 Okay, we're back. We're here. Down to the final stretch here. We are the Cube, SiliconANGLE.tv's theCUBE, where we go out to the events and talk to the thought leaders, cover it. We're at the EMC VSpec Launch. I'm John Furrier, the founder of SiliconANGLE, and I'm with my co-host. I'm Dave Vellante of Wikibon.org, and we're here with Bharat Badranath, who is in charge of cloud marketing at EMC. Bharat, welcome to theCUBE. Congratulations. This is really your event. You've been planning this for quite some time. Thank you. How's it feel? A great venue, really. Good turnout today. Yeah. How are you feeling? Thank you. It's great to be here. A little tired, but outside of that, it's great. The event was great. Good attendance, good coverage. It's all been good. Yeah, I mean, talk about the emphasis. I mean, it really is a lot of partners here. You guys bent over backwards to really showcase them, give them some airtime up on the stage. A number of them came in theCUBE. We really focused a lot today on the channel angle, didn't we, John? So talk about that whole piece of it. So one of the objectives of VSpec was to provide flexibility to partners. Right? So to partners, to customers, to give them choice. And a key ingredient there is bringing our ecosystem partners, both alliance partners as well as distribution partners, and including them in a way in the event as well as in the go-to market in the future. So we can take this product to market to solve some of the customer challenges the solution is out to solve. And as somebody who was designing the event, one of the ways to do it is have them an integral part of the event and bring them up on stage and give them some airtime. So we get everybody's views out that we're all in this together to make it better for our customers. Talk about the announcement in terms of, you know, I was just showing you the piece that I wrote and we quantified the market. You might have seen that, you know, earlier. And we identified what we call the reference architecture as the biggest piece of the market. But you guys said this is more than a reference architecture. You know, a reference architecture, people think of white papers and best practices and communicating. And the problem with reference architecture is a lot of time the customer says, it's close, but it's not exactly me. How is this different from a reference architecture? Sure. So in two specific ways, right? It's different than a reference architecture. The first and foremost is the way it's designed. It's designed to be truly modular so you can mix and match components. You can get the best of breed while not being forced into a specific architecture. You can pick and choose which elements you want that go into it. But what we did which makes it somewhat different than, maybe it doesn't make it different than a reference architecture, it adds or augments a reference architecture as we added complete go-to-market vehicles around it, right? So we worked with distribution partners and resellers to allow them to brand it. We're putting enablement. We're putting the right kind of incentives together to make it more attractive for distribution to package it and deliver it to their customers. So there's two ways. One is the technology that went behind which you heard from Prasad on making sure that it's modular in nature so you can mix and match components to get the appropriate environment or the optimal environment for your company. That's number one. And the number two is go-to-market around it, enabling channel partners, giving them the right incentives to take it to market. We heard from the channel guys here today that they're all loving the product, mainly because of the simplicity of the packaging and the ability to bring it to their customers. And essentially, turn key, I said push button, kind of sounds easier, I guess. Push a button, exploit some cloud, kind of sounds simple, right? But the reality is that's what they want. They want a complete turn key and then wrapping services around it. So I got to say, you guys are really ahead of the curve because, you know, I just came back from the SAP event and this notion of keeping the infrastructure separate from the application environment to enable mobility in cloud is really just now hitting the scene for the big guys, SAP including EMC. You guys are bringing essentially what seems to be a core product to the channel. So has that been, have you heard that feedback? Have you heard like, wow, thanks for bringing some good product to the channel? No, absolutely. So this product or offering, if you will, has been designed with the channel in mind, right? So this is ongoing for the last two and a half years. We ran a pilot back in Europe where we tried to both bring these solution bundles together to see how the reception is. And as you know, channel partners today are offering solutions to their customers already. Some of them are building these kind of bundles and going to market. And when you see such pent up demand and the need from a customer saying, I don't want the complexity which goes into the infrastructure, take it all away from me, almost like giving me an abstraction layer. So below that, it makes it easier for them to deploy and expand the infrastructure. Is it just demand or is it in your mind or is that striving or just the fact that the market's underserved? I mean, the channel has not had this kind of service from a product underserved. Absolutely. Is it the demand and underserved or both? I think it's a combination of both. It's a demand and lack of supply both at the same time, right? Because it's not like, as you said earlier, there are reference architectures in the market, but nobody is providing them. There's one or the other component missing. We, for the first time, are bringing all the components that are acquired, not just the technology, not just