 From around the globe, it's theCUBE with digital coverage of Dell Technologies World, digital experience brought to you by Dell Technologies. Hello everyone and welcome back to theCUBE's continuing coverage of Dell Tech World 2020. This is Dave Vellante and I'm here with Sam Grocott who is the Senior Vice President of Product Marketing at Dell Technologies. Sam, great to see you, welcome. Great to be here Dave. All right, we're going to talk generally about cloud in the coming decade, but in really how the cloud model is evolving. But I want to specifically ask Sam about the as a service news that Dell is making at DTW. You know, what those solutions look like, how they're going to evolve. Maybe Sam, we can hit on some of the customer uptake and the feedback as well. Does that sound good? Yeah, sounds great. Let's dive right in. All right, let's do that. So look, you've come from the world of Disruptor. You know, when you joined Isilon, they got acquired by EMC and then Dell. So you've been on both sides of the competitive table and cloud is obviously a major force. Actually, you know, I'd say the major disruptive force in our industry. So let's talk about how Dell's responding to the cloud trend generally, then we'll get into the announcements. Yeah, certainly. And you're right, I've been on both sides of this and there's no doubt if you look at just over the last decade or so, how customers and partners are really looking at evaluating how they can take advantage of the value of moving workloads to the cloud. And we've seen it happen over the last decade or so and it's happening at a more frequent pace. And there's no doubt that is really what planted the seed of this new operating experience. You know, kind of a new lifestyle, so to speak, around as a service. Because when you go to the cloud, that's the only way they roll is you get an as a service experience. So that really has started to come into the data center as organizations are moving specific workloads through applications to the cloud of, hey, how do I get that in an on-premise experience? And I think throwing gasoline on that is certainly the pandemic and COVID-19 has really made organizations evaluate how to move much quicker and more agilely by moving some applications to the cloud. Because frankly, on-prem just wasn't able to move as fast as they'd like to see. So we're seeing that macro trend accelerate. And I think we're in good shape to take advantage of that as we go forward. Well, that brings us to the hard news of what you're calling Project Apex, i.e. your as a service initiative. What specifically are you announcing this week? Yeah, so Project Apex is one of our big announcements and that's really where we're targeting how we're bringing together and unifying our product development, our sales go to market, our marketing go to market, everything coming together underneath Project Apex which is our as a service and cloud-like experience. Look, we know in that world where customers were constantly evaluating which applications stay on-prem, which applications and workloads should go to the cloud. I think the market has certainly voted clearly that it's gonna be both, it's gonna be a hybrid multi-cloud world. But what they absolutely are clear that they want is a simple, easy use as a service experience regardless of if they're on-prem or off-prem. And that's where really the traditional on-premise solutions fall down because it's just too darn complex still. They've got many different tools managing many different applications that oversee their cloud operations, their various infrastructure, whether it's server or compute or networking, they all run different tools. So it gets very, very complex. It also is very rigid to scale. You can't move as fast as the cloud. It can't deploy as fast. It requires manual intervention to buy more. You typically gotta get a sales rep in-house to come in and extend your environment and grow your environment. And then of course, the traditional method is it's very capex heavy in a world where organizations are really trying to preserve cash, cash is king. It doesn't really give them the flexibility traditionally are going forward that they'd like to see on that front. So what they wanna see is a consistent operating experience for their on and off-prem environments. They wanna see a single tool that can manage and report and grow and do commerce across that environment, regardless of if it's on or off-prem. They want something that can scale quickly. Now look, when you're moving equipment on-prem, it's not gonna be a click of a button, but you should be able to buy and procure that with a click of a button. And then very quickly within less than a handful of days, that equipment should be stood up deployed and running in their environment. And then finally, it's gotta deliver this more flexible finance model, whether it's leveraging flexible subscription models or OPEX-friendly models, customers are really looking for that more OPEX-friendly approach, which we're gonna be providing with Project APEX. So very, very excited about kind of the goals and the aspirations of Project APEX. We're gonna see a lot of it come to market early next year, but I think we're well situated, as I said, to take advantage of this opportunity. So when I was looking through the announcement and sort of squinting through it, the three things jumped out and you've definitely hit on those. One is choice, but sometimes you don't want to give customers too much choice, so it's got to be simple and it's got to be consistent. So it feels like you're putting this abstraction layer over your entire