 Live from New York City, it's theCUBE. Covering Lenovo Transform 2017. Brought to you by Lenovo. Welcome back to theCUBE's coverage of Lenovo Transform. I'm your host, Rebecca Knight, along with my co-host, Stu Miniman, who is a senior analyst at Wikibon. We are joined today by Julian Box. He is the founder and CEO of Caligo. And Shikhar Mishra, who is the director of product management here at Lenovo. Thanks so much for coming on the show. Thank you. So Julian, I want to start with you. Tell us a little bit about Caligo and your business challenges. Okay, so Caligo is six years old now. We're a cloud service provider, but we do things slightly differently. So we were set up with Data Privacy at this call, which is a little bit of a paradox for cloud, of course, because you shouldn't really care where the data is, but I believe people would care where the date was and what laws were applicable and who could look at the data and so forth. So fast forward to today and we've had Edward Snowden and now we've got the EU GDPR, which some people will say is a lot tougher now because of Edward Snowden's stuff that he actually showed was going on. But interestingly, a lot of that stuff was really focused very much on the US, not really about outside the US. So we focus very much around any organization that touches EU citizens. So we have a privacy play around that. So we do it just slightly differently than a standard cloud service provider. And I do want to get into that new EU regulation you were talking about, but can you tell us a little bit about why you chose Lenovo? So there's a lot of history there. Right back in the day, I was true blue in the 80s, code in a way, in the mid-range, and I've always had that link with IBM and then through the acquisition that Lenovo did, we've flowed into Lenovo. And it's been actually very, very good. Some people questioned whether that was a good move, but I saw what they had done with the ThinkPad and ThinkRange and the PC, and I was pretty confident it was going to carry on. And we've been very, very happy with what we've had so far. Shaker, want to bring you into the discussion. We've been talking a lot about infrastructure, things like server, storage, and networking. Bring us into how cloud fits into the Lenovo portfolio and the announcements we've been talking about today. Okay, definitely. So if you really look at, you know, not the how, but why people are moving towards a hybrid cloud structure, people like as he was talking earlier, that service providers, I mean, they're looking really for the agility and simplicity of a lot of the public cloud brings, but then, you know, as Phil was talking, that a lot of the regulatory issues, SLA security concerns really prohibit them to actually put everything on a public cloud, right? So they want those benefits, but they want that at their own terms, right? And the best people who can provide that, there's one who are able to embrace openness, play with the ecosystem, like partners like Microsoft, Nutanix, and VMware, and also provide a very solid infrastructure to run those things, right? And we as a company, Lenovo, DCG can offer that, right? So those are the key value, but also going beyond that, if you think about cloud is really simple, but once you get it deployed and working, right? That is a big if there, right? And what we have done as a strategy is to simplify this, to increase the time to value for our customers, we promote this as a pre-integrated solution, which is really a turnkey with a simple support. So customers are not like running around for support or having to deploy it on their own terms, things like that. Yeah, I would actually say the idea of cloud is simple, once you really get into it, it's not so simple. I've been at the Amazon re-invent show for many years, they're adding like 1,000 new features every year. That's not simple. Julian, six years, I mean, that's like multiple lifetimes since you started your company. The whole service provider marketplace has changed a lot. Can you talk about what's been changing your business, and you're involved with a Microsoft Azure stack, how do you look at the public cloud and that hybrid layer and envision your role going forward? Yeah, so it has changed a lot. If someone had asked me that we would be doing a Microsoft stack cloud-based system a few years ago, I wouldn't have thought we would be, but because of the way people can see data and where it is and where it's held, there's more and more of a demand that I want my data and I want it executing in the location, the jurisdiction that I live in. So Microsoft and Amazon and all the other places, they can't be in every single country in the world. Clearly the scale's not there, even for them it's not. So the Azure stack is a way I think that Microsoft's gonna attempt to deal with some of those challenges around actually where data is processed. And that gives us an opportunity because we have a lot of clients that won't put their data into the Azure cloud because of where the Azure cloud actually is right now. But when we put it into the jurisdictions we're in, they will, you know, they've got a lot of people wanting to use it. So the sooner we get it, the better. So you look at it more from a actual physical location more than kind of control or