 Live from London, England, it's theCUBE. Covering Discover 2016 London. Brought to you by Hewlett Packard Enterprise. Now, here's your host, Dave Vellante and Paul Gillan. Back at Excel London, this is HPE Discover 2016. I'm here with Paul Gillan. This is day two of our live coverage of Discover. Rick Lewis is here. He is the Senior Vice President and General Manager of the Software Defined and Cloud Group. New role, congratulations on the expanded responsibilities. Thank you. Really appreciate it, it's a great mission that we have on behalf of Hewlett Packard Enterprise and I'm really enjoying it and we have a fantastic team. So it's a lot of fun. It's starting to come together, as you were saying, you know, if you're just sort of looking at the headlines and really not paying attention to what's going on, it might seem a little confusing, but it really makes sense what's happening with, I mean, infrastructure as a service, cloud, it's sort of all coming together in the industry and now your organization, right? Yeah, absolutely. What we've concluded at Hewlett Packard Enterprise by looking at the market is public cloud is certainly growing, it's maybe growing around 20%. Private cloud is growing almost as quickly, around 17%. We know from that and from working with our enterprise customers, it's going to be a hybrid world. And we believe that the company that makes that hybrid IT experience for their customers as simple and straightforward as possible is the company that's going to win. So make hybrid IT simple, that's the mission of my group and we're working on that and we're aligning our plans and products and well down the road in that direction. Well, now you're making it sound like a winner take all proposition. IBM has a story that it's telling, Oracle has a story that it's telling. Do you see this as being, in fact, one company will dominate? No, I don't see that at all. Is this going to be a kingmaker in the industry? No, I don't see it as being one company. I think it's good news that we're all headed a little bit in the same direction. It validates that they're seeing the same market trends that we're seeing. I think our approach and value proposition is fairly different than some of our competitors. Certainly our approach around being open, embracing as many infrastructure as a service standards as we can, container as a service, partnering, heavy partnering and a big ecosystem. You can see that in our software defined products. You can also see it in where we're going with our cloud software strategy. It's partnering, partnering, partnering. And you're seeing us make announcements on partnering. So I think the difference with us is we're headed in the same direction, but it's not about buy my entire stack with only my stuff and your life will be good. We want to make our customers' life good. However they want it pieced together, we just want to make sure that that experience is simple to them. And that they can run workloads on-prem and off-prem and do that as simply as possible. Well, HP has always been a profitable company. It's thrown off a lot of cash, but you've decided that you don't have to own the entire stack. There are others, as you say, you say, oh, we want to own the entire stack and that's another way to make money. So how did you come to that decision and why is partnering now so important in that context? Yeah, so I mentioned hybrid IT and that's the bullseye. As we look at that, we were watching what customers do. And even for us, if someone came to us and said we want a private cloud installation, for a while we're saying, okay, well we have open stack and we can help you with that and we have staccato with our Paz environment and we'll help you implement that private cloud. Well, what we're finding is it's great that we've got open stack now to where it's a enterprise class distribution and there are a lot of customers on that and we're continuing to support them. But we have more demand for broader environments, more integrated environments, things with traditional infrastructure mixed with cloud infrastructure and being able to do both worlds, the old style of applications and the new. So really it's not about, well, I'm going to do open stack with KVM for this type of stuff. I'm going to do that and I'm going to do traditional workloads with VMs and I'm going to do container as a service. So it's really, in order to cover that broad space and really do it in an optimal way, you have to partner with partners to be able to pull that up. But that doesn't mean you just say, we'll integrate whatever you want. You also want to provide some sort of foundation for them that has measurement, analytics, easy deployment, metering so that you can change the consumption model for customers. All those things could be consistent across the different IaaS styles or the different container styles. That's really where we're focusing our IP and our investment in the software stack. Carrying forward on the partner theme, I mean, this is really an unusual strategy as you said in the market, but it does place some demands on you. I mean, you have to be agnostic with your partners. Will you have favored partners or will every partner be treated the same? Certainly we even talk about specific preferred partners. So you could say that's favorite if you want, but that means we're