 from Austin, Texas. Extracting the signal from the noise. It's theCUBE covering Dell World 2015, brought to you by Dell. Now your hosts, John Furrier and Dave Vellante. Okay, welcome back everyone. We are here live in Austin, Texas for theCUBE, SiliconANGLE's flagship program. We go out to the events, and expect to see the noise. I'm John Furrier, the founder of SiliconANGLE, Joe Michael's Dave Vellante, co-founder wikibon.com, also chief analyst at wikibon. Our next guest is CUBE alumni, and always dramatic, always flair, always a lot of flair. Target made a CEO of Accentic, great to see you. Congratulations on all your recent success. And you got it damly brewing. Congratulations on getting married. Have it a kid. Look, do you look great? Thank you, thank you. My wife Cassidy, I love you. We have a 17 week. We're waiting, we're expecting. Exciting. Yeah, a baby girl. One of the things that I'm excited to talk to you about not only are you leading a company that's growing very rapidly, software-driven company, doing great. You want to get down to that. But also you're involved in a lot of industry, really what I call top-level events, where you're seeing the big picture in the tech industry evolve, and Michael laid out this vision of the future, where it's got a sprinkling of society, benefits, housing technology, can enhance society, not detract from it. So I want to get your take on that first. This message of how technology can change the world from, we talked to Karen Kintos earlier about women in computing, we're at Grace Hopper, political change, geopolitical, global, connected, internet of things as people do. What's your take on the societal benefit of technology? So on the societal benefit, as you know, an extent is in the software-defined storage space, software-defined data center space, commodity hardware, cloud services, big data, all merging, right? In that context, tied to that context, I'm also on the board of Silicon Valley Education Foundation. I was talking to you earlier, I'm with the Silicon Valley Leadership World Economic Forum, we do a lot of work right now, how we can bring more analytics, business intelligence, contextual intelligence, AI, to different facets of life. One of the areas we're focusing on is education and healthcare. Those are two areas that you have a lot of data, bigger data, huge data, and it's not about the data, but it's the analytics behind the data. So we're providing a lot of software and services support right now to school districts, and also genomic research companies. I don't know if you knew, but we're one of the biggest vendors for NASA. We just closed a big deal with NASA. Really? With SpaceX, we manage all their data. We're doing a lot of work with CERN in Switzerland. With a lot of universities, Yale Medical, Stanford Medical, my wife actually happens to work for Stanford Medical. We're doing a lot of healthcare research data, and the cost of storage, cost of IT in general, data center cost was so high with these hardware-only models. Now, everything is moving as you know well. Commodity hardware, low cost, open systems, open source innovation, collaboration, software-defined innovation, bringing cost to a level that you've never seen before. So schools and healthcare is benefiting from that. CERN is interesting. CERN basically building out their own cloud. Huge opportunity. We had them on last week at Pentaho World. Fascinating story. And CERN Management Director was in our last CEO conference in San Francisco opening a CX Summit. And they're talking about the amount of data they're analyzing, so huge opportunity. So everyone sees this social change that we just highlighted, but really let's get down to it because your company, Nexenta, really captures on this because now compute can be deployed anywhere. You can have massive supercomputer power at an instant, so genome sequencing to some of the things you're talking about are now available. So now people are starting to grab the data. And it's piling up into a data lake. We call it a data ocean, real-time analytics. So now there needs to be solutions for this. So Nexenta is really addressing that, so talk about what you guys are doing because the real challenge is, there's data out there, it's piling up, I need massive storage, I kind of have a price point that works, but it's got to enable innovation. Talk about what you guys are doing specifically. Sure, as you know, Software Defined Data Center is this big event story at Dell World. By the way, Dell World, how it's amazing, it's an amazing event. The best Dell World I've been to, Michael was amazing, all the partners, customers, you've been here, it's cube, it's unbelievable. I see a lot of software-defined story. When you think about it, however, when you peel the onion, many of them are still hardware-based. They do some software, but on their own commodity hardware, built-in. We are truly, 100%, no gimmicks, software company. And we've based our software innovation on top of an open-source file system that we share the love. We give the open-source file system away and we basically build licensing on different capabilities around security management on top of the file system, which means we bring the cost to a level in storage, which is the 60% of the cost in data center to a level never seen before. This way, the customer can innovate with us, collaborate, and build their systems according