 Okay, we're back here live. HP Discover in Frankfurt, Germany. This is SiliconANGLE.com and Wikibon, The Cube, our flagship program. We got to the events of Silicon The Noise. This is the final wrap up of day two of our exclusive two days of nonstop coverage here at HP Discover. HP Discover is HP's big show where they come out and lay out their entire offerings to all their customers here in Europe. We were at HP Discover in Las Vegas a few months ago, and I'm joined by my co-host Dave Vellante. Dave, wrapping up the show, day two. We did a great wrap up yesterday. If you're interested to look for day one wrap up, we lay out our observations for day one. Now let's talk about our observations on day two. Meg Whitman yesterday talked about cloud security and data as the key areas, and today we had a great lineup. We talked about security, we talked about the services, we talked about the new laptop launches, the tablets and awesome stuff. Storage, IT transformation skills. Software to find networking. We had VMware on. Cloud offerings, unbelievable day. And networking. So the cloud offerings, John, I think were the most interesting thing that I saw. I've been looking and trying to understand HP's cloud strategy. It had not been articulated, in my view, well enough by senior level management. But we got the story today, and I thought it was a good one. What's your take on that? Well my take obviously was the same as yesterday. Similar consistency. Obviously it's about computing and about applications in a modern way. HP is well positioned. We heard that again today throughout the interviews. Big data is embedded in all of the DNA and different groups in HP with the autonomy, Vertica and some of HP Labs software and innovation. So that's really was a highlight. Real impressive, gotta say HP really has a momentum in this area and their shipping products. And what I'm seeing from HP is, they're not overhyping and they're proud of what they're doing and they're holding their head up high in light of the autonomy disaster and the write down, the goodwill. As Pauline Nissen Intel said, it's a balance sheet issue. They got plenty of cash. HP is a strong company. The people are really, really proud. I mean, my personal observation of the people at HP is that they're not withering. They're standing tall. And that is a really big observation for me and it's great to see that. On the meat and potatoes of the day, it was all about cloud, right? So today we talked about cloud. We had the autonomy guys in today as well. That was phenomenal. We went deep on that one, went deep on cloud. And I try to say HP is getting their act together on cloud. They have a cloud offering and I kind of clicked for me and I'll tell you why I liked what we heard from the cloud. We heard from Berry Singh who runs the Converge cloud. And then we also heard from the other executive, Sargillai. Sargillai who runs Converge cloud, which is kind of an overseer of the different groups, enterprise services, Converge cloud, and the technical services group, all the different groups, they coordinate for a customer experience. But here's my takeaway on why HP has been quote, fumbling the cloud. Some people have been saying HP is fumbling the cloud offering, but here's what has been happening. HP has been getting their ducks lined up and HP as a company is a global footprint. Putting something out there within the HP ecosystem is a really big deal. So to do it, they got to do it right. And what HP has done is they've taken a step back and waited to take a big step forward. And what they've done with the cloud is, they've created it in an environment so that they can have all of the cloud opportunities be tightly integrated in each group as well as manage holistically. And that means they can take cloud global. Not only taking it global, which has a lot of different requirements to it Dave, but also make it enterprise grade. Enterprise grade cloud really is about a couple of things. Reliability and availability are kind of like table stakes. But more importantly, security and SLA, service level agreements, with those kind of guarantees of security and SLA that makes cloud ready. The cloud reliable and enterprise ready. And that workload focus allows HP to take advantage of the cloud trend in all of their portfolio and their products. So that is the key takeaway for me is that HP waited for the cloud to evolve. It's taken a giant step forward. And it appears to me that they're way ahead of the market at this point. And you see VMware spinning out cloud foundry just yesterday announcing that HP sees that. That's a validation to HP strategy and they're going in that direction. So I have to give HP some high marks on their cloud strategy, mainly because I think they've done it correctly. Well, here's the thing. So there's always a trade-off, right? So eight, and I agree with you, HP's done it correctly in it. Here's the deal. As CEOs, they'd like to outsource the whole lot of IT. Now they realize they just can't do that. CIOs obviously are impressing upon them. There are security risks in doing that. And that's the problem that HP is attacking. Now you mentioned VMware. I mean, essentially they are very actively out building that ecosystem, but they've got to build their cloud strategy with that ecosystem. Now, of course, HP has an ecosystem as well, but HP is a $120 billion company. You can say the same thing about IBM. They can do a lot more themselves. You've seen Oracle do a lot more of itself. So these red-stack companies, the full-stack companies, are able to actually go to market with