 Live from Las Vegas, Nevada, it's the CUBE at HP Discover 2014. Brought to you by HP. Welcome back to Las Vegas, everybody. This is Dave Vellante with Jeff Frick, and we're here live at HP Discover. This is the CUBE. The CUBE is our live mobile studio. We go out to the events. We extract the signal from the noise. Johann de Schieffler is here. He's the Senior Vice President and General Manager of the Technology Services Group in consulting within HP. And Johann, welcome back to the CUBE. CUBE alum, good to see you again. Thank you. So, another new cover. You know, excited, right? We see you here. We see you in, last year, I guess in Barcelona, right? Barcelona, yep, indeed. So, what's new since we saw you last? Well, I think we have evolved in the journey. And for us, you know, going to the new style of IT is really a journey, just like it is for our customers. And what we want to do is we want to be with our customers as they move on the journey to the clouds. And I think there is a big opportunity around the new paradigms in IT, whether it's big data mobility or clouds. And we clearly want to be there for our customers to go with them on that journey. So, how are you, you know, sort of responding to some of these specific initiatives? I mean, a lot of the buzzwords are now turning into real IT products. You know, cloud, big data, mobile, social. I mean, particularly around cloud and big data. And obviously, everybody's moving toward mobile. So, how has that affected your business and the services that you're offering? So, I think it is our role to detect the new trends, the new paradigms that come to IT. And so, what we do is we provide our customers with a point of view around those new paradigms. And what we have done, and by the way, this is something that is ongoing, we have developed what we call transformational experience workshops. And in those workshops, we explain to customers what they can do, what is new in IT. For example, years ago, we started developing a transformational experience workshop around clouds. We probably had more than 500, you know, customers going through the workshop. Then we started doing those workshops around mobility. Then we started doing those workshops about big data. Now we move towards a software-defined data center. So, what we do in a structured way, we come with a kind of concept, a kind of process on how we can take customers through those workshops, using our framework, using their data, and at the end of the workshop, they have something that they can take actions on. So, this is a four-pay service, right? These workshops, is that right, or is it a sort of tip of the spear, last leader? So, clearly, for us, we are a consulting company, so we create intellectual property. We absolutely believe that it brings value. So, those workshops is something for pay. Now, the cost is not really big. I mean, we talk something like 25, 50K, so it is not massive. And for us, it's an entry point. It's a way to explain to customers what can be done, and then from there, we go into transformational consulting, where we make, you know, the bigger contribution. Well, and I think that, to me, that's critical, because I've been involved in a lot of such projects, both for pay and not, and I've found if there's no skin in the game from the customer, then you don't get executive involvement, you can't bring people into the room, but even if they're paying a little bit, you know, they want to get value out of that. It's all about ROI, so, and that's the beginning of the process, right? And for us, it's also important, because as I mentioned, you know, we need to go for new types of experience workshops, so we need to invest in that too, and we need to develop intellectual property around it, and so there needs to be, you know, there is an expense, there needs to be an income, but what is really important, as you mentioned, there needs to be skin in the game from the customer, and it's not only the financial contribution that is important, but what we try to do in such a workshop is we only, we do not only have IT people there, we also have people from the business because the outcome of such a workshop should contribute to the business needs of the customer, there should be business outcome at the end of a workshop. So there is preparation needed, you know, there is brain work needed, it's really hard work, it's really hard work. Not only for us, also for the customer. And there's value. There's value, definitely, definitely. So, you know, when you get out of the workshop, you have an action item that you can take on Monday morning. Right. So, you know, talk about kind of their receptiveness to these huge trends that they're just getting hammered with. Are they excited about it? Are they scared about it? Are they, you know, just looking for some assistance and really want to get behind it? Can you give us kind of your vision of a lot of the customers you talk to? I think that's the beauty of the experience workshops because before you go into a transformational project, it is best to know what you can get out of that project. And so, to your point, I think in the beginning, customers want to learn. Then, probably, they start wondering, is this really something that I can take benefit on? And then, from there, you take them through the workshop and they understand that that can bring real value to them. So, they go through different phases, like every time when you get confronted with something new. Right, right. But we help them go through those different phases in a structured way. So, you think we're kind of, because you keep adding more workshops, so you feel like the cloud and some of the early ones that you mentioned, mobility. You're still delivering those to a lot of customers and we're kind of past the early innings of that phase. I would say, for example, for clouds, I mean, it was very, very intense, I would say, a year, a year and a half ago. I think most people now understand that, you know, the way forward will be hybrid cloud, where you will have traditional IT next to private cloud, next to managed cloud, next to public cloud. It will be a combination of that. I think people understand that right now. Of course, now the big question is, what can we do with big data? You know, how can we raise our revenues or how can we make more business using big data? How