 The Cube at EMC World 2014 is brought to you by EMC. Redefine, VCE, innovating the world's first converged infrastructure solution for private cloud computing. Brocade, say goodbye to the status quo and hello to Brocade. Hey, welcome back everyone. We're here for the wrap up for day two on the Cube, our flagship program. SiliconANGLE and MugiBond, we go out to the event and track the signal from the noise. I'm John with Dave, Dave here for the wrap up. Got Dave, long day, how you feeling? We got a hold on the day tomorrow. I just want to say that today was a fun day because yesterday was very high energy. Today, high energy again. Pat Gelsinger giving the keynote. Big fan of Pat Gelsinger. He's really spends the time to come on the Cube. We had two other Cube alumni come on that are very notable and we've gotten to know over the past four years. Now going on our fifth season, Jeremy Burton and David Goulden. And we've had other folks come on. We just had the advanced software division. We're getting to know the groups, Dave. So I mean, it's exciting for me personally to get to know these tech athletes, these tech musicians, if you want to call it, whatever analogy you want to use, get to know them because they are serious players and EMC is under a lot of pressure. I mean, they've transformed their business. You know, Tutsi at the top, we've talked about the Federation. They've now branched out. They are executing this Federation strategy which is, in essence, a holding company across multiple portfolio of companies and products and executing well. And it's fun to get to know them and hear their insights. And what I've learned is, the master plan is coming together, Dave. Now, you could argue how much is coming from M&A and pure organic innovation. We'll see. I don't think the meat is on the bone on the R&D at that point, at this point. I think more M&A has certainly led the field in terms of activity. I want to get your take on that, specifically around the excitement around the, quote, third platform, the bridge to the third platform, execution of the Federation, and do they have organic R&D? Is there meat on the bone? Well, so let's take the third platform first. I mean, it's sort of a, to me, the third platform is kind of a euphemism for all new stuff. You know, I'm not really sure what the third platform is. I mean, I think it's, you know, IDC's defined it, but I don't really, I don't know when I see it. But I do think that there's a convergence of obviously cloud, big data, mobile, social. And I'm not sure the industry knows what that third platform looks like yet. I think they're trying to figure it out. I think it's a combination of, we have glimpses of what Amazon is doing in the public cloud. You talk a lot about DevOps. We spent a lot of time in Hadoop. Those worlds are slowly coming together. So anyway, let's assume that is, okay, the third platform. The big challenge for EMC is obviously, we had Jeffrey Moran last week at Service Now Knowledge. How do they cross the chasm? And the formula that they've chosen to cross the chasm is I think very innovative. They've selected this federation model. So you got Pivotal, which is, I guess a couple hundred million now because they've moved some assets out of there, growing at 40% per year. Has to grow faster, by the way. You got Amazon at three billion, growing at 60 to 70% a year. Not that Amazon and Pivotal are directly comparable, but they are in the sense that Amazon is the new, Pivotal is supposed to represent the new. You got VMware now, $5 billion software company, growing at 15 to 20% a year. That's a nice business with a lot of legs. But you see people trying to nip at their heels, whether it's Amazon, whether it's OpenStack, et cetera. HP, even, with its cloud. And then you've got EMC Classic, which is basically flat, right? The install base, you mean? No, the revenues are flat. And now, some of that was math, we heard from David Goulden, but the naysayers are going to point to that and say, aha, now it was, I called it accounting. I thought it was the way in which they accounted. He said it's math in terms of the way in which they deal with end of quarter builds. But nonetheless, they are on track to throw off $5.8 billion in cash, free cash flow this year. I love companies that throw off cash, because companies that throw off cash, cash gives you options. It gives you options to pay down debt. It gives you options to pay dividends, which EMC just increases dividends by 15%, keeping shareholders happy. When its stock is up, it has more flexibility to do things. It finance things like AirWatch. So the federation model, to me, is a really savvy way for Tucci and company to navigate through this turmoil. Because normally, companies that are in the previous platform, whether you call it platform two or whatever, get disrupted. And this is their angle on not getting disrupted. And you see the making investments. And yeah, I've always said, John, EMC is one of those companies that will always survive, they'll always find a way to win. They'll always gain share. They just, it's in their culture. I think to me, Dave, the big thing is Viper 2.0 has legs. It looks like it's going to have some meat there. I like that direction. I think that's a good bet. I honestly, last