 From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now, here are your hosts, Dave Vellante and Stu Miniman. Hi everybody, welcome to SiliconANGLE's theCUBE. This is an in-studio presentation that Stu and I are going to preview. HPE Discover London 2016. We've done a number of HPE discovers. London's the big European show. It goes on the end of November to early December. theCUBE will, of course, be there. I'll be there with my co-host, Paul Gillan. HPE, Stu, has been sort of a really interesting ride over the last five years under the direction of Meg Whitman. She had to clean up the autonomy mess. That looks like we're now finally almost through that. We'll talk about that a little bit, but when you go back to the challenges that she faced, last year at HPE Discover London, it was all about the split, taking this huge company and splitting it into two Fortune 50 companies. Last June at HPE Discover, there was a lot of discussion around the spin merge with CSC, essentially jettisoning the legacy EDS business, which was a drag on HPE's business. It was not a focused part of their strategy. Now this year, you're going to hear, I'm sure, about the micro-focus sale of the software business. I don't think it's going to be a major theme, but it's true. It's an underpinning of what HPE's doing in the strategy and HPE's going to talk about what's left. And what's left is a very focused infrastructure company that is essentially an arms dealer to on-prem and the cloud. I mean, that's really what HPE is all about. I mean, you've got infrastructure, which is storage, compute, and networking. You've got what used to be a cloud business that's now folded into converged infrastructure and software defined. You've got IoT, which is a big thrust of theirs, focusing on the edge, and of course, services to wrap that all together. And that's HPE, and it's a clean story. They don't have nearly the supply chain that it used to have. They don't have the end-to-end strategy story, but they don't have a lot of baggage either. They're basically selling core parts of the software business, Vertica, autonomy, big chunks of the security business to micro-focus. And then, as I say, what's left is an arms dealer that's going to knock heads with Dell, with Lenovo, and obviously with Amazon. Your thoughts on HPE. Yeah, Dave, spin merges are a little bit interesting for us to kind of wrap our heads around as to how are they kind of, they're getting rid of a piece, but still having ties to it and making sure there's some strategic alignment as to what's going on there. And it's interesting to always see, when you look at infrastructure, how much software do I still need to have? We know how critically important software is, and there's software in a lot of this infrastructure. How much of it is really still core? How much of it is non-core? Cleaning up that autonomy piece, I think a lot of people think is a good move, but you lose pieces like Vertica outside of that business which had some ties for backup and certain areas on the infrastructure. So that new HPE, as you said, the balance sheet's cleaned up. They're a smaller company, and it's something that we definitely think had to happen over time as they need to compete against the like of not only the infrastructure companies, but that overhanging presence of the public cloud with HPE Discover, of course, going up head to head against Amazon re-invent, it'll be an interesting compare. Well, so you're right. The reason for these spin merges is to clean up the balance sheet. The thing about what they've done with these spin merges is it opens up partnership opportunities for them. So now HPE can partner with, I mean perfect example is a small one, but it's the HPE Protect software, the backup software. So now they can go out and do a partnership, for example, with Veeam, who's a leader in that space, who's got tons of momentum in the VMware community, and they can partner with that instead of having to sell their own stuff. Yeah, that's a good example. Working with Accenture and Ernie Young and Deloitte and KPMG and the big SIs, they don't have to worry about the EDS competition anymore. I think that's a big deal for HPE. And you're going to see some stuff around, more stuff around Docker and things of that nature. So the rumor last summer was that HPE was going to sell its software business to private equity, actually it's micro-focus is not private, and then they were going to do a big move and buy Nutanix. Okay, well Nutanix did an IPO and it's pretty rich. So there was a rumor that came out in the register that they were going to buy SimpliVity for like $4 billion, which is valued more than Nutanix. So that didn't really make any sense. You had some information on that, but what was your take on that? That's not going to happen, right? Yeah, first of all, Dave, just your comment about being able to partner more, I think that's really good for HPE, or HPE as it is, because the concern I had, I mean, I even think back to when they bought EDS. EDS worked with a lot of companies out there, and over the years went on, you saw EDS basically were sold services and put solutions together, baked with HP gear. And it's really tough these days to think that you're going to be able to vertically integrate and do it all yourself. Today it's a very robust ecosystem. Doc, you mentioned was one that HPE is trying to take leadership and bundle again with a lot of their solutions. So when you buy servers, that you're going to be ready for that next wave of containerization. And the cash flow available now is they can make acquisitions if they need to. Definitely hyper-converged is an area where, we're seeing big growth, not only with Nutanix, but VMware, who is an HP partner, but also competitive when you add in the likes of the Dell EMC, the old VCE group doing the VX rail. And HPE, they have composable infrastructure with their synergy product line. They also have the old, what was the left-hand VSA that's in there. So they have a number of solutions. They are still the number one server manufacturer from a revenue standpoint. So hyper-converged is