 Live from Las Vegas, it's theCUBE, covering Dell EMC World 2017, brought to you by Dell EMC. Okay, welcome back everyone. We're live here, day three of three days of coverage at theCUBE at Dell EMC World 2017. I'm John Furrier with my co-host, Paul Gillan, and special guest on our day three opening, Peter Burris, head of research and social media general manager of wikibon.com. Research guys, good to see you on day three. We're going strong. I mean, I think I feel great, a lot of activity. So many storylines to talk about. Obviously the big one is the combination, not merge, I slipped yesterday, or acquisition. The combination of equals, Dell EMC. Some will question, did EMC acquire Dell or Dell acquire EMC? Certainly Michael Dell's still captain of the ship. But that's the top story. But a lot of product line conversations, not a lot of overlap. Peter, you've been at all the analyst sessions. We had David Floyer on yesterday teasing it up. But I'd like to get you your perspective and reaction to your thoughts as you look at the giants in the industry. Michael Dell bought EMC for record 60 billion plus. You've been around the block, you've seen many waves. You've analyzed many generations of the computer industry. What does this actually mean? Where are they? What's your thoughts and reaction? So John, I'll give you three different storylines here, right? The good and the what the hell's going on kind of picture. The first one, the meta picture is, and SiliconANGLE said this, it was a really relevant article, you might have even written it, Paul, that there has never really been a successful mega merger in the tech industry. And historically, I think that's because, well, here's the bottom line. This one may actually work. It may actually work nicely. And the reason is that most of the other mergers or combinations were companies with problems and companies that didn't have problems, or companies with problems and companies with problems. And if you take a look at Dell and EMC, neither of them had problems. They weren't buying each other's problems. It was a nice combination and complimentary in that EMC had a great consumer business, great channel business, and had a pretty strong financial position. And EMC had a great enterprise business, great, you know, sales organizations, great sales organization, and they were strong in where the industry's going around how do you handle data and how do you handle storage? So it's got, what we're seeing here is everybody singing out of the same hymnal, I'm not seeing any tension, and that is an indication that this one may actually go well. I think it's a very, very good early sign. Paul, you and I were talking on the day one open, and also we kind of hit it a little bit yesterday with David Floyer talking about this mega merger. Compare and contrast that to HPE, which has been kind of being depositioned by some of the Dell executives. They don't actually call them out by name, but HPE Enterprise is taking a different approach. They're taking a, you know, smaller is better approach. I was seeing Michael Dell has a completely different philosophy. We're still going to analyze that as well. We got HPE Discover coming up as well. Thoughts on the compare and contrast, guys' reaction to the strategies of HPE, smaller, faster, as they say, or Dell, bigger, more powerful. I think both are viable strategies. It's just a matter of if they can pull it off. I mean, HPE, you talk about bad mergers here. I mean, you think of HPE Compact, HPE Autonomy, this is a company that has had a terrible track record of big mergers, although they've had some successful ones, certainly. And by the way, Meg Whitman inherited those. Yes. Prior to Meg Whitman coming on board. Oh, she was a board member for some of them. Okay, so she was at the table, now we don't know. Okay, but your thoughts continue. But Dell, clearly going the other direction, they're building sort of an IBM-like model, the way IBM was in the 80s when it dominated every market that it played in. And it played even more markets than Dell does now. So I think that the model makes sense. I think Peter's absolutely right. I'm not sensing any tension at this conference. There seems to be, most important thing is there seems to be a lot of communication going on. The executives are spending a lot of time with each other and they're talking a lot to the people. And when you look back, and I live in, you remember the DeX, the fiasco with DeX being purchased by Compact, that was clearly a takeover. And that was, Compact came in, took over the company and didn't tell anybody anything. And the DeX people were living in the dark and it was clear that they had no value to the acquiring company. That clearly they're not making those mistakes here. For the younger audience, DeX is Digital Equipment Corporation, which was a behemoth winner in the micro-mini-computer era era and then now defunct company. Except the one thing I got out of that, Paul, is that, and this is why this first sign is so important, that executives here seem to be collaborating and working together. DeX had been one of those mini-computer companies dominated by an OEM business, which means you had a common set of components and then everybody was competing for customers with how you put those components together. So it was a maelstrom of internal competition at DeX. When Compact got ahold of