 Live from Las Vegas, Nevada, it's the Cube at HP Discover 2014. Brought to you by HP. Welcome back everybody, this is Dave Vellante at Wikibon, and this is the Cube SiliconANGLE's continuous live production of HP Discover 2014. We're here in Las Vegas at the Sands Convention Center. This is HP's big U.S. customer event. We also covered HP Discover in Europe and Barcelona last year. Actually, believe it or not, the European show is slightly larger than the U.S. show. HP Global Company, more business done outside of the U.S. than inside of the U.S. We're here to drill down into the networking space. Dominic Wilde and Alex Monroa here. Alex is the assistant vice president of corporate IT enterprise technologies at Pacific Life Insurance, and to my direct left is Dominic Wilde, who's the vice president and global product line manager for HP Networking. Gentlemen, welcome to the Cube, good to see you. Thank you. Okay, so we're here at HP Discover. Of course, you've got big announcements, right? Dominic, what's the big news? So we've announced this week a new virtual cloud networking solution. It's really about delivering the data center of tomorrow today. And it's made up of three essential parts, delivering a solution. Basically, it's a software-defined networking application called BCN, Virtual Cloud Network. This is actually a network virtualization solution that is integrated into HP's Helion OpenStack Cloud solution. That is simplifying by a factor of 20 how we deploy networks for multi-tenant networks in a cloud environment, but also increasing by a factor of 20 in the OpenStack environment the scale to which we can deploy those virtual networks. So we're really delivering greater agility, much better scale, simplicity, but we're also changing the economics by integrating it into the Helion product as well. And then in addition to that, we also announced a new set of switches, the 7900 series of switches, which is a new form factor of switch, a space-saving switch. It actually reduces space in the data center by about 50 percent, reduces power by about 20 percent, and reduces overall complexity in terms of configuration by 75 percent while still increasing availability. And then alongside the product announcements, we've also announced a set of transformation services that help customers on the journey from traditional IT to cloud-enabled data centers as well. So when you say 20x simpler, what are you measuring? Just sort of human time? Is it clicks? Yeah, it's basically a random click. If you look at a traditional model, if you do about 10,000 provisioning steps a day, for each kind of configuration step, you're doing about 20 clicks. With this new VCN application, it's basically one-click configuration. So you're reducing the complexity by a factor of 20 rather than having to go to each and every element in the network to change and configure. You're actually doing it from a central position and being able to define ad hoc networks in a multi-tenant configuration. All right, Alex, let's bring you into the discussion here. We always love to get the practitioner's view. You and I met in Boston. We were just trying to figure out where we met. And we had a great discussion about your environment, about the relationship with HP and where that was at. But let me start with Pacific Life, a large insurance company, regulated industry. Describe some of the company a little bit and your role there. Sure. So Pacific Life, obviously, everybody knows us for the whales on TV. So it's life insurance, annuities, financial services. It's really a broad spectrum of investment protection against actually people living too long or unfortunately departing too soon. But a great company, a lot of history, 146 years old. And it's really as a premium brand in the insurance space. Almost double HP's age. And your role there is... Yeah, my role. So I run enterprise technologies, which effectively is most the data center management, networking, unified communications. We still have a mainframe, data center operations. I also run all the email infrastructure, communications system, SharePoint, collaboration environments, things like that. So really, I call myself the plumber of Pacific Life. So I kind of keep things moving. So what are the big drivers in your business that are affecting change? I mean, if people talk about the big four cloud, mobile, social, big data, and then underneath that you have a lot of technologies are talking about SDN today, et cetera. How are these affecting your organization? Yeah, the biggest opportunity for us obviously is kind of maintaining a flat cost structure but being able to deliver more value, more service to the business. Your budget's flat every year essentially. In general. I mean, we can get more budget if we need it but we try to keep it consistent. That's your mandate. Yeah, that's it. Not the business's mandate. Not the business at all. You just keep it flat and support the business. Yeah, so really it's about the amount of value you can deliver for a given spend. For us also just more on the infrastructure side, we have these periodic refresh schedules where in a large environment you are looking at significant capital or significant effort to refresh your environment, particularly while you're keeping everything running. So for us partnering with HP, both on the network side, we also leverage HP for servers, desktops, et cetera. It really was an opportunity to kind of leverage a partner relationship and combine some functions into a more effective operating environment for our users and our business. And talk about the applications that you're supporting. I mean, insurance companies, the Claims app is the heart and soul of customer service. Your agent systems are about the sales growth. I mean, those are the two of the biggies. But what are you supporting? Describe that portfolio a little bit. Sure. Well, sir, obviously there's the policy generation software case management. On the annuity side, a lot of investment type software applications. We also manage about 130 billion in assets. So really, at the end of the day, there's a lot of, we have hedging grids and we have actuarial grids, which really gets us into the high performance computing model. And we're doing a lot of that to predict analytics and look at how we price our products. So really across the board, we have everything from ERP systems to life insurance products to annuities type products. We also have a real estate division. We have an aircraft group. So we have a lot of moving parts. It's really at the end of the day. Pretty standard environment, mostly Microsoft. But