 Live from San Francisco, it's theCUBE. Covering Micron Insight 2019, brought to you by Micron. Welcome back to Pier 27 in San Francisco. I'm your host, Dave Vellante with my co-host, David Floyer, and this is theCUBE, the leader in live tech coverage. This is our live coverage of Micron Insight 2019. We were here last year talking about some of the big picture trends. Derek Dicker is here. He's the general manager and vice president of the storage business unit at Micron. It's great to see you again. Thank you so much for having me. You're welcome. So, you know, we talk about the superpowers a lot. You know, cloud, data, AI, and these new workloads that are coming in. And this, I was talking to David earlier in our kickoff. How real is AI? And it feels like it's real. It's not just a bunch of vendor industry hype, and it comes in a lot of different forms. Derek, what are you seeing in terms of the new workloads and the big trends in artificial intelligence? I think just on the front end, you guys are absolutely right. The role of artificial intelligence in the world is absolutely transformational. I was sitting in a meeting in the last couple of days, and somebody was walking through a storyline that I have to share with you that's a perfect example why this is becoming mainstream. In Southern California, at a children's hospital, there were a set of parents that had a few days old baby, and this baby was going through seizures, and no one could figure out what it was. And during the periods of time of the seizure, the child's brain activity was zero. There was no brain activity whatsoever. And what they did is they performed a CT scan, found nothing, checked for infections, found nothing, and can you imagine a parent just sitting there dealing with their child in that situation, you feel hopeless? This particular institution is so much on the bleeding edge. They've been investing in personalized medicine, and essentially what they were able to do was extract a sample of blood. From that sample of blood, within a matter of minutes, they were able to run an algorithm that could sift through five million genetic variants to go find a potential match for a genetic variant that existed within this child. They found one that was 0.01% of the population found. A tiny, tiny, call it a less than a needle in the haystack. And what they were able to do was translate that actual insight into a treatment. And that treatment wasn't invasive, it didn't involve surgery, it involved supplements. And providing this child just the nutrients that he needed to combat this genetic variant. But all of this was enabled through technology and through artificial intelligence in general. And a big part of the show that we're here at today is to talk about the industry coming together and discussing what are the great advances that are happening in that domain. It's just, it's super exciting to see something that touches that close to our lives. I love that story, and that's why I love this event. I mean, obviously, micron, memories, DRAM, NAND, et cetera, et cetera, but it's, this event is all about connecting to the impacts on our lives. You take that, I used to ask this question a lot of, when will machines be able to make better diagnoses than doctors? And I think, a lot of people say, they already can, but the real answer is, it's really about the augmentation. Machines helping doctors get to that, very, a small probability, 0.100 or 1%, and then being able to act on it. That's really how AI is affecting our lives every day. Wholeheartedly agree. And actually, that's a big part of our mission. Our mission is to transform how the world uses information to enrich life. That's the heart and soul of what you just described. And we're actually, we're super excited about what we see happening in storage as a result of this. One of the things that we've noticed is we've gotten engaged with a broad host of customers in the industry, is that there's a lot of focus on artificial intelligence workloads being handled based on memory, and memory bandwidth, and larger amounts of memory being required. If you look at systems of today versus systems of tomorrow, based on the types of workloads that are evolving for machine learning, the need for DRAM is growing dramatically. Multiple factors, we see that. But what nobody ever talks about, rarely talks about, is what's going on in the storage subsystem. And one of the biggest issues that we've found over time, or challenges that exist, is as you look at the AI workloads going back to 2014, the storage bandwidth required was a few megabytes per second, called tens of. But if you just look every year over time, we're exceeding a gigabyte, two gigabytes of bandwidth required out of the storage subsystem. Forget the memory. The storage is being used as a cache and it flushes. But once you get into a case where you actually want to do more work on a given asset, which of course, everybody wants to do from a TCO perspective, you need super high performance and capability. One of the things that we uncovered was, by delivering an SSD, this is our 9300 drive, we actually balance both the read IOPS and the write IOPS at three gigs per second. And what we allow to have happen is not just what you can imagine is almost sequential work. You load up a bunch of data into a training machine, the machine goes and processes on it, comes back with a result, load more data in. By actually having a balanced read and write model, your ingest times go faster. So while you're working on a sequence, you can actually ingest more data into the system and it creates this overall efficiency. And it's these types of things that I think provide a great opportunity for innovation in the storage domain for these types of work. Right, and that's what's requiring new architectures in storage, right? I mean. Yeah, I mean, so one of the things that's happened in bringing SSDs in is that the old protocols were very slow, et cetera. And now we've got the new protocols within NVMe and potentially even more new protocols coming in into this area. What's Micron, how is Micron making this thing happen? The speed that's going to provide these insights that have happened? It's a fantastic question and you're absolutely right. The world of standards is something that we found over the course of time. If you can get a group of industry players wrapped around a given set of standards, you can create a large enough market and then people can innovate on top of that. And for us in the storage domain, the