portfolio and trying to hit on those three items, which is somewhat of a balancing act, but is that right? Yeah, no, you're exactly right. The pillars of the Project APEX value proposition, so to speak, is simplicity, choice, and consistency. So we've got to deliver that simple kind of end-to-end journey view of their entire cloud and as is for this experience, that needs to span our entire portfolio. So whether it's servers or storage or networking or PCs or cloud, all of that needs to be integrated into essentially a large single web interface that gives you visibility across all of that. And of course, the ease of scale up and frankly scale down, you should be able to do that in real time through the system. Choice is a big, big factor for us. We've got the broadest portfolio in the industry. We want to provide customers the ability to consume infrastructure anyway they want. Clearly they can consume it the traditional way, but this more as a service flexible consumption approach is fundamental to making sure customers only pay for what they use, so a highly metered environment, pay as they go, leverage subscriptions, essentially give them that OPEX flexibility that they've been looking for. And then finally, I think the real key differentiator is that consistent operating experience. So whether you move workloads on or off-prem, it's got to be in a single environment that doesn't require you to jump around between different application and management experiences. All right, so I got to ask you the tough question and I want to hear your answer to it. I mean, we've seen the cloud model, everybody knows it very well, but why now people are going to say, okay, you're just responding to HPE. But what's different between what you're doing and what some of your competitors are doing? Yeah, so I think it really comes down to the choice and breadth of what we're bringing to the table. So we're not going to force our customers to go down one of these routes, we're going to provide that ultimate flexibility. And I think what we'll really define ourselves against them and shine ourselves against them is that consistent operating experience. We've got that opportunity to provide both an on-prem edge and cloud experience that doesn't require them to move out of that operating experience to jump between different tools. So whether you're running a storage as a service environment, which we'll have in the first half of next year, looking through our new cloud console that is coming out early next year as well, you're going to be able to have that single view of everything that's going on across your environment and also be able to move workloads from on-prem and off-prem without breaking that consistent experience. I think that is probably the biggest differentiator we're going to have. When you ladder that onto just the general Dell Technologies value of being able to meet and deliver our solutions anywhere in the world at any point of the data center at the edge or even cloud native, we've got the broadest portfolio to meet our customer needs wherever we need to go. So my understanding is the offerings, it's designed to encompass the entire Dell Technologies portfolio from client solutions, ISG, et cetera, not VMware specifically, but it's really that whole Dell Technologies portfolio, correct? Yeah, and look, over time we totally expect to be able to transact VMware through this. So we do expect that to be part of the solution eventually. So yeah, it is across PC as a service, storage as a service, infrastructure as a service, our cloud offers all of our services, traditional services that are helping to deliver this as a service experience. And even our traditional financial flexible consumption models will be included in this because again, we want to offer ultimate choice and flexibility. We're not going to force our customers to go down any of these paths, but we want to do is present these paths and go wherever they want to go. And we've got the breadth of the portfolio and the offers to get them there. Okay, so it's really his journey. You mentioned storage as a service coming out first. And then as well, if I understand it, the idea is that I'm going to have visibility and control over my entire state on Prem, cloud edge, kind of the whole enchilada, maybe not right out of the chute, but that's the vision. Absolutely, you've got to be able to see all of that. And we'll continue to iterate over time and bring more environments, more applications, more cloud environments into this. But that is absolutely the vision of Project Apex is to deliver that fully integrated core edge, cloud partner experience to all of the environments our customers can be running in. I want to put my customer hat on, my CFO, CIO hat. Okay, what's the fine print? What are the minimum bars to get in? What's the minimum commitment I need to make? What are some of those nuances? Yeah, so both the storage as a service, which will be our first offer of many in our portfolio and the cloud console, which will give you that single web interface to kind of manage report and kind of thrive in this as a service experience. All that will be released in the first half of the next year. So we're still, frankly, defining what that will look like, but we want to make sure that we deliver a solution that can span all segments from small business to medium business to the biggest enterprises out there. Globally, goal expansion through our channel partners, we're going to have GEOs and channel partners fully integrated as well as service providers as well as a fundamental important piece of our delivery model and delivering this