 continuous coverage of HP Discover. We're live in Las Vegas. This is the Cube's second year at HP Discover. We are in the middle of our summer tour. It's not even summer yet, Stu, and we're in the middle of the summer tour. And we're just coming off. I was at IBM Edge yesterday, which is an event down in Orlando. Fluent today. Our colleagues are right behind me. We'll be here Tuesday, Wednesday, and Thursday broadcasting wall-to-wall coverage. Go to siliconangle.tv. Check out siliconangle.com and wikibon.org for all the information. We're here with Nick VanderSweep of HP. We're going to talk about Cloud. Nick's a Cloud advisor and has been on the Cube before. Welcome back, Nick. Hey, it's great to be here. Appreciate having you. So HP Discover again, big event. I thought Meg was energized this morning. I thought she really did a good job connecting with your core audience. She really spoke to them. It wasn't pie in the sky. It was like, we're here. We have a purpose. We're about the enterprise. You're about the enterprise. She really, really does match the HP culture. And that's what we try to do inside of the R&D organizations inside of HP, is look at what are the customer needs. And when we get it, get down to brass tacks and deliver value to the customers, makes the employees feel good. And she's articulating that very well in the marketplace. Yeah, I thought so. Again, I think she did connect. You know, of course, Meg was an aspiring politician, but it wasn't too politicized, not at all. You know, a little bit of military. Well, she did a good job. I mean, just a little Clinton-esque kind of connecting. But that's cool. I mean, I think that's desirable. But I thought that she really did do a good job of expressing the culture. So, and then she also talked about cloud. I wonder if we could talk about your... So, if I can just tee this one up. She said HP is 70% of HP's revenue is infrastructure. But cloud is, you know... She said hardware infrastructure. Hardware infrastructure. Right, hardware infrastructure. Not software, so, but, you know, where we look at the future of infrastructure and where it's going is cloud. And she teed up a topic she called Converge Cloud. And I think it's hitting the wire any minute now. And can you tee us in as to what we're talking about here? There's a couple of things to Converge Cloud. It was actually, Converge Cloud itself was actually announced a few weeks ago. And it's our strategy for cloud, overall cloud. And when we look at cloud, we're not just looking at private clouds or managed hosters or managed private clouds or public clouds or traditional. We're looking across the entire spectrum with a Converge Cloud and a single architecture across all those different areas. Because there's a need for private cloud, there's a need for public cloud, there's a need for managed services. But what we saw in the marketplace is there's private cloud providers building management systems for private clouds. There's public cloud providers that are building management systems for public cloud and security for that. And it's different. And it's making life worse for customers because now they got their traditional environments, they got their private clouds, they're dealing with public clouds, and they got and managed clouds as well. So they got three, four different security systems, management systems, provisioning systems. And with Converge Cloud, what we're trying to do is pull that all together. One common architecture across private, public, hybrid environments. You design your application and it's independent of the deployment model. You can design it and it deploys to public or develop it in the public cloud. And then you deploy it in the private cloud maybe for security purposes. But if you need extra resources you burst to the public cloud again. And it's all transparent, all easy one management interface. So what's the engineering underneath the covers? Because the more we talk about simplifying IT, the more complex IT gets underneath. Hopefully not to the user and the consumer. What's the engineering underneath the covers to create this convergence? So you've got to put a lot of energy into the architecture of course. And so there's different things like APIs and openness. We've got a very strong history of HP being open in the marketplace. And even when we introduced cloud system, we're open. So we actually support HP servers, storage, networking. You and I were blogging a little bit about this a little while ago. But we also support non-HP servers, non-HP networking, non-HP storage. So open this and then APIs so that these different deployment models can actually talk to each other. And one of the big things in this space that we've really showed some meat behind our converge cloud strategy is in the area of what we call cloud bursting. And bursting means I can use private cloud resources. But if I need extra resources, I can transparently just reach out to a public cloud provider. And grab resources from HP's public cloud, HP cloud services. And there might be, you know, you just need extra capacity or maybe you need to deploy your application in Singapore and you don't have a footprint in Singapore. So fine, just put it into Singapore using a public cloud provider just through this transparent interface. It's as easy as select a deployment model and take your application and just drop it in. So what happens to the data in that scenario, Nick? So Nick, one of the challenges we really see here, I mean, there's still a speed of light challenge and there's not enough bandwidth from here to there. So how do we solve that? How do we really do? Guys working on that speed of light problem? In the lab? We've got to talk to each of you in the lab, so now. There's an interesting- We'll have them all later this week. That's good, talk to them about speed of light. But yeah, you know, there's, you actually, this helps you in some of the performance models. Let me give you an example. One company that's doing scholastic testing out there. So if your child goes to school today, does