definitely a wave that they don't want to miss. And, right, as you said, Nutanix is too expensive. Simplivity, we don't think it's billions of dollars. The register reported that their 2015 revenue for Simplivity was 95 million. Now, some of that is software that gets bundled in solutions. So the total market that they hit's a little bit bigger, but it does not from our standpoint makes sense to spend billions of dollars to buy Simplivity. There's also a number of smaller players out there that could help HPE get deeper into that marketplace. But with their server presence and the various offerings that they have, it should be something that HPE can be a strong player for. Well, the question I have about HPE is, does it need to acquire, oh, first of all, actually make a comment. HPE gets dinged a lot for making poor acquisitions. I think Vertica was a good one. They just didn't know what to do with it. Obviously, autonomy was a disaster. Three bars of great acquisition, although it was kind of a no-brainer. They needed to fill that space. Aruba looks like to be a really winning acquisition, particularly with the IoT strategy. So HPE could be sensible. They could do acquisitions. So they just got to do the right ones. And I think that they've got some better management now in focusing on those things. The question I have about their hyper-converged, do they need to acquire somebody or can they do this organically? When you think about converged infrastructure, when Donatelli was running it, you heard a lot about how we invented converged infrastructure. They probably were first with the term, they popularized the term, but they couldn't get from R&D to product fast enough. And others like VCE surpassed them. And they sort of cobbled together some solutions. But you never really felt like they were there in the mix. And so do they now with elements of the machine and synergy sort of coming out, memory-based computing, can they do this on their own or do they need to fill gaps? Yeah, so Dave, I saw Synergy before it got released. And if you looked architecturally, it had a lot of the look and feel of what we would expect to see from HCI. But I felt it was a little bit over-architectured and the price point it was hitting was a much larger piece. And we kind of hope that it was more expensive and because of the things we poked at is things like a vSAN from VMware or Nutanix is I could start really small and I can build kind of incrementally. That's what customers are looking for. Really kind of the way I buy public cloud is I can buy small increments, use what I need, expand as needed. And it was like, well, why'd you start here? Why can't you do this? Oh, well, we have this other product line that kind of fits that piece of it. And as we all know, taking a big product and pushing it down markets really hard. It's much easier to take something small and expand it and grow it. So, HP has the talent inside to be able to build a lot of these. It's not just the hardware pieces, but the software engineering. It's a computer science distributed architecture problem. And you look at what HPE was doing with Moonshot and the machine and they understand a lot of these problems. But what I scratched my head is IBM and HPE, the two that you would think really have kind of the research chops and the knowledge to be able to do this to date are being outmaneuvered by some of the other guys to be able to put these solutions. So maybe the new focus of HPE can streamline some of the R&D and focus the R&D as well. Because I felt like, I mean, they reorganized HPE labs. So, and I believe now it's under Antonio. And so, which to me is a good thing because you want to get R&D out to product. And HPE labs has not been able to do that historically. I've all have said HPE's got to get back to its roots of invent. I think being more focused should help. So that's something that we've got to look for, obviously. And you would think that they would pour money into software defined and hyper-converged infrastructure. I mean, those are really two growth areas for HPE. And a big opportunity for HPE coming in 2017 is they're one of the first partners for Azure Stack. So Microsoft of course, huge HPE partnership, long track record there and they're going to push that. However, I look at Azure and from what I hear, Microsoft is going to spend more time focusing on adoption of Azure than they are for some of these early Azure Stack deployments. Okay, and then IoT is the other big one. HPE's pushing IoT, IoT at the edge. They're redeploying Moonshot and other server architectures at the edge. So I'm actually pretty excited about what they're doing there in particular because of the Aruba acquisition. Now you can, you want to instrument the windmill but you better have connectivity to the windmill and wireless is a great opportunity to do that. I want to hear more use cases beyond Levi Stadium. So I'm looking for that, right? I mean, HPE tends to roll out Katzenberg and Levi Stadium a lot. I want to see more and I think there is more. They just got to knock down some of those references but the Aruba acquisition looks to be a winner and very synergistic to IoT and they put Dominic Orr in charge of that IoT business. So that's, you know, I have a lot of hope for that business. Security's the other one that I have a big question mark on. I got to believe that HPE is going to go, going to retool some of its security business. It basically decided, look, we've got this mishmash of software components. We can't compete, we can't make it work. Let's get rid of it, give it to Micro Focus which seems to be thriving on a bunch of misfit toys and making that work great. Let's get rid of that, we'll maintain some ownership in that, we'll partnership as we need to and let's refocus on the software that's core to our business. So that's management software, infrastructure management software but I got to believe that security, there's some security opportunities out there. There are a number of small startups that solve really important problems that I would think that HPE over time is going to start tucking in some