just collaborating extremely close. But in all areas, we don't have a preferred partner that's the only partner we're going to work with in a specific area of the stack. We try to make sure that the leading solutions are provided for us. So for example, moving forward with containers, you've seen us have announcements with Docker. You've also seen Mesosphere on stage today. Two leading container kind of service provider, not service provider, but people working in the stack around containers. And we support both of those in our platforms and we'll continue to integrate at a higher level with both of those solutions and containers. And we're taking that same approach across the board, not just VMware for VMs, but embracing KVM as a VM alternative and making sure that we're partnering tight there. So that's kind of how we look at it. It's not every single partner. It's make sure that the customers have some alternatives, partner with the leading ones, Microsoft's another good example on a number of dimensions. And we've talked about Azure Stack, we've talked about Hyper-V, deep partnering with them and that. So it's pick the biggest players, make sure that we're partnering well, and then do the part that we do well, which is the whole surround it and make it simple for the customers to install and service and deploy on our infrastructure. Is it the idea that you will be the one, the one throat to choke? We definitely are eager to be that for our customers. There's no doubt about that. So even with our announcements about what we're doing with OpenSack and all that, we still are supporting our customers. We're still enabling them. We're still the people that they come to say, hey, help me with this solution. And they can go to those partners if they wish directly. We're okay with that, that's fine. We still sell hardware in those cases, absolutely fine by us. But when a customer comes to us and says, I want to implement hybrid IT, how do I do it? We say we got you covered and here's our solution, here's our IP around it, and here's the services we can bring to bear. Rick, in thinking about the Spin Merge, particularly the software going to the micro focus, generally speaking, many of those software components don't really affect your business. Maybe there's some workload affinity with Vertica maybe, but that's fine, you can still partner with them. The one area that I was a little bit surprised at, but I kind of understand it is security. So I wonder if you could comment on that. If it's a key fundamental part of what you're doing in cloud, how do you fill that gap? I mean, is it a partner strategy? Does it open up opportunities for you? Yeah, so security is a really important element. And I think one thing that you'll find is that, when people are not using our help, not using our IP, not using our infrastructure, not using things like cloud system where we bring things together or our software defined infrastructure, which we'll talk about in a minute, around our hyper-converged synergy, they're kind of piecing together their security strategy. What we're trying to do is, as we provide that management envelope that integrates pieces, we're trying to provide end to end security. So that means all the way down to TPM chips in the servers, mapped up through the software stack, all the way through the orchestration and analytics capabilities up through the top. There certainly were some security assets that went with the micro focus skin merge, but not all assets, right? And we certainly kept some security experts inside the company and we've got IP and development going on in that area. It's more now focused on enabling simple hybrid IT rather than security products, if you will, or security application products and selling those on the open market. So it's really focused on that, make hybrid IT simple for our customers. So if that IP enabled that mission, you kept it is what you're saying? For the most part. That's right, we looked really closely. In fact, myself went through everything and said, okay, what are the pieces that make the most sense here? And what are the pieces that make sense as an application piece of software that micro focus can do a great job with? And since partnering is core to our strategy, micro focus is now a huge partner of ours, as is SUSE, so really important. A lot of speculation about what the next year will bring HP is sitting on a lot of cash right now, that cash hoard is growing, acquisitions will be natural. Are there, is there a scenario in which you can get back into some of the software markets that you have left? Or is that really off the table right now? You know, I think it's unlikely for us to be looking a lot at things that aren't core to the key strategic pillars of Hewlett Packard Enterprise. The key strategic pillars, data center infrastructure, that's our world class, number one in the industry across a bunch of dimensions on servers and storage in those places. DCIG is the group that does that. The software defined things that I'm leading, that's about make the hybrid IT simple, and the intelligent edge, the IoT and Aruba things, those are the key strategic pillars of the company. So if we see opportunities where we see companies that could help us with those key strategic pillars, we're all over it. If it's acquire some piece of application software