the work that goes into it, but also putting all the other elements and making it easier for them to take it to their customer, which makes it interesting. So the cloud brings this imperative to converge infrastructure. I think people generally accept that. You talked about this abstraction layer. You've also mentioned best of breed. My question to you is, we've seen in the industry there's always been this tension between best of breed or fully integrated suite. And it seems like the cloud is working, the pendulum is swinging toward that fully integrated suite. At the same time, product companies like EMC, Cisco, NetApp, et cetera, all want to claim their best of breed. And so, but by definition, everybody can't be best of breed. So is that more than a marketing term best of breed? Does it really matter? If I have integration, doesn't that sort of trump best of breed? What's your take on that? At the end of the day, it's the customer who decides, right? Which what they want to move towards, whether it's fully integrated or best of breed, depending on the environment. I think when you look at EMC, whether you look at the integration aspect or whether you look at the best of breed aspect, as Jeremy pointed out earlier today, you know, we have the leading market share, and not only do we have the leading market share, we're also growing that leading market share faster than anybody else. So I think that is testament to the products. It's testament to the value EMC brings in customer's environment. So I think we have the numbers to back up what we would traditionally call best of breed or typically call best of breed. Yes, it's become a marketing term because everybody wants to claim it's got best in it, so everybody wants it. But when you look at fully integrated system, VCE is doing phenomenally well. It's growing at $800 million run rate. It's at a $800 million run rate exiting. We'll have the numbers for this quarter as we get in later. But you will see that for a two-year-old company, a two-year-old endeavor, very few companies can claim they're close to a billion dollars in run rate, right? So I think EMC is winning on both of those. Well, you know, Instagram sold for a billion dollars. They weren't actually doing any revenue. No run rate. That's a business model. I think you can get 15x multiple. That's a nice... I think that's a real business you got there. Oh, yeah. Sorry, I couldn't resist. I know. There's no logic there, but I'm sure there is because they paid real money for it. But when you look at it, I think going back to Jeremy's point, it's all about giving customers choice, right? Let the customer choose whether integrated is the way they want to go because customer environments are suited for integrated and some are not. And for them, they need to still have choice. They need to still be able to pick and choose best of breed while still getting some of the simplicity benefits that you would get from a fully converged... So I like the way that Jeremy set up the spectrum this morning. He had, you know, integrated and simple and he had, you know, choice on the other end of the spectrum and he said, we asked ourselves, is there room for something in between and use the iPad analogy, which I thought was very powerful. I want to talk about specifically pricing and lock-in. So, and you and I have talked about this. There's a perception that the fully integrated, you know, single skew V-block-like system is going to be a premium. And I've always argued it should be. And then the roll your own from a CapEx standpoint, by the way. For the roll your own, in theory, should be less expensive if you want to do all the integration yourself. What seems to be happening in the marketplace, though, is that there's a land grab going on and the vendors are being very aggressive on pricing. I presume V-specs, you're going to be aggressive. And there seems, right now, not to be a premium. There's white glove service going on. You saw the channel emphasis today. Over time, shouldn't users expect to pay more for integration? I agree with you. I think over time that is because if you're truly adding value on the integrated aspect, if you're truly adding value on the converged segment, then somebody has got to pay for that value, right? So it's absolutely understandable why customers would expect to pay more at the far end of the spectrum. But having said that, you hit it on the head. There is a land grab going on with cloud, more and more customers thinking about deploying cloud, moving, virtualization is adding some complexity which customers are not used to. It's now becoming a true land grab of who gets there the first and how much of a space in the data center can they occupy, which is leading to discounting, which is leading to some of the points you had mentioned. But I think from the EMC front, as you've seen, we are able to push the value to our customers and still be able to get the right kind of growth without having to sacrifice some of the value or what our competition seems to be doing. Yeah, and I think that as this thing proceeds, you talk to customers and they say, well, I'm afraid of the single skew because I don't want to get locked in and I don't want to give pricing power. That's really their big concern. At the same time, you see people gobbling up. You said $800 million run rate, so somebody's buying this stuff. Now, from the standpoint of V-specs, that's moderated somewhat because you can choose anybody's server, you can choose whatever hypervisor you want, et cetera. So to a degree, the pricing power for V-specs shifts to the buyer and they can make some options. And so that's why we feel like, and I've shown you the numbers, that that reference architecture piece is so much more substantial of a market opportunity. So as we go forward, do you agree that the vast majority of infrastructure deployments are