DeX, that DeX sense of internal competition took over Compact. And then when Compact, when HP acquired Compact, that maelstrom of internal competition took over HP. It used to call it the Red-Blue Wars and it was ugly. And that's not happening here. That's the first sign. Yeah, I would agree, Peter. I'm going to get your thoughts. So I would agree that this is, I've been trying to sniff out where the wind's blowing on this for a year. And to my knowledge and my insight and sources, it's not going bad at all. It's going great. The numbers are performing, they're winning some deals. But let's compare to HP because I asked Mark Hurd at their Oracle media event last week, because they were touting number one in every market. So I said, well, there's a digital transformation going on, a whole new way to do business for the next 33 years, not looking back at the past 33 years. Which metrics are you using? Everyone's claiming to be number one at something. So the question is, maybe HP does have it right. Maybe their strategy will work. What are going to be those metrics for this next generation? If cloud becomes the connective tissue to data, value of data, and that apps are going to be very agile, maybe this decentralized approach from HP might be a better strategy for the growth. Well, I want to get back to what's good about what we're seeing and some other things that probably need to be worked on. But here's what I'd say, John, and this is what Wikibon believes, that customers is always going to be the most important metric. So the first metric is, is HP gaining customers? Is HP losing customers? Is still gaining customers or is still losing customers? That's the number one most important metric. Always will be, as far as I'm concerned. But the second one is, and I'll pre-save something I'm going to talk about in a little bit. The second one is, I'll call it data under management. If we think about this notion of data as an asset, data as a source of value, how much does HP, through its customers, how much data does HP have under management? How much data does Dell EMC have under management? And I think that's going to be an important way of thinking about the intensity of the relationships. Which relationships are going to steer towards which types of environments? Is it going to be a procurement relationship or a real strategic relationship? By procurement, I mean, it's fundamentally focused on driving costs out of the deal. Strategic, I mean, it's fundamentally focused about jointly creating value. So this notion of data under management, to me, is going to be something that we're going to be talking about in five years. Joe Smarzo, a friend of both of ours, was came by the set before we came on here and he's the dean of Big Data, is going by the cue, but now he's taking on it. He's actually a dean now, teaching Big Data. We are talking about some of the research that you're doing and taking a stand on. It's important, I want to put a plug in for the Wikibon research team that you're leading is the business value of data. And that you're looking at data as a valuation mechanism, not an accounting compliance thing. And this is something I think is way ahead of the curve. So props to you guys for putting the stake in the ground to your point. The new metric might just be the valuation of how they use data, whether it's customer data, product services data, application development, concepts to reconfiguring how they do business. And it's the reconfigure that's smart, that's the absolute right word. So from our perspective, John, the difference between a business and a digital business is the business uses data one way, a digital business uses data another way. A business uses data as something to just handle coordination and administration. Bookkeeping. Yeah, exactly. A digital business uses data as a strategic asset to differentiate how they engage the markets. That's where the industry's going and that's what we want to talk about. And by the way, in previous business constructs or business books people might have read over the years, certainly the Peter Drucker's and so on can management consultants never actually factored data into the value chains of- Oh, they did, they did, they just didn't actually, so Drucker for example did. Oh, he talked about information and the role of that information. I stand correct. Herbert Simon talked about this kind of stuff 50 years. Unfortunately, it all got lost when we went through things like, geez, you know there was a very famous economist who said in the late 80s, information technology shows up everywhere but in the productivity numbers. So, you up guys. I remember that, I remember that quote. So the idea ultimately is we now have to get very discreet and very specific about what that means. And that's a challenge, but let's come back to, at least what we think is really working here, if I may. Absolutely, go ahead. So the first thing is, at a more tactical level, number one is the hyper-convert story is exciting. And it's starting to come together. And again, we're not seeing tension between the folks that are selling servers and the folks that are doing hyper-converts. Both are introducing new technology that are going to create new opportunities for customers and they're not, as your good friend Michael Dell said a couple times over the past year, here in theCUBE, we are not going to artificially