 Live from Las Vegas, Nevada. It's theCUBE at HP Discover 2014, brought to you by HP. Okay, welcome back everyone. Live here in Las Vegas for HP Discover 2014. This is theCUBE, our wrap-up day, day three. Let's wrap this whole show up, Dave. HP, fourth year now covering HP Discover. We've seen and we are chronicling and documenting the turnaround. We are embedded in reporters here inside HP doing social media magic, as we always do. How many interviews have we done? So many, I can't even count. Let's get the last. 23, well, I don't know, probably about 30. No, way, way over that, almost 40. Let's get the last burst of energy and then break it down here. Impressive. Is there a lot of flair? No, is there a lot of game-changing announcements? Yes, I think the HP high-performance computing thing is a game-changer. I think that innovation is fantastic. That's one. The turnaround, I just still think it's too slow, you know? I think, and the Khadifa comment you made earlier about him leaving, being kind of forced out or stepping down or whatever you want to kind of intimate really is about performance. Are they doing it fast enough? Meg Whitman got a round of applause, which said they're making the hard choices. They had layoffs and they're continuing to bleed a little bit, trim that fat down and produce some numbers at the same time, do innovation. But, you know, overall, you know, I think the health meter, I see the ship moving positively in the right direction, away from the icebergs, into the warmer waters. HP Cloud, a real bright spot, okay? There's a lot of energy there, they're evangelizing, but they're putting in the team together. You're going that next evolution. They're hanging iron off the foundation to build that skyscraper called OpenStack for the Enterprise. You have the storage group, you know, dropping a bomb on the hybrid flash. I liked that move, it was very stealthy. I would not expect that. And then HP Software, just continuing to mine their business and knit together some killer solutions with big data and the analytics side. So, overall, I think the storage piece is very positive. I'm very surprised with the HP Cloud stuff. And HP Storage is not going away. They're moving, moving the ball inch by inch. Well, I think, let's step back and look at the bigger picture here. You have to evaluate this company. And I agree with you, it's going too slow. Why is it so slow? I think you have to go back to the herd era. And what he did is he placated Wall Street, and he did a good job. Marker is an operator, he cut expenses, he got people focused, he focused on the go-to market. He's, I know guys who have worked for him, both in HP and in Oracle and other places, NCR. Guy is an operator, okay? So he was on a path. Now, my opinion was always that they were going to, HP was going to hit rocky waters because of the squeeze in R&D. And because of the piece parts really not coming together as well as they potentially could. Enter Leo Apatecker, disaster. One of the most disastrous 10 years of any CEO I can ever think of, started to juice up investments in various areas. Obviously, the mobile stuff pulled back on that, threw a lot of confusion out there, spinning off the PC division, sent this company into a tailspin. And they had to bring in a Silicon Valley veteran, Meg, you've said before, taking one for the team. And it took a long time to figure out what's going on, the autonomy acquisition. It just took a long time to get through all that crap. Those pieces were a mess. And I think you had leaders of those companies. It comes down to those acquisitions, John. I think HP has really got to figure that out coming into this, coming out of this downturn. Because you look at companies like IBM, EMC, Oracle, they do a really good job with these acquisitions. They find companies that either fit culturally or fit into their mold. And I think HP didn't do that with autonomy. I think it didn't do that with Vertica. And as a result, it wasn't able to leverage them early on. You had leaders of those companies that wanted to stay independent. And that didn't work. So Meg's finally got her hands around this thing. And she's still tweaking, making moves with Kadifa. Obviously she moved Donna Telly out. And that's part of the reason why it's taking so long. It's somewhat frustrating. But the good news is the valuation of this company has risen quite dramatically in the last 12 months. They're throwing off cash. They're paying down their debt. And I think there's nothing but upside for these guys. I think you're right, Dave. I think Meg Whitman is an interesting persona to evaluate her performance. Think about the dilemma she has and what she's done. She's had to come into HP and essentially write the ship. With a lot of great people here. And I got to say, I'm a big fan of HP and IBM for that matter. Both those companies have earned my respect because I've worked with them and I've seen, I know the people in there. Quality, quality individuals. At the same time, she's got to put the team together that's going to make the best move for the shareholders of the company. The shareholders of the company want innovation and they want performance. So you got to balance the short term performance of Wall Street expectations with innovation. And that is always a hard thing to do while you're hemorrhaging a PR disaster, which HP has had. I think she's done a good job. But she's not technical, right? So the thing that I've always watched, and I think I've said this on theCUBE when she's first started, when we were here, was that she's not technical. She's got some experience running for governor. She's running in CEO at eBay. She can run, she's an operator. She can smell what's right and what's wrong. She's, her strength is not technical, okay? So that being said, who within HP was going to rise up to be that steward for technology innovation? Who's