 Hey everyone, welcome back to theCUBE's day two coverage of HPE Discover 2023 from the Venetian Expo, Lisa Martin with Dave Vellante. We are so pleased to be welcoming back the president and CEO of HPE to theCUBE, Antonio Neary. Antonio, it's great to have you back. Thanks for having me and thanks for covering the event. Our pleasure. It's great to be here. Absolutely, our pleasure. Five years, you said this yesterday was your sixth time as CEO on main stage. When I was leaving to get to set, it was January only. Eight to 10,000 people here, a couple of thousand partners. People are excited to be hearing breaking, bold announcements yesterday from HPE. Talk to us though about the last few years. Obviously the last three have been quite challenging. What are some of the takeaways, the success metrics that you are most proud of that HPE has delivered? Sure. Well, first of all, thank you for covering the event. It's always wonderful to be back in Vegas and host 10,000 customers actually and more than 1,500 partners. Plus our own staff, obviously, we've done an amazing job helping all of you and our customers go through a fabulous, I'll call it fabulous show floor. All our innovation is displayed there on the floor. And as I said yesterday, my sixth as a CEO, but 18, I have done 18 this company. So it's been a long time. And every time it's different. Every time it's great to be back. You can't really replace the energy and the adrenaline to meet with customers and partners. And yes, there was a great moment for us because after five years, the entire vision strategy came together. And if you recall in 2018, I stated that the edge will be the next frontier and it was gonna be a massive opportunity for all of us. We met a bet and the bet paid off. And you see that in the results. Since you ask what metrics really matters. In the end is, are we growing? Are we growing profitably? Are we getting share? And are we delivering value to our shareholders? And the edge business has done that. The business has tripled. We had the vision of hybrid cloud. And obviously that was not well understood at the time. Everybody said everything needs to go to the cloud, meaning the public cloud. And yesterday having partners like VMware and AWS on stage reaffirms that the vision was right. And GreenLake has done a phenomenal job in driving attention and stickiness on those engagements. And the business now is more than $10 billion in the balance sheet. And last but not least obviously was AI. Because everything is about AI. And we have a right to play with a unique intellectual property. And we announced I think a bold move to offer the first language model available as a service that you can privately train your data in a sustainable environment. So obviously out of here, we're going to see the pipeline that we create. That's obviously the important metric. But to me the most important metric Lisa is the customer feedback. I come here to listen and not just to tell but to listen and gather what is next in their minds so we can continue to address those challenges. And the financial metrics are an outcome of the customer adoption. And you still have some knobs to turn. Obviously the business is doing better. But I mean your HPC and AI has got a lot of upside storage. We were just talking to Tom Black. And the storage strategy has been kind of haphazard over the years. And now it's just seen some solid sort of momentum to it and it's been a clear strategy. What I want to ask you about your differentiated strategy because it's very clear that you're purposeful in that regard. A really good example is what you announced that LLMs is a service. It seems like you're not going to put your supercomputer IP in the public cloud. You're going to use that for your own advantage with the customers that you can directly affect. So can you explain to the audience your differentiated strategy and how that translates into what you're doing as a business? Yeah, I think it starts with a common vision of the experience we want to provide to our customers. And that's what I refer as the journey to one. One unified cloud operating experience. And that's what we have built inside HP GreenLake. That covers the edge to cloud spectrum of solutions and services that customers need to operate today in this cloud-native world. So that's number one. And if you listen to Fidelman's keynote early on, you can see how architecturally and technically we have done that. So it's easy for customers to get on the platform and it's easy for them to consume the services and it's easy for them to operate the entire hybrid IT enterprise. So that's one differentiation. Number two, obviously when you look at the services and the solutions underneath, the edge is an area where we have been driving a purpose-driven experience of mobile-first, cloud-first approach on the back of basically wireless connectivity but then offered the rest of the connectivity layer with the same kind of experience. And we have expanded that connectivity layer beyond systems to devices and things, but ultimately it's connecting people with data. And whether it was the switching portfolio, buffing the campus all the way to the data center now or whether it is now the addition of 5G because obviously customers want to take advantage of this revolution that 5G will bring to us, create new use cases. But at the core is all about the data, data, data, data. And I think that data-first modernization approach has given us a unique point of view and differentiation. And then from there on, obviously when you deploy a hybrid solution, you have to include the public cloud in that conversation because ultimately, workloads and data will live in both aspects on-prem and off-prem. But on-prem, we give the same experience and yesterday also we expanded through co-locations. So we treat everything like it's a cloud instance because we believe cloud is an experience not a destination. So whether you have a workload at the edge on your own data center or in a column or in a public cloud, we treat it the exact same way. And we understand it's multi-cloud and