constrain any of our businesses. And as Amazon said at Reinvent, if you're going to do it at scale, eventually you're going to put it in hardware and he wants to demonstrate that all this great software stuff is happening, that ultimately Dell's going to be the leader at designing these new capabilities into the hardware and he wants to show how that's going to show up in all his product lines. That's a great point. And I think the most interesting dynamic I've been seeing out of the interviews we've been doing the last two days is that the problem Dell has to struggle with now and it'll be interesting to watch how they figure this out is all of their, used to be called the Federation, now they're called the Strategic Business Alliances, I think, the VMwares, the RSAs, the Pivotals. How are they going to make sense of those in the context of this bigger whole? On the one hand, they've got some competing priorities here, Dell has a very strong relationship with Microsoft, VMware is a competitor to Microsoft, so you've got to figure out how to make sense of those different alliances. Pivotal is potentially a competitor to Microsoft. Potentially. Look, Microsoft is in the past business. Yeah, it is. Yeah, it is. It's going to compete. So you've got some paradoxes here in the businesses that Dell has acquired, it really still, I sense they still haven't made sense of what they're going to do with them. Great point, I mean, first of all, you guys are pros and we have a historical view here of the collective intelligence of all of us old guys here. We've seen a lot of ways, but Rob Hoef wrote an article on SiliconANGLE, our editor-in-chief, Rob Hoeper, who's also an industry veteran and journalist himself. After the Oracle media event, the headline reads, in Oracle's cloud pitch to enterprises, comma, an echo of a bygone tech era. And his point with this story is, and I want to get your reaction to this, I think we're seeing a trend here, you guys are teasing out here. We're kind of going back down to the old tech days. You were the editor-in-chief of computer world, back in the day with the mainframe world and then the minis, you're seeing Marius Haas on here using words like single pane of glass, one throat to choke, end to end. We're almost seeing the bygone era coming back again where maybe they might have the right to it. Certainly Oracle's saying, hey, reorganize our sales force. So the question, is the cloud the decentralized mainframe? Is it now the new centralized with edge, intelligent edge? Is that, are we going back to the old ways in a way? Not fully, but unifying the sales forces. So the computing industry has been on an inexorable march to greater utilization of public infrastructure. What an economist would say is we've always found ways to reduce asset specificities. I buy something and I apply it to one purpose. I can't apply it to another purpose. Software changes that. Commodity pricing and hardware changes that. Public infrastructure changes that. So we're going to continue to see that inexorable march to the use of public infrastructure or stuff that looks like public infrastructure and that's going to continue. And the industry's always been very, very good at that. That does not mean, however, that we're going to have one supplier. So what we're seeing is a lot of flood right now. Amazon flood, Dell flood, Oracle flood. There is a real tension in the model. And the real tension is more than likely the future is going to be composites of services operating in multiple different cloud-like instances, including on premise, and who's going to offer the best end-to-end control plane. Paul, I want to get your thoughts because you remember, go back to the days, the IBM had SNA network stack, Deck had DeckNet, they had proprietary stacks, Cloud, Azure stack, this stack. Are we seeing this again? Your thoughts? I think Peter's absolutely right, but the variable, and you're right, we are seeing this again, we're seeing it trying to return to simplicity because what IT organizations have been wrestling with for the last 20 years is everything is just getting more complex. There's more vendors, there's more piece parts, and they've got to fit them all together and it sucks. And so they want someone to simplify this. Now cloud vendors simplify it on one level, but software defined on another level. We've been talking here about software defined storage, about software defined networking, massive virtualization. And that's on an open source or at least an open API based model, which I think is the twist here. Are we going back to the days of IBM? Yeah, but the IBM may actually be software defined. Or five different companies that look like IBM. I know you're saying Paul, I'm not going to disagree with you, but here's the option. But you disagree with them. No, I'm going to put a slightly different spin on it. It used to be that the most valuable asset in an IT organization was the mainframe. And the entire organization was organized and the interactions with the business were organized and put in place to handle the value of that mainframe. We are not going back to a day where the IT organization, the way business uses IT is organized around the mainframe as an asset, or even around the provision of infrastructure as an asset. We are going to start seeing organization and frameworks that are fundamentally built around this idea of