 Welcome back everyone, it's theCUBE live at Mandalay Bay Dell Technologies World 2023, our second day of coverage. Lisa Martin here with Dave Vellante. We've had some great conversations as I always say did because we do. We've been talking a lot, a lot of news, a lot of deep partnerships that Dell has going deeper. We're going to be chatting about that next with Microsoft and Dell. I always like to see projects turn into products. We've seen a lot of that. We have. Partnerships, ecosystem is growing. It is growing, expanding. Hybrid cloud, it's all happening. We're going to be unpacking all that. One of our alumni is back with us. Travis V. Hill is here, SVP, a product management across platform software installations at Dell, great to have you back. Douglas Phillips joins us. Corporate vice president, Azure Edge, and platform at Microsoft. Welcome, great to have you. Hey guys, it's awesome to be here. So Travis, let's go ahead. Before we talk about the new platform, you had a blog recently. I want you to kind of unpack that with the shared Dell's and Microsoft's shared vision for Hybrid Cloud. For our audience, kind of summarize what you talked about on that blog. Yeah, I think the blog really did a good job of detailing that Microsoft and Dell have had a long and very successful technology collaboration relationship. I mean, we've been partnering together for 30 plus years. And if you look at even today in market, Microsoft and Dell have a great partnership with Azure Stack HCI. Dell is one of Microsoft's largest partners, or isn't Microsoft's largest partner for Azure Stack HCI today. And we're really excited about the ability to take that partnership to the next level. And so if you looked at kind of the pillars that we built the relationship on, it was how do we make Hybrid Cloud easier for customers to consume? How do we make it so that the services that they know and love in Azure can be extended to on-premises or the edge in the case that customers have a latency or a data gravity or data sovereignty or a cost issue that they might want to address? And how do we make it so that they can manage it all from one place securely? So those are really the pillars that we've built our historical relationship on, but also this going forward collaboration around Azure. Douglas, expand from your perspective. Travis mentioned, Michael mentioned yesterday when he did the pre-record with Satya, 30 plus years. Talk about it from Microsoft's perspective. Obviously a long history partnership, a lot of evolution and maturation. Yeah, it is a critical partnership for us. And I think always, but even more so right now as we're seeing a real pivot. And with the incredibly broad adoption we see from our customers of cloud and cloud computing, more and more of our customers want to take the power of the cloud I think as Travis stated and expand that out into the world where they live, work and make decisions. And that's the way we refer to the edge, right? It's everywhere outside of our brick and mortar data centers and our ability to partner together and deliver a seamless experience for our customers is just absolutely critical. And right now I'd say, when we look at the number of customers coming in looking at as we call it digital transformation or modernization of their applications and workloads, statistically an incredibly large number of those consist of an edge component. I mean, inevitably, regardless of if we're talking about industrial, manufacturing, automotive, retail, our customers are coming to us and saying we want the power of Microsoft's cloud. We want the power of Azure. And we wanted to extend out into the world where we're operating. Whether we have factories or retail locations or restaurants, we want that power. And in order for us to do that, this partnership is just an absolute key part of that. And I'm very, very excited about the announcements yesterday as we've had so many customers asking us what's next in our big edge strategy. And this is it. This is the start of it. So I'm incredibly excited. And I know a lot of the other folks back in Redmond are very excited about this announcement and how we move forward on this partnership. Well, you've got two companies that obviously there was nowhere to go except on-prem back in the day. So you both started there. You both have long, long histories in the industry. Azure's been amazing. I've written about it a lot at this unbelievable momentum that Microsoft has created. It's actually quite remarkable. And then I like the way you described it, Douglas, is sort of extending. So the cloud, but writing about this for years, the cloud is extending back to on-prem, out to the edge. And the challenge has always been that singular experience. So maybe you could talk about what you've announced and we could dig into that a little bit from a customer perspective. Yeah, yeah. And to answer that question, Dave, I'd like to build a little bit on what Douglas was saying, that there is something new that is happening that we're seeing in the market. The, we did a survey recently. Almost 50% of our customers are hybrid today. And over the next 12 to 24 months, an incremental 25% say that they're going to go hybrid. We're talking about 75% of all customers being in a