going to be cloud-like and there going to be some degree of integration, whether it's fully integrated or reference architecture or solutions, as you guys have mentioned. Absolutely. I think it's just going to be varying degrees of integration as you put it right, which is if you are deploying an infrastructure, you want it to be scalable, you want it to meet your demands of the cloud environment, you're going to see more and more integration being built in. We've already done quite a bit of integration even within the best-of-breed space. When you look at VMware and Microsoft, we're tightly integrated with the hypervisors. We have application-level integration, which is already going on so customers can get it today. What we're doing with VSpecs is getting some of the benefits of standardization, if you will, into a way that can be easily consumed by customers and easily delivered by partners. So you will see us roll out specific versions and try to bring more of that standardization with each of the partners you saw on stage because if you're a Microsoft shop or if you're a VMware shop, you want to make sure that the infrastructure that you procure is optimal for that environment. So you will see flavors of VSpecs, if you will. Today we announced 14 configurations. You will see that expand over the next few months to include more and more and create some custom configurations with our other platform partners as well. So one of the things we like to do in theCUBE is we like to have conversations that your customers are having. And your customers are talking about the different choices that they have, and we like to get our guests on and have knowledge about the market landscape and talk to them about that. Now, of course, we're here. There's all the EMC branding around us. You guys have sponsored us to be here. Thank you, by the way, for having us here. But at the same time, we're an independent organization. So we want to lay out the landscape. So you've got the defenders that have the big install base. It's a $400 billion TAM by 2017, and it comprises all the storage, all the service, all the networking, all the infrastructure management, and of course the services. Now, so you've got the defenders. Of course, IBM and HP have the big bases to defend. You guys come in with VMware, and you don't really have a server play other than VMware. So that's all green field for you. So you're attacking. Cisco is attacking with UCS. So it's a really interesting dynamic. You saw IBM yesterday announce from its strong suit, which is servers, some really impressive capabilities. You see NetApp making moves. What's the landscape look like, and why is EMC different? Why should people buy from EMC? Sure. So when you look at defenders, we've got a pretty large install base on the storage side within the enterprise. So we are leading the market when it comes to the storage side. We've got a whole portfolio of products all the way from our security products from RSA, of course our storage portfolio, VMAX, VNX, and our backup and recovery division data domain. So we've got a whole slew of offerings within our portfolio, which we bring to bear. But I think the more important thing here is we are also working with the best-of-breed partners as you saw up on stage. We're creating an ecosystem of partners so we can go to market to meet customers' choice requirements. So we're not only bringing VMware, we're also bringing Microsoft, we're bringing Citrix on the hypervisor as well as on the desktop, virtual desktop space. You will see in future we're working with application-level providers to get some of their apps on a VSpec bundle. Because at the end it's all about making it simple, efficient, and flexible for the customer, giving them the choice of procuring. Now, what we are doing to get there is bringing to fruition our years of development experience as well as engineering work, which you heard earlier about EMC Proven, bringing all of that together. We believe that is what is going to win where customers have the optimal flexibility, choice of picking and choosing what is right for their environment, customers and partners picking and choosing what's right for their environment, while at the same time getting the benefits of what the converged infrastructure is promising and VBlock is delivering today, while at the same time getting the choice. So we believe EMC is in the best possible position among the other competitors in the industry to win this. Well, I mean, no doubt you've got some assets. You know, a lot of this too is intangible, as you know. I mean, you've got momentum. It's like when you're watching a football game and all of a sudden you just feel the momentum turn. You do have the momentum behind you and a lot of that, of course. Well, I think I said your homework and I think what I'm impressed with was you guys did your homework and then Jeremy pointed out, listen to the channel. I mean, if you listen to the channel you pretty much can't get it wrong because they're vocal because they're driven by margin. They're driven by profitability. So they're not afraid to share from my experience what the hell's wrong and what vendors need to do. So people who don't listen to the ones who get crushed. So good call on that. I see that. But also to me, I think you guys have brought something to the channel that really hits the target demand right now in that it's really early with a viable solution to bring into the marketplace that's this good because we heard mystery is margin. You solve the mystery, you get margin and there's a lot of mystery. There's a lot of demand for clouds. So again, I was pointing to the SAP thing there. Huge uptake with Ana right now that they're seeing the most highly accelerated success deployments ever in the history of SAP with Ana because of mobile, because of cloud. So I think you got that right. Now