there, Pat Gelsinger? I think Martin Fink is emerging as their, you're right, as the Pat Gelsinger. So we heard from multiple people. So now, okay, you're going to rearrange the chairs. Now in HP language, that's years, right? You just can't, HP is not the kind of company that can handle the trauma of just ripping out an executive and moving things around that fast, right? So if you look at HP, the culture is about gradual change. Under a timetable, I would grant, it's five years, it's still some nice runway for Meg, but still, still not enough time. So it's interesting to see the flushing of talent and who's leaving and who's staying, but I got to tell you, I'm impressed with the cloud. They're attracting really, really amazing people from the industry to work here. And so, you know, the notion that HP is a disaster, it's a tough place to work. Yeah, even when you're giving layoffs and you're trimming down, it can be sad. But they're attracting good people. The software team, Robert Young-Johns and his team are refreshing to talk to. They're not empty suits. So I see where it's going. You start to see the formation of the teams. I still think they're missing the developer angle 100%. I think they're winning with OpenStack in the developer community. I think they're groping on the software side with the developers. Vertica certainly has done well on the developer side, but I just don't see a coherent vision around developers worldwide under what HP can do for them. I mean, if you look at the big system vendors, IBM, HP, let's put EMC in that list. I guess Cisco, you've got to include them as well. And Oracle. When I look at Oracle, obviously, you get database and applications. You look at IBM, a huge software portfolio. EMC's got VMware. HP's got autonomy, it's got Vertica, it's got security, it's got little acquisitions here and there that it's picked up. You know, it's got a $5 billion software business. I don't know, $6 billion software business, 5%, 6% of the company revenue, not enough. They're missing that killer sort of component, whether it's, you know, a SaaS portfolio like IBM has, you know, or a slash database. Yes, they've got Vertica, but it's not a mainstream database. So that's missing. So they've got to grow that business. The question is, can that business grow fast enough and become a big enough contributor to power HP, to power the margins of this company? I don't see it. I think it's going to take some time and I've said all along, HP is going to have to get back into the acquisition game and get some corporate development folks in here that really can drive this company's inorganic growth, complimenting the organic growth that I'm starting to see. Now that's the other thing I wanted to mention. I've said many, many times, got to get back to the roots of Invent and I'm starting to see that. We've seen that innovation on the server side with Moonshot, we're seeing with Apollo, the piece that Martin Fink put forth to your point with the machine. Memorister, you know, the guys I talked to, some Jean-Luc Chattelain is convinced, you know, the CTO of data domain, we've had him on theCUBE many times, John, he's convinced that Memorister or something like it, some other non-volatile memory is going to take the enterprise by storm. Other guys like David Floyer, who's made some good calls, are saying they're not going to be able to compete with the volumes of Flash and DRAM. So that's going to be interesting. They're putting a big bet on that. But I like it, I like that they're inventing and innovating on that front. The OpenStack piece, again I love, just not big enough yet. No customers are actually implementing OpenStack and Sara said yesterday, you will by next year see some big names that are implementing OpenStack. Okay, we'll see. They've got to have that. So let's talk about the HP's high performance computing. What do you think about that? Because you and I were talking just a few weeks ago around our vision and editorial agenda and research agenda that we're putting together around HPC and the cloud, the intersection. Not in the cloud, but cloud and on-prem HPC. What's your take on GTA and Antonio Neary's approach there? Well, as Jim said, when you look at the top super computing installations, HP has participated in many, many of them. They've been in that niche for a long, long time. It's a quirky bunch. And the question is, I tell you, I used to run, not run, I mean, yes, I managed the high performance computing business at IDC under a woman named Deborah Goldfarb. She was really the brains behind it. But in just observing that space, so I'm not an expert in that space, but in observing that space for 20 years, I've been hearing that these technologies are going to go mainstream for 20 plus years, John. And they've not done so. And the reason is they're architecturally different. The availability attributes are different than what you typically see in the enterprise. That's why I asked the question on big data. I think big data is the conduit for HPC into the enterprise. And Jim said, well, you know, not really. And I think that because that was a marketing answer and Jim has a product that he can plug in, he's positioning for big data. But I think that that high performance computing technology that scale out that HPC file system type of approach is perfect for big data. Why? Because it's inexpensive in theory. It's fast. It's scale out. It's massively scalable. And it's a perfect fit, as I say, for big data. So that's where I think the conduit is. And I think I haven't seen that from HP. I want to hear more about how they're going to bring that to the enterprise. I was very impressed with HP's use of social media and they've been adopting our CrowdChat product day, which has been getting a lot of great reviews here. Some of the feedback from the folks is that we're going to use more of them. People