 From London, England, extracting the signal from the noise. It's theCUBE, Cover, Discover 2015. Brought to you by Hewlett Packard Enterprise. Now your hosts, John Furrier and Dave Vellante. Okay, welcome back everyone. We are here live in London. This is SiliconANGLE's theCUBE, our flagship program. We go out to the events, extract the signal noise. I'm John Furrier, the founder of SiliconANGLE. Dave Vellante, founder of wikibond.com. Our next guest is Mishkoi Al. He's the Senior Vice President of GM of the HP Storage Group at the HP Enterprise. Welcome back to theCUBE. Thank you. The new HPE, same as the old one, but now the official split, 180 days in the job. You came in right at the right time. Give us your take on the update with your group. What's happening? What's the new thing? What's hot here at HP Discover? Oh my God, John. I mean, I think timing could not have been better. So we, there is a massive disruption going on in the industry, as you know. I mean, the transformation from disk to flash. And HPE with its three-part product line and what we have done with flash is just absolutely the right product at the right time to catch that disruption. So the business has been, storage is a relatively low growth environment right now. But in that environment, we have our core product lines that are growing double digit. I mean, you know, three parts growing 29% year over year. Store ones is growing 14% year over year. It's a good time to be at HP. Dave always says three parts of the gift that keeps on giving. And at some point, you know, that's going to happen, be mature and be solid to build, based to build on. But the big story here is now this composable infrastructure. Another trend we're seeing storage kind of playing in and seeing storage kind of sprinkled into the whole composable message. You got hyper-converged, software defined, all flash, object store, now composable infrastructure. You guys got a lot of stuff going on. You guys are responding to the industry trends. But if you're a customer out there, you got to make sense of all this. How do you talk to customers? What are they saying? What's their vibe? Are they like, whoa, slow down or go faster? Or how do you simplify all this? I think there is actually, if we step back, there is a way to put a framework to sort through this madness, right? I mean, as you say, there's so many different questions coming out of storage buyer that's enough to drive anybody crazy. And the simplest way to perhaps sort through it is there is a technology vector and there is a consumption vector. And in the technology vector, there are certain applications and workloads which require a storage system or system-defined storage. And 3Power would be a great example of that. There are other applications and workloads where either the application is a shared nothing application or it's a virtual sand where that application can run on a software-delivered set of data services, which is running on industry servers, et cetera. And that's software-defined. So those are really the two big design centers in storage now and that's a new conversation. And then the customers are having to make a choice of saying, do they want to buy individual piece-part storage and integrate it into servers and networking? Or do they buy it as pre-integrated, pre-engineered solution? So do they buy it as converge infrastructure or do they buy it as hyper-converge appliances? So if you think of that as a two-by-two and say, do I want system-defined storage or software-defined storage? And do I want to consume it as piece-parts that I integrate myself or pre-integrated? I think that pretty much covers the entirety of the choice that you need to make. So that's the simplification. How about deployment? I mean, we're seeing management a challenge in all this now. What's going on with that piece of it? Is that technology or consumption or both? I think that's consumption primarily, right? So for the last several years, more and more customers are basically saying, listen, I need the vendor community to take on more and more of the ownership of the reducing the complexity of integration. That conversation started with converge infrastructure. I think that conversation is beginning to move to hyper-converge appliances. And the next step of that is hyper-convergence at data center scale or composable infrastructure. So that really is a continuum in that process. And people are liking it. They absolutely benefit from the simplification of ease of deployment, ease of management, ease of troubleshooting. Those are all benefits customers want more and more. So thinking about your career, you got background from Morton, McKinsey. You saw the industry split up. You saw net-app benefit from that sort of destructuring of de-vertical integration, if you will. Horizontal integration. And what did you learn from all that? And how do you see it changing and going forward? And how will that affect decisions that you think Hewlett Packard Enterprise should make? Yeah, I think there are two big forces going on right now. One is a technology conversation. The other is an industry forces and industry structure conversation. I think the technology conversation is about with storage becoming more and more memory-based. Compute and