that's not really core to those pillars, we're not that interested in that. So, you know, just because we're deep in partnering doesn't mean we won't go after M&A, but it's going to be in the space where we think we add value. I felt like in the converged space, if we go back to the 2009, 2010 timeframe, HPE was early on there, certainly from a marketing standpoint. I felt like you fell a little bit behind. Some people don't like the fact that I've characterized that, but, and then I saw Synergy and Composable and the Hyperconverged 380 as sort of a leapfrog attempt, and I think a pretty successful one, but is that a fair characterization and what now differentiates you from the competition? You know, we definitely were the first company to talk about converged infrastructure, and yet as we rolled it out, we were not the market leader in rolling out that wave, and that's okay. We learned a lot from that whole experience, and I think it really helped us frame how we go after Composable infrastructure, and there is no doubt we are the market leader in Composable infrastructure. I would say that the competitors are probably a year to two behind us at least, and we're kind of watching really closely to see what people are doing. Some are out there saying, hey, we have that Composable infrastructure, but really the way Composable infrastructure is defined is fluid pools of resources that can be dynamically applied to applications and flexed against those applications or not, and the software-defined intelligence to make it happen, and a single UPI to get at those. So if they don't have compute storage and fabric in the infrastructure, you can't really flex all those elements that you need, and it has to be dynamic, and you have to have the infrastructure automation built in. That's our HPE OneView proprietary software to be able to do it, so we're definitely ahead in that. What we learned in converged infrastructure is keep the hammer down, keep moving like crazy, and make sure that your go-to-market is heavily enabled, and make sure you just keep the innovation train rolling. We almost treated it a little bit more as an experiment early on. Now we ended up with really good converged infrastructure offerings as well, and those are strong and leading in the market, CS700 and hyper-converged. At the same time, we learned a lot, and Composable infrastructure, we are full speed ahead and out there in the lead. So in that same vein, you kicked off this week with really the most detailed showing yet of the machine, of the architecture underlying the machine, and a lot of excitement about this. What are you going to do to drive that momentum? What have you learned from perhaps your hyper-converged experience? You're still a couple of years out from commercial product, but how are you going to drive that momentum? You know, I look at the machine, and a lot of people say, when is the machine shipping, right? When is this thing? And it really is not a product per se that has a deadline on its shipment. What it really is, is a research program that is influencing everything that we're doing. So it's influencing our infrastructure, it's influencing our software, and it's where we see the industry going. So for example, in my Synergy product, it's pre-plumbed for photonics because we were working on the machine at the same time and looking and saying, look, we're going to need photonics links in this platform. A data center infrastructure play like that can last in the market, not just in people's data centers, but for sale. I mean, a data center product like Blades has been for sale for 10 years, right? So as we go and implement Synergy, we know in that seven year lifetime, in the even three to five year lifetime, photonics are going to play a big part in that. So it's pre-plumbed for those capabilities. Photonics is a key element of the machine. That's where we did the initial work. That's where we're doing the photonic chip development, where we're doing that testing. So the machine itself is already influencing the product romance. Similarly with persistent memory. We have persistent memory dims in our hardware today at Hewlett Packard Enterprise. You're seeing that stuff creep in. So I don't necessarily think you'll see the machine chips on this day. I think what you'll see is, oh, there's a piece of that technology that came from machine. Here's another piece of technology. And ultimately we'll say, oh, that platform now is basically the machine because it's memory centric and it's got photonics in it and things kind of evolve. And I started out leading research programs and driving R&D programs early in my career. And I kind of saw that, the further things out, they always morph a bit, but then they always end up happening. You're on the right track, you just got to figure out what the productization of that looks like. Well, basically what you're describing is, the machine is this main spring of innovation that's going to find bits and pieces, you're going to find its way in. Exactly, there's OS innovation, there's photonic innovation, there's persistent memory innovation. Does the box have a fixed number of slots and a bunch of features? Yeah, but that's not the question. The question is, I think back to what I be ended with Watson in 2011 where they had this architecture that was going to be a long-term