can we target specific customers? Then how can we reach out to those customers? That's where mobility comes in. And then how can you build a platform to run all of that in a cost-effective way, what you can do with the cloud? So, I would say cloud was very hot from a workshop point of view a year and a half ago. Then we had mobility coming in and now there are a lot of questions and a lot of opportunities around big data. And the next thing we see is everything about software defined. Software defined data center, software defined networking, and software defined storage. And that's one of the things that is really hot right now. That's all right now. So also talk about, I mean, the nice thing that you said as a consultant is you see lots of customers, you see lots of industries. So you've got a kind of a breadth of experience that you can draw from to help these folks out. So talk a little bit about how you can draw from different industries, different customers to help newbies kind of get started on this journey. Yep. So for us, what is really important at that point of time, so as we are very focused on EG and EG intellectual property, so what EG brings to the market from a server point of view, a storage point of view, and from a networking point of view, you know, this is pretty horizontal. So in very few cases that is industry specific. Now, what is really important for us is to see the evolution on how IT gets consumed. And so a segmentation we see is on one side, you have the big companies out there, but we focus more and more on another segment and that are the service providers because we believe that those service providers also have a need on building up their business model. We also believe that there is a need for them to have a very, I would say, flexible and open infrastructure so that they can react flexibly in a flexible way to the needs of their customers. And for example, that's one of the reason why we invest now so much in OpenStack because I truly believe that OpenStack is going to deliver that flexibility not only at a service provider level, but also in the connection with their customer. So OpenStack and software defined data center which fits into that is really something that is very important to us. Yep. And talk also about it as a service provider, you're really, you know, kind of solution centric and in hand with your client. You know, let's solve the problem and then we'll put the technology in under the covers to really solve it from a business point of view. Talk a little bit about the relationships that you established with those customers because technology changes, but I imagine, you know, relationships continue regardless of what we're solving under the covers. So whenever we go into a consulting project, what is really important for us, I think it's probably the most important is, you know, what does a customer want to achieve? What are the business opportunities? What are the business pains? What kind of outcome are they looking for? So very seldom we start from the technology angle because when you know what a customer wants to realize, you can build a project around it, you can find the partners to solution it and then of course it leads to infrastructure and the services to create the solution. But rather than starting from the product, we start from the business and the business outcome that is expected and we drive that to a solution being composed of products, hardware, software and services. And one of the things that is really important for us right now, and one of the things that we introduced in this cover at this time is the trusted network transformation. Because we feel like in this whole environment, networks still today are very complex, it is rigid, managed in a manual way, very little link between the performance that the application needs and the network and we want to move them to software defined networks, but we want to do that in a trusted way. We really realize that for customers, making big changes to the network is something extremely fundamental. It is transformational and that's what we call transformation consulting, but we want to give them a trusted approach, we want to give them a kind of validated approach so that the chance to be successful in that transformation to go to software defined networks are really, really, really high. You've been around, talk about the impacts of some of these transformations that we're going through, mobile, cloud, big data, relative to some of the other big changes that we've seen over the last few decades. How is this one different? Well, I think that this is a completely different way of thinking about the business and the word that I already used before is flexibility. And you see that in the past, it was technology that gave a number of capabilities that were pushed to the business. Today it's completely different. Customers have certain expectations, they go to the business, the business translates those expectations into needs to IT and flexibility is really, really, really important. I think we have a lot of the infrastructure today. The building blocks are there, the question is how do you make it more effective? How can we help customers to get the maximum out of it and help their businesses to reach customer expectations? I don't mean their internal customers but their external customer expectations in a very fast and flexible way. Yochan, you were talking off camera about some of the data that you've looked at. Some of the research firms have talked about how customers aren't getting the full value out of their infrastructure. Can you share some of that insight with us? Yeah, what we see is, when customers move from a legacy system, let's say network or storage and they want to a new architecture, 3-par HP networking, and when you implement the new product in the same way you used the old product, you don't get the maximum benefit out of your new product. And so what industry watches are telling us is that probably 30, 40, 50% of the capability is used and in fact, only a limited return on investment is made on the hardware infrastructure investment. And what we claim and I mean, we have proven that many, many, many times when you wrap the right services around it, when you wrap the right project management around it, you raise that return on investment extremely quickly and extremely