosystem it's also working within theirs and you know if you look at it and I think what you'll see with the vsp as well is how much more do we help enable the server virtualizations it's amazing to me a couple stats I just read one was uh they're forecasting that customers will spin up 80 to 120 million virtual machines in the next 12 months 80 to 120 now again it's a bunch of different forecasts who knows if it's exactly even if it's a quarter of it there's a lot it's a huge huge amount way more than physical and what's interesting for me and I travel all over the world so even talking to customers in more remote areas it's amazing to me how often customers are saying my default standard on the server side is you will be virtualized and you need to have a business case the business and the application guys need to have a business case onto why not and let me tell you you think that that's a big big shift that's a line in the sand it is it's a total line in the sand and you know you think about it like DBAs you want to see their spindles and their servers and I mean you think about that world that we've lived in forever the gala runs at SAP it leaves nice droughts probably yeah right it wasn't an easy decision for them to correct to virtualize and so I think if you look at that that's just going to continue to kind of go throughout the whole so we living in that virtual world tell about the culture that that impacts it within the IT organization it's a cultural shock huge I mean I'm used to having my siloed organization absolutely network guys app guys you know yeah now virtualize it is it is what do you hear from customers when you when you you know is it the blunt instrument over the head carrots sticks and carrots I mean how do you motivate well I think at least on the server version section my my opinion is just more the cost savings are so obvious the cio is going to force it down and that's kind of what you see there in terms of how the organizations are changing you get all kinds right now I think it'd be very interesting to see kind of you know how we come in pattern you're seeing not not yet not yet you know it depends on how distributed or centralized they are I see more centralized organizations certainly today than I did three years ago but the question is more matter of your point around siloed for storage and networking and we're seeing I mean we're the pattern we're seeing is chaotic it's really not the only consistent thing is it's coming yeah exactly but what's the best model and I don't think that that's and some of the some rogue organizations where you have you know mutants going on somewhere it's a cio is getting shafted by the guys underneath or the cio is going down saying you got to do it yeah all kinds of POC is going on red herring so it's it's really crazy yeah yeah talk about day were you seeing the same yeah I mean I mean I think that I think you're right there's a there's a class of customers saying no more silos right they're busting the silos and but it's in pockets right there's no there's no clear trend that that we can discern it depends on industries sure like you say the culture of the distributed nature of the organization I wanted to talk a little bit about the whole m&a activity we've just seen some sanity we you know we had three power on last week at open world they were all smiles for some reason I can imagine why yeah so what does that all mean to Hitachi what's your what's your angle on the whole m&a well if you look at I mean I think and Jack did I think a pretty good job about talking about it today is our strategy is very integrated so first and foremost you gotta be integrated second it's gotta be open so I mean you take that as a premise and m&a for us is to complement a strategy m&a is not a strategy right and I'm not placing judgments on that it's just kind of that's how we look at it every company is different every company is different in how you want to implement it and but for us if it's got to fit into that integrated strategy and so for that we're going to be very selective you mentioned archivist great that's going to be a core part of that content platform we picked up some IP of a company called Periscale yeah and so you know how does that fit in as an ingest engine to help with the filing content in the content club so I mean it's for us it's all about making sure it fits in an integrated strategy and make sure it's open we are pretty clear about how far we want to go up or not want to go up just because we aren't interested in creating more and more silos or I'm going to own the whole stack or I'm going to compete with everybody in their brother or whatever so you weren't tempted to bid on three bars that was your domain right right so uh you know it is what it is but uh it's interesting everyone has your answer there well yes I have plenty of opinions on that anyway so it's but integrated and open are the key ones that we that's the filter that we use in terms of any m&a strategic partnership or build decisions that we do well I think the other thing too is that you know we hear a lot of talk about big companies getting acquired you know uh netapp CEO uh uh tom jorgens and his predecessor dan wormanhoven frequently had to say well here's why we're not going to get acquired and you hear a lot and joe tucci does the same thing you even see you gmc people talking to get acquired you don't expect the tachi's going to get acquired you know 97 billion dollar company right so it's not as though your force your hand is forced to go acquire because you're taking a defensive approach and that just doesn't play into the equation at the same time do you do you feel like sometimes you've got to be tempted to to play in that game and protect some of your your assets well i mean you again you have to pick and choose i think we're what's important and what's not i mean if you look at what hp wants to do our ibm they all have very different models right i mean ibm's models all around analytics and software and that's a big shift for their business since five seven years ago which is all about services um hp is all about the infrastructure and they have some pretty big pocket books right i mean you look at even hp and del and you know michael del is obviously a pretty aggressive kind of guy they have about similar cash on the balance sheets but if you look at the assets and the enterprise value it's probably five x the enterprise value is at hp relative