hybrid workflow. And what we hear them ask us is, I went to the cloud because it was easy. I went to the cloud because of elasticity. And Dell, if you can work with Microsoft so that when I'm deploying the infrastructure in my data center or in the edge, if you make it easy to scale, you make it easy to upgrade it, you make it easy to make sure that everything's working properly, you tie into the native Azure services, that's what I need to effectively scale that environment back on-premises. So that's what we've worked on and that's what we've announced. What do you see in terms of, that's interesting. My data shows about only 14% of customers are all in on the public cloud. So the world is hybrid. And that's- The world is hybrid. You ask them, you say, what's that going to look like in three years? And they stay pretty much flat. What about workloads? You know, there's this narrative out there that says that 90% of the workloads are still on-prem. Again, my data doesn't suggest that. Not withstanding telco. If we take telco out of it, what do you see in your worlds? It feels to me like it's a lot more like 45 to 50% is in the cloud. And the stuff that's on-prem is sticky. It's not a business case to move necessarily or it's hard to move or it's risky to move. So why not just keep it there and give it the cloud operating model? What do you guys see? Yeah, I would classify it slightly differently. And statistically, I don't know. But what I would say is, you know, building again back on what Travis was saying, what we see very clearly is our customers want the power of that centralization. Global businesses or local businesses that have presence, which is most businesses in multiple different locations want the ability to have oversight of those businesses from a centralized location and even more so in a post-pandemic world where companies, regardless of industry, are working in more hybrid fashion. Some of their workers are required to be in factories. Other workers are required to be in a headquarters location. Some are working remotely and working from home. And they want to be able to have a centralized place where they can go and look at data. Data about how their factories are running, how their stores are performing, and have a common developer experience of how they deploy those applications and workloads in that centralized location. We would call the Microsoft Cloud or Azure or out to the edge in the locations they live. And I think to your point, I see that being durable. I see it being a durable state, right? We're not looking at this as transient where how are we going to migrate this workload to the cloud? But the point I would make is it's also different from the way we've historically talked about hybrid or private cloud, which is give me my own Azure. I want an Azure in my factory. I want an Azure in my own data center versus we want to extend the Azure fabric and what it gives us. A common developer experience, common security, compliance, user experience, whether you're talking about an IT person or an operator or a developer, and help me project that. And just enough of that out to the edge so that I can have the workloads I need at the edge for real time decision making or powering the robots in my factory or whatever it might be. That's interesting, I listened to your speak, Douglas, I was thinking about single point of control and that's always been really important in technology, IT, generally. And largely because of recovery, right? Recovery's hard, but you check that box, not that it's an easy thing to do, it's non-trivial, but you mentioned a single version of the truth, essentially, with analytics, security, governance. Those are relatively new, higher priority items and that's where you extend the fabric and that seems to be sort of different than, like you said, just give me a stack on-prem, it's a new model. And so my question is, what impacts will that have on the operating model? Because the cloud operating model obviously had an impact. Does this take that further? I would say this is a big part of our partnership and it's hard, right? And I think this is the exciting challenge that Travis, the rest of the Dell team, and I have had the ability to work on together, which is when we control the brick and mortar, the HVAC, the network, the nodes that are going into our data centers, it's arguably easier. When you start throwing in customer networks, their own power, somebody cutting fiber in the street outside of it, and they have a dependency that they can't sell someone, a hot dog or a car, if that system isn't working, that interoperability and what is running at the edge and what is running in the cloud, you have to have very clear and intentional decision-making in how you do that. And a huge part of that is the interop between the hardware infrastructure, the software, the operating systems, and the cloud. And that is what we're working together on. And I think this is just the beginning. We've got a lot of exciting work ahead of us in expanding that relationship and that fabric for our customers. Yeah, at home with Genete. Speaking of customers, can you share their involvement in the productization of what was announced yesterday? I imagine that there's a customer flywheel that