multi-stack on-prem. And then now with the data, remember I said, H-centric cloud-enable and data-driven, that data-driven has become a reality with the acceleration of the generative AI and NLMs. And that's where we have an opportunity to really participate in the cloud world. And I would like to say there have been three clouds. Now there are four clouds because one is very specialized. It's not the capacity cloud, it's the capability cloud. And we have a unique IP to be able to do so. Larry might have something to say to that, but that's okay. Yeah, I know. I think they've done a remarkable job of this stuff. But they also start from the database side. Of course, but I think there are some similarities in terms of a deliberate strategy in terms of differentiation. And M&A has been an interesting part of that transformation. I tweeted out earlier that HP, actually their M&A prior to the split was kind of haphazard and it's been very good. You weren't CEO during the Aruba, but you did that deal, I think, that was you. Which has been a pleasure. Actually, the little story is that my, when I was running the server and networking business, actually I was running the server business, then Bethany Meyer was running the networking business. She started with that thought. Then Bethany decided to take a different position outside HP and I completed that transaction all the way through. And now I asked Bethany to join my board. So Bethany now is part of my board of directors. And so I was talking to her yesterday because she came here to watch HP Discover. And she told me, well, you know, full circle, right? She's an amazing executive. A cube alum, really wonderful. But I mean, even just this year OpsRamp, which I mean, people are trying to, okay, where does that fit? And I think you got a lot of potential there. Packarderm, access security, Athonet was actually, it was brilliant. We were at MWC and Dell had just announced a partnership with Athonet and right afterwards, you guys announced you were acquiring them. So that was kind of clever. And even determined AI. So these really interesting, successful acquisitions on top of obviously Aruba was a big one. But how do you think of that sort of balance between M&A and Organic? You're seeing that in storage, an interesting combination, partnership. So how do you think about that balance? Well, as I always said, we cannot innovate everything. But to me, innovation is a three legs tool. Number one is our organic innovation. GreenLake is a great example of that. Obviously what we have done in the compute business and even in the HPC business for a long time with the clear acquisition, we acquire a super computer set of capabilities which are actually were not understood at the time, which is okay. It was Silicon and software to run large systems at a scale to deal exactly with the AI. And in that case, I will say, as people are coming now and saying AI is a big opportunity, the big investment, we already invested more than $2.6 billion in that business since 2019. And you mentioned some of the acquisitions. But the other piece of this is that you have to complement your own innovation with external innovation. Because the other thing you have to think about is bring different type of talent. And every acquisition we have brought brought a different way to think about issues or solutions. And that complemented our talent. And then the third piece of this is the broader partner ecosystem. And part of the partner ecosystem is to make strategic bets in small, call it startup companies. And if you look at the case of OpsRamp, it was actually done through our HP Pathfinder program. And then we realized, you know what? This is going to be a great asset to have as a part of GreenLake. Not only to address the IT operations management and the AI ops, but also to help with the sustainability challenge with custom theft. Yeah, Lisa, I think they put 35 million if I'm right into OpsRamp at the beginning. And so that's a big bet. And then you obviously acquired the company. Big bet. So we've been talking a lot about AI, super computing, the IP, the differentiation that AI, that, sorry, HPE has. How will, in your mind, HPE's prioritization of AI really boost the profitability of the HPC business, the AI business, and continue to drive the strategy that you're looking for. Yeah. So well, today we have a growing HPC and AI business driven by both the HPC aspect of the portfolio and the super computing aspects. But the reality is that when you think about super computer is a lumpy business because there are these massive, massive systems that have to go through the lifecycle of building it, deploying it, accepting it, and then eventually you'll get to recognize the revenue. And that's a long, long cycle. Some time can take 18 months, some time can take two years, depending on the size of the system and the complexity. And so with the, you know, the unveiling of the AI cloud as we get to introduce new space, we will be able to smooth that out because now you are leading in a software subscription model which is those are those AI applications. So yesterday we announced the LLMM, but there will be soon more. And we have the expertise in many of those AI models because we have done it in a discrete system, whether it's climate examples, whether it's molecular research, whether it is computer fluid dynamics. So we can take that and make it available in pre-package to everyone, to every vertical that needs that, but now it is offered as a service. And that will allow us to smooth entire profile of that specific P and L. Now when it comes down to differentiation, we have multiple areas of differentiation. Number one is exactly that. We know how to tune and train models at scale. We have done it for many, many years. Again, very specific customers, but we know what it takes. And that's a huge advantage. Number two, we have the infrastructure to run it at scale because we have unique IP both on the silicon side that allows us to give openness and choice to customers. Of course, NVIDIA is a big driver here, but it's also AMD and Intel. If you