 Okay, I'm John Furrier, the founder of SiliconANGLE.com. We're here inside the cube live at Cineclaris Silicon Valley with my co-host Dave Vellante, who's back on the plane from Vegas. Good to see you again, John. He's just in from Sin City. That place is crazy. Stu was subbing for you, did an okay job. I thought that was a job. Good, thank you, Stu. We're here with AJ Chandramalli. Chandramalli, that's right. Chandramalli, on one shot. From Intel, you are a cloud and data center manager. You work on sharing the Intel best practices around cloud, data center, consumerization security. To your IT peers, you did a big presentation here in the weeds detail, big hour presentation. So let's one, talk about the trends while you're here, kind of what you're talking about in your talk and then some of the macro trends going on in this big trend of consumerization. Obviously, we all know about Apple. We all know it's going on with Google. We know it's going on with mobile, cloud, Amazon. Now IT's impacted by all these trends. So it's a paradigm shift, it's an inflection point, all those things being said in the industry. So let's hear it. All right, yeah, sure. So I'm here, I had a presentation like you mentioned, sharing Intel IT's best practices around cloud computing virtualization. So cloud computing is a hot topic these days, as I'm sure both of you know. But Intel, we were actually ahead of the curve. We started our cloud initiatives back in 2006 in our design grid environment. And so we've had a lot of experience in this area. And one of my objectives, my job functions is to share those best practices, those key lessons learned with my peers in the industry. So I focus on cloud computing and our data center strategy, but in Intel IT, I think there's three big trends that we're focused on this year and the next year. Cloud computing is one of them, like I mentioned. The second thing is IT consumerization. So another thing that Intel IT has done is- What does that mean? Yes. I mean, everyone talks about it, we do all the time, but what's your definition for that? Sure, IT consumerization is the second one, I'll do that. And the third one, of course, is security. So to your question on IT consumerization, what that means is we've allowed consumers to bring in their own personal devices, smartphones into the enterprise and have allowed our employees to access corporate data on their devices. So that's a pretty big paradigm shift for Intel. Security is a big concern. Most Intel employees have their own smartphones already that they purchase. So why not let them bring it into the enterprise if it helps them be more effective and efficient if they can see their email without attachments on their handheld devices, if they can see their calendar and know what rooms to go to or book conference rooms from their smartphone. Why not enable that? So that's what we've done. And these three initiatives are not unrelated, are they? I mean, consumerization and cloud, you start talking about cloud, you're talking about security, but is there an element of consumerization that involves things like pay as you go? I think consumerization, I think I swipe a credit card to buy a software as a service or maybe even to buy some storage from S3. Is that a dimension or are you not there yet? No, you're exactly right. To your point, security, your first point, security does transcend both of those areas. It transcends everything, actually. I outlined a three Intel IT objectives that cloud computing, consumerization and security, but even Intel corporate-wise, security is a huge pillar for us in addition to energy-efficient computing and connectivity, evidence by our acquisition of McAfee just recently. So security definitely impacts all of those areas. So how about the- Well, EMC Dave talks about, we had the CIO of EMC on the queue. Yes, Sanjay, Merchandani. And they eat their own dog food. So what's the Intel, as they say, eat your own dog food, meaning you guys build and test and deploy? Is there anything going on there you can share? That's unique to Intel that you've brought to the market. Well, actually as a member of Intel IT, I've sworn an oath, so to speak, to not endorse or speak about any vendors. So I'll have to politely decline on any comment there. So how about- So are you using virtualization? Yes, we're actually- All right, here we go, let's start there. I would like to talk about that. So yeah, we're actually at Intel IT, we're very proud of the progress we've made in virtualization. We ended 2009 at 12% of our OS instances virtualized. We more than triple that in 2010, close out the year at 42% virtualized. And our end goal is to be 75% virtualized. So virtualization is the foundation for our cloud. And we've made a lot of progress there and something we're very proud of. How about apps? How far have you taken it into the application portfolio? Virtualization? Virtualization, yeah. You're still talking about essentially OS instances, right? How about the applications? I mean, is it a similar percentage? It is actually, and one of the things that we've actually just enabled to is the ability to virtualize our mission critical applications. So we've virtualized some of the easy stuff, but to get to eventually to 75%, you have to start virtualizing your mission critical applications. Meaning applications that are inside your DMZ, for