year, I thought it was great slideware. I think they didn't have much there. Clearly, they shipped. We heard Goulden pretty proud of that. Being a product manager on Nile, that was a good inside base. Well, we kid in fun, but apparently that's true. Supported by the Advanced Software Division president. I like what Viper's doing with OpenStack. I think EMC could actually be a bigger player in OpenStack than I thought. Certainly, I think the Cloud Foundry is a lot of hype right now. I think Cloud Foundry is a strategic asset, as Jeremy Burton pointed out. But I just see that as a lot of Barney action going on. I love you. A lot of deals getting done by Paul Moritz. I think Paul Moritz is going out and doing the deal, sitting down with people saying, I'm Paul Moritz, you're going to do a deal with us. And kind of making people feel good about it. But ultimately, that's good news for them, but they have to execute on that. They still have no community. That has to get stitched together. And they're basically betting out, the bet in the farm, that the methodology of the open source approach will work. Will an open governance model work? That's still unproven, right? So with Red Hat coming into the ring, other forces, that is not a sure thing. So I think the federations can certainly help that. So Cloud Foundry has a wind at their back with the federation support of Cloud Foundry. Yeah, so, you know, Viper's interesting. I mean, I still got a lot of questions about it. I think it looks good. I think it's solving a problem for EMC customers and that EMC customers have all these disparate systems and they need a way to bring them together and Viper does that. What I don't understand is whether or not, the world wants an open source object store. Viper's not that. And Viper, we heard from Jeremy, probably won't be that. EMC's going to keep that. They're going to have a, be able to get right to the API, but they're not going to open source it. So that's going to be kind of interesting. To me, open source is the wild card for this company, John. I think open source is a mega trend and I think EMC, VMware, they're dipping their toe in the water. They're not leading open stack by any means. I can't see any substantive contributions of ongoing development resources. They could provide, we heard some of the key things from the Advanced Software Division, separating this application from the hardware. If EMC can be a nice little lightweight glue layer, Dave, between rapid growing cloud development frameworks, whether it's agile development and or some data fabric layer, like what Pivotal's approaching, EMC could basically jury lock the whole thing. So that's Pivotal, right? I mean, that's what Pivotal's trying to do, but Pivotal and other people, the EMC could be independent and basically jury rig the whole thing for themselves to win the whole game. So again, to me, open source is the wild card for companies like EMC. I would say open source is a wild card for Amazon, too. It's a potential blind spot and it's disrupted so many industries. I mean, it essentially neutralized Microsoft Monopoly. We've seen the ascendancy of Red Hat. Now there aren't a lot of open source software companies, but open source as a phenomenon can create some incredible innovation. I think the moves that Red Hat is making in storage are very interesting, so those are things to watch. So we had the Vatican library on today that was exciting to hear that little Italiano, little accent there. We had Guy Church, who had always dynamic, Amitabh just recently on software. I mean, literally the stuff we talked about last year was what we talked about, what was on the keynote this week. David Goulden was superb, other notable guests we had, a lot of the Brocade guys on. You know, Brocade is one of those stories that a couple of years ago, people were like, oh, Brocade, you know, I'm going to go on there, I'm going to upload, actually the investments that they made back then, Clayco and company really made good calls and the wind was at their back now and they had a good spot around software to find networking, et cetera. And tomorrow, another blockbuster schedule. I mean, we're wall to wall. Tomorrow, we're setting a record here, the most CUBE interviews we've ever done at an event. I think we're going to be over 70. Brian Gallagher's coming on tomorrow. Brian Gallagher, John, he is a great perspective on the future. You know, here's his business, everybody's all under fire, everybody says it's dying, but you'll see tomorrow, he is so confident and has such a great perspective on the future. Stella Lowe is coming on, she's the new head of Com, she's the one who's organized all the AR and PR stuff. Jason Mendenhall from Switch is coming on, based in Vegas. Switch is a really interesting company and Jason is a guy who can really talk to how organizations like EMC are going to compete in VMware with the public cloud. Jonathan Martin's coming on, we're going to ask them to play the guitar, I hope. And of course, Howard Elias is coming on, the head of EMC Global Services, big time exec at EMC. So really excited about being here with you, John. Stay with us tomorrow, wall to wall day three here at Live in Las Vegas. This is the CUBE, we're out for day two, we'll see you tomorrow.