 Live from Las Vegas, it's theCUBE covering HPE Discover 2017 brought to you by Hewlett Packard Enterprise. Hey, welcome back everyone. This is theCUBE's day two coverage of HPE Discover 2017. We're here live in Las Vegas, I'm John Furrier, the co-founder of SiliconANGLE Media, my other co-founder, Dave Vellante, head of research at wikibon.com. And our next guests are Kevin Wan, Director of Software Defined Cloud Group at Marketing at HPE and William Fellow's co-founder and VP of Research at 451 Research, well-known research firm with wikibon and other research firms out there covering the cloud. Guys, welcome to theCUBE. Thanks for having us. It's a exciting day today. So the first thing I want to get into here is, we were just talking before that we went on live about multi-cloud and kind of having a great debate. It's great because it's a great debate because it really is a hard definition to knock down. And wikibon has done some research. You've got some new research. I want to get into that. They've done something called True Private Cloud that shows not a decline in on-prem and server deployments. Actually, an increase. Hybrid cloud is increasing. You guys got some new research. What is the state of enterprises with respect to moving to cloud vis-a-vis hybrid? Because certainly there's movement there. What's going on? So users want to make decisions about where to place applications and workloads and source services based upon policy, based upon latency, based upon geography, and so on. And as the worlds of cloud and hosting and co-location and managed services as they converge, those options are growing exponentially. And what HP has been doing is to bring into view tools which allow organizations to select those best environments to meet their hybrid IT needs. So what we've seen in 451 research is that between now and the next couple of years, there's going to be an increased momentum to put those workloads and applications into different kinds of cloud environments. In other words, when you talk to an organization, they say, well, we've got a bit of SaaS here. We're using a bit of public cloud here. We're using a lot of hosted services and we're doing things on-premise already. They're using multiple cloud services. So when we've asked our global commentator network of about 60,000 folks for whom Enterprise IT is their day job, which we call Voice of the Enterprise, they've told us that between now and in two years' time, existing 40% of workloads in those cloud environments is going to become 60%. In other words, the majority of workloads in two years' time are going to be running in some kind of cloud environment. Now, the mix of those is going to be different, depending on different organizations. But we found a variance of less than about 10% across different vertical markets, which suggests there's an interesting benchmark, if you like, a right mix coming into view in terms of the balance of when you would use public cloud services, when you would use hosted private, and when you would use on-premise services. Ken, I want to get your thoughts on this, because that's a great point he's bringing up. The cloud business model is not necessarily, I have to move it to public. You can do cloud-like on-premise. That's where the true private cloud comes into your point. There is a massive shift to cloud-like, and there's a trend towards the same software on-prem as in the cloud. So as this thing gets laid out, you're seeing that path. So just because you're still on-prem doesn't make you not cloud, right? That's exactly right. And so what we're seeing is, as William was saying, is that there's an interest in figuring out where is the best place for workload to go, based on its performance needs, its security compliance, cost needs. And often we find that sometimes a traditional IT, leaving it in a traditional IT environment is the best thing to do. Sometimes it's best to put it into a private cloud. Sometimes it's best to put it into a public cloud. And so we're seeing a lot of customers with multiple clouds, on average somewhere between five and eight clouds today. And the challenge it's starting to have now is, my God, I've got five to eight clouds, how do I manage all this? How'd that happen? Cloud sprawl. And so, but there's very little interoperability between them. And so you have different stacks of management before each of these clouds and there's a fair amount of resource required to manage all these different clouds. So I think what the next thing you'll start seeing are tools that allow you to migrate resources or look at clouds more holistically and to analyze the entire cloud environment, all the multiple clouds, and to be able to use policy or analyze where is the best location automatically and to be able to pull cost data out, performance data out across the whole cloud environment. And this is what we, 451 Research, have been calling best execution venue for about 10 years now. So the idea is that for every class of IT related business need, there's an environment which best balances performance and cost and other things. And IT should be able to deploy to that environment automatically and get the benefits associated with having things in the right resources and the right services that they need. That's right, and our view is that people need to figure out their right mix, right? Every company will use a different amount of SaaS, a different amount of private cloud, public cloud, based on their company's strategy. You know, an online bank will have different requirements than a brick and mortar bank, as an example. Even though they're in the same industry, because their business models are different, their mix will be different. So we work with each company to figure out what their right mix should be. Where do they need that portability? One of the exciting things that we're doing today at Discover is talking about Microsoft Azure Stack, which we've worked with Microsoft to bring out this new offering that provides full compatibility between what's running on-premise and what's running in the public cloud. So Azure Stack gives us the ability to run Azure consistent services right out of your data center, with its fully API compatible. So that means that as a developer, I can write an application and deploy it into either a public cloud or a private cloud with no change to the code at all. The extensibility is the key message there. You don't have to adopt Azure Stack for the Azure cloud. You can actually mirror that on-prem in a cloud-like way. That's still on-prem. You can call that private cloud. I mean, you can call it private cloud, but that's what it is. Right, right. But that's obviously going to resonate with developers, this whole notion of infrastructure as code. So one of the things that CEOs complain about is we spend way too much money on non-differentiated infrastructure