example. So we've demonstrated that we could do that, we've tested that vigorously. And one of the things that are now stopping us, one of the things we have to do to get into production mode is the security aspect of it, which we've also found a way to implement as well. So VCE is a coalition with VMware, EMC and Cisco and Intel recently joined that, which we're now calling VICE. So VCE is being renamed by, called VICE. The VICE squad? Intel's now in the VICE squad. It's not only a VCE, so Mike and the Palace will have that new acronym. But do you have any experience with that involvement at all with VCE? No, I do not. What do you think about the concept of cloud in a box? I mean, Ellison calls it cloud in a box. I was wondering, John, if Oracle can do cloud in a box, does that mean Amazon can start charging monthly maintenance and raise its prices by 10X? You think that's possible? Well, I mean, we talked about that. Oracle being very cloud-centric in their last Oracle Open World, we saw Larry at his keynote, and he threw Dell under the bus and through HP under the bus, his partners, and saying, we own cloud, especially what he said, and he wants to own it, A to Z, up and down the stack. But what about that whole convergence trend? Buying logical blocks of compute, storage, and networking to support applications? Is that something that you guys are looking at, or is that... In fact, Intel, we're leading an effort, which is called our two efforts we have. We have a cloud builders program and our Open Data Center Alliance program, where Intel, we're in a unique position where we work with all software vendors. We're not, we like to consider ourselves as the Switzerland, so to speak, right? We work with every software vendor out there, and we're in a unique position to be able to lead an industry group and an initiative like that. You'd be very well-trained on the media speaking. You deny, you admit nothing. You're going to be Switzerland. You love everybody. We're pretty rigorous about our media training, so... You're good. I admit, you're good. Okay, we're going to get you somehow, believe me. We're at a storage conference here, and everybody, we talked about the practitioners in the Wikibon community, they're always saying that virtualization breaks storage. Gems, IOs through the roof, our estimates are that it increases IOs per mit by at least four X. Are you seeing that sort of IO storm, and how are you dealing with that? Are you changing the way you do backups, or is it just sort of business as usual? No, there's no question about it. In fact, you know, we've seen the bottleneck is no longer a processor compute power anymore. It's networking, it's the bottleneck. And so, because of things like virtualization and the huge explosion in not only compute intel, we've seen a 45% year-over-year compute growth, 35% year-over-year storage growth, and our networking growth has been explosive as well. And so, that bottleneck is now on the networking side. And so, we've implemented 10 gigabit ethernet. We've done some POCs on that and planted deploy that soon, moving eventually to a converged fiber channel over ethernet, and eventually, after that, we see demand for 40 gigabit ethernet networking. So you're one of the guys who are going hard after sort of end-to-end ethernet, FCOE. Yeah. And what are you finding are the benefits of that? I mean, obviously, it's cutting your cable bulk. Is it cutting your cost yet, or are you still on the other side of the curve? Yeah, I mean, really fundamentally, I mean, there's a lot of benefits, but keep it simple and up-level. It's really performance and cost. Those two things, you know... It is pretty simple, isn't it? Yeah. We try to over-complicate. Yeah, I mean, there's a lot of technical reasons for it, which, you know, I'm sure... What about multi-hop, man? We don't have to go there. Yeah, right, exactly. I was advised early on. I don't know, maybe it was my... They told me not to go into the weeds. Don't say multi-hop on this show. Yeah, so it boils down to those two things. How about security? Let's talk about, you know, security is one of the evil twins of the cloud, the other one being management, right? Yeah. So, you know, the whole premise behind security, traditionally, even the last, you know, since I've been in this business is, you know, you build a mode around the castle. Yeah. And you protect the, you know, the perimeter, basically, and virtualization kind of changes that, right? And the king wants to leave his castle every now and then. Right. And so how do you architect security for the cloud? Yeah. Yeah, no, it's very interesting, actually. At Intel T, we have begun a new re-architecture of our security initiatives. And really, what it boils down to, to summarize, is cloud in some ways can also help improve security. And what I mean by that is the following. Because of cloud, we are now able to understand, you know, first of all, who is accessing what information from what device? And, you know, based on those three things, we can then push out the right amount of data. So, you know, if you're outside the firewall versus inside the firewall, you're going to get a different, access to a different set of data. If you're accessing the data, if you're requesting the data from a smartphone, your car even, your TV, they're talking about the compute continuum as