look at Frontier, it's an AMD system. That's a 1.2 exaflop system. If you look at Aurora, which is being deployed now, it's an Intel system and that will run two exaflops. But there is also NVIDIA system where they're deployed all over the world. And so in our AI cloud, we can offer the flexibility and the choice to customers. But then the software, the software to really optimize that infrastructure to the workload is what differentiates us. And then last but not least, I think our understanding of sustainability is a big, big component. And we started this journey with the intention to offer a carbon neutral AI offer and comes down to two things, trusted AI and sustainable AI. And on the trusted AI, you need to have these capabilities because the most important metric is accuracy and to drive accuracy, you need completion rates. And you've built up kind of going back to that IP portfolio. I mean, things like Slingshot, right? Which is really interesting and could potentially a differentiator. I want to, you said something on the earnings call. He said, I consider AI a massive inflection point, no different than Web 1.0 or mobile in different decades, potentially disrupt every industry, et cetera. HPE has a unique opportunity in that market because ultimately you need what I call, this is your words, a hybrid AI strategy. What do you mean by that? Because it's a life cycle, right? So we think about training, tuning and inference. You train, you can train in our cloud, you may train some aspects in the public cloud, but maybe there is a hybrid approach to that, depending on what type of workloads you're running. Tuning, obviously, is something that you may take a pre-packaged model and then perhaps you pick a pre-packaged model on the public cloud, but then you want to train at a big scale, you can do it in our cloud and then optimize it and last but not least, you go to the inference, which is ultimately what the value is because you have to deploy it and run it. And the inference is, I think, the long-term opportunity because your phone soon will be able to do 20 billion parameters, so it's going to be a very powerful inference device, but at the same time, when you go to large datasets, you may need a little bit more compute power and that's why we also introduced the HP ProLiant Gen11, tuned for these inference use cases. So there is an opportunity with a public cloud to partner and there is an opportunity to end, end-to-end life-cycle management. That's why I call it from the edge to the extra scale. But you also called out some advantages relative to the public cloud, specifically in generative AI and supercomputing. And you know that old saying, Andy Jassy's famous for saying, there's no compression algorithm for experience. Well, it works both ways. When you think of something like a storage stack, right? It's hard to build that. You've got supercomputer IP. Do you feel like it will be very difficult for the cloud providers to replicate what you have and does that give you, what kind of advantage does that give you? Well, I mean, if you think about how public clouds are being architected, right? Is a traditional network architecture at massive scale, right, with leaf and spine, where generic or general purpose workloads of sorts use that architecture to run workloads and connect to the data. When you go to this architecture, which is an AI native architecture, the network is completely different. You mentioned slingshot, right? That network runs and operates totally different. Obviously you need the network interference cars that connects with each GPU or CPU for them either and also a bunch of accelerators that come with it. And there is all about the silicon programmability with the contention software management. And that's what slingshot is all about. It takes many, many years to develop. But if you look at public clouds today, generally speaking, they have not developed the network. They have you be using, you know, companies like Aristo, Cisco or Juniper and the like. We have that proprietary network and so NVIDIA by the way, right? But ours actually opens up multiple ecosystems and we can support any of them. So it will take a lot of time and effort. And then also remember, you're now dealing with a whole different compute stack, which is direct liquid cooling. And that requires a whole different set of understanding and the data center is very different as well. So you mentioned NVIDIA, you're talking about the acquisition of Melanox, I presume, in Finneban. But so slingshot is, we should think of that as comparable IP and I think it's Ethernet based, is it? Ours is Ethernet based. Okay, so you've got the open standard, Ethernet's going to explode, it's been exploding, but it's now even got, you know, a huge headroom. I just wanted to ask you about, you mentioned sustainability earlier. It's a topic that we talk about. It's so important, it's so important to customers. I was talking with one of your folks yesterday who said that the volume of questions we get per quarter on sustainability and how HPE can help customers on their sustainability programs is just growing quarter over quarter. It's, you know, environmental responsibility. Where is sustainability really baked into HPE's product portfolio and how does that provide that unique approach, that differentiation in your mind? Yeah, so well, let's start first as a company, right? So we as a company are deeply committed to drive the best sustainability in all our offers, but also to ourselves. So we had the commitment to be net zero by 2050. The team and I pulled that by 10 years, but we are one of the only two companies that they are science-based certifies to achieve that goal. So that to me is a source of pride because it means we are doing it the right way, the hard way. No carable footprint credits, none of that, but really attack the fundamental problem and how we reduce the entire carable footprint from the design all the way to the runtime. Now, if you read our living progress report, which we just published two weeks ago, we already in one year reduce scope one and scope two