to del so even they have limits in terms of how much they'd be willing to pay for certain things so um you know my take is it's it's a it's a swing of a you know we're in this consolidation phase we'll continue in this consolidation phase i expect more macrophies intels you know the next rumors that are all out there about different storage companies that will continue the real question is we'll be sitting here five years from now and will we see that trend continuing that way or will we see okay well now we'll see more of this divestitures in terms of figuring out where the best of breeds and well and the big the other big thing about otachi is you guys invest you got a big r&d budget correct synergies across the organization that a lot of companies just don't don't have a lot of companies have to go acquire correct you know for a variety of reasons and seems like you got you got patient capital there we do in the innovation you had talked about that before but the four billion dollars that we do i think we invested last year just alone on r&d but that innovation has is the heritage right so that's how you can continue to do that and have some great solutions like the vsp and command suite talk about talk about a question i want to ask you talk about the marketing i mean otachi this event is really kind of is a statement event yeah because have a lot you know you have your heritage out there the drums are beating you come before you came out in stage you know you're not hiding from that but you're not known for being super aggressive on the marketing front but this is a pretty big event well is that a is that a tone you're setting or i think so i mean we're not a marketing company and it's okay because we're going to market you we're going to market your product correct exactly and i think that's the big distinction you probably seen from us or will continue to see from us is basically we're a great product and technology company we have thousands and thousands of customers that love what we do so our jobs just get the word out right and so i think if you look at what you'll see more and more from us is again we're not a marketing led organization we're a product and technology company and marketing will play its role and so i think what you'll see more and more and today i thought was the most valuable for me is listening to the customers listening to our partners but you know getting the customers and all we're doing is a good marketing event it was a pretty good marketing yeah really good marketing event yeah yeah and but for my standpoint it's how do you actually just get the word out and and from my standpoint it's the we have so many great customer testimonials and just so many customers i don't know if you listen to a bbnt in there or whatever i mean they just we were broadcasting it live yeah they love what we do and i mean from that standpoint just how do we continue to get the word out and for us the best marketing we have is just reference selling just go talk to so-and-so go talk to this you know we've got so many different customers that most people don't know just go talk to each other and find out what works and what doesn't and that's a big change five six seven years ago you didn't see that kind of reference marketing at an hds event yeah exactly you talk about the customers what we can't really say this cio from some large bank sure yeah and now you've got them on stage exactly you know so that's that's your and that's testament to the fact that your product does what it you said it would do right and that's again that's our heritage too around just the transparency and not a lot of exactly shipping today yeah we're just that's kind of our culture and so we're kind of not the not a bs type organization it's all about just kind of let's go out there add as much value as we can we'll tell you what we know what we don't know here's how we think we can add value for you and then we're kind of actually even surprised and amazed at even some of the use cases and savings that some of our customers have i think i mentioned that over 85 percent of the customers that implemented our virtualization solution got a payback in 18 months or less i mean like shocking from you know this is an independent third-party company that went and did that for us and i was like wow that's a pretty big statement let's talk about customers for a second for the folks out there who you know who are getting to know you guys you know through this broadcast that might not have known the inside baseball if they if what would you tell them and said when you if you talk to a customer what would they if they talked to a customer what would the customers say about the toji to them they asked if they asked a customer hey you were with a toji what are they were like working with um so i've had customers actually to talk about some of their experiences so i think at the end of the day they talk about the people they really would i mean which embodies the culture and all the hitachi spirit but i think just in general we had a customer that had a flood in southern california here a couple years ago and he was speaking at our customer council and just talked about basically how the first people on site were the folks that were supporting the hitachi environment they were the last people to leave for three and a half days and they were not just focused on the hitachi stuff they were focused on just helping the cio get back up and running i mean they're out there sweeping things or i mean they're doing all kind it's all about kind of going above and beyond a commitment is a commitment and that's kind of really from our standpoint i think if you look at our core it's all the people that just kind of make a great organization and it's fun it's fun very loyal i mean and it's just um it's a it's a great company to be at and the fun thing for us is we're you know we're doing well in the marketplace we're growing you know business is good business is good and so that's from that standpoint it's a you mean a good product you get the word out now you got word of mouth networks with twitter and all these kind of you know transparent communication exactly yeah that's great it's great we're here with brian householder uh... senior vice president executive vice president that uh... the tachi data systems brian was great having you in the cube thanks for your time thank you so much for you appreciate it thank you so much guys thanks guys