well, or your laptop, that's going to affect what kind of data you can, you know, have access to. And, lastly, who you are? I mean, what kind of permissions do you have? Are you a sales guy or not? And that will also depend on what kind of data we will allow you to see. You know, this also ties back to the consumerization trend with, you know, we've enabled iPhones inside our organization. But we allow folks with iPhones to see their email, their corporate email, and their calendar, but not attachments. So, we've, you know, taken a holistic view and, you know, a nuanced view. And depending, like I said, on who the person is, what device they're accessing it from, and what information they're requesting, that all plays into what information they can. So, your premise there is that the cloud can actually be more secure. At least, you're talking about the endpoints now, right? Yeah, yeah. Potentially. Right. Now, what about the mess in the middle, right? Because you don't know which port is attached to which storage, or which LUN, or which server. How do you architect for all that stuff that's all abstracted now, and it's changing constantly? You can. You can build that intelligence in, and that's something that Intel is working very vigorously on. That's what we call the compute continuum. Deep. You're talking about architecting it within the system. In the chip, yeah. Yeah, OK. And so, you know, once you get below the various OSes, below the various, you know, it doesn't get more secure or more fundamental than the chip itself. And you guys have made some announcements there that got a lot of attention. Yeah. We have, with McAfee, as well as some others. Yeah, so where are you with that? Is that sort of, you're in pilot with that? Are you actually in production with any of that technology? I'm not as close to it, to be honest with you. I couldn't tell you exactly. So I've seen the announcements just like you have. Yeah, OK. So let's see. So how about we talk about how you protect data in this new world, right? So I was talking to a customer the other day, and he said to me, you know how I back up two petabytes? I said, no, how do you back up two petabytes? He says, I don't. So with all this data tsunami, all this virtualization cloud, are you changing the way in which you protect data? Is it, what's going on there? Yeah, you know, it definitely impacts it. We have to be even very vigilant in making sure, especially with virtualization, there are technologies that Intel does bring to bear to help in these areas. Things like TXT, for example. It's our trusted execution technology, which ensures the integrity of a hypervisor upon boot up. So you don't have any compromise. You know when you've booted a hypervisor that it is a secure VM. And we have a paper that we publish on this, as a matter of fact. It goes into a lot of detail on. So Intel, we're baking in, we're creating these technologies. Another key technology for us to answer your question is around encryption, and something we've built into our chips called AESNI, which is advanced encryption security. It's a new instruction set. And that also helps improve the performance of encryption so that now, prior, some IT managers, there's always a trade-off between security and performance. If you encrypt everything, you take a performance hit. Now with AESNI, you don't have to compromise anymore. You can have your cake and eat it too. Let's talk a little bit more about cloud. When Intel talks about cloud, well, Intel IT, what specifically are you talking about? Are you talking about private clouds? Are you talking about using public clouds? Can you talk a little bit about what you're doing there? Sure, it's both. So Intel IT, our cloud strategy is to grow the cloud from the inside out. So what we mean by that is first building our private cloud and using our public cloud selectively, where it makes sense. For instance, our non-differentiated applications, applications that don't necessarily provide a competitive differentiation or advantage, we move that to the public cloud. They're not producing revenue. Yeah, what's an example? Yeah, like our HR applications, benefits applications, expense reporting. Intel does expense reportings that are probably not that much different than the way you or anybody else does it. So that doesn't need to be inside our firewall. We can put that in the public cloud, and that's what we've done. But things that are sensitive, right, that do contain sensitive IP, obviously, Intel or a design company, we've got, there's a lot of things we don't want out there and we don't want to risk, and so we'll keep that internal in our private cloud. So did you encounter, I mean, I'm sure you did, what were some of the challenges that you encountered when you went to that sort of, let's call it a hybrid model, and what kind of things would you do differently if you had to do over again? Yeah, well, I think the big thing is, it was actually the benefits, yes, about challenges, but really it's the benefits, the promise of the cloud that really drove us, things like agility, efficiency. We started, the cloud wasn't an end in and of itself, it was a means to an end, and being able to improve that, a great example of that is our on-demand self-service. It used to take us 90 days to provision a server. From the time an Intel employee requested access to server