really generates and powers this. Can you share, and maybe a favor to customer story that really demonstrates the value of what this is delivering? Yeah, I think if you look at the business that we have today with Microsoft, with Azure Stack HCI. As I mentioned, we're the number one provider, the number one partner for Microsoft with that. So we have hundreds, if not thousands of customers already running a version or a predecessor to what we're delivering. And what they were clearly telling us is, this is great, but can you work together so that is a seamless support experience? It is a validated appliance that when I do a firmware update that I know that everything works, can I work with you, Dell, so that I can start to incorporate some of maybe the storage services that you provide as an adjunct to the appliance model so that it fits into my broader on-premises ecosystem. Those were the things that customers told us, and if you looked at what we've productized, that's exactly what we're doing. So talk more about the announcements. Give us some specifics, right? We've been sort of dancing around it. Give us the hard news. We are announcing Apex Cloud Platform for Azure, which is all what we've been talking about. It's the collaboration between Dell and Microsoft to provide a platform which Azure services can run on-premises or in the customer's data center at the edge in a co-engineered appliance that Microsoft and Dell have jointly brought to market. Okay, so I bring that to wherever I want it. Edge, everything's Edge, I guess. And I'm now- For Douglas, everything's Edge. I call it the data center. His data center is different though. What did Jensen call it today? The AI factory. There you go. There we go. We named things. Okay, but that's stretching Azure, that Azure you can call the fabric. I don't want to confuse it with some other product, but conceptually, stretching that experience to wherever. Edge, data center, AI factory, correct? Precisely. And then, what does that actually mean for a customer? So what services can they tap with that stretch? So this will be a growing list. So, and this is a huge part of our strategy with Microsoft Arc. So we have several services that are Arc-enabled today. We allow our customers to go to their Azure portal and as they're managing their cloud infrastructure in Azure, they can use Arc to project a set of those services out to their edge appliance. And we will be working to expand that very, very quickly. Right now I'd say two of the most popular services we see are our database services and security. Security is one of the first. So people are looking for the security they see which is top of mind for everyone right now, I think in every industry in the cloud and how can they project that through leveraging Microsoft security tooling from Azure out to the edge and then monitor that in a centralized way. So those are two of the workloads we see being used. Sequel server, is that right? Precisely, yep. Okay, that's the starting point. Precisely. Cosmos, DB, and other stuff will in-ass. Secure SQL, and also Defender and other security services that Microsoft enables in our cloud and we're allowing our customers to now project and manage from the cloud to their edge endpoints. What's the go-to-market approach? Like you talked about the joint collaboration, where can customers go? I imagine to both, you mentioned the co-engineering but talk a little bit about the GTM strategy. Yes, it will be available definitely as a Dell branded appliance and we're working with Microsoft on how for the right instances it can also be made available via Microsoft but there will be joint incentives for both of the sales teams to go and pursue business together on it. And while we're still working on that, I'd say, the end goal we have at the end of the day is for our customers, our joint customers and our Microsoft customers to be able to go very simply request through their Azure portal to expand that into their brick and mortar locations out in the world. So we're going to be working in earnest to make that a reality. Travis, what's Dell bring to the table that some of the competitors you would say can't do as well? I mean, we have a history of working with ecosystem providers and making it easy. There are several examples in recent history where we've shown that if we can partner together with what we would call an operating environment provider, where we do the integration, we do the testing, we do the simplification, we do the orchestration of the upgrades. We do those very basic but powerful things that customers struggle with that were successful. So we have a history of doing that. And then the other thing that I wanted to comment on when Douglas was talking about it, what I think about Douglas's Azure experience where it's tens or hundreds of data centers. We have customers in thousands, tens of thousands, hundreds of thousands of locations. We have things like stocking, services, at scale that just make it such that we can, we have a reach and an at scale capability for both support and sales that really complement the overall relationship. What's the ecosystem overlapping? We're trying to project, okay, things that customers can take advantage of. We talked about some of Microsoft's