 Live from Las Vegas, it's theCUBE, covering HPE Discover 2017, brought to you by Hewlett Packard Enterprise. Welcome back everyone, we're live here in Las Vegas for HPE Hewlett Packard Enterprise, Discover 2017 SiliconANGLE Media's program theCUBE. We'll go out to the events and extract the simple noise. I'm John Ford, my co is Dave Vellante, my co-CEO and co-founder of SiliconANGLE Media, which is part of SiliconANGLE.com, theCUBE, SiliconANGLE.tv, theCUBE.net, and wikibon.com. Go to wikibon.com, she got all the great research and a lot of the stuff they're talking about here at HPE Discover has a lot to do with what's happening at Wikibon and around big data and IoT. Dave, summary of day one wrap up, kind of our take, if you will, on HPE's messaging, what they're showing, and you know, the debate. I mean, we were at Dell EMC World, we heard Michael Dell and his team say, bigger is better, HPE is saying agile, nimble, but they've got a confederation, a, you know, federation of all these little kind of HPE companies, it's still a conglomerate. It's not small, as you said, in our opening. Meg's keynote today was all about the future of computing in a new way, if you will. Data, IoT, center of it, your thoughts and analysis of day one, keynote, our guests, your thoughts. John, I opened up this morning segment saying that five years ago we talked on theCUBE about, and I made the statement, HPE's got a shrink to grow. The other thing I said about HPE, now HPE, was it's got to get back to its roots of invent and it has not gotten back to those roots and now it is reinventing itself and its opportunity to get back to its roots of invention is through a partner ecosystem. That's very clear, kind of point number one. The second point I want to make is that these transformations that HPE and companies have gone through, I mean I've never seen anything this large, splitting a company up of a hundred billion dollar company, changing all the IT systems, doing all these spin merges, these are not trivial exercises. So when Meg says we're sort of at the end of that transformation, that five year process, in many respects they've now got to create a new transformation. They finally got this, they have this smaller company that's more focused and they've really got to still sharpen the edges on that sword in my opinion. The software business is still part of HPE, so that's got to happen. The cash coming in from the CSC spin merge still has to come in, so the balance sheet is still being restructured. But essentially the message that you're hearing from HPE is we're going to help you keep the lights on, we're going to make hybrid IT simple which is a good sort of tagline but it's a very, again, non-trivial thing to do. We've got this new partner ethos and we've got this fourth piece which is a moonshot on IoT and that's our big growth opportunity and we're going to put all our muscle behind that. I like the strategy. I mean, if you're going to go smaller and more focused you've got to have some kind of moonshot like that. You've got to have a partner ecosystem as they've described but as I say, there's still some more work to be done. They're still shaking off the embers of the exit of the cloud business trying to reshape that whole thing. So there's, as I say, more work to be done. You know, it's interesting. Good points, I agree 100%. I would add that my observation and what I came into HPE looking at was what will leadership and specifically Meg Whitman and Antonio Neary, mainly Meg Whitman and the team articulate to the customers because they've been getting pounded in the press on financial performance, the journey. I mean, if I'm Meg Whitman, I got to be saying, hey, enough with the, you know, backbiting on the five year journey and trying to peg me to a milestone because the market's changing. You know, you go back five years and say, it's not going to be a five year journey. Let's say Meg Whitman says that. What that really means is that's just kind of an estimate based on her opinion, execute. But what I think she couldn't, well, she might have seen but what happened was the cloud just came in and completely decimated the landscape relative to disruption opportunity. So a five year journey pegged at that time becomes essentially made me longer. And so they're executing a turbulent marketplace that's good for them, but it could be at their back too. So I think they had to come out and talk to their customers. The customers need to hear from HP and saying, look it, we got your back. We're going to be delivering. We understand the transformation. We understand what's going on. They've been in the IT consumption business serving customers in IT. They're a big company. They got to calm the customers down and give them confidence. So to me, I saw confidence in the simplicity message, hybrid IT message, and the IoT with the headroom. I didn't see any game changing futuristic vapor. I didn't see a lot of AI washing. I didn't see a lot of machine learning, which is important. I think we're seeing the trend, but they didn't lead with that. They led with the meat and potatoes of HP. Storage, talking about the acquisitions, simplicity. Services. Nimble, the messaging with partners. I thought that's very much a meat and potatoes. It wasn't like a lights out keynote by Meg Whitman in the sense of standing ovation on, yeah, raw, raw, but it was meat and potatoes, aggressive, assertive. We're here for the long haul, and I thought that was positive. I think the partner friendly ethos is really, really important. And you've seen it around the show. I mean, look at Veeam as a platinum sponsor, right? That never would have happened two years ago because of HP Protector, their HP's backup software, never would have happened before. You see Fortinet out in the show, basically a competitor with HP security business. And so, and then this whole new partnership around the large SIs, right? I mean, that's a big deal. My, you're saying India, SIs, the CEO of Wipro standing up there today. I thought he was one of the more impressive parts of the keynote. So a much more aggressive posture with partnerships, a much cleaner story for partners. Yesterday, the partner conference got pretty high marks. People, I think, are fairly excited about that because HP's got enough muscle to put resources. And John, you know, I mean, what's your take on the whole channel and partnership thing? I mean, you lived that for a decade. Well, I mean, I think the channel thinks a great opportunity for them. It's about money making money together. I think that's going to be a key thing. My thoughts just from a, you know, trying to read the tea leaves. And I'm going to put this out there. I would say not half-baked, but my observation from today