to their applications. This is the reason customers don't call us software-defined storage. They call us application-defined storage. They call me and say, Tarkin, look, you're building certain applications which require a lot of IOPS, certain applications which require a lot of capacity, certain applications require a lot of management. I work with VMware, Citrix, Microsoft, whatever the system in the back end. I need openness, we are the answer. So the people call us the Walmart of storage in an open-source mode. And you don't sell hardware? Zero hardware, that's why we partner with Dell. No appliances? Zero hardware, zero. And this is the big delineation. There are a lot of software-defined storage companies. They like the branding. We've been in the industry for 15 years. Everything, pure software and open-source, that's why we partner so well with Dell. And Dell is one of our largest investors. And the file system, it's not a Linux derivative? So the file system runs on any operating system. We run bare-metal on the system. We have our scale-up file system as well as scale-out. We are the only company in the industry. We do block, file, object from one single management console. So if you have applications, new type of web applications running container-native, cloud-native applications, you need object, scale-out, we support that. If you have old-school applications, legacy applications, I was talking to a guy earlier, they do video surveillance for cities in China, in Korea, petabytes and petabytes data. They use us for block and file services. They don't care about object. Then I have customers who are doing all this cloud-native, open-stack type of applications on top of Dell. Next Center, they want scale-out, Swift, open-stack, object storage, container storage. We provide that as well. So one structure. You have one customer base. You have all businesses. All workloads, all workloads on any system. And the beauty of software is, you can basically define your environment for the application needs. Not, who cares about software-defined? What customer needs is application-defined. So one thing that you guys are doing I want to get your thoughts on is, you've got a lot of innovation when you guys talk about the use cases. But if you're also disrupting on price performance, that's another issue for customers, is what's it going to cost me? So what is the price point? What are you guys seeing for cost? Because your software, you must have a good margins, obviously. You know how we're involved. Dell picks up that. Business, good job. Good job there for Dell or whoever. But what's the price point for cake? You're a good question. So we have three different clusters right now in the business. Service-only companies like Amazon and Azure and so on. And in the cluster, you have the legacy system cluster, the old school systems, you know, Hitachi's of the world, NetApp of the world and so on. EMC. Yeah, to a certain extent, correct. That's why Dell is doing this, right? Because leverage the legacy systems but build new software defined, application defined systems with Nexenta partnership. And then you have pure, what we call solutions like Nexenta, software-only on Komar Biharber. So on the Azure Amazon site, one cent per gig per month and you pay every month. For their solution. For their solution. One cent per gig. So you're 12 cents per gig and all of a sudden you're going to pay it forever. And if you want to buy, if you want to get it back, tax. There's a lot of evil taxes. So when you add all those things, it sounds cheap but it gets so much more expensive. That's why there are other companies building new technology to bring that stuff back into the private cloud. And then you have the legacy systems. Last year we shipped $9 billion worth of storage incremental for nine exabytes. If you do the math, $1000 per terabyte. At the Amazon store here in Austin in the corner, you can get a $39 Western digital one terabyte drive. $39. $1000. So what I'm saying is there's a huge premium on legacy systems. $1000 per terabyte is a big number and that's a discount number. We do this $50 per terabyte solution perpetual forever. One-time cost. One-time cost. So there's no recurring payment. This is so stupid cheap people cannot believe. So we have to go through it. It's ridiculous cheap as you say. Ridiculous cheap. That's why I said we're Walmart of storage meaning mass merchandising. We go for large capacity. That's why customers who do healthcare, education, telco, manufacturing, any cloud environment they're going to get petabytes of data. That's why as Nex Center with Dell we love large capacity. But that's the big picture that's going on here and that's a big part of the reason why EMC and Dell are emerging because EMC would take 10X markup over the raw cost of the devices when they could justify with controller and high availability and all that stuff. Big collapse. Big collapse. And Dell is a company that can handle that collapse. Right? I mean put your thoughts on that. Look, Michael did a great job yesterday in the keynote. He just said it. We have about seven zettabytes with a Z storage today. By 2020 that number is going to be nearly 50 zettabytes. But storage budgets for the CIO is going two to 5% year over year down. Whereas storage capacity is going almost almost 70, 80% year over year growing. So the answer is application defined, software