high. And so the investments you make from a services point of view is probably recuperated extremely fast by taking advantage of the full capabilities of the infrastructure that you deploy. So for us, there are two things that are really important towards our customer. How can we make sure that we increase the return on investment and how can we build customers for life? Because we know that when we open doors with consulting, we implement the right EG products, we deliver the right support with data center care on it, customers are happy. They come back to us to consulting, make new investment, get new support opportunities. And so with TS, with technology services, our motto is how can we create customers for life? So, okay, so that makes sense. Why do you think customers aren't taking full advantage? Just because they're just going to a technology refresh and they just need more capacity, more network bandwidth, more server power, and they just put it in the system. And maybe they say, oh, look at that stuff, nice. Maybe I'll get to it down the road. Or are they actually buying for those capabilities and they don't really know how to exploit them? Well, I think they're also each a journey and it's a cultural shift. And of course, HP has been known and Enterprise Group has been known for fantastic product, best of breed service, storage, and networking. I think the evolution we have to make together with our customers is not only to look at what is in the box, but what is the solution that we want to sell? Let me give you an example. A lot of customers out there have compliance, obligations that they need to make, for example, in the financial world. Therefore they need to have a Bura strategy, a backup recovery and archiving strategy. We can help them develop that and then of course you have a store once platform that needs to go under it. But if you approach it from the solution to the product, probably you're going to get much more out of it than when you only look at a backup device. And I think it's a journey that we have to educate our customers on. It's a journey that we have to educate our sales people on because selling the product goes fast, achieving the solution is probably more important than it takes a little bit more time. And you want to compress that time to value. And networking is obviously a huge area of transformation. Maybe we could talk about that a little bit more in terms of how you're, I mean it's probably one of the most important things that's going on with cloud right now. Compressing the network, going, flattening the network, going east-west instead of north-south. Maybe talk about that transformation. So as I mentioned before, we think that networking in the overall context is still very rigid. It is quite complex. And the management is done completely manual. And so probably in this area where flexibility is key, what we need is to have a network that is geared by the application. The application needs to be able to decide what kind of bandwidth you need for a certain application at a certain moment in time. For example, in our company, as we are a very international company with people all over the place, we use a lot of link to communicate and work together. The worst thing that can happen is, when you use a link, you don't have the right bandwidth available. So there needs to be a link between the application and the bandwidth that you need from network. And you can achieve that through software-defined networking. Now moving from traditional networks to software-defined networks is something that is not obvious. And what we want to achieve is we can bring the experience, we can bring the learnings that we had, we can avoid traps for customers and move them from the old world to the new world. And networking is a very, very good example of that. And that anticipatory approach has to be dynamic, right? It can't be manual is what you're saying, right? It cannot be manual, but it's not only a question of bringing the right tools to automate. You need to implement those tools in a structured way. There needs to be a strategy behind it, there needs to be knowledge behind it. And one of the things that we have done, and I think I mentioned that to you the day before, we went from a very broad consulting portfolio doing everything to everybody everywhere. We went to a very narrow consulting portfolio that is 100% aligned with the intellectual property that we have in EG, which means that we do not invent in front of the customer anymore. One of the things we do is when we introduce a new product, at the same time we introduce a new service. So product and service introduction is going 100% parallel right now. Which on one side means that we cannot do everything to all our customers out there, but when we engage to do something, it's probably because we have done it already many times before. And so the return on investment for the customer is really high there. That makes a lot of, I remember when you guys aligned and that has to have a positive impact on your business and the customers out there. And by the way, one of the things that we have achieved with that, and it's remarkable, we do around 5,000 projects on an ongoing basis with TS Consulting. And today we are in every region, we are below 2% of red projects. And I think in the industry of consulting, that's a kind of a really good achievement. And I think we can get there because you are extremely focused and because you are extremely close to, e.g. intellectual property. And by the way, there is a correlation between happy customers, of course in red projects, but also between happy customers and profitability of our business. You know, when we deliver in time and up to specifications, customers are happy, they pay for it. If we are not in time, we get into a bad discussion and it's not good for anybody. So I'm really proud that we have this high level of customer satisfaction because it's not only good for the customer, it's also good for us. All right, Johan, we have to leave it there and really appreciate your insights, very focused and great story. So thank you for coming back on theCUBE. Thank you for giving me the opportunity. You're welcome. Keep it right there, everybody, we'll be right back. This is Jeff Frick and Dave Vellante. We're live from Las Vegas, this is HB Discover. This is theCUBE.