a solution that is proven. Barry Singh, I pushed him on the hybrid cloud thing. John, I'm not kidding. At Wikibon, we're doing a study right now on the service providers. We probably talked to 15 to 20 anyway, in depth. These are in-depth interviews. And we set out to test the premise of a study that we did last May where the customer said, we're doing hybrid cloud. That's our predominant mode of deployment. So we said, all right, let's narrow it down and see if they're actually doing hybrid cloud where they're federating applications. He is the first cloud service provider that said, absolutely, we're doing that today. Our customers are doing that today. He described the use cases. That was very impressive. And the reason most folks aren't doing it is because they don't trust it. So that to me, I'm going to follow up with him and actually interview some of their folks and peel the under a little bit and just make sure that's true. But if in fact, what he said is true, that's unique in the marketplace. There's another observation I want to say in this wrap up in these two days at HP that has signal from the noise. And that is that, and this is something that is not obvious to the naked eye if you're looking at HP. And that is that we are entering an era and if you follow SiliconANGLE and you follow my blog and you follow Dave's research, you'll know that we are big believers in emerging technology and disruption. And in disruptive markets, there's game changing things that happen. What's happened in the past, say, 10 to 15, 20 years is that it evolved into a best of breed market, meaning that companies will put out products that are good and great in their categories, best in class, as they say. But what's happening today is the world's moving from best of breed to transformative. And when you have transformative markets, things happen fast, they happen fast, they happen big, and that's going to create opportunities for HP and some moves in the marketplace. So in the server side, Jim Gontier was on talking about industry standard servers and the converged infrastructure side of the house. There they have some game changing capabilities with their modular design and some of the low cost energy and how they're developing products for workloads. In the cloud business, they have cloud for converged cloud, they got enterprise services, they got cloud, private cloud and public cloud, and then hybrid, they call delivery. There really is no hybrid cloud, so I think that needs to be explained. It's really more of the bridge between private and public. But again, in those environments like the server guys, they've built technology in their platforms and architectures to be workload dynamic and flexible, meaning that there's no one solution that fits all anymore, but HP's been successful at defining a architecture that's similar across platforms so that no matter what the workload is, it will work across the different platforms. So to me, that is going to be a game changer and I think HP is well positioned for that. And the third thing I would say in summary here is that HP's software defined networking, software defined storage and software defined servers is a big deal. We had the networking guys on earlier with a customer from HBO talking about SDN. HP was the first company to actually ship an open flow switch. And they have now 25 switches that support open flow and SDN and 15 million ports in market that support that. So HP is leading that effort we had customers talking about how it's going to be game changing and Mike Bannack, the VP over there in that group had a great quote. He said, with network virtualization or software defined networking, the imagination is the only thing limiting that market opportunity, meaning it's so much opportunity that this inflection point is going to create all new methods to create efficiencies, operational automation, that's going to change the entire data center and that the only thing that's stopping that market right now is imagination. So I believe we're going to see a massive tsunami of new things at the networking layer that's going to really be awesome with software defined networking. So HP's doing very, very well in that area. Well, and I don't want to pick up on that thing. We had Dave Donatellian and he said, look, our objective is to transform networking servers, storage and the services that support those. And so that's pretty ambitious. Clearly HP's making progress in each of those. Like you said, we heard from Jim Gontier what's going on in the service. We were at the Gen 8 launch. We're at the Moonshot launch. So we're really watching that closely. I have, personally, I have a lot of enthusiasm about Moonshot and I know you do too because you want to get your hands on some of those little puppies. Well, you see Moonshot, you just blown away. It's just changed the game. If you've ever racked this deck servers, you look at Moonshot, you go, wow, this is really amazing. And so now, and of course in the storage side, we heard more today about polymorphic storage, polymorphic simplicity they call it. Our translation that is polymorphic storage. Somebody said on Twitter that we should make room for the polymorphic cube, so that's pretty good. But so there's term polymorphic many shapes and we're talking to Dave Scott in depth, how he came up with that. He's really gave it a lot of thought. And this is a guy who essentially coined a number of terms, multi-tenant, autonomic, federation and as applied to storage. And so we'll see if it sticks. It's kind of an interesting one. But here's the bottom