storage as a technology stacker coming closer together. So the viable vendors of the future have to have both compute and storage assets to be able to survive. So which is what you're beginning to see in terms of the industries moving from best-of-breed storage vendors to more and more integrated storage vendors, even if the solution is being sold as an integrated appliance or not. I mean, that's a slightly different kind of thing. That's the technology force. The industry structure force is a slowing of growth in the external storage market because of cloud consumption. And as is the case in any maturing market, industry consolidation is inevitable. So that is forcing the consolidation of smaller players or lower-scale players into larger entities. We saw that in enterprise software as Oracle kind of consolidated that space. We're absolutely beginning to see that in the enterprise hardware space. Yeah, and you're seeing that downward pressure on infrastructure pricing in hardware and software with open source, you mentioned cloud. You've done some M&A in your past. You got a new balance sheet to work with. I'm asking everybody, what's on your shopping list? I'm not getting many answers, but everybody seems to have a shopping list. But without getting to specifics, how do you think this changes M&A activity in the industries? EMC is a storage company. Could buy little things here and there, tuck them in. I mean, VMware is sort of an outlier. Even NetApp is a pure play. Do different things. You had flexibility. How does M&A change as the industry sort of reconsolidates? And my sense is that when we were in an industry structure where storage vendors were best-of-breed players, they were constantly looking for the next best-of-breed technology to tuck in, right? And EMC obviously made a fantastic sort of career out of doing that with the tuck ins of I think technologies like Clarion, Data Domain, Isilon, Extreme IO, you name it, right? But that was a, how do I keep enhancing my portfolio because I am the one-stop shop for storage for my customers? And it's okay if I have multiple different solutions. Now the conversation's moving to, how do I consolidate at the front end in terms of my customer footprint? And because it is now, again, a maturing industry structure, so the Dell EMC merger is a great example of that, right? So Dell EMC merger is essentially saying we're taking a multi-tensor billion dollar company, combining it with another multi-tensor billion dollar company because that's the only way we can get in front of the enterprise customers. So, you're talking about previously these tuck ins were TAM expansion, and yet to a point where you said storage isn't growing right now. So your TAM expansion comes from mega mergers. That's right. Okay, how do you think that affects your decision-making as it relates to your organization? I mean, we noticed this year that the, you don't have a lot of experience with HP Discovery, you got one in your back pocket, but you remember they were sort of stove-piped by the way the organization was structured. And now it's these four customer-facing areas. So how do you think that changes the way in which you guys behave? So for me it's a fascinating sort of difference if you will because I came from a pure play environment and coming into HPE, the single biggest thing that strikes me is just the sheer customer footprint we have by virtue of the fact that we are the number one server market share leader in the industry. So I don't feel from a storage leadership standpoint that I need to buy other storage companies simply to get more customer footprint because we already have the relationships that we need in every fortune company, every CIO, we just need to do a better and better job of parlaying our server footprint into broader storage conversations. That historically we have not done because as you said, we were siloed organizations and we were really having independent conversations. Oh, so phase one is a tachry. I mean, get that up. I mean, that's kind of a no-brainer, right? That's how you expand your serve market. But then beyond that, there's innovation. So that innovation is going to come from presumably combination of organic and inorganic. And that's something that HPE is now got approved. Do you agree that you could take organic innovation and get R&D out to product? What gives you confidence that HPE can do that? I think there is an HPE, sorry. So interestingly enough, HPE is always, at least in the storage space, had a history of doing a ton of acquisitions. In fact, three-par was an acquisition, right? Before that, so if I think about our two core platforms, it's based on left-hand networks and store virtual, which was an acquisition, and three-par, which was an acquisition, right? So there is a mindset of if we catch the right technology trend and we believe that it is more efficient for us to buy than build, we will absolutely use the power of our balance sheet to buy. My view of acquisitions always is that any acquisition has to live up to two rules, if you will. One is, if I buy a company, do I have the market power that I can significantly expand the sales of that product? To get instant ROI, essentially, yeah. Or, if I buy that product, will it help me sell significantly