data as an asset. And that is going to be a lot more complex with a lot more buyers and a lot more opportunities for differentiation and creating value. So we will see more complexity in IT at the software and the use case level, less complexity at the infrastructure. Which is why machine learning and automation is a lot of hype. But to Paul, I want to get your point and tie Peter's point together and introduce Jeff Bezos's comment last week on MDC he mentioned that most things take 10 years to bake out in terms of getting things right, 10 year kind of horizon. Kind of a order of magnitude. But he says, all these startups say they have disruptive technology. It's not their technology that's disruptive. It's what the customer is disrupted. So we're talking about customers being disrupted. It's not some company having disruptive technologies. And disrupting. So are we saying that customers are being disrupted by reconfiguring their businesses and it's what the mainframe disrupted a new way to do things? We're seeing cloud and data as a new way to do things. So that's causing some reconfiguration and disruption allows them to say, shit, just when I thought it was simple, it cut more complex. But the disruptive element is the data, as Peter says. I mean, the machines are becoming, the machines are already a commodity. The, with open source, the platforms are a commodity. What's disruptive is how you use data in different ways. And to your point, Peter, yes, it's going to be a much more complex world because there's a lot more data and there's a lot more things we can do with data. That's exactly right. We can do so much more with data. So again, let's go back to the fundamental metric that at least I suggested. Who gets more customers? Yeah. There are going to be more buyers of this stuff in five years than there are today. More buyers of the sense of within an organization, there's going to be more people involved in the decision and there's going to be more businesses because if this stuff actually works, the transaction costs are going to go down and you can then organize your businesses and institutionalize how you do work differently so you can have more partnerships. All that means that fundamentally, what we're talking about here is going to reach a greater complexity in business, greater opportunity, therefore. But what I've always said, and I don't know if you've heard this, Paul, but I know you have, John, and I've said it on theCUBE, that the fundamental demarcation is that the first 50 years of this industry featured known process, unknown technology, and what do we focus on? The technology. What's the next 50 years? Unknown process, known technology. What are we going to focus on? How to build that software, how to handle those data assets? What are we going to focus less attention on? The technology. What does everybody want to talk about at this show? The technology. That's a disconnect. So going to one of the things that we now have to think about from a Dell's EMC standpoint is, where's the story about how Dell is going to appreciate the value of your data assets over time? We need more of that. So let me just point out, you didn't mention IBM, but one company that is doing that well right now, they aren't getting the business benefit for it yet, is IBM, where they are really taking, they are not talking technology, I mean, they don't talk about PowerAid anymore. They talk about Watson, they talk about what you can do with analytics, they talk about a smarter planet. They haven't been able to turn this into a successful business yet, but they're doing, I think, exactly what you're talking about. We have a turning point. They have some product challenges. So let's get back down to the customer thing. I like that angle. You got to have the product that customers will be buying. That's the value exchange that customers will value, and then hence by your service or product. Andy Jassy and Pat Gelsinger, when they did the Amazon deal, BMWare, Jassy, Andy Jassy, CEO of AWS said to me, we are customer focused. So I believe that you're right on this 100%, whoever can get the customers. And this is not about, who's the better stack? If the customers like it, they're going to buy it. And, and very importantly, John, they are going to invest in it to make it valuable in their business. And that's what you want. You want to see your customers become a centerpiece of value creation in your ecosystem. And I think Amazon Web Services proves that they could dark horse to come out of nowhere and be the behemoth that they are because they serve the customers. So that's the second thing that I'm missing at the show. And I know, I hate to think I know why, is where is the additional details, even a little bit more, about BMWare and AWS. Now I know that they're going to wait for the VMWare World- They showed a little preview in the keynote. They're still baking out. Yeah, but it would be nice to have a little bit more. That's one of those, those tough relationships they need to manage. BMWare and IBM also have an alliance. They have, they are allied with their foes now through the acquisition. The point about the value of data. I think Amazon has done a good job of building platforms that are very flexible for customers to use, but they abstract a lot of the underlying. All right, so with the data, I want to just double down on that for a second