line. Clearly HP's going after EMC's large portfolio. They both have stovepipe portfolios. HP's really making some moves to rationalize. They're putting all the wood behind three arrows. Primary with three par, backup with store once and store all being the archive platform. They're saying we got other platforms but these are the three big growth platforms. So the key to me, John, is can HP with those, the growth of those platforms offset the decline in the balance of its business transition, its customer base to those new modern generation products. If it can, it's going to be very, very dangerous. Another highlight today in the cube was a really big surprise. We've had a breaking story around a first look at HP's Elite Book Revolve, which is the tablet revolving computer tablet and the Elite Book Pad, which is their iPad, cool, both running Windows, really well designed. I liked the industrial design. You know, this is why I said HP should stay in that business, Dave. HP's, these products, but we sat in the cube today, you can see the videos, were impressive. They were a very impressive design and impressive looking. Now my only ding on this were their Windows based. It's not a consumer product, it's enterprise, so it has Windows and all Intel chips, but the performance is very, very strong. The only other thing that they didn't have on these machines were the Thunderbolt. They had kind of an HP answer for that, but I think it came down to cost and demand just not there. In the enterprise, there really is no demand for Thunderbolt, all Macs have Thunderbolt in their Thunderbolt design. Really an amazing technology from Intel. We saw that at NAB and we know the benefits of that when storage and moving files around with video. So again, it's a Windows based tablet, Windows based PC, kind of revolving screen, and that was cool. Other highlights, again, I said the cloud was cool. Meg Whitman's talk, you know, she's not overly dynamic in front of an audience, but she was very credible. To me, John, the key there is you got to have your financial house in order, and HP actually is profitable. It's good, it's a $120 billion company throwing off $10 billion in cash a year, 10 plus. It added $3 billion to the balance sheet this year in terms of the cash and equivalents, and it paid down $5.6 billion in debt. So those are good ratios, I wish our US government could follow that roadmap. But so the point is, though, John, you know, they overspent for autonomy, everybody knows that, okay, fine. You've got to put that behind you, you've got to focus on improving the balance sheet so that you can be in a position to continue to make strategic acquisitions and do these little tuck-ins. You know, you sort of, there's a saying, you partner with big and you buy small. I'd like to see HP stop buying EDSs and, you know, autonomy wasn't really that big, but it was a big price tag. I'd like to start seeing them buy some of these more strategic technologies. Like they did with 3-par, but maybe a little bit earlier. If you follow what I'm saying, right, they paid 2.45 billion for 3-par, it's paying off, it's a great move. I would have liked to see them get in on that before the bidding war. And so, you know, HP, big company, a lot of opportunities, it has a lot of white space, and also we're seeing HP labs maybe start to make some more contributions. Want to see more, store wants, express query, okay, that's good, let's see a string of those. So that's something that we're also looking for, some organic, HP's logo, it's heritage, what is it? Events, you want to see HP get back to that. I think one of the things, Dave, that you pointed out on the storage side, which is a real big announcement here, was the storage is not just your storage, old storage. It's new, it's fresh, it's, they have a holistic view of storage, and they integrated the big data piece into it, and they didn't really grandstand that much. I thought they could do more by grandstanding their storage launch with more emphasis on the big data, and they didn't, but that's just, they kind of, they wanted to keep it focused on the transformative 7,000 from three-part guys, but I thought that was a big deal. Again, the big data autonomy conversation was awesome this morning. These guys were really excited. We talked about the public perception right now of autonomy, but really what's happening is that these Pfizer are moving fast. Meg Whitman and her team are focused on cloud heavily, cloud and infrastructure level, and cloud on an application level, and big data is the application of choice. Big data will be with analytics, the core business app is information, and that's the key area, information management, information data, the data side of the business, the cloud side of the business is really critical, and then securities in the middle of all that, so it's cloud security and big data really is what HP's focused on. They say information, I'd say big data, so data in general. Great move, I think the software-defined movement positioning is great. Great success with SDN in particular, with VMware buying NICERA. I think HP has a lot of opportunity there. Let's see what they can do with it. And outside of that, I just think HP's got their hands on the pulse, and what all they have to do at this point, in my opinion, is just roll up what they already know. They have people talking to the top customers, the global customers, roll up that data, put a coherent message together, and keep the CEO in for at least a year. I mean, come on, guys. It's just so easy to fix, you know? Meg says five years, I think