the question is can they accept this product? Can they integrate it to the channel? You guys are new to the channel, right? So that's going to be since VNX really in my mind kind of having that channel presence. So, you know, if you guys can click on that front on the technical side, getting it integrated into their normal tools base and joint deals, et cetera. I think you're going to be very successful with it. So yeah. And that's where that's where we're working hard to make sure that that happens. The execution happens meeting in the channel with our ecosystem partners, making sure that we have incentives aligned and programs aligned to make it happen. You guys are enabling to a whole nother set of, you know, the classic pyramid, the top of the pyramid is the elite, you know, elite people. And then as the mid-range opens up, you open up a mid-range fat middle of an opportunity for someone to be specialized enough to broker and piece together solutions, not just engineer them, right? So that's always been what we've seen as a sticking point in this business right now is that you need some engineering chops. If you were going to take this from scratch, and we're kind of seeing it in the big data spaces, you know, you guys know about it, you see. You know, you don't need a PhD to do certain things, whoever can make that simple for an average tech person and a manager, you're good. Yeah, and you hit it right on the head. If you listen to the channel, if you listen to the customer, you can't go wrong, and that's what we did. We went to the channel, we said, what is it that you want? They said, we want flexibility. Don't just give me a single skew which I have to sell because then my value add reduces. Now they have a uniqueness of adding value. And at the same time, I think, you know, the putting the logo on that was sheer genius because now they can call it their own and brand it their own as opposed to being just a reseller. Yeah, and I think that, as John pointed out, listening to the channel, you can't go wrong. And I think in some respects, for all the success that VBlock has had, there was some tension in the channel. We don't want that, we want choice. We're going to go do our own. We and I have talked about this, and, you know, your premise is that those guys out there doing it on their own are going to, you know, glom on this, on these specs because you've got the lab behind it, you've got the capabilities, you've got the branding, kind of a no-brainer for them. Maybe there's some not invented here that are going to hang on to their own, and that's fine, they may have some unique capability, but I would think the vast majority of the channel is going to leverage your engineering expertise and then go to market with you. Absolutely, even those who are grappling with the not invented here, once you start looking at the economics and the cost savings of not having to invent it again when somebody else is doing the work for you, it becomes a lot more logical for them to pick this up and then add higher value add services on top of it. And there's still might be some white space, there may be some management capability or some unique thing for an industry that's going to require some of their own integration. It's good for them, you know, to find their niche. If you're a small player, you've got to have a niche. So one of the key things in the design of the VSpecs was we need to go far enough for the customer relevant for the channel, but you can't go too far because then you disintermediate the value the channel provides and that's not what we want to do. We want to make it easier for them to sell it. We want to make it easier for customers to buy the right infrastructure for them and provide the right tools so the channel still adds tremendous value as they go through it. I have a personal question. You're relatively new to EMC. Talk about the culture a little bit. You know, you've worked at other companies out here and others and how do you compare it? I've been here for slightly over a year. It's been a great company to work for. It's been a great company to work with people. I will say it almost feels like the culture is in transition which is, it's ongoing change in terms of, as you know, I work out of the West Coast, so one planes most of the time, probably not as often as you are, but we do get up to back to the home base. You got some West Coast mojo going on, you got Jeremy out here, you know, aggressive branding. Yeah, so infusing some of the West Coast into the EMC culture, if you will. But still, majority of the people are based in Hopkinson. I think very bullish on where EMC would go. People in Hopkinson, just because they're in Hopkinson, they make some a little different, but EMC is known to be aggressive. Very aggressive. And you see some of the market share of the market gaining momentum which we are having right now. It's amazing. I think that East Coast, West Coast mojo, John, we got some East Coast mojo going on too. I think it's the right formula. It's good balance, man. I don't see one trying to force the other. It's just a great balance. I think it's really from a business culture standpoint, case study. It's really a testament of our times, Dave, that companies like EMC and our companies can work together because it's a global economy now, it's a global business. It's not about East Coast, this coast, and you've got to kind of make it all work. Great. Well, hey, thanks for, we're going to wrap up here. Thanks for that chat. Dave, we're going to wrap up on our next segment. We'll be right back with our show wrap up with Stu Miniman, Dave Vellante, and myself to wrap on this EMC v-spec launch. Thank you. Every journey has a first step, a transformation from where we are to where we wish to be. When there is no path, we rely on technology that is proven. We trust. And we can attain our goals.