big transitions have been in SATA and NVMe. You see that happening today. We can talk a little bit about maybe a teaser for what's coming a little later at our event. In some of the broader areas in the market, we're talking about how fabrics attach storage into infrastructure. And interestingly enough, where people are innovating quite a bit right now is around using the NVMe infrastructure over fabrics themselves, which allows for shared storage across a network as opposed to just within a given server. There's some fantastic companies that are out there that are actually delivering both software stacks and hardware accelerators to take advantage of existing NVMe SSDs, but the protocol itself gets preserved but then they can share these SSDs over a network, which takes a scenario where before you were locked with your storage stranded within a server and now you can actually distribute more. It's amazing difference, isn't it? That potential of looking at data over as broad an area as you want to. And being able to address it directly. And having it done with standards and then having it done with low enough latency such that you aren't feeling severely disadvantaged, taking that SSD out of a box and making it available across a broad network. So you guys have a huge observation space. You sell storage to the enterprise, you sell storage to the cloud everywhere. I want to ask you about the macro because when you look at the traditional storage suppliers, some of them are struggling right now. There aren't many guys that are really growing and gaining share because the cloud is eating away at that. You guys sell to the cloud, so that's fine. Arms dealer, whoever wins, may the best man win. But at the same time, customers have ingested so much all flash, it's giving them headroom. And so they're like, hey, I'm good for a while. I used to have this spinning disk, I throw spinning disk at it, at the problem to give me performance headroom. That has changed. Now, we certainly expect a couple of things that that will catch up and there'll be another step function. But there's also elasticity. You saw, for instance, pure storage last quarter said, wow, it hit the price drop so fast, it actually hurt our revenues. And you'd say, well, wait a minute, if the price drops, won't people buy more? There's no question that they will, it just didn't happen fast enough in the quarter. All these interesting rip currents going on, I wonder what you're seeing in terms of the overall macro. Yeah, it's actually a fantastic question. If you go back in time and you look at the number of sequential quarters when we had ASP decreases across the industry, it was more than six. And the duration from peak to trough on the spot markets was high double digit percentages. Not many markets go through that type of a transition. But as you suggested, there's this notion of elasticity that exists, which is once the price gets below a certain threshold, all of a sudden new markets open up. And we're seeing that happen today. We're seeing that happen in the client space. So these devices actually, they're going through this transition where companies are actually saying, you know what, we're going to design out the hard drive cages for all platforms across our portfolio going into the future. That's happening now. And it's happening largely because these price points are enabling that situation. In the enterprise, a similar nature in terms of average capacities and drives being deployed over time. So it's, I think the last time we saw each other, it's one of the most exciting times to be in the memory and storage industry. I'll hold true to that today. I'm super excited about it. Well, I just bought a new laptop. And I have half a terabyte today. And they said for 200 bucks you can get a terabyte. And so I said, oh wow, I could take everything from 1983 and bring it over. Interestingly, it was back ordered. So I think, wow, am I the only one? But this is going to happen. I mean, everybody's going to have, you know, make the price lower. Boom, they'll buy more. We believe that to be the case for the foreseeable future. Do you see yourself going in more into the capacity market as well with SSDs? And I mean, this drop must make big opportunity for... Yeah, actually, you know, one of the areas that, you know, we feel particularly privileged to be able to engage in is the use of QLC technology. This is, you know, quad level seller four bits per cell technology. We've integrated this into a family of SSDs for the enterprise. We're interestingly enough, we have an opportunity to displace hard drives at an even faster rate because the core capability of the products are more power efficient. They've got equal to or better performance than existing hard drives. And when you look at the TCO across read-intensive workloads, it's actually, it's a no-brainer to go replace those HDD workloads. In the client space, there's segments of the market where we're seeing QLC deployed today for a higher capacity value segment. And then there's another segment for performance. So it's actually, each segment is opening up in a more dramatic way. So last question, I know you got some announcements today they haven't hit the wire yet, but what can you, show us a little leg, Derek. What can you tell us? So I'll give you this much. The market today, if you go look in the enterprise segment is essentially NVMe and SATA and SAS. And if you look at NVMe in 2019, essential we're in crossover on a gigabyte basis, right? And it's going to grow, it's going to continue to grow. I mentioned earlier the 9300 product that we use for machine learning, AI workloads, super high performance is a segment of the market that we haven't announced products in to date that is a mainstream portion of that market that looks very, very interesting to us. In addition, we can never forget that transitions in the enterprise take a really long time, right? And SATA is going to be around for a long time. It may be 15% of the market and 10% out a few years, but our customers are being very clear we're going to continue to ship SATA for an extended period of time. The beautiful thing about Micron is we have wonderful 96 layer technology. There's a need in the market in both of the segments I described and that's about as much as I can give you. All right, don't bet against data. Derek, thanks very much for coming on theCUBE. I really appreciate it. You're welcome. Thank you. We'll be back at Micron Insight 2019 from San Francisco. You're watching theCUBE.