a mathematics test, they do it online, right? What actually happens is the scholastic test is out in the public cloud and it's hosted on a public cloud as close to your child taking the test as possible for performance reasons, right? So you take your math test, you connect up to HV Cloud Services or Amazon or Savis, you get the test taken. And when you're done, then your marks get stored in the database. But the database is actually in the private cloud. So that's a kind of a use model where it actually makes sense to use a public cloud provider with the test as close to the student as possible, but from a security and perspective, you keep the data inside of your private cloud. In fact, there's regulations in various different countries, Canada, others have regulations that scholastic data, student data, must stay in a province or in a state or in the country, right? So it's an example, but it can actually improve performance. Does that make sense? Go ahead, sorry. And one of the things that we were, that I want to emphasize is, we're doing, we're unveiling new capabilities for our cloud solutions today at HV Discover and originally with Cloud System, which is our showcase solution for building a cloud, turnkey cloud for our customers, virtually turnkey cloud for our customers. Previously, we were able to burst to Savis and I think we talked about this before, but what we're announcing today is the ability to burst to HV Cloud Services, HV's public cloud offering as well as Amazon and then you'll see other cloud agile service provider partners show up even further in the future as well. So Meg obviously called out security as one of the things that CEOs are concerned about. And of course, security is a lot of process and policy around that. So when you talk about these different public cloud providers that you're integrating with, how do you, what do you tell customers to say, I'm concerned about my edicts transferring to these providers, I'm concerned about audits, I'm concerned about what an incident, I might define an incident differently than what they define an incident, the frequency of reporting. How do you rationalize and reconcile all those? Is that HP's role to do that as the sort of cloud integrator, cloud broker, if you will? Is that me as the customer who has to sort out all that stuff? Well, HP absolutely will step out to work with the customer. We have workshops, we have services, we can analyze a customer's environment with the customer, determine which applications should go across that line and which shouldn't. And the example of scholastic testing, it made sense for the test to be out, but not the actual scholastic data to be out. So we can sit down and we have sat down with many of our enterprise customers and done these workshops, assessed their applications, give them a roadmap of which applications can go, shouldn't go, and then work through it. So customers should think about this. I mean, you think about Amazon, Amazon's good for some stuff, it's not good for other things. You see, you're not trying to change Amazon and mold it into an enterprise wide play necessarily. You're saying, look, if Amazon is the right fit, let's use Amazon. If it's not, we're going to tell you it's not. And we're going to go to another cloud server. Well, the bottom line is businesses are using public cloud and the IT departments most of the time don't even know it because developers are finding that when they go to the IT department and say, I need some infrastructure to test a new version of my application, it takes them a month to get that set up. And that's way too slow, especially with agile development. Nowadays, there's a new version of that application to test every week and it may require different infrastructure as it evolves. So these developers are going to the public cloud. They're doing it, they're doing development out there and IT isn't in the loop. And with Converge Cloud and Cloud System, our objective here is to provide a self-service portal available for the developers. They say they need resources, they can get it from Amazon, they can get it from the private cloud in a matter of minutes or seconds. They can burst and move across the line very simply and easily. So that facilitates the IT department and the security department getting involved and working with the end customers, the end business because like I said, right now they're doing it and they may have not, they're taking maybe some chances in the security area but this kind of brings it all back together again to take a look at that. So obviously the management, the orchestration layer is critical here and Cloud Systems has been around now for a couple of years. Is this just an expansion of the existing management piece that you have there or is there something new on the management piece? Yeah, we've been in the marketplace for a number of years. We started with basic capabilities when it was Blade System Matrix in its first incarnation and then we moved to Cloud System, moved it to be much more open and heterogeneous, self-service, disaster recovery, capacity planning. With the latest announcements that we're making, we have bursting, like I said, additional bursting capabilities. We have a software only solution so you can take software, drop it on top of any VMware server or any Hyper-V server and within a day have your cloud up and running. So very, very quick, very, very simple. The cloud service automation software which is part of Cloud System has undergone a major announcement today as well, simplified user interface from a self-service portal perspective and then a graphical drag and drop designer to build out your application to lay it on top of the infrastructure. We've got a great drag and drop designer for infrastructure that I've demoed here last year and now this brings a graphical designer for the application on top of that to simplify. So yeah, we are incrementally adding capabilities to Cloud System and tying that to our public cloud offering and other partner cloud offerings and bringing it all