emissions by more than 20%. And scope three slightly down, but in the context of our growth actually means we have taken it down. So we are very committed to that. Now, when it comes down to how we enable customers in addition to design better sustainable products, which obviously was one of the key principles for Gen 11 is also the fact how we give them the understanding and the data of what they are consuming, how much carable footprint they're consuming, how much energy they're consuming, and so forth. And this is where the sustainability dashboard, in fact, Fidelma just demonstrated that, is now available inside the platform. And with OpsRap, now we can actually provide a heterogeneous view of that because we can measure everything they have in the data center, whether it's HPE or another brand, and then also allow them to do their own deep analytics on top of that data. So I think it's one of a kind. I don't think it's available anywhere. And this is our commitment to continue to develop in the next releases, because the more data we get, the more intelligence we can build around. Go ahead, Lisi, you had a follow-up. I did, I was just wondering, do you see, and I think you're going to answer yes, sustainability is a lever to drive profitability, to drive revenue for HPE. Oh, there's no question, because CIOs now are being pressured to reduce the carable footprint. Many companies are already leading in the way they reward CIOs and any executive for that matter. So there has to be a direct correlation of action and reward. And so for us, it's important to lead that change. And honestly, when we compete for business, we see it every day. If you're not meeting certain requirements, you're not allowed to participate in any RFP or any business decisions they need to make. And last year we were able to actually pinpoint to almost a billion dollars of business we won't because of our sustainability opportunities that we have, but honesty capabilities that we deployed. Big change in the way it used to be 15 years ago. I want to close on culture. Often talked about topic, very important one, obviously. I got to taste it down in Houston in April 4th, I think it was. So you invited us or the team invited us to participate. It was storage day, but also to participate in all hands meeting. It was like a big party, right? Bobby Ford was the MC, was amazing. You came out, you had the cool sneakers on. It was a band playing. Late night, late night show, but informative and late night. It was awesome. I mean, and you really got a flavor for the culture. I don't think that was always the way. That's something that you guys brought when you moved to Houston. I mean, what if you could sort of back that a little bit. It's super important to me personally, but to the executive team. Someone said a long time ago that it starts and pretty much ends with culture. And if I think about the transformation journey we have been going through in the last five and a half years, yes, there is a lot of technical aspects, how you architect certain things. And you mentioned some of the solutions we have been working and delivering. But in the end, to me, the major takeaway is the cultural transformation. When you have a 30 billion dollar company and you have six line of businesses, which in their own, it could be their own company, you're now driving an horizontal innovation with basically a one common mission. And the human behavior is generally is like, I'm gonna de-risk myself first, and then I will contribute to the cause second. And that has been honestly the hardest part. Everybody has the best intention, but you have to be able to drive that in an intentional way. And to me has been about the culture of the organization, the culture of how we measure and reward people, but ultimately make it fun. What you saw is also a fun way to celebrate everything. And I see it in my engagement with employees, I go around here, obviously, people want to take pictures with you, it's a moment. But the message, someone the other day, I was walking to a dinner with the partners, he stopped me and says, and I just want to say something. I said, yeah, what is it? I said, my house burned down. I live in Oregon, I got caught by the wildfires and burned down. Within an hour, someone called me in HR and said, we understand you have this situation, how we can help you. It is $1,000 to get you in a hotel right away with your family. And that to me is everything because we are the core is about empathy. The core is about being people-centric. And right now in June 2023, we have the lowest attrition rate we ever had in the history of the company, low, low, low single digits. And at the same time, we have the highest employee engagement in the history of the company at 88%. So to me, that's a positive momentum. And ultimately, remember, the biggest job you have as a CEO is to plan succession and make sure all our employees can grow as we grow as a company and deliver the value to shareholders. Well, my goodness, do you have a lot to celebrate tonight? John Fogarty is going to cast stage. Yeah, I think I know. I heard your shoe game is strong. Is your dancing game up to par? No. I will do the intro and hand it to John. Is there a song you're looking forward to him too? No, no, I think, listen, I remember when I had my first Nintendo, one of the first songs was a joint Fogarty to play. They like you playing with the guitar. That was fun. But I think it's going to be wonderful. You know, it's different demographics, but in the end, it's going to rock the house. He is going to rock the house. Antonio, you rock the house here on theCUBE. Thank you. Thank you for joining Dave and me. Thank you for having me. Thank you for being with us for so many, many years. Yeah, you bet. And covering this wonderful event. Awesome to see you. Our pleasure. We love it. For Antonio Neary and Dave Vellante, I'm Lisa Martin. You're watching theCUBE. Up next, we're going to be talking with the Chief Product Officer of HPE and the CEO and founder of OpsTrump. You want to know about OpsTrump? Antonio, Dave talked about it. Stick around.