and in the interviews, kind of things came together for me around something that I was thinking about, but I could see it now with a little bit of a clarity. And that is, I think we're going to see a hardware renaissance. And what I mean by that is I think the message of computing is changing. We've been predicting with open compute that we've been covering, which is an open source project where Facebook and now others are donating reference and limitations of which Antonio Neary was supporting that project. It's not a lot of funding. There's a lot of open source projects going on. There's a lot of disruption kind of happening. It's almost like small little, you know, not really well reported marketplace, not a lot of money's being made yet because there's some new things happening. I think what's clear to me today is that a new business model of hardware is coming. And I think HP, if smart could change their business model instead of being a hardware box supplier, which they know is a declining market, to a total addressable market of true private cloud of 260 billion and be a supplier of hardware business model rather than hardware product where they bring their systems expertise in, use open source, bring the stuff out of HP Labs and not try to be hardcore about productizing it in a hardcore way, meaning another skew. I think they got to have some core products. But the growth I think is going to come from a hardware renaissance where a new developer is going to come out of hardware. You're going to start to see hardware being in the game. I mean, just last week at the recode conference, you had Steve Ballmer with Kara Swisher saying we should have gotten the hardware business a long time ago. Everyone's making their own phones in reference to the consumer market. So I think the enterprise market, you're going to see real opportunity around service providers and enterprises, essentially getting the best of what Amazon and Google does, which is build their own boxes in a new hardware development way. To me, that to me is absolutely clear. And I think that's going to open up essentially that long tail of compute. Cloud like true private cloud and hybrid. And I think of HP smart, they should jump on that and double down on that trend. So the things I'm looking for between say now and let's say the next discover in Madrid in December, the post-spin merge balance sheet. Let's take a look at that, because I think it's going to look a lot better. And that's going to cause people to go, whoa, look at that. Now HP's got even more leverage to go out and do deals. The second is when does IoT actually become a meaningful and measurable component of HP's business? Talking a lot about it, building up the ecosystem, talking about some use cases, a lot of blue sky types of things, but not a lot of hardcore concrete examples at the customer level. So when does that become a meaningful revenue generator? And then I think from credibility standpoint, margins. Meg said, this is it, margins have bottomed. They're going to bounce off the bottom and grow from here. We've got to see that. And I think the keys are services really executing on the services side, leveraging their acquisitions. Let's see what they can do with, I mean, Aruba looks good, Nimble, SimpliVity. Can they turn those into billion dollar businesses like they did with 3par? And then the partnerships. I don't expect any head fakes. You remember, HP used to always head fake the channel and head fake partnerships. I don't expect that now. I don't, they've never had fake partners. I don't expect that now. I just would call them out in the carpet on that. I think they've been groping with the partners and hoping to have a flagship. I don't know, I mean. I don't think they've, I know you've been trying to be critical of HP but they've never had fake partners. When they, let's say head fake, they would buy a company like EDS and their partners ecosystem would go, whoa, wait a minute, I'm not sure I want to partner with these guys. Well, I would just, I would debate that with you, but I mean, I think HP's always had great channel, great partnerships. I think where they've misfired, if you want to be critical, is that they mismatched where the growth was with, you know, throwing an outsource, for instance. That's a complete mismatched where the growth is. Now, to your point about IoT, I think that's a big opportunity because IoT is a beach head setup. I think it's a great opportunity as a flagship message to take the portfolio of HP into a partner-friendly world that has going beyond swim lanes. These are like the Grand Canyon, the Panama Canal. They're more than swim lanes. So I think, you know, having a portfolio with more M&A activity, with Aruba and some of the hardware they have, they can go in and get the beach head in IoT and use it as a driver, a flagship with their partnerships to start engaging customers and holding the ground. And then, moving the services in, that can hold them for a good couple years and then as the margins from the declining hardware business. Well, I think that's an opportunity and we're going to look at that. And the other big opportunity beyond IoT is this inter-cloud management. Will HP participate in earnest in building up some software capabilities to manage cross-cloud, on-prem, off-prem, everything in between, SaaS, et cetera? You didn't hear, you don't hear anything about that now. So is that part of the HPE strategy? Will it use its new balance sheet to go after some of those emerging software companies and rebuild its software? Well, we always will analyze. We've got all day tomorrow. We've got some great guests. But Dave, information technology, known as IT, is not going away. It's changing, certainly for sure. Information and technology is really going to be a really big opportunity for HP. If they stick in their old ways, they'll be dead. If they can transform over themselves, I think that's a winner. And of course, we've got live coverage, three days tomorrow and Thursday. This is theCUBE. Go to silkenangle.com. Check out all the latest reporting and journalism. Go to wikibond.com for all the great research. The best research is behind a subscription. You got to pay for that. I would definitely do that. The true private cloud report you guys did, I thought was killer. Really, that's groundbreaking and IoT stuff is fantastic. And of course, go to the silkenangle.tv to check out all the great stuff. And of course, go to crowdchat.net and we have a new CUBE 365 product coming out of the oven from SiliconANGLE Labs. A lot of great stuff. Stay with us for more coverage tomorrow and check out youtube.com slash SiliconANGLE for all the videos in replay. We'll be back tomorrow. Stay with us. Have a great day.