she can do it in three. So again, very impressed with the products and the technology they're showing off. This isn't just slideware, it's not slideware, it's real products, real technology. HP is bringing out their best. I think when it's all said and done, Dave, companies are defined by the adversities that they face, and I think, again, back to my personal observation, this is a company where people are standing tall. Okay, in the wake of public pressure, they're bloody, they're being battered publicly. People taking cheap shots at the company, and people are jumping on that bandwagon, I got to say. It does not affect their cash position, it's a balance sheet issue. I think they're going to lose some sales. They got a black eye right now, a little bit bloody, but right now HP is standing tall, they're going to take their hits and they're going to move forward. And I see them breaking through this pretty quickly. Well, I mean, again, I said the $120 billion company with a $25 billion market cap, to me that's got to change. I personally think HP has hit bottom. Now there's some risks to the scenario. I mean, I'm obviously not a stock picker, but if I look at HP over the past, over its history, I mean, its stock is trading lower than it has since really a herd came on. You got to go back to the early 2000s to see the stock that's really this low. So I feel as though, dog of the dow, HP could really turn it around next year from a financial performance standpoint. Now there's obviously some risk to that scenario. GDP spending, IT spending, HP's growth is going to be pinned to that, no doubt. Certainly the Greek debt crisis, certainly the fiscal cliff in the United States, these are all risks to the scenario of an HP turnaround, but fundamentally, John, I think that we have seen the bottom of HP and I think it's up from here. I think the big difference between this and many some other turnarounds that I've seen is there's not a fundamental restructuring that has to take place in order for this company to be profitable. It's already done that. So it can invest in, it can still invest in marketing, it can still invest in sales, it can still invest in R&D and throw off a profit. And the cloud story is good and I'm glad they're cleaning that up and moving forward with it. Again, they're doing all the right things. HP has always been an engineering company. I want to see them get back to those roots. I like the direction that they're taking and again, the converged infrastructure side of the business, my advice and what I'm seeing here and what we've heard them say directly and they will quote HP executives, yes, this is a software led infrastructure. So Dave, congratulations to you and your team because they are now adopting the words, we put forth and your team put forth software led infrastructure. And I think HP, because of their leadership and converged infrastructure and they invented the term, led the market is to redefine it in a modern way. Not throw it away, build upon it, create another layer of greatness around what converged infrastructure can do. And that's what we call software led infrastructure. Software is the key. At the same time, the hardware paradigms are changing. HP is still going to be in the hardware business but software led infrastructure is everything and for us, it's exciting. I'm excited, big data and software led infrastructure are two areas of focus, cloud, mobile and social is solid and it's exciting. John, it was again a pleasure working with you. It's been a fantastic year for theCUBE. We got one that I know of, major CUBE gig left. We're going to be at Dell World next week down in Austin, we're going to have Michael Dell on. Michael Dell personally committed to John Furrier and myself that he would come on theCUBE if we came down to Dell World. So we're doing that next week, bringing the team and I'm really looking forward to that. Yeah, I want to say Dave, thanks for the great analysis. It's been great working with you this year. We had a great run in season three. I'm putting together a list of our all time CUBE guests and we've interviewed over 900 people since we started doing theCUBE, getting great props from people who love the content here and outside of the US and within the US. We are glad to bring that to you. You can strike the ceiling from the noise. We want to do more of it. So we're expanding every dollar we make from doing theCUBE under our sponsorship model. We'll go right into our operations, expand and want to thank the crew, Marcus and Hopkins and the team, Alex Wilcox behind the board there and of course everyone at home, Bert, Kristen, Stu, Jeff, everybody back at the ranch. Awesome, awesome job. Yeah, thanks everybody. We really appreciate it and the whole team of writers watching the flow and watching the stream. Really appreciate all the effort you've put in. Check out wikibon.org, check out siliconangle.com, check out siliconangle.tv, and also go to youtube.com slash siliconangle. You will see these videos and others and all our playlists from all our CUBE gigs up there. So check that out, really appreciate your support. And of course we've got a public shout out to HP. Hewlett Packard supported us with underwriting our model for our CUBE SiliconANGLE TV. Independent media, we love to do this, bring our independent, no one, there's no canned questions here. Dave and I bring the original content. It's underwritten by HP, they're the key sponsors. Want to thank HP, great event at HP Discover. We'll see you next week at Dell World. This is the CUBE signing off from Frankfurt, Germany.