are using the CrowdChat to meet each other. And I think what's been interesting is that that's been a fun social piece. So I'm seeing HP's social media teams really doing a better job this year than last. Every year it gets better, better and better. So overall, HP is retooling. I'm very impressed with them. And I think in my take, another successful event. Hi, great, John. I think this is, of all the HP discovers we've been to, I'm more excited about where HP is right now than I ever have been. And then, so we haven't talked about some of the stuff we talked about in day one, which is the Flash portfolio. I love what 3PAR is doing, driving costs below $2 a gigabyte. I think you're going to hear the same criticisms, it's a bolt-on, et cetera. But with HP's distribution channel, if they're really under $2 a gigabyte and they're, I like their positioning. Unlike EMC, who says, oh, it's going to take a long time for Flash to replace disk, numbers suggest that it's going to take till 2017, blah, blah, blah. HP's saying, no, there's no reason for high performance disk anymore. It's an oxymoron. I think they're right. And I think that positioning and that marketing is going to pay off for them. And I think they can be really aggressive there. Other parts of their portfolio, you know, man, it's okay, you know, store wants, it's nice. I think they've really got to beef up the software component there. And other parts of the portfolio, but 3PAR, as I've said many times, the gift that keeps on giving, that is the crown jewel on the storage side. I also like what Tom Joyce is doing with the converged infrastructure. They've now got a single SKU product. I think that positions them very well. I think they're working toward, related to what we were talking earlier on the service side, the hyperconvergence space. I think HP's very well positioned there. And it's HP, you know, so I think they're going to do well. So Barcelona's right around the corner. Dave, predictions. Let's go into our prediction mode. You know how we love to do predictions. Sometimes we fall flat on our face. Sometimes we get it right. Most of the time we get it right. So my prediction is that HP turnaround continues. I think the company's going to continue to move forward. I think the stock's going to continue to go up. I think this company is going to get to, I think their valuation is going to double over the next 12 to 24 months. That would be my prediction. That's a bold prediction, 24 month double double in value. I'm not sure I would agree with that on that. I don't think it's good. Well, you want a bold prediction, here it is. Certainly bold. We'll be in Barcelona. I like to be more accurate. So I see, almost my predictions come true, Dave. So that's why I won't go out in a little bit. About half of mine do. Okay. My prediction is I think you're going to see some aggressive M&A activity and start to come out. So now you see in Meg's keynote, the vibe was different with Meg's keynote. So that gives me some confidence that she's holding some cards back. I see the movement. I see people holding cards close to their chest. There's a pony in there somewhere. We're going to find it, but I believe that there's some new stuff going to spring out of HP, some new markets, new opportunities, but they're going to manage that with a risk management approach. I think it's going to be very conservative. With that being said, they have to do some things quickly. Now that they've got the runway gone, Dave, they're absorbing the autonomy hit, you're going to start to see some tuck-unders. You're going to start to see some deals that are strategic. I'm predicting the cloud team will start doing some acquisitions. Given the team that they got, I just cannot imagine them not, going to the free agency market, getting more talent, more capabilities, and moving quickly on the product-market fit to accelerate the open-source community around OpenStack, but more importantly, getting a more sales growth mindset around that cloud opportunity. And the software side, I think, you're going to see a much more accelerated effort around product-market fit for revenue. I think you're going to start to see some aggressive sales take place. And so that's going to happen to see some growth there. So my prediction is the software group will grow. The cloud group will start to really accelerate. I don't even think they've hit that hockey stick yet. I think they're still the bottom of the curve and hasn't even kicked up yet. So with that team, I'm just expecting- I like that prediction. And I've been saying for a while, HP's got to shrink before it grows. And I've also, I've sort of pushed Meg Whippin on this, Meg, you're saying you're not going to do any acquisitions until you pay down your debt. That's kind of draconian. I think you have to make acquisitions before you pay down that debt. And you should, but I think there've been so, there's such a backlash from the last acquisition. If our HP, I would be buying software as a service companies in the niche application space, vertical industries, other niche type of services, and I would be running them on my HP cloud to get critical mass. I would be shifting my portfolio toward software as a service because that is the future. Cloudification and software as a service, if you're in the software business, you have to have that capability. And that's where I would be investing in tuckins. So Rackspace has got a $5.3 billion valuation. Obviously HP can't afford it to do a proxy on that. So maybe nice to get Rackspace. They had Rackspace. But I just don't see that as a good fit. I mean, you mentioned that before. It's just too much legacy hosting there. Why do they want to be in that business? Whereas a distribution channel, I mean, they've got a distribution channel. Is it technology? They got open stack technology. Why Rackspace? I don't get