thing for them and that they wanted to be a big business and they spent years to explain to the market what this was and it was pretty cool. And you had the same thing here, it's pretty cool. How are you going to explain to the market as you begin rolling these components out, what's different about it? Yeah, I think we're doing that. You saw a little bit of a presentation on that here about memory centric architectures and I think we're early in that process and we need to let that bake. Right now we're a lot more focused on the platforms that we have, that we are shipping that customers can use to change their environment, which is really things like composable infrastructure. That makes sense. Which is now shipping in volume. I mean, customers can order that and have it within 30 days in their data center. And what are they saying to you about composable? Now that they've been in the market for a while. So, almost 100 early access customers, I spoke with you a little bit about them in Vegas I think a few months ago that we were just starting to ship to those customers and we were eager to get that going. Now they've got them, now they have them, they love it. That thing, there's been a few surprises along the way. We expected mostly the traditional style customers. The ones running virtualization or bare metal to grab it and just say, I want to try this thing out and see if it runs faster on my X application or I can start more VMs in it. We totally expected that because we knew customers but will they really start using it in this bimodal way? Will they really start doing containers on it? Will they really start using some of the cloud native things that we've integrated in? And the shocker is, most have. And I think it's because they get it in, they go, we got to try that out. Now we're still in the early dev test for a lot of them. Some are in production but some of them are in dev test. But they're exploring and using in multi-use case. In fact, we had at least five customers on stage in various sessions. I had three in my spotlight and one on the main stage and every one of those was kind of a mixed-use case. Customer that's talking about, here's how I use it for traditional apps, here's how I use it for new. Here's how I'm recomposing the architecture to meet needs like genomic mapping and all those examples. So just super excited and they love it. Yeah, so you're talking about really essentially describing an operational model change. Yes, for sure. And I wanted to ask you about your spotlight session. I think it was Antonio plugged you up on stage and then you did it, he said, if you want to really get into the technology go to the spotlight session. So were you sensing in that spotlight session a desire to change that operational model and evidence that that's actually happening? Yes, for sure. So one thing that we believe is that for a while I think people thought the way you're going to do private cloud in the data centers is everybody's going to go mimic what the public cloud guys do. And you're going to do this massive scale out architecture with big, heavy customized software layered on top of it and lots of cheap nodes and things like that. And really the data center for the enterprise, the enterprise, the masses of the enterprise. We kind of say, you know, there's double black diamond skiers in the enterprise data center. They're going to do everything custom. But there's a whole bunch of blue square and single black diamond that they are just saying, I need a roadmap to hybrid IT, make it simple for me. I don't want to deal with all this infrastructure stuff. My lines of business are logging onto the public cloud so they can develop apps like that. Can't you give me infrastructure that's already pre-integrated so I can do the same thing and be an internal service provider as IT for my lines of business? And that's exactly what we're providing. So they're really excited about that saying, look, I remain relevant now. I don't have all the app devs saying, I don't want to do it that way. I don't want to generate POs. I can carve out chunks of infrastructure and say, here's your sandbox, knock yourself out. Let me know when you're ready to roll that in production and we can do that. So it's a change in operation model but it's a pull change in operation model from their customers. The app devs and the lines of business are demanding this kind of performance from the on-prem infrastructure guys. They're also demanding that you can bridge to hybrid and that's why we announced our Cloud System 10 on Synergy is that does service provisioning for both AWS and Azure on that same platform. So you don't have to say, well, you have to choose on-prem or public, service provision both, run wherever you want and IT's back in control of where the workload lands and where the devs happens and it gets them back at peace with their line of businesses and their app developers. That's the magic of Synergy and that's why changing the process, it's a pull that they want to do it. They're motivated. Making IT heroes again. All right, Rick, we got to go. Thanks very much for coming back in theCUBE. Thank you guys so much. I always enjoy it. All right, our pleasure. Keep it right there, everybody will be back with our next guest. This is theCUBE, we're live from HPE Discover in London. Be right back.