only, commodity hardware and Dell's big vision. They have the mass, they have the capacity now, they have the scale, and they have the relationships with the EMC and the large enterprise customers and with mid-market. And now Dell is the leader in software defined with Nexcenta can go to all these customers who have large capacity, large performance needs and bring the cost to a level never seen before. And with that, there's more opportunity also for Dell for old flash, hybrid converge, more disk, more Jbots. So it becomes a win-win for the partners, customers, for Dell and partners like us like Nexcenta. And you don't care what the medium is, it's just the volume to you, right? It's capacity is the key for us. And by the way, I'll tell you, we're talking to a lot of CIOs. In average, I was just in Michigan with a bunch of automotive company CEOs, all the big three. The answer comes back to us is, look 60, 70% of our business is moving to cloud. We're not going to give the business to Amazon or someone else. We're going to build our own hybrid cloud to serve, to service our channel partners and customers and appliances and also dealers and working with Nexcenta and Dell. We want to deliver this to ourselves internally and bring the cost down with larger capacity. Well, congratulations on awesome platform and your success. Obviously, great price point, great innovation. I want to shift gears with you in a second and get your take on what's happening at Dell. Michael Dell, you're close with, he was quoted as saying, wise is one of the best acquisitions Dell's ever done. You're on the watch, we were new you then and so you transitioned to the great job. Congratulations. I want to get your insight into the mind of Michael Dell, the mind of the Dell employee base, no EMC as well, a lot of institutional knowledge. When you have the founder that stays around, companies thrive. I always said that founder should stay around. That's always founder led companies has always been a big success, but also they have loyalty amongst early employees. There's still a lot of Dell employees that have been around for a long, long time. This is a lot of legacy Dell. What's the mindset? This is a great move. What's your take on some of the color inside of Dell with this new EMC acquisition? So I'll tell you, and I'm on the record on this all the time and it was acquired about, as you know, about three years ago. The team, EUC team, Stilala, Mariam Alexander, and Jeff Clark doing an amazing job. I've worked with Jeff, Michael for about a year. And I'll tell you, it's the best team. I only mean this, I'm not just saying this because it's on the record here with you guys. Yeah, Dell world. You know my stuff. You're very truthful. You send an email to Michael or the ELT team, Marius, Jeff, Sresh, John Svane's in the team. You get an answer in 10 minutes. These folks are dealing with a lot of partners, as you know, globally growing so fast. This acquisition is happening. This is a huge opportunity for the industry. My view is culture is everything. And the leadership is everything. CEO means a lot for a company because it sets the tone. Michael set the tone in a way for growth, but he's an entrepreneur. He just said it, right? It's the biggest startup, private startup, ever in the industry, which I completely end the number stock for themselves. What we see is Dell with that capacity, with that size, with that culture is playing now as if there are a startup moving fast, innovating fast, partnering. Look, there is no other partner I have partners this well like Dell, with startups like us. And as their point is to buy an EMC, a lot of storage vendors are freaking out here as a partner, we love it. It's a huge opportunity for us because one plus one equals four for us. And we are a completely disruptive company with a completely different way of doing this. With software only application defined way. So having said all this, I think this is going to create a huge energy for the federation with all the partners of that federation through the acquisition. We're big VMR partners already. We do a lot of work with VMR, which is awesome. We do a lot of work with Pivotal. So we welcome this and I think culturally it's going to be a very positive impact on the future. It's a powerhouse. I got to ask you, you're talking about unicorns. You're like a unicorn executive. And here's what I mean, whether you're selling thin clients or you're selling terabytes, you sell to the senior level execs, you sell to CIOs, you organize meetings, meetups. You do a lot with philanthropy. Talk about your style. It's unique in the industry that people sell devices and infrastructure and hardware and certainly storage. You typically sell it to a storage admin. You sell at a very senior level, you build relationships with those levels. Talk about that template. What did people learn from that? Look, a lot of companies are divided like startups versus the big companies, so to speak. We are a startup, but we have a big reach. So we build a phenomenal team. Our team is all executives who've done IPOs before, M&A before, they're seasoned. My executive team don't take salaries. They're all equity shareholders. Every round we do for financing, we put our own money on. One thing I'm going to say, Dave, don't hate me on this, but I hear this unicorn concept all the time. I don't believe it because unicorns are not real. Santa