together. So HP has a robust management portfolio for the cloud systems, what's the entry point for that? The entry point is Cloud System Matrix is the infrastructure as a service. You can push a button and get a whole set of infrastructure in minutes, it'll provision server, storage, networks, OSs, VMware, Hyper-V and some basic application deployment. Second step up is you deploy an entire application, lay down all the application logic, it manages, it patches it, it updates it so it doesn't just deploy it today and then six months from now, it's out of date because there's a new version. It keeps it up to date and if a rogue database administrator goes into that system and changes a configuration, it flags it and it remediates that and puts it back. But are we starting, pretty much starting at kind of a large enterprise or how far down market will this be? I've seen medium enterprises put in Cloud System, absolutely, I've seen service providers use it to build out their cloud offerings but now with this software offering where you can just take cloud system and within a day, layer it on top of any ESX or any VMware server, it's very much moving into the smaller mid-market space because it's much simpler to deploy. It's virtual machines only, you get more capabilities with the full solution but within a day, you get a good cloud up and running. So was that priced per VM then or what? That is, we're priced on a per server basis for the private cloud and a per VM basis as you burst out to the public cloud because I don't know how many servers are really going on behind the curtain, right? So we're priced on a per VM basis. Nick, we did a survey recently, we did a survey a year ago asking people what the predominant cloud strategy was. It was in public, it was in private, it was in hybrid, it's cloud a bunch of BS and it's a buzzword. And last year, very few single digits said yes, hybrid is our primary strategy and a sizable number of 15, 20% said it's just a meaningless buzzword. We did a survey exactly a year later and hybrid clouds through the roof, about 38%. Up and to the right, absolutely. Yeah, up and to the right and buzzword way down, still guys just getting started, there's a big chunk that's just getting started, maybe 15% but the hybrid off the charts. I've noticed that. Why is that? Well, at first hybrid was hype, right? And there wasn't a lot of backing as to, where's the substance of what can we really do with hybrid, there was a lot of people talking about hybrid and bursting, but until you can really do it and see it and have management systems and security that make it tangible, people didn't know exactly what it was. It wasn't a solution. It wasn't a solution. A lot of power points. But yeah, when you get down to brass tacks and deliver it, and you know, even when I was on stage bursting to Savas last year, that was not shipping at that point, but now it's absolutely shipping, we've got customers using it. People are going, I know what it is, because I got my hands on it. And so hybrid is definitely taking off, especially since people are noticing that their business is, the IT departments are noticing that their business is using public cloud. I think a lot of the yourselves, the industry analysts as well, are telling the IT organizations that it's happening, even if they don't know about it. Forrester, Gartner, others have written reports about this. So there's a lot more awareness that the business is using the public cloud, even though the IT department didn't know about it. Yeah, I mean, I think the other, right, you're touching on the other big change, which I've sort of observed, which is it was the techie guys, the developers spinning up EC2 instances, or it was small businesses that didn't have an IT shop. And now it's the traditional IT folks are saying, yeah, this is actually real. Yeah, and I've been in a room two years ago where we had a room with IT and then the next couple hours later, we had more room with business and we were talking about cloud. And I'd say 25% of the people actually folded their arms and went, you know, this cloud thing, I'm not going to let it into my company until I know exactly what's going on and how it integrates in and fits in. And the room over from the same companies, talking to the same companies at the business side, they're already in it. There was complete disconnect. You're right, you're right. You talked to IT folks that our organization is not doing external cloud, we're not doing internal, we'll go down the hall and we're like, oh yeah, we've been doing it for a year and a half. Yeah, absolutely. So I think most people have gotten a lot more awareness of what's really going on in their own companies. And they want a hybrid environment because some applications need to stay inside the four walls of the data center. Absolutely, but it does make sense to use a managed service provider and a public cloud provider for the right applications. And there's great reasons for that extra capacity, locality to customers. So use case after use cases is showing up. The other thing, we asked people what are you going to use? What initiatives, for which initiatives are you going to tap outside services? And it was cloud management, cloud deployment, cloud management, some little less cloud strategy. Those three really, cloud deployment and cloud management went right to the top. So people are doing it, big data strategy by the way was also up there, but big data deployments way low. Well, you know, back it up, cloud was low on the deployment some years, a couple of years ago. And I don't know, we've got at least 600 production private public clouds in all over the world. And that's definitely going up into the right. I expect big data to follow suit. 2012, you've heard of here. Wikibon, SiliconANGLE, 2012, the year of the cloud. Nick Vandersweep, thanks very much for coming back on theCUBE. It's great to see you. This is theCUBE and we're live from HP Discover in Las Vegas. Keep it right there, we'll be right back. We've got a CIO segment, keep it right there.