it is a large environment, about 5,000 virtual servers supporting the enterprise. And you're in a hyper-regulated industry. Very heavily regulated. That's got to be putting some serious challenges on you. It seems to be getting, I'm going to just say it, you probably can't but worse. Joking a lot of folks in the industry from what I get to understand. Yeah, I will say that we take regulation and compliance very seriously and everything we do is aimed at protecting our customers and protecting our policy holders which actually own, it's a mutual holding company. So they actually own the company. It's a private company. And we really do focus on protecting the brand and our customers. So presumably it's sucking up a bigger and bigger portion of your budget pie. Is it not or are you able to keep that portion as well? I would say compliance and security are both areas that we are investing in. That's all I'll say. Okay, now my last question I want to come back to Dominic is cloud. Are you using at all any public cloud infrastructure? We have a couple of applications that we can run in a public cloud. We use it for on-demand services or if we have a situation where we don't have capacity internally we'll burst out, you know, burst out and leverage cloud for some of the grid type application I talked about, some of the calculations, we call it compute on demand. And so we do have a couple models where we do that but back to the compliance and security discussion we do prefer to keep our sensitive data, the crown jewels in house and we run our own data center. And so essentially you're trying to replicate the agility and the cost structure on-premise. So that's where you guys come in. Let's talk about how you helped them do that. Let's talk about SDN specifically. Why software-defined networking? Why now? Why is now the time? So essentially when you look at the speed of business the speed of business is just accelerating it and it's exponential year on year. Like I said, organizations, particularly IT organizations are being asked to do so much more but keep budgets flat. In fact, many organizations that we talk to are being told they have to cut budgets. And particularly when it comes to networking when you talk to CIOs they'll tell you we've probably squeezed out about as much as we can out of the server real estate. Data is just going to continue to be a value entity that we're going to just keep growing and so storage has reduced the cost per gigabyte of data but we're going to keep buying more and more storage. But networking, they have struggling to really understand what is the value beyond connectivity that they're getting from the network and why is it so expensive and why has it been so expensive and so static for so long. And so SDN is the opportunity to really revolutionize networking to really introduce back in significant innovation to reduce costs, increase agility, increase the ability to align the network with the goals of the business. Today the network is regarded as a roadblock to business. I mean, Alex, I don't know if you have this experience but every time that something goes wrong in the IT infrastructure it's always the network's fault even though it is because basically people just go straight to the fact it must be the network's problem. And so when we talk to customers what they're looking for is they're looking for improved mean time to innocence to be able to prove that it isn't a network problem. Mean time to innocence? That's a new metric. And so to be able to say this isn't a network problem and more proactively make the network dynamic so as the network itself can in a more autonomic way be able to show that there's a problem here or to be able to adjust to a potential problem-like scenario without the intervention of human middleware. And SDN is the opportunity to deliver that kind of innovation. So it's early days but we're already delivering SDN applications that are really adding value. We're already selling those commercially and we're already working with customers and customers are finding their own ability to innovate within their environments to create solutions themselves without having to wait for a vendor like us. So I wonder, Alex if I can ask you, I think of enterprise networks sometimes like the Kremlin, very hierarchical, very structured and now with mobile you're seeing this sort of north-south emphasis change to east-west. How is that mobile affecting your business and is it affecting your network and commentatively with that? So a great question, I came up through networking so I have a lot of background in networking probably 20 years or so. Mobile was considered a nice to have, a convenience and then people started running things like link, real-time video, FaceTime, these high bandwidth latency sensitive real-time communication applications and they just expected them to work on the wireless network in the basement, in the garage, in the elevator and so we really had to go from a wireless perspective and really look at our buildings, do our studies, RF studies, saturate the building essentially and treat it as a tier one app. And that was a big challenge, a big wake-up call, kind of caught us a little bit off guard but we spent the last couple of years really fortifying our wireless infrastructure from meeting rooms to executive offices to all levels of all buildings so that people could have a consistent, reliable experience and also we weren't burning a lot of minutes so if you're on a mobile device you can burn a lot of, if you're on a 3G or 4G you're paying for that data and you're paying for those minutes. When you're on a wireless network now it's effect, I don't want to say it's free but it's effectively a fixed cost structure and you can again back to delivering value to our business partners they can now collaborate real-time from home, on the road, in the office without having to think about am I at my desk, am I connected to the network with a cable, you know I'm on my iPad, I'm on my laptop, I'm on my smartphone. I'm just working, I'm not thinking about it. Yeah, yeah, don't have to think about it. So is your network effectively over time flattening, as you push data to the edge or not necessarily? I will say, I'll talk about the data center for a second and the building which are the closets, the IDFs. You know our theory is that we push out all network nodes to every location in the building and the reason we do that is we never know what business group or what division is going to occupy a floor or section. One of the big advantages with HP is that we went in and we designed the data