experience to our customers. So the fine print day will be out early next year as we GA these releases and bring into market but ultimate flexibility and choice up and down the stack and geographically wide is the goal and the intent we plan to deliver that. Can you add any color to the sort of product journey? If you will, I even hesitate, Sam, to use the word product because you're really sort of transferring your mindset into a platform mindset and a services mindset as opposed to bolting services on top of a prior, you sell a product is okay, service guys, you take it from here. It's really, you have to sort of rethink how you deliver. And so you say, you start with storage and then so what can we expect over the next midterm, longterm? Yeah, I'll give you an example. Look, we sell a ton of as a service and flexible consumption today. We've been at it for 10 years. In fact, in Q2, we sold our annual recurring revenue rate is 1.3 billion growing at 30%. Very, very pleased. So this is not new to us but how you described to Dave is right. We adopt products, customers then pick their product, they pick their service that they wanna bolt on then they pick their financial payment model and they bolt it on. So it's a very good customized way to build it. That's great. And customers are gonna continue to want that we'll continue to deliver that but there is an emerging segment that wants more just kind of think of it as the big easy button. They wanna focus on an outcome. Storage as a service is a great, great example where they're less concerned about what individual product element is part of that. They want it fully managed by Dell Technologies or one of our partners. They don't wanna manage it themselves. And of course they want it to be pay for use on an OPEX plan that works for their business and gives them that flexibility. So when customers going forward want to go down this as a service outcome driven path, they're simply gonna say, hey, what data service do I want? I want file or block unified object. They pick their data service based on their workload. They pick their performance and capacity tier. There is a term limit of, you know, right now we're planning one, one to five years depending on the amount of terms you wanna do. And then that's it. It's managed by Dell Technologies. It's on our books from Dell Technologies. And it's of course leveraging our great technology portfolio to bring that service and that experience to our customers. So the service is the product now. It's, it really is making that shift that we are moving into a services driven services outcome driven set of portfolio and solutions for our customers. So you actually have a lot of data on this. I mean, you talk about a billion dollar business, maybe talk a little bit about customer uptake. I don't know what you can share in terms of numbers and a number of subscription customers but I'm really interested in the learnings and the feedback and how that's informed your strategy. Yeah, I mean, you're right. Again, we've been at this for many, many years. We have over 2,000 customers today that have chosen to take advantage of our flexible consumption and as a service offers that we have today. Nevermind kind of as we move into these kind of turnkey, easy button as a service offers that are to come that early next year. So we've leveraged all of that learnings and we've heard all of that feedback. And it's why it's really important that choice and flexibility is fundamental to the project APEC strategy. There are some of those customers that they want to build their own. They wanna make sure they're running the latest PowerMax or the latest PowerStore. They wanna choose their network, they wanna choose how they protect it. They wanna choose what type of service they're, they wanna cover some of the services they may want very little from us or vice versa. And then they wanna maybe leverage an additional more traditional means to acquire that based on their business goals. That feedback has been a lot of fair but there is that segment that is like, no, no, no. I need to focus more on my business and not my infrastructure. And that's where you're gonna see these more turnkey as a service solutions fit that need where they wanna just define SLAs, outcomes. They want us to take on the burden of managing it for them so they can really focus on their applications and their business, not their infrastructure. So things like metering, tons of feedback on how we'll wanna meter this, tons of feedback on the types of configurations and scale they're looking for. The applications and workloads that they're targeting for this world is very different than the more traditional world. So we're leveraging all of that information to make sure we deliver our infrastructure as a service and then eventually solutions as a service. You think about SAP as a service, VDI as a service, AI and machine learning as a service. We'll be moving up the stack as well to meet more of a application integrated as a service experience as well. So I wanna ask you. So I mean, you've given us a couple of data points there, you know, billion dollar plus business, a couple of thousand customers. It is this, I mean, you got decent average contract values if I do my math right. So it's not just the little guys. I mean, I'm sorry, it's not just the big guys but there's some fat middle as well that are taking this up. Is that fair to say? Totally. I mean, I would say frankly, you know, in the enterprise space, it's the mid to larger sides of historically and we expect they'll continue to wanna kind of choose their best of breed of products, best of