that. One, the rumor is they're on the block. And then the second thing is, is that it's an interesting fit. I mean, with software with IBM, I was again, I'm falling on my sword. I completely was laughing at that acquisition. You know, I didn't have a lot of context, but when I started to dig in, what they did with Softlayer, you can see that the bare metal as a service is an interesting market, right? So- Why not buy Virtustream instead for a billion? Rodney's company. Why get all the baggage of Rackspace? Well, I'm not predicting, I'm just saying, Rackspace would be interesting. No, let's play M&A for a minute. Okay, open stack. If you're betting on open stack, right, and you're putting a billion dollars into development, or more, what's a couple more billion? Are they deficient in open stack, do you think? Who? HP. No, but in terms of open stack presence and open stack. See, I think they're deficient in public cloud. That's why, to me, an acquisition like Virtustream, you know, or, you know, a Softlayer before them, would be a better fit for HP than a Rackspace, which is, which is really a holster- I don't mean to rattle over, I'm wrapping this in as an example of a nice little brand that could be tucked under. If, I don't think IBM's healthy enough to handle that- Why would you want Rackspace? I don't get it. I just see Rackspace- All right, it's over, you'd be overpaying for an asset that just doesn't fit that well because it's got so much of a legacy baggage. Yeah, I think there's some value there, some synergy to tell you what I like about Rackspace from an HP standpoint. Again, I have not done the analysis, I'm just completely pulling this out of my, you know what. One, the brand has got some good value. Their employee customer-centric approach really fits HP's culture. HP is a culture of quality and serving customers. So the Rackspace fits there. Three, you got bare metals of service on the hosting side. Customer base you can build onto and bring public cloud into. You have public cloud, so. And they're in the open stack community. So, and they're a leader. They like the inventors. So just kind of, you know, it would get my attention. Now the numbers probably don't work out. My point is, you can tuck that in. It's not a tuck under, it's a major deal. But that's all I'm saying. Yeah, now I'm throwing off Virtustream and I really haven't done the analysis either. But I don't think you get public cloud with Rackspace because I think Amazon is kicking the crap out of Rackspace. Well, I mean Amazon will continue to kick the crap out of HP because their public cloud is not as viable. But okay, well will Amazon continue to kick, here's the question. Will Amazon continue to kick the crap out of IBM? I think IBM is going to beef up its, swipe the credit card service with SoftLayer. Now maybe I'm wrong about that. Maybe they'll try to stick with the private cloud. Maybe that's just a red herring. But I think with SoftLayer, they have the capability to do that. I think HP needs to replicate that because I think they're given lip service to the public cloud and I think that's a mistake. Well, I think the public cloud is a really interesting play in small, medium-sized enterprise. For instance, we were at the Nimblesoft Restorage event. The mid-sized market is huge. And the legacy in that market is telephone closet, servers, channel partner, doing Outlook email upgrades. When you put everything's platform as a service, softwares as a service, serves a huge market. If you think about how fast HP or IBM could onboard the software market that's in the mid-range, huge opportunity, everything can win there. So I think there's a huge tsunami in the small, medium-sized business and enterprise that could be great. So, okay, overall quick view, quick summary. Let's end this thing now. Put a bow on the show. I think to me, John, again, you're seeing upward momentum for HP. It's not, as Dave Scott says, escape velocity, but it's momentum in the right direction. I am more positive on HP than I have been in four or five years. I think the various parts of their business are from a product portfolio standpoint in pretty good shape. And I think they can continue to increase the value of this company. I do not think as a company they will grow. I think they will continue to shrink as a company and that's okay. I think they have to shrink before they can grow, before they can start doing acquisitions, but I like where they are. I think their portfolio is stable and I'm encouraged. I think HP's image of humanization of the culture is to get back. I think you're seeing a spring in their step, you're bringing in some good mojo from the employee base. I think you're starting to see people start to realize, let's just get through with this and move forward. Let's just say that we're recovered. It's like we are speeding to the new destination, the new style of IT. I love that. I love the rhetoric around this new style of IT. It's a DevOps culture, cloud and software. It's all big data. All that's happening. Beautiful positioning. Obviously it's positioning that we love, cloud and noble social, big data. But I think they're on the right track. My summary is people are pumping. The engine's almost at full strength and now they got to start showing some results. So we'll see what goes on in Barcelona. But again, impressive. Impressive group at the cloud. Again, great people we interviewed on theCUBE. It's been fantastic. Thanks for watching. This is a close wrap up here at HP Discover. This has been theCUBE. We're attracting the signal. And those I'm John Furrier with Dave Vellante. Thanks for watching and stay tuned for more CUBE. Go to siliconangle.tv to find out our next event and wikibon.org for all the free research and of course siliconangle.com for all of our blog commentary and of course theCUBE on YouTube. Thanks for watching. We'll see you next time.