governance back on? Well no, that all goes part and parcel, but starting point is jurisdictional position in the data. So with the EU, you're either in the EU or you're not in the EU clearly, but with the GDPR law, it's switching. It's switching to become where, who that person actually is. So at the moment, it's all around where the data is. With the GDPR, it's more focused on the individual. So the individual doesn't have to live in the EU anymore, but it's still protected by the same laws. So people do care very much so where the data is actually gonna be. And businesses don't wanna be caught out either and they have the challenges of actually, you know, processing the data or controlling the data as it's known. And as a service provider, one of the biggest changes for us is that we're now liable for some of the processing of what that actually happens to that data. So before it was just the client that was using it, now it's more proportionally between the two of us. So we have a role as a processor and they have a role as a controller of that data. So therefore again, it comes down to how do we minimize the risk? How do we ensure that we're meeting the obligations that we have under these new laws and it becomes easier if you're actually doing it in a jurisdiction that has the appropriate laws or it's physically in the EU. So there's a thing called an adequacy rating that the EU give to a certain set of countries, you can apply for it, anybody can apply for it, but only about a dozen or so countries around the world actually have it. And what this gives them is the ability to be seen as being in the EU, even though you're not in the EU from a data protection perspective. So companies are really fundamentally rethinking how they approach data privacy. Shekhar, how are you partnering with other companies and helping them work through this? I mean, your example with Calico and other companies too that are affected. So that is one of the biggest challenges if you think about this. And not only have the companies have to think about, yes I have to go to a cloud and have a cloud strategy, but the whole deployment model, the mindset of the companies themselves are also shifting and they need to shift. Very simple example I'll give you, for instance, we have a very prominent educational institute. Their budget right now was allocated to build three more buildings, for instance, to accommodate the influx of new students coming in. They're now talking to us with respect to Azure Stack that should I move some of that budget to build up an Azure Stack versus building a new building. So no one thought two years back that IT will be actually competing in the construction. I mean, it's very weird to think of that way. And one of the key reasons when you ask them is, look, Amazon is there, but I cannot just go there. I need that flexibility, but I need it on my own terms and this makes sense for me. So we are partnering with people like Microsoft to create those. We are doing innovations on a platform itself from the compute all the way to the networking. So as you asked earlier, we own end-to-end staff, whether it is compute, storage or networking, we have our own IP around it. So we can really create that security across the platform. And then we are not trying to kind of create an island for customers where you have to go towards the proprietary solution because that's totally against the old cloud model then. So that's why we partner with Microsoft, we have partnership VMware, we have partner with Nutanix and then other networking players also, but that kind of helps our clients to get the best-of-the-breed solution, the software on a best-of-the-breed infrastructure. Where do you see data privacy right now? I mean, famously Europeans and Americans look at data privacy very differently, just individually consumers also, businesses, Edward Snowden, is he a hero, is he a villain? I mean, there's so many questions and we're still really a society wrestling with all of this. How does Lenovo approach this? And you talked about the mindset. So from a piracy perspective, if you see that, I mean, we have a very strict policy around the security and what do you call the real, the sanity of the infrastructure itself. So we do unique things inside our infrastructure itself. We control our infrastructure lineup, the manufacturing and everything. We have certain features enabled, which are default, like IPv6, for instance, right? It won't let a server go in a default, in a mode where it can be compromised in any way. We bring that into our software stack all the way from the firmware. So those kind of things are helping us kind of drive and maintain that piracy machine. So Julian, Lenovo of course has a long history partnering both Intel and with Microsoft. When I look at the first generation of Azure Stack, there's not a lot of feature differentiation, at least it did. Microsoft says this is the configuration you're going to offer, kind of lock it in. So why Lenovo in your mind? Because there's another three companies, two of which have more market share and other positions. So what led you down the path of Lenovo? For me, it was very much the history that Lenovo and the Lenovo team that they inherited from IBM have got. They led the way when virtualization first came