Claus is not real. Angels are, okay. Wait a minute, Santa Claus isn't real? Come on, damn. But you know what's real? Real is the companies who have customer base, true IP, innovation, and they have patents, and they have a partner base that just generate revenue. You know what's real? Cash flow is real. Cash flow is not Santa Claus. Brother, let me tell you why. I also, as you know, invest in smaller companies in our ecosystem. We invest as executive team in companies that we work with in open stack space, VMware space, Citrix space, Microsoft space, Dell space. We invest angel investment to the companies we build around our network as Nexcenta. There's a Nexcenta ecosystem. We have 100,000 transactions a year on our open source community website. We have 100,000 developers run open source file system development with us. So having said all this, our style is grassroots movement with open source communities, work with them, we also build relationships with executives who've done this before, at EMC, Dell, Cisco, NetApp, with large Fortune 500 companies. We have so many Fortune 500 accounts. We just, as I mentioned, we just closed NASA, as every customer, SpaceX, Ford, Vistion, big companies we work with. But having said that, we don't forget our open source community, the grassroots, the people who create value. I see a lot of business plans from so-called unicorns, no revenue, but a lot of beautiful flights, and great investors. They raise a billion dollars, 700 million dollars. That's great. I like to raise little money for bigger outcomes. So customers, partners, employees, and investors make a lot of options. So I asked Sherry Chen at Greylock this question. I'll ask you the question because you're in the enterprise. Blitz scaling and the consumer size, one thing they talk about, Blitz scaling at Greylock. They teach you at Stanford, which is how to scale up fast, with HR, all these processes. And there's some similarities. That's consumer, with the flywheel going. In the enterprise, it's hard. I mean, go to markets, it's very difficult in the enterprise. Enterprise is a tough business to crack, and most entrepreneurs just don't understand how damn hard it is. And they've never done it. They've never done it. So Sher won the color on how hard it is to win in the enterprise. On go-to-market technology, hiring across the board. And how do you scale as an enterprise business in today's age? Very good, very good question. So the three dimensions. Team obviously hugely important. The people who have their relationships. When I joined NexCenter, it was an open source project. But there were a lot of customers in that open source project. 100,000 transactions a year. People buying storage with a credit card. $300, $400 at a time for enterprise customers. I went to a Fortune 50 customer CIO meeting. There were 30 people in the room. CIO goes, we never do business with you. And all of a sudden, there's two kids in the backhand, ACDC shirts, earrings, they go, we're wrong. Our entire legal department runs on NexCenter open source storage brother on some commodity hardware. So the CIO of this Fortune 50 company freaks out. It goes, how much is the cost? $150, $20 per terabyte. Because we shall use this everywhere. So how do we scale? Right IP. Right customer-partner relationships with the right team. And obviously operational excellence. What does that mean? I'm running 80% of the time with my executive team. We're at Dell World, at VMworld. OpenStack conference in Tokyo next week. Meeting with the open source community, the grassroots, meeting with the customers. We just closed one of the biggest deals in the automotive space with Hyundai. We are doing a big deal with Korean telecom. 250 petabytes running all their infrastructure. And that changes the game. So I think one thing you're going to see, there are a lot of startups, great founders, engineers, but they don't know necessarily how to scale companies. So professional management is super important. My founders of the company, been there since the beginning, they're still there. And now they're seeing this huge wave growing the business to Fortune companies but also to mid-market. That's why we work so well with Dell and EMC. What tricks can you share or tricks or just things advice around go-to-market? Because winning a customer is the hardest thing. Lifetime value of a customer, share that. Share the thoughts there. Number one, differentiation. IP differentiation is hugely important. How do you differentiate your story and the product? Hugely important, it's not easy to do. Number two, channels. No small company can win these business by themselves. What do we do? We partner with Dell. Dell invests in our company and they also invest into our go-to-market channels. And when Dell does a business, a server business, we run on top of them and we bring a lot of gross margin. Partner, customer, and investor, everybody wins. And Dell is an investor wins. They invest in our company. More success, more success for everyone. Partnering is critical. Thanks for sharing. Tarkin, great to see you. You look fabulous as always. Big fan of your work. Nexent is doing really well. Congratulations. Thank you so much, John. Dave, thank you. Great to see you. This is theCUBE. We're live here at Dell World Day Two of Wall-to-Wall Coverage theCUBE. We're right back. I'm John Furrier. Dave Vellante of theCUBE. Stay tuned.