and get your reaction thoughts on obviously one of the themes here is IoT. And we heard Michael Dell saying, it's going to be centralized, pushed out to the edge. You got research from Wikibon Intelligent Edge. You and David Floyd and the rest of the team doing some real amazing work at wikibon.com. Check it out, subscription required. What's the edge strategy? What does that actually mean for IT practitioners out there? It's certainly we heard from Basque Iyer, who's the CIO of Dell, said most CIOs are conservative and don't usually jump on these waves. They miss mobile, they miss some other waves. His mandate was CIOs don't miss the IoT waves. So what is this IoT, this edge of the network thing mean for a CIO? Well the first thing is in hardcore circumstances, many CIOs aren't even involved in the edge. So if you take a look, if you go into where a lot of the edge domains are really crucial, you see a plant manager that's more responsible for what's going on in the edge than the CIO. The CIO is handling the corporate systems. The plant manager's having what's actually happening at the edge, the operational technology stuff. So the first thing is we're going to see a slow circling of the IT and OT organizations about who's going to win. OT meaning operational technology. Operational technology. Just as we saw a slow circling back in the 1990s when TCP IP came in and blew a deck and blew away everybody and started blowing away the telecom divisions or telecom functions within side of large enterprises. So you think that IoT is going to be as disruptive as TCP IP was in standardizing in the network layer? Oh absolutely, absolutely. It's going to have an enormous impact because there's so many new sources. The data is going to have, how to think about it. And that was the second point I was going to make, John, is we do not currently have architectural standards in place for thinking about how this stuff is going to come together. That's something that David Floyer and I and the Wookie Bond team are working on and I hope to come up with some research actually probably next month on what we call automation zones or data zones or probably edge zones. Which is just as we think about security zones today, how do we think about edge zones? Where the edge zone is defined by a moment, an automation moment, cannot have data outside of that zone. And that needs to become an architectural principle where OT and IT can work together and say what data has to be in that zone? I'll make sure my data gets there, you make sure your data gets there, we'll figure out how control happens and that's how we drive this thing forward. Well just to give you a prop here on the cube here is Wookie Bond was right about flashed, we're right about hyperconvergence and convergence infrastructure, big bets early on that we're kind of like, people are like what? And certainly vSAN, serverSAN, although some people will disagree with that. And we're right about that. Now you're right about it. I think you're right on, way right on the edge and you're way right on value of data. I think those are two stands that you're taking. And let's give great props to David Floyer who is a catalyst for thinking many of these things through. All right Paul, final word from you. Obviously, as a veteran you've covered it all. Okay, what's your take? I mean, what's the, how's the wind blowing? What's your instinct tell you of what's happening? I think it's generally good but it's hard to tell from conferences. As you know John, the reason most conferences are so boring is that there's no tension, there's no conflict. It's all good, it's all everybody's happy and everybody's doing a great job. And that's the very same thing that we're seeing here. Rah, rah, Kool-Aid injection. One thing I can't help notice is on the keynote, if you look at the keynote agenda for the three days there's not a single customer on the keynote agenda which I think is a problem. I don't think that says good things about where Dell is really focusing its message right now. You want to have, at most big company conferences there's lots and lots of customers that come up on stage. I think Dell is still thinking about, I mean, it's a technology focused company. I think they're thinking about technology integration right now. How are they going to make, yeah, you hear a lot of speech. Everybody wants to be the most important thing in the enterprise and they still want hardware to be the most important thing. Well, I think, I mean, just I would agree with you 100% but I just think just in this acquisition, I mean, sorry, merger of equals, they have a lot of herding cats going on right now. There's a lot of herding of portfolio and not a lot of overlap but I can see them kind of making room on the stage for that but I do agree. I mean, customers do tell the best story. And in the long run, that's, as Peter said, that is what is going to make the difference. Are the customers happy? Guys, amazing exchange. Thanks so much, Peter, for coming on and taking the time out of your busy schedule to come on theCUBE and share your insight, the data on theCUBE. Paul, as always, we're having another three days, third day of our three days of coverage here in theCUBE. Great commentary, great analysis, more live coverage from day three of Dell EMC World 2017. We'll be right back. 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