center network and the building network is a holistic, I'll call it an organism for the time being and we manage it all with a single pane of glass which is IMC and it allows us to have things like quality of service, you know, gig to the desktop, 10 gig everywhere in the data center, 40 gig up links into the core and it really allowed us to deliver a lot of performance and a very easy to manage very holistic experience for not only the network engineers but the IT, application development and then the business users. So that was one of the big advantages we're gaining with the new network that's going in right now. So that was a lot of HP services that provided that? We definitely are leveraging HP services. What about the gear? What are you actually buying from HP? Well, the gear, we buy the 12,000 series core switches. We're doing top of rack design so we have 5500s. We used to cable everything to the end of the row and it was a lot of cabling, a lot of copper infrastructure. We're pretty much eliminating all the copper from our data centers going all direct attached to top of rack and then bringing everything back to the core 12,000 switches which have been great. We are using the IRF, the fabric framework and so that gives us a resiliency and redundancy for every system in the data center and then we extend that all up to the closets and that's an extension of the data center network. We do have zoning for security. We do have the ability to do filtering. We do have the ability to do class of service and all of that. It's a much more flexible framework and network architecture than what we had historically with our previous vendor. I want to ask you, why HP? That's part of it, right? You got a 66% market share guy out there, safe bet, nobody even got fired from buying IBM. Why HP? All I'll say is I believe in conducting RFPs, bringing equipment into a lab and letting the engineers get their hands on it so they can learn it and make an informed decision about what they're buying. We followed that process. We had four vendors who went down to two. The two finalists we actually brought in and did extensive work in the lab not only for just their equipment but we bridged it into our current networking infrastructure and actually ran some of our applications and made sure that we were going to have a seamless transition from where we were to where we wanted to be. All I will say at the end of the day when we looked at the overall value, back to value, the HP partnership, they emerged as the best vendor for the selection criteria that we have. You guys are primarily a Microsoft shop, you said? A lot of Microsoft. Hybrid Linux. VMware. VMware. VMware environment. And then what about OpenStack? You doing anything with OpenStack? Kicking the tires at all? Not a huge OpenStack company. Pretty traditional. Life insurance is not a... It's a low-risk business and we're very cautious about... We don't bleed a lot. We're not a bleeding-edge company. We're not an eBay. We're not a dot-com. We are really a life insurance company and we behave like that. Any open-source activity going on inside the company? Inside the company? Yeah, some development. But most of it's traditional vendors. So it would take OpenStack to hit critical mass for you guys to even look at it, right? Yeah. And part of it's a skill-set discussion. When you do have to look at your staff and how they're trained and what they're comfortable with, that goes to all levels. That's application development, all the way into the infrastructure teams and you have to take those things into account when you're making those kind of decisions. So our research shows that about... a little over half of the customers we talk to are in that camp. They would rather have a stable relationship with a vendor to even risk lock-in. Talked to a lot of Oracle customers, right? They say, we risk lock-in to get value and reduce our risk overall. About 15% say that, no, we want open, open source, open everything. But that 15% is a big foothold for you guys, isn't it, Dominic? Yeah, it is, absolutely. I mean, we as a company are big believers in Open Standards and Open Source. Right, always happen. Yeah, and the reason that we continue to move down that path as a company is because for us it does mean it means choice and it means interoperability. Even if you want to take everything from a single vendor, and by the way, we would love to sell HP on HP, but even if you want to take everything from a single vendor, be able to do that with open standards-based protocols, open standards-based operating systems, et cetera, just gives you that much simpler interoperability. So as you come to transform your infrastructure or transform your IT environment, it becomes a much easier proposition. I'll give you the example. The example is HP IT itself. We did a huge transition for the company. Our IT staff did an amazing transition from the company where they transitioned from the infrastructure we had to an HP networking infrastructure throughout the company, and at the same time consolidated from over 60 data centers down to six. Now all of that was done in under a year, and the reason they were able to do that was because they had relentlessly gone after open standards throughout the infrastructure. And so that transformation and that transition when a decision was made from a business perspective to do that became a, you know, and say easy, but it became a, you know, a straightforward proposition and meant that we could do that with the resources we had, and we could do that in the time frame that the business demanded. And that's the other critical thing about open standards, is it gives you business agility. It gives you agility and continuity and those kinds of capabilities. So it's not always about just kind of like, hey, I want to, you know, plug 27 different vendors' stuff together. And that's often not the case. It is often the case that people want to buy, you know, everything a complete solution from HP. But they want to have that knowledge and that comfort in the fact that somewhere down the line, if there is a time where they have to bring something else in, or they have to adapt quickly for the business, they can do that. And it gives you R&D leverage as well with the crowds. It does, absolutely. I'm going to leave it there. Gentlemen, thanks very much for coming to theCUBE and sharing your stories and good luck going forward. Thank you very much. All right, keep it right there, everybody. We'll be right back after this word. This is theCUBE. We're live from HP Discover. 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