management. And so to the extent that you're putting in these clouds, private cloud, whatever, hybrid clouds, that substantially mimic public cloud, William, what does your research show in terms of how organizations are shifting their spending on labor? If that premise is true, that CEOs don't want to spend it on provisioning loans, but they do want to initiate digital transformation initiatives, are you seeing any evidence that this notion of cloud is helping on-prem, is helping them shift their spending on labor? So what I would say is that cloud provides the basis and a platform for broader digital transformation agendas. And cloud brings with it some really important changes in the operating model, which affect staffing and how you do these things. So for example, moving from a processor development, which is waterfall or top-down to agile, from moving from a situation where resources are allocated from one where they are consumption-based. So from installing new things in different silos to where things are updated on a continuous basis. So those things have a dramatic effect on the way you organize internally in order to support that, which indeed then sets you up for doing these things that would create a digital platform. So linking technology, information assets, customer experience, marketing, and so on. And I think DevOps is at the heart of that because it provides the automation, the process change. Because remember what we're talking about here is moving from a world in which you've talked about the silos to one in which is collaborative, to one in which is multi-directional, and to one which is based on sharing. And I think all of those things have an impact on how you start for those. I think there's been enough research to understand that not everyone is going to make it necessarily in this transformation. But I think our research indicates that at least two-thirds of the folks inside an organization buy into the things that they will need to be doing in order to support this digital transformation. Yeah, we've certainly seen the many customers that I've talked to look at this and see this huge opportunity for essentially automating a lot of functions, dealing with the loans and networks, installing the applications, the databases, all of that. And through this automation, all these people who used to do this now are available to be re-skilled to do higher-level, more value-differentiating sorts of work. You know, all these IT departments are struggling because they want to focus more of their effort on new services, but there is so much work to just maintaining existing services, they don't have the time. So one of the things that cloud does is through automating it allows them to reduce the mundane day-to-day time and take those resources and move them on the more differentiated value creating types of services so that they can advance their businesses in a much more compelling way. Can, an interesting point, I mean, yesterday we were talking about IT, information technology, those two words. I mean, they're not going away, they're only getting stronger. And it's interesting that some of the narrative in the media is the decline of servers, decline of storage shipments. Now, I get that, those boxes may or may not be sold in the same volumes as it was before, but the growth is shifting somewhere else. And that's interesting, I want to get your thoughts on that because it's not a decline in IT. IT is growing, if you look at the private cloud and your report, suggests that it's a massive growth. So to your point about shifting to the value stack is interesting. So what are you seeing with customers? How, what specifically are they doing in that shift with IT resources? Is it app development? Is it more operational automation? What are some of the things that you're observing? We're seeing through this digital transformation, a desire to automate a lot of the common functions that they used to automate so that they can spin up services, spin up VMs in minutes rather than days, being able to provide past services to their developers. So the developers, instead of getting a VM from the IT department, then having to load in the database, the middleware, all those development tools that he should go into his environment, request an environment and the environment automatically comes up. So now the developer doesn't have to spend time figuring out what version of database, what version of middleware, all that. The environment's up and running and he can just focus on writing code, which is ultimately what we want to do is to help our customers get the developers doing more of what they do best, which is writing code and less of this infrastructure management concept. Yes, they automate a way and they move to higher value. I guess at the top of the pile there, the old adage used to be that for CIOs, cloud meant career is over, but what that really should apply, it means becoming the chief innovation officer and returning to innovating for the business rather than just keeping the lights on, right? That's right, it gives the IT folks an opportunity to think about how can you apply this new technology to the business challenges that the line of businesses are having so that they can bring together those thoughts. So very often the line of business guys don't know enough about the technology and the technology guys don't know enough about the line of business. You've got to have somebody who knows both sides who can see how you can apply new technology to accelerate the business. So that underscores that the organizational roles are changing, less, like you say, doing this provisioning, server provisioning, more strategic initiatives. There's an area in the marketplace that everybody's sort of talking about is jump ball, which is this multi-cloud, inter-cloud management. Nobody really dominates that. Hewlett Packard Enterprise obviously has a good position there. So first question is what are you seeing in terms of the changing role of the IT department, the gestalt of that, and what does that mean in terms of opportunities for Hewlett Packard Enterprise? Maybe William, you could take the first question. So what I would say is that the IT department is increasingly becoming a broker of services, both those that are created internally and those that are procured from outside. And so what they need is a way to be able to provision those, to be able to manage, to build, and meter and charge for those, to implement security and governance and so on. So what we're seeing is the rise of sets of cloud management technologies and writ large, we talk about a cloud management platform that enables users to find, access and use, a range of different kind of services. And this is what HP is going to be providing with the new stack. And the new stack is effectively a cloud management platform. Absolutely. Right? So talk about the