breed services, best of breed, financial consumption, great. And we're in great shape to there. We're very competitive, very, very confident or competitive in competing in that space today. I think going into the turnkey as a service space, that will play up market, but it will really play down market, mid-market, smaller businesses. It gives us the opportunity to really drive a solution there where they don't have the resources to maybe manage a large storage infrastructure or backup infrastructure or compute infrastructure. They're gonna frankly look to us to provide that experience for them. I think our as a service offers will really play stronger in that mid and kind of lower end of the market. So tell us again, the sort of availability of the actual, like the console, for example, when can I actually get, I mean, I can do as a service today. I can buy subscriptions from you. This is where it all comes together. What's the availability and rollout details? Sure, so as we look to move to our integrated kind of turnkey as a service offers, the console we're announcing at Dell Technologies World as it's in public preview now. So for organizations and customers that wanna start using it, they can start using it now. The storage as a service offer is gonna be available in the first half of next year. So we're rapidly kind of working on that now, looking to early next year to bring that to market. So you'll see the console and the first as a service offer with storage as a service available in the first half of next year, readily available to any and everyone that wants to deploy it. So we're not that far off right now, but we felt it was really, really important to make sure our customers, our partners, and the industry really understands how important this transformation to as a service and cloud is for Dell Technologies. That's why, frankly, externally and internally, Project Apex will be that North Star to bring our end-to-end value together across the business, across our customers, across our teams. And that's why we're really making sure that everybody understands Project Apex and as a service is the future for Dell and we're very much focused on that. So I mean, as the head of product marketing, this is really a mindset, a cultural change really. You're really becoming the head of service marketing in a way. How are you guys thinking about that mindset shift? Well, really, it's how am I thinking about it? How is the broader marketing organization thinking about it? How is engineering clearly thinking about it? How is finance thinking about it? How is sales? This is transformative across every single function within Dell Technologies has a role to play to do things very differently. Now, it's gonna take time. It's not gonna happen overnight. Various estimates have this as a fairly small percentage of business today in our segments, but we do expect that to start to, and it has started to accelerate and ramp. We're preparing for a large percentage of our business to be consumed this way very, very soon. That requires changes in how we sell, changes in how we market clearly, changes in how we build products and so forth. And then ultimately how we account for this has to change. We're approaching, and I think the right way, Dave, where we're looking at this truly end-to-end. This isn't a tweak in how we do things or an evolution. This is a revolution for us to move faster to this model. Again, building on the learnings that we have today with our strong customer base and experience we've built up over the years. But this is a big shift. This isn't an incremental turn of the crank. We know that, I think you expect that, our customers expect that, and that's the mission we're on with Project 8x. Well, I mean, with 30% growth, I mean, that's a clear indicator, and people like growth. No doubt that clients are, that's a clear indicator that customers are glomming onto this, and I think many folks want to buy this way, and I think increasingly that's how they buy SaaS. That's how they buy cloud. Why not buy infrastructure the same way? Give us your closing thoughts, Sam. What are the big takeaways? Yeah, big takeaways is, from a Dell Technologies perspective, Project 8x is that strategic vision of bringing together our as-of-service and cloud capabilities into a easy-to-consume, simple, flexible offer that provides ultimate choice to our customers. Look, the market is spoken. We're going to be living in a hybrid, multi-cloud world. I think the market is also starting to speak that they want that to be an as-of-service experience, regardless if it's on or off-prem. It's our job, it's our responsibility to bring that ease, that simplicity and elegance to the on-prem world. It's certainly not going anywhere. So that's the mission that we're on with Project 8x, and I like the hand we've been dealt. I like the infrastructure and the solutions that we have across our portfolio, and we're going to be after this for the next couple of years to refine this and build this out for our customers. This is just the beginning. Well, it's awesome. Thank you so much for coming on theCUBE. I mean, we're seeing the cloud model. I mean, it's extending on-prem, cloud, multi-clouds, going to the edge, and the way in which customers want to transact business is moving at the same direction. So, Sam, good luck with this, and thanks so much. We appreciate your time. Yeah, thanks, Dave. Thanks, everyone. Take care. All right, and thank you for watching. This is Dave Vellante for theCUBE and our continuing coverage of Dell Tech World 2020. The Virtual Cube, we'll be right back right after this short break.