of those security companies because I think security's pretty fundamental to infrastructure. Yeah, absolutely Dave. There's a whole wave of new companies coming out doing that both from kind of the networking side, what's happening in the cloud side, that kind of micro segmentation space. Could be a nice fit for HPE, as you said, do a do over. Yeah, and HPE always been very partner friendly. So to me, it's this collision course between HPE and Dell EMC. Dell's got the volume, they've got the supply chain, they got every single product known to man and they got VMware. So Dell EMC, they're going to compete with VSAN and VX with that piece. They've got the relationship with Nutanix, which is interesting. We'll see where that all shakes up. Right now it seems to be going pretty well and they've got, as I say, their portfolio is one of everything. So massive, massive company with not a lot of gaps in the portfolio, much more overlap than gaps sometimes kind of complicated. We heard at Dell EMC world, the channel's a little nervous right now. Rightly so, right? There's a lot of uncertainty. Dell EMC executive said, don't worry about it. It's good, kind of got that Donald Trump. It's going to be great. We'll see. We're lacking details there, but I have to say that I know certainly from EMC standpoint, EMC has done a good job in the channel over the past five years, a very good job. Dell, I don't know as much about. I think I've heard anecdotally that people are more concerned about Dell as a channel partner, but they're smart. They'll figure it out. I think that's an opportunity for HP from a partnering standpoint as they've always been partner friendly. They don't have the supply chain that they used to have. So it's, it's HPE, the Dell EMC and obviously Amazon. So how does HPE compete? What do you see as their, the prognosis for HPE? Particularly as it relates to the channel. So I mean, just first on the cloud piece, Dave, I mean, we saw, you know, HPE go through a number of machinations. That, you know, they bought Eucalyptus. Oh, Martin Mikos was, you know, going to be exciting and then Martin's out. And, you know, there's a new person in charge and oh wait, you know, we're changing the cloud strategy. So cloud, a lot of it is partnering today. Partnering means opportunity for the channel. You know, the channel is looking for ways to make money. Things like HCI, you know, all flash arrays are opportunities to make money. HPEs had a pretty good track record, you know, with the channel. We've been at some of their partner summits, you know, as a server company, you know, HPE has done really well and made, you know, compute pieces that are compelling for the channel to be able to make money. So as long as they can keep that going and extend off of it, you know, there's still a very strong brand out there and one that should be reckoned with in the industry. Yeah, and I think, you know, again, it sounds like bromide, but it's HPE talking about choice. They are a company that's offering choice. I mean, you know, if you want, you know, to do business with Microsoft, they're obviously a great partner. They've got options now for other cloud suppliers, obviously, you know, Amazon, Azure, et cetera. So it's all about choice. It's all about having a strategy that will allow you to have an exit strategy if in fact you need one, which a lot of people need right now because they're trying to put together cloud strategies and IoT strategies. And there's a lot of big data strategies. There's a lot of uncertainty out there. So you want to have an exit strategy if in fact you need one and HPE gives you options and gives you choice and gives you flexibility. Yet at the same time, they're big enough that they can cover you. I see the services piece too as now critical. So services is really focused. They don't have all this other extraneous stuff. You know, they're focused on infrastructure. They're focused on software defined and they're focused on IoT. Those are good areas extending the total available market from the data center out. So I'm encouraged, but I want to hear more, particularly around how they're going to fill the gaps in hyperconverge. I want to hear what they're doing, you know, specifically in software defined. I mean, obviously a big growth area and I want to see more use cases and examples and customer references in IoT. It's a big show in Europe. It's actually probably even a little bit bigger in Europe than it is in the US. It's, you know, nine, 10, 11,000 people, a high quality audience. It'll be in London again this year. So we'll be there with a cube. I'll give you a final thoughts, Stu. Yeah, and being over in Europe, Dave, you know, what is the impact of cloud that's going on there? So, you know, good mix of customers and, you know, IoT, it's still early. So how is the European, you know, customer set, you know, ready for that? And, you know, what's the general sentiment around HPE is, you know, those of us kind of the industry watchers, you know, tend to, you know, inflate how much some of this matters to the customers. Customers, you know, they vote with their wallets. They're still buying lots of HPE gear and, you know, satisfied with the direction they're going with, you know, it'd be good to see. Okay, so we'll be broadcasting Tuesday, Wednesday, Thursday from London. Obviously, our European audience, you know, you'll catch us during the prime broadcast days. Go to siliconangle.tv. You'll see where we're broadcasting. You just click on HPE Discover London. You can click on, we'll also be at Reinvent. You'll see both of those shows. But for our U.S. audiences, get up early, you know, check out what's going on in London. We'll be ending the day on the West Coast in Las Vegas with Reinvent. Stu, thanks a lot. It's good to see you. Good luck in Vegas. As I say, we'll be in London. Thanks for watching everybody. Check out wikibon.com. Ton of Edge and IoT research coming out. We got our predictions up there as well on the site. Check out siliconangle.tv for all the cube action at siliconangle.com for all the news. Thanks for watching. We'll see you next time.