services, but there is some ecosystem overlap between what Dell has and what Microsoft has. You guys have been around for a long time. So what can we expect going forward in terms of other types of not necessarily Dell services or Microsoft services that may become available? Can I tap into my ecosystem, I guess is my question. What ecosystem, Dave? Other security players or areas with Microsoft might not have products or products that I want to utilize on this solution. Yeah, look, the one that we're collaborating on real time and very closely is the ability to use Dell software defined storage within the Apex Cloud platform for Azure. We have a lot of customers that on-premises have utilized Dell software defined storage as sort of a substrate for many different environments and they want to use that as a part of ACP for Azure as well. So that's the first step. Could that tie in to whatever project Alpine has become? Is that sort of part of that? You're going to stretch the Alpine fabric? I'm sorry, what's the product name? Power, it's Powerflex. Yeah, yeah, yeah, it is absolutely Powerflex. So within ACP we will be utilizing Powerflex. We also announced that we're going to be running Powerflex in Azure. And so if you have Powerflex running in Azure, if you have Powerflex as part of ACP for Azure on-premises, you can start to do cool things from a data mobility perspective. So I could bring that storage maturity, that storage stack maturity into Azure now. Yeah, yeah, we now sit here. Yeah, yeah, yeah, okay. And that's available today? Yes, sir, it is. Awesome, yeah. Now how about pricing? How do you price this stuff in that sort of hybrid environment? Is it cloud pricing? Is it on demand? Is it, how does that all work? Have you figured that out yet? I'd say we're still working on that. What do you say? So that's a very fair statement. But it's available today. If I get my checkbook out, I said, all right. So Azure Stack for HCI is available today. Powerflex in Azure is available today. ACP for Azure is coming soon. Yeah, cool. Last question, guys, in our last 30 seconds, your feedback from the folks on the show floor here, I'm sure at dinners and meetings that you've had based on the announcement, what are some of the things that you've heard that excite you about the momentum that the partnership has currently? Go first. Sure, I'd say, you know, at the end of the day, the huge value that we see in this partnership is for our customers. So I think, you know, the customers seeing Microsoft and Dell truly partnering and collaborating at a technology level. You know, you've asked a lot of questions about pricing, go-to-market, how do we sell it? At the end of the day, two technology companies, and this is something I'm really proud of, two technology companies working together as one company from a product perspective, removing not just our org charts, but our brands, and getting them out of the way so that we can deliver a seamless experience for how our customers are consuming transformational technology that's allowing them to operate their businesses in more secure, effective, distributed ways, that is a superpower. And, you know, I think we've seen, certainly, in the period of this partnership we've been working on, I'll speak for myself here, our companies come together at an engineering level and jointly develop a product where, you know, we have people co-located on one continent together working on some of this. We have your hardware in our labs and our development environment. You've got our software in your labs and your development environment. We're running daily, weekly scrums, bi-weekly leadership sinks where Travis, Sudhir, myself and others are coming together and reviewing progress as if we were one company. I'd say I'm hearing some of that excitement from our customers and it's visible, which is, you know, we have a huge demand from our customers today to simplify this. How can we get, you know, Microsoft and Dell's technology delivered in as seamless a way as possible where it just works? And there's a lot of excitement around that. That's not trivial to get engineering teams together. I mean, you just, in one company, what's less than two? It's a significant expansion of the partnership. And just to add just a little bit to what Douglas said, because he said it so well, the customers that I've talked to basically said thank you, right? Thank you for making it easy. Yes. You know, stop talking to me about your widget. Start talking to me about my operating environment and how you bring it all together. Awesome, guys, thank you so much. We are out of time, but we appreciate you guys sharing and really unpacking the announcement, the value in it for customers, what it means for the partnership. So next year you've got to come back, bring some customers and really show us, crack the lid open how it's working. We appreciate your insights. Thank you. We'll be back so much. Thanks guys. For our guests and for Dave Vellante, I'm Lisa Martin. Up next, couple of alumni join us. Rob Emsley is back, David Noy as well. Got to be talking about data protection, how Dallas helping customers achieve that elusive cyber resiliency, which is incredibly important these days. Stay tuned, they'll be right here.