opportunity that you see from Hewlett Packard Enterprise's perspective. So what we see is exactly the challenge that you laid out is that there's a lot of different clouds out there, but there's still a lot of manual work to have to configure and manage them individually. And so one of the things that we announced at the show is something that we call Project New Stack. So this is a vision for how we're going to enable our customers to manage a multi-cloud environment. So you imagine if someone is using AWS, Azure, Google, VMware, OpenStack. Containers. Containers. Kubernetes. And you have a way to look across all of these different clouds and say, I can see where my spend is. I can see where my capacity is. And I can do that not only as a whole, but from my finance department, they can see their part as well. The HR department can see their resource usage. So now we have a way to look across the entire computing environment, the cloud environment, and understand cost, utilization, performance at a more holistic level rather than at an individual level. So we look at this from three different personas who have to think about this. We're talking about people and organizations. So one of these personas is the IT guy. He has to worry about operations. So we give him a portal where he can set this environment up where we can make connectivity into all these services on the public cloud, the private cloud. We have a different persona where it was the developer. So that developer doesn't care about the infrastructure. They don't care. All they want is access to their development tools. So we give them access to a whole marketplace of different tools, whether that's Chef, Puppet, all these Ansible, all these tools that they can use to do their DevOps work. And then there's the line of business. There's the line of business, again, he doesn't care about the network or the storage. What he cares about is how much money am I spending? Are my services meeting their performance requirements? So we see the shift to these three very clear personas that need to interact with this environment, what we call Project Newstack, and to look at how we enable this multi-cloud environment. So Project Newstack supports this notion of an IT operations management center that allows me to have full visibility and control over all my clouds, my SaaS, my on-prem, my public clouds, protecting that data, securing that data. How far away are we from that Nirvana? Well, and to be not to be locked in, right? Because I think one of the things that factorizes Project Newstack versus other approaches is that it allows organizations to access and use different kinds of services. Because the danger with these things is that, when everyone talks about a single pane of glass that they can easily become a single glass of pain if they don't allow you to do these things, right? That's correct. And one of the challenges we see from the developer world is developers like to use the tools they like to use. So they don't like to be told what to do. So it's very important that there's a broad ability for the developers to bring in the latest and greatest tool that they're working with, just heard about, to bring in, because it's going to make their job a lot easier. So this Project Newstack has strong integrations to third-party products and ability to bring in new developer tools. This is a challenging opportunity. I want to, we should follow up on this, but I want to get your final thoughts on this, both of you, because this is an interesting challenge, but an opportunity. Too many tools, same hammer, five different versions of a hammer that have now multi-cloud, which has kind of been by accident on purpose. People just got Amazon over here. They wake up and they go, oh my God, I'm in multiple clouds. That doesn't mean multi-cloud in the sense of seamless workloads moving around to the best resource. So in a way, there's an existing kind of legacy setup here. So your thoughts on how customers can manage this, is that accurate? Do you agree or? So there is, so you raise a good point. So there is a small percentage of folks who are using multiple clouds to fulfill a single business process. However, the majority, when they say hybrid cloud, it just means they're using different clouds to meet different needs at different times. More workloads on Azure. I got Office 365. I got some analytics on Redshift. Exactly, but what we haven't seen is organizations moving workloads and applications between clouds based upon minute by minute or penny by penny changes in price. However, the world that HPE and other folks envisage is one where you will be able to, because of the needs of a particular application or a geography or a latency, you will be able to move data between things. More cost, as you said. So build a stack for your company basically. So you're essentially giving a composability fabric. Go to a company saying, hey, there's no general purpose products anymore. Here's a stack, a new stack approach where you can kind of, I won't say cobble together, but stitch together what they need. Put together your right environment. In fact, it's not just going to be about, so moving applications across different clouds based on container technologies is certainly one of the things that we'll be doing. But even beyond that, it's the ability to run different microservices on different clouds. So your actual service is actually running on multiple clouds, all managed together by a single environment, and the operator can look and say, oh, looks like this service needs a little more resource, so let me automatically provide that more resource so that we're scaling up. Your application continues to meet its needs. So that's where this is really going to get interesting. Because microservices aren't always so micro. That's true. Latency and data are really important factors in this multi-cloud. We want to continue this conversation. But also, if you leave the hyperscalers to one side, every other organization is becoming a broker of cloud services to some extent. In other words, what I mean is, they're offering access to not only their own services, but to third-party services as well. Because if they don't, the customer is going to go elsewhere. So they need a mechanism to be able to manage that, right? So, which is- That's exactly right. It's a great opportunity for HP to take that home market and increase that TAM of that cloud service provider, if you will. Huge opportunity. Anyone in the SaaS business is essentially a cloud provider. I'm a cloud service provider, I guess. Guys, thanks so much. William, great to meet you and have your commentary here on theCUBE. Appreciate it, Ken, thanks so much for the new stack conversation in hybrid IT. This is theCUBE. Day two coverage of three days. I'm John Furrier, Dave Vellante. Stay with us for more coverage after this short break.