out. I remember when the 440 was released back in 2001, 2002, something like that. People didn't understand why it was being built because they were ahead of the game. They could see that virtualization has come in. And I think Lenovo has the edge from just a capabilities perspective. The X-Clarity tool is, I think it's the best management tool that's out there right now. And reliability, I've been using their technology for a very long time now in all its forms. And you can see why they're number one because they genuinely hardly ever, literally I can hardly think of in the last six years, we've probably replaced a couple of spinning disks. That's about it. It really is that reliable actually. So, Julian, I want to get your input. You've been looking at the Azure Stack here. Azure Packs existed for a while. We've been talking about Azure Stack for a couple of years. This will be a 1.0 release. Yep. What does it mean for your business and your customers? And how much do you feel, are there things that you're looking at beyond the 1.0 that will expand it even further? Yeah, clearly on the first version, it's not going to have every single feature that you want it to have. But it will have a lot of the things that our clients are calling for right now. And I'm speaking to them right now. And they're prepared to wait for the extra features to come along. Because right now they can't get any of it. So we're giving them a big chunk of it and they will take the extra features as they come along. As to the point you mentioned a little bit earlier about, you know, it is what we're given. That's true. But people want it to be exactly the same as the one in the, you know, the big one. So we don't care that it's not exactly the same. That said, it will be deployed alongside our standard infrastructure serving offering, which is what we call Cloud Core. And that is, again, it's all in OVO equipment, not just the Azure Stack. And, you know, we've been, we're 100% flash. We guarantee any workload. We do things very, very slightly differently in a lot of cases. And you combine these two technologies because clearly the Azure Stack does stuff that Cloud Core doesn't, and Cloud Core can do stuff that Azure doesn't do. So we actually think we can give a combination there that you wouldn't typically be able to get. And of course, they're right next to each other running at super high speeds and not different clouds going across, you know, much slower with higher latency links. So lots of, lots of positive stuff. And Chaker, from your standpoint in product development, you know, what excites you the most about Azure Stack and, you know, what your customers expect today and what features we see in the future from Lenovo? You know, you asked a question earlier that, you know, that is fixed and is that a constraint? Actually, in my view, I feel that other than minor tweaks, customers actually don't want a lot of variations because that actually simplifies their environment, right? And they want to make sure, because today there's a lot of overhead management. So what my group is really focused on is not about so much on what the infrastructure layer is, but more about what the end-to-end solution is. And not just from, you know, a point product, but how the customers are consuming their entire lifecycle of it, right? So all the way from when they start thinking about Azure Stack, for instance, how do you make sure that what kind of data is right on Azure and what is not? How do you make sure that, how much of Azure do they really need? How do they make sure that, you know, it's, you know, ordered and shipped promptly and then they can deploy it? And by the way, once you deploy it, how am I going to maintain it, right? So our on-site professionals go and train them. And then once you have it deployed, how do I do ongoing management? I'm going to have issues. Who's going to help me? Because this is now built with multiple things. So we think of all those end-to-end consumption and that's what the whole motivation around Think Agile is, to make all of that simplified for our clients. All the way from deployment to support the management, things like that. Yeah, I mean, a great point on the consistency because if you ask any customer, what version of Azure are you running? They'll laugh at you because Microsoft takes care of that. Exactly. And you would want, in the customer, the colleague's environment, it to be similar. Yeah. So for us, the fact that they're actually going to come and commission it for us, it's one less thing I have to organize. I have to resource. Literally, the rack turns up. They do the commission and give us two cables to plug into our core switches and away we go. So the time to delivery is far quicker for us. And as we want to roll these out quite quickly around the globe with everything else that we're up to at the moment, that's another massive plus for us. So we actually like the fact that it's coming in this set form. And these guys are going to look after it for us at that lower level. And we're operating and running it with our clients. And that, again, is a huge benefit for us. Julian Shekar, thank you so much for joining us. So it's been a pleasure. Thank you. I'm Rebecca Knight for Stu Miniman. We will have more from Lenovo Transform after this.