more of my existing products, right? And I think good acquisitions, sort of, meet those two criteria. And not an or. Right, and the bad acquisitions don't meet that criteria, and sometimes we get caught up in the technology or the deal and we let our discipline down, which is what we need to be watchful for. I mean, just talk about the growth. You mentioned it's a mature business. Certainly, storage is mature. You guys are still growing, even with the three-par. So you're taking shares, certainly, on the mature market. Different management techniques are involved in mature markets. We know that. But now, with the whole, you know, composable, you're seeing a whole other, I won't say a replacement, but it's an evolution, so it's adding another layer of growth. So there's new growth coming in with Agile and DevOps and Cloud. What's your vision on that? I mean, that's a growth opportunity. What's the innovation strategy and what's your vision? Yeah, I think for the next, for the foreseeable future, I mean, if we take a look at, let's say, 18 to 36 months, we are absolutely, as HP, storage, we are absolutely in a share shift mindset, right? So there are different strategies, as you said, for when the markets are growing, versus when you're taking share. When you're taking share, I fundamentally believe customers change only when one of two conditions exist. Either their existing choice is so painful that they have to relieve the pain, or the benefit of the alternative is so compelling that they're willing to pay the cost of change, right? So we have to live up to either of those two. And I believe right now, because of Flash, it is such a disruptive change going on that is forcing customers to change their architectural choices. And their strategic imperatives are driven around apps and embedded data value. That's a key driver too. So the industry forces are, that's the wins that you're back on that one. Yeah, I mean, the transition to an all Flash data center in the business of IT, we can use a lot of the different buzzwords, but ultimately it always boils down to, was it cheaper, better, and faster? And mostly, sometimes you get a value prop which is cheaper, sometimes it's better, sometimes it's faster. The transition to an all Flash data center simply is cheaper, better, and faster. And so if I understand you correctly, you're saying that the value of this all Flash is so great, it's going to cause people to essentially rip and replace their existing processes. And whether they stay with, say they have an EMC or a NetApp system, they're going to have to change those processes. So that's jump ball, and you guys can get in there. Is that, am I, I'm interpreting a lot here, but- That's exactly right. In fact, I was having a conversation with a customer yesterday, and we spent a half hour talking about how disruptive it is to bring a new technology. And at the same time the customer kept saying, and we are going to bring in all Flash. And at some point we connected the dots of saying, if you're going to bring in all Flash, it doesn't matter which vendor you go with, it will be a different technology. So the customers are beginning to internalize that the only way they can get the benefit of all Flash is by introducing a new technology, which really gives us a better footing and a better standing than we've ever had. Well, unless they're a three-part customer. That's the one unique situation. And that plays sort of an issue. Maybe it's another one, but that's the obvious one. That's what the growth is, but I got to get back to this question around the growth. So to your point, in the talk this morning you gave in one of the main theater was the end of storage as we know it. Or as you know, it was actual title. I got to ask you, we talked about this last time, David Scott had mentioned that it's hard to see the escape velocity of these startups. Certainly pure storage went public, $3 billion valuation. Is there a, will there be a billion dollar storage company solely focused? You were at NetApp, that was pretty much, in our mind the last revenue, a billion dollar company. But pure as a $3 billion valuation, not doing that kind of revenue. Will we see a billion dollar revenue company emerge in revenue growth since NetApp? It hasn't happened in the last 23 years, so it's very unlikely that's going to happen again, right? I mean, I think there are almost three phases of companies from startup inception to ultimate sort of demise, if you will. And the companies get to roughly, it seems like the VC formula is, get to as fast as possible to 100 million so that you can go IPO. And the current private valuations and public valuations are so inflated in the early stages of growth that that gives the early backers a handsome return. But very few companies get to that escape velocity, and as you mentioned, only three in the last several years have gotten to that point. It was nimble, pure, and potentially Nutanix, which is still private, right? But they're not doing a billion in revenue. The valuations are over a million. So they get to 100 million in revenue and their valuations are amazing multiple, right? But then, as you can see clearly with what happened with nimble, right? They missed a quarter by eight million and the valuation dropped by a billion. Now that's a multiple deflation of like eight million. Markets are very efficient, aren't they? Yeah, exactly. But so in the last 20 years, as you've seen, most of the companies, whether it was compelling, whether it was ecologic, whether it was three par, whether it was Icelon, whether it was data domain, every one of them got to the 250 to 300 million mark and ended up getting picked as becoming a part of somebody else's portfolio. Yeah, I mean, I just see that it's an M&A opportunity, but the valuation's so high. I mean, what was three par? Was two point something billion? Two point five billion. And you got pure at three. So that's got a drop and most certainly the exits been there, liquidities didn't be investors, but yeah. Well, but the difference is today you don't have the gaps in the Flash portfolio for the large companies that you had then in the virtualization side, or in the case of Icelon, EMC's, you know, scale out NAS gap, et cetera. I mean, but that's the fundamental question is, right? I mean, the fundamental question for all the startups is, are they really going after something that's a clear white space? Now, one could argue that in the case of Pure, at the time when the company was founded, it seemed like it was a white space. They closed fast. Right? But they closed fast, right? Certain white spaces are harder to close and NetApp was a great example that even 20 years later, people are still trying to build a compelling NAS solution and, you know, so certain advantages are more. Well, VCs are funding source, so we're seeing some out there, but they're all the go big or go home mentality. Something unique that will either hit or not. It's kind of binary. Well, there are a lot of storage startups popping up. I have a VM world this year. I was amazed at how many startups were sort of showcasing their way. What does that tell us? What does that mean? Well, it basically says there's an enormous amount of money looking for ideas. Okay, so that's one. So back to your talk. So you said in the talk, the era of the monolithic storage is over, or something to that effect. I don't know if that was the exact quote, but that was pretty much your statement. What does that mean? I mean, what does monolithic mean to you? I mean, I actually talked about Pure. That's a one siloed company with all flash, but what does monolithic storage mean? What does that error describe that? I mean, I may paraphrase that a little bit in terms of saying, I think the era of disk based storage is over, right? So we're clearly just like 30 years ago, we moved from tape based systems to disk based systems. We're now beginning to enter in a very vapid transition from disk based systems to memory based systems. Now, that has multiple implications. The first phase of it is storage systems will become memory based systems, like all flash arrays. At some point, memory will continue to get closer and closer to compute and the unit of infrastructure delivery will become this combined CPU, network and memory in a single form factor with the right sort of data services, data delivery capabilities. All right. Persistent high bandwidth, high processing power brick. That's right. So that's the hardware implication. The application implication is applications now increasingly being designed in a way that the persistence is being designed into the application layer as opposed to relying on the storage layer. So that's a shift as well. If the persistence is being handled by the application, if the application is relying on shared nothing models, it's relying on multiple replica models, then storage plays a very different role. Great, right. Manish, thanks for coming on theCUBE. Really appreciate your insight. I want to give you the final words. Share to the camera and to the audience directly your vision. You've been on the job for 180 days or so. Storage is the center of all the action, not only on the existing business, but in all of the solutions and the transformation areas, it's sprinkled everywhere obviously. Storage is the center of the action. Share with the audience your vision going forward. Next three to five years, what you're trying to do for the customers based on their feedback and the direction of the storage group within HP. I think the customers are looking for a single thing, which is how do we begin to deploy solutions that are constantly reducing the ever-increasing level of complexity they're dealing with. So the single thing that we are focused on is anything that reduces the customer complexity. At the technology level, it is the transition from a disk-based data center to an all-flash data center. At a delivery level, it is as HP, as Hewlett-Packard Enterprise, to be able to deliver compute networking and storage as a single-shop solution, wrapped up with infrastructure software, wrapped up with services, wrapped up with different financing models so that we can meet whatever customer consumption requirements are there. Ishka, scene rights president, general manager, storage group with HP Enterprise, the new HP Enterprise, of course it's theCUBE, wrapping it all up here. Day two, we've got more interviews